Banco Santander has internally announced the appointment of Adela Martín as the new Head of Business Globalization for Wealth Management & Insurance (WM&I) at Grupo Santander, as confirmed by *Funds Society*. Martín will work closely with country teams and report directly to Javier García Carranza, Head of Asset Management, Private Banking, and Insurance.
Previously, Martín led Private Banking in Spain and was most recently in charge of the Wealth division in Spain. Her extensive knowledge of the three business areas will enable her to drive the global division by leveraging her deep understanding of how the business operates at a local level. The group’s new model aims to further globalize and coordinate its businesses, according to sources from the bank.
In light of this change, the bank has also confirmed the appointment of Víctor Allende as the new Head of Santander Private Banking Spain. Allende will report to Alfonso Castillo, Global Head of Santander Private Banking, and to the CEO of Santander Spain. His role will take effect at the end of September, and he will play a key role in transforming Spain into a leading private banking hub in Europe.
With nearly 25 years of experience in private banking, Allende brings extensive knowledge of the Spanish market. He spent the last 12 years at Caixabank, where he led a major transformation of the business, focusing on customer-centric strategies. Before that, he held various positions at Morgan Stanley and AB Asesores. Allende holds a degree in Economics and Business from the University of Navarra and an MBA from IESE.
Following these appointments, Nicolás Barquero and Francisco Bosch will report to their global business leaders and the CEO of Santander Spain. Additionally, the bank has made another key appointment: Monika Vivanco will take over as Head of People and Culture, replacing Patricia Álvarez de Ron, who is leaving the company.
Grupo Dunas Capital has announced the appointment of Natividad Sierra as Managing Director and Chief of Investor Relations for the firm’s alternative assets division. In her new role, she will be responsible for leading the fundraising processes for the firm’s alternative asset vehicles and managing investor relations. Additionally, she will join the Group’s Executive Committee.
With this appointment, Grupo Dunas Capital is once again focusing on the development and consolidation of its real assets business line. The firm advises several alternative asset vehicles that invest long-term in transport assets, as well as in impact projects, renewable energy, and energy efficiency. “It is an honor to join the team at Grupo Dunas Capital, a company built on strong values that has experienced exceptional growth since its creation, thanks to its unique business model, philosophy, products, and a highly professional team. In this new phase, I will continue to develop strategic, long-term relationships with investors, who will find in our product catalog a unique value offering in Spain,” said Natividad Sierra, the newly appointed Managing Director and Chief of Investor Relations (Alternatives).
Natividad Sierra brings 30 years of experience in the financial sector, primarily in private equity, as well as in mergers and acquisitions and corporate banking. Prior to joining Grupo Dunas Capital, she was Head of Investor Relations & ESG at Corpfin Capital, one of the leading private equity firms in Spain, where she successfully led the fundraising efforts for several funds and oversaw the ESG function. She was a partner at the firm, Director of Investments, and a member of the Board of Directors of several companies. She began her career in corporate banking in the Structured Finance division at BNP Paribas and later worked as an Associate at Apax Partners, executing mergers and acquisitions.
Regarding her education, she holds a degree in Business Administration from Universidad Pontificia de Comillas ICADE and a degree in Law from UNED. Her executive education includes the General Management Program at IESE and the Executive Program in Senior Management, Promociona, at ESADE. Additionally, she is co-President of Level 20 in Spain, a non-profit organization that promotes gender diversity in the European private equity sector.
Mexico City surpassed São Paulo this year as the largest tech talent market in Latin America, according to CBRE’s annual report on these markets in the Americas.
The report analyzes Latin America’s tech talent markets based on total employment in the sector, five-year tech job growth, average salary growth in the sector, total numbers of tech graduates, and five-year growth in the number of tech graduates.
Mexico City has the largest tech workforce in the region, with 300,000 tech specialists. São Paulo, last year’s top-ranked market, has 240,227 professionals.
“Mexico City continues to grow as a tech hub, with a large number of tech graduates from the city’s top universities and affordable labor and real estate costs compared to many North American markets,” said Yazmín Ramírez, Senior Director of Labor Analytics and Client Consulting at CBRE Latam. “The city’s growing pool of tech labor continues to attract manufacturers, engineering firms, and other companies looking to bring operations back to Latin America from overseas,” she added.
CBRE’s 11th “Scoring Tech Talent” report ranks 75 cities in the U.S. and Canada based on multiple factors, including tech job growth, tech degree completions, labor and real estate costs, and millennial population, among others. The San Francisco Bay Area tops this year’s rankings, followed by Seattle and Toronto.
This is the fifth year CBRE has ranked Latin American markets in this report. The rankings are based solely on the size of each city’s tech talent workforce. The report also examines the average tech salary in each market and its five-year growth, the average office rent and its five-year growth, and the completion of tech degrees.
“The relevance of Latin America as a talent source in the Americas has expanded due to its proximity to the United States and Canada, the growing pool of tech talent, the cost-benefit ratio, the time zone, infrastructure, and tax benefits,” said the executive. “As a result, the region is now considered a well-established location that hosts a significant number of multinational tech companies,” she added.
Mexico City stood out in several other key areas in CBRE’s report:
– It produced more tech degree graduates in 2023 (24,050) than any other of the top 11 markets. The next closest was São Paulo with 15,972.
– The tech salary growth rate in the city over the past five years was 42%, higher than the average increase across the 11 markets (36%) and the U.S. (18%).
– It saw a 32% increase in software developer salaries since 2018, reaching $47,938 in 2023, surpassing Latin America’s growth rate (28%) over the same period.
CBRE Group, Inc. (NYSE: CBRE) is a Fortune 500 and S&P 500 company headquartered in Dallas. It is the world’s largest commercial real estate services and investment firm (based on 2023 revenue). The company has over 130,000 employees (including Turner & Townsend staff) and serves clients in more than 100 countries. CBRE provides a wide range of services, including facilities, transaction, and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services; and development services.
AFP Planvital has a new leader at the helm, as announced to the market on Thursday. José Joaquín Prat Errázuriz, who previously served as General Manager of the pension fund administrator, has been appointed as the new CEO.
The company’s board made the decision during an extraordinary meeting on Wednesday afternoon, as disclosed in an essential statement to the Financial Market Commission (CMF). This marks the end of Andrea Battini’s five-year tenure as CEO.
According to his professional LinkedIn profile, Prat has 18 years of experience in the Chilean pension system. He joined Planvital in 2006 and has held various leadership roles in different corporate areas, including legal, compliance, and risk management. He assumed the role of General Manager in August 2019.
In addition to his law degree, Prat holds a master’s degree in corporate law from the University of the Andes.
Battini will remain with the company for the next few months. According to the letter sent by AFP Planvital to the regulator, he will continue providing services until November 30 of this year, acting as an advisor to the board and senior management to support the leadership transition.
The board of Planvital praised the “high professionalism, commitment, and track record” of the outgoing CEO during his time with the company.
Founded in 1981, at the dawn of Chile’s individual capitalization pension system, the company closed August of this year with an AUM (Assets Under Management) of $10.986 billion, according to information from the Superintendence of Pensions. This gave it a market share of 5.6% at that time.
Anta Asset Management, an independent firm belonging to Corporación Financiera Azuaga, has appointed Eduardo García-Oliveros as its new Director of Private Equity.
García-Oliveros brings over 10 years of experience in alternative markets, having worked at organizations such as Gala Capital, Nomura, and most recently, Alter Capital, where he served as Director of Investments and led the Madrid office.
Throughout his career, García-Oliveros has gained extensive expertise in alternative markets, with a particular focus on direct private equity investments and advising on mergers and acquisitions.
He holds a degree in Business Administration with International Honors Cum Laude from ICADE and Northeastern University (Boston).
Jacobo Anes, CEO of Anta Asset Management, emphasized the significance of this appointment. “Eduardo’s experience will help us strengthen our alternative investments line to tackle the upcoming projects. We aim to stand out in the industry as a manager offering unique and high-quality products,” he stated.
India has consistently been one of the most expensive countries in our emerging markets universe, boasting a larger number of high-quality companies with strong structural growth. However, over the past year, it has become even more expensive. In our view, India deserves to trade at a premium, but the high valuations and elevated expectations remind us to be particularly vigilant and disciplined regarding valuation levels.
The most overvalued areas are the small- and mid-cap segments of the Indian equity market, as well as companies in sectors more sensitive to government actions. However, it is still possible to find reasonably valued companies. Additionally, we see significant differences in valuation depending on the sector, and even among specific companies. In particular, we find relative value opportunities in the financial, technology services, and pharmaceutical sectors, all of which exhibit high-quality operations and management.
In Southeast Asia, Vietnam has faced challenges in recent years due to a deteriorating real estate market and a sudden liquidity shortage caused by anti-corruption measures and regulatory reforms in the corporate bond market. The market is volatile and has been revalued, requiring caution from foreign investors. However, from a valuation perspective, Vietnam is appealing. In the first half of 2024, Vietnam recorded a year-on-year GDP growth of 6.4%, demonstrating solid economic performance. The country serves as an important outsourcing hub for the Asian region, benefiting from recent supply chain shifts. Vietnam is becoming a new manufacturing center, attracting increasing foreign investment from international companies like Apple, Samsung, and Intel. The shift in supply chains from China to Vietnam is still focused on low-value-added production, such as final assembly, where Vietnam holds a competitive edge due to lower labor costs.
In our opinion, Indonesia also offers solid investment potential as one of the strongest and fastest-growing economies, not only in Southeast Asia but across the entire emerging markets region. It boasts a diversified economy and substantial wealth in natural resources such as coal, nickel, and copper. Both domestic consumption (53% of GDP) and exports of commodity-related products are contributing to a robust current account balance. At the same time, Indonesia is undergoing a political transition, raising some fiscal concerns, which has led to widespread sell-offs, making the market more attractive to value investors like us.
Finally, one of the markets that has lost favor with investors in recent years is South Africa. However, following surprising results in recent elections, which have led to the formation of a new national unity government, the country’s fundamentals are improving. Investor positioning is also low, which could present opportunities for value investors. As the country overcomes its energy problems and the quality of its companies improves, South Africa is becoming an interesting market once again.
As long-term equity investors, we understand the need to be selective and recognize that the world is constantly changing. Our analysis highlights that the quality of management can make a significant difference in company outcomes and their ability to navigate challenging market environments. Therefore, evaluating the management teams of the companies in our investment universe is a crucial part of our investment process, alongside our focus on companies with sustainable business practices that can generate long-term returns.
Opinion piece by Laurence Bensafi, portfolio manager and deputy head of the emerging markets equity team at RBC BlueBay Asset Management.
BBVA Group has taken a significant step by opening a new office in Houston, with the primary goal of leading the financing of the energy transition in the United States. This move aligns with BBVA’s growth plans in the U.S. and is integrated into its U.S. Corporate & Investment Banking (CIB) operations.
The Spanish bank made the announcement during the inaugural edition of Houston Energy & Climate Week, an event sponsored by BBVA in Texas.
“America has a unique opportunity to lead the transition to a more sustainable global economy. Complementing and closely integrated with our operations in New York, the Houston representative office— the world’s energy transition capital—will play a key role in our sustainability strategy,” said Álvaro Aguilar, BBVA’s head of strategic projects in the U.S.
BBVA’s sustainability strategy in the U.S. focuses on supporting companies in the energy sector and those promoting sustainable development. This includes traditional renewable technologies, such as wind and solar, as well as emerging cleantech solutions. The strategy also involves assisting companies in transforming their business models toward more sustainable alternatives through financing and advisory solutions.
These initiatives will contribute to BBVA’s global goal of mobilizing $331.8 billion in sustainable business between 2018 and 2025, of which $278.7 billion had already been mobilized by June 2024.
The new BBVA office in Houston joins the bank’s existing teams specializing in cleantech financing, which are based in New York, London, and Madrid.
With its historic leadership in the energy sector, and home to over 4,700 energy-related companies, Houston is positioning itself as the global capital of the energy transition. The city is a leading hub for companies pioneering decarbonization solutions.
Additionally, Houston was recently selected as the base for BBVA Mexico’s nearshoring unit, and BBVA Mexico’s U.S. branch is already operating from Houston. By the end of 2025, BBVA’s Houston office is expected to employ approximately 100 people, making it a key growth center for the bank.
BNY has announced Alts BridgeSM, a comprehensive data, software, and services solution built to meet the growing demand from wealth intermediaries looking to access alternative and private market investment products, through a simplified end-to-end investment experience.
Designed to deeply integrate into intermediaries’ existing desktops, beginning with BNY Pershing X’s Wove advisory platform and NetX360+, with cutting-edge AI and analytics tools that are designed to reduce manual processing and error rates, Alts Bridge creates a powerful solution for investors, advisors, and the home office, the firm says.
The platform will provide access to alternative and private market asset managers from around the world, the selection including 26 North, AB CarVal, Alternatives by Franklin Templeton, Apollo, Atalaya, Aviva Investors, Blue Owl Capital, Carlyle, CIFC, Coller Capital, Crescent Capital, Eisler Capital, Generali, GoldenTree, Goldman Sachs, Hunter Point Capital, Invesco, KKR, Lexington Partners a Franklin Templeton Company, Lunate, Marathon Asset Management, Partners Group, Polen Capital, RCP Advisors, and Stormfield Capital.
“Powered by BNY’s data and technology, Alts Bridge will connect clients across the wealth ecosystem and alternative markets in a unique and more seamless way. As a firm that supports more than $2.6 trillion of wealth assets1 and has relationships with more than 500 leading alternative managers, we believe we are uniquely positioned to unlock this market,” said Akash Shah, Chief Growth Officer and Head of Growth Ventures at BNY. “We’re combining the breadth and depth of BNY’s distribution team with our expertise across investment management, advisory, securities services, wealth technology, and wealth custody and clearing, enabling Alts Bridge to provide a comprehensive solution to find, access, and custody alternative and private market assets.”
The platform will offer features across the pre-, at- and post-trade processes, including an advisor education and fund discovery center, home office and asset manager tools, product overviews, automated document preparation, simplified order entry, and integrated reporting and investment management capabilities, BNY adds.
While 90% of advisors are targeting a 10-15% average portfolio weighting to alternative and private market investments, actual allocations remain in the low single digits. Global alternative assets under management are expected to reach $24.5 trillions in 2028, representing a forecast annualized growth rate of 8.4% from 2022 to 2028.
The platform is expected to be available to U.S. Registered Investment Advisors (RIAs) and Independent Broker-Dealers (IBDs) in fall 2024. The initial platform will be available to clients of BNY Pershing.
Pixabay CC0 Public Domaintop10-casinosites from Pixabay
In the world of investing, fixed income has traditionally been associated with stability and income generation. This role has been uniquely challenged since the spring of 2022, when the Federal Reserve (the Fed) embarked on a series of massive rate hikes – at one point, four 75 basis points hikes in a row – which the markets had not experienced in a generation. Not surprisingly, many fixed income strategies and indices posted the worst total returns in their history. Naturally, many investors flocked to the front end of the curve, taking advantage of elevated yields. However, the tide is turning, with the Federal Reserve expected to cut rates multiple times over the next year.
Let’s begin by discussing the post-pandemic interest rate environment, specifically the implications of the Fed’s hiking cycle. The Fed and other central banks used their policy rates as tools to bring exceedingly elevated levels of inflation back towards what they deem to be “normal” or within their respective target ranges. Risky asset markets rallied in response to the improvement in inflation data in the absence (so far) of a U.S. recession. Further, the hiking cycle led to attractive yield generation in short-term instruments like Treasury bills, money market funds, and certificates of deposit (CDs). As of mid-summer 2023, the 6-month Treasury bill yielded nearly 5.5%, the highest level since 2000. As yields rose, the money followed, with prime and taxable money market funds taking in a combined $965 billion in flows for the calendar year 2023, per Morningstar. Contrast this to the active taxable bond space, which has experienced a net inflow of just $33 billion over the same period.
Rising rates had the effect of increasing the coupons paid on new fixed income securities, which should support forward looking returns. But perhaps more importantly, the rate sell-off decreased the dollar price of bonds already in existence, many of which are government or investment-grade corporate bonds with low credit risk. As a result, the bond market is priced at a discount even though fixed income securities, with the exception of a default event, mature at “par” or $100. It is this “pull to par” that should drive attractive returns going forward as rates potentially fall in response to a Fed policy pivot.
The term “pull-to-par” refers to the tendency of fixed income securities to move towards their face value (par value, or $100) as they approach maturity. Bonds priced at a discount will see their prices rise as they get closer to maturity, while bonds trading at a premium (that is, above $100) will see their values fall to par over time. In today’s environment, with the Fed near the beginning of rate cuts (as of this writing), fixed income securities with prices below their par value have potential for meaningful price appreciation. That appreciation, in addition to regular coupon payments, leads to larger total returns for investors. We believe this total return likely eclipses the yields that may be earned on short-end instruments going forward.
To illustrate how unique the current fixed income environment is, let’s examine historical price data for various fixed income indices over the last 10 years. The chart below shows the average price for the Bloomberg U.S. Universal Index. For the vast majority of the 10-year period, the average price for the index was either near or above par, with the mean dollar price at about $100.50. Rising rates drove the average dollar prices of the index, and active portfolios as well, down to near unprecedented levels, below $92 as of July 31st, 2024. Given the quality of the constituents of the index, it is reasonable for an investor to believe that these bonds will pull back to par as they get closer to maturity, thereby providing investors with an additional boost to performance over and above just clipping coupon payments.
Another lens to look at the relative value of owning fixed income versus cash instruments can be seen in historical data on how both have performed in an environment similar to the present one, that is, with the Fed pivoting to rate cuts. We looked at data for the last four Fed tightening cycles going back to the mid-1990s to see how both cash and fixed income performed both prior to and when the Fed began cutting interest rates. We used the ICE BofA U.S. Treasury Bill Index as a proxy for short-term instruments and selected four Bloomberg indices representing both above and below investment-grade securities for fixed income. As the table shows, the subsequent two-year returns produced, in most cases, better economic outcomes when owning fixed income as opposed to staying invested in Treasury bills. These results are consistent when cash was deployed at the end of the hiking cycles or the beginning of cuts, though investors did better by not waiting for the Fed to deliver cuts first. In the current environment with the Fed posed to ease, and with an elevated chance of economic weakness going into 2025, fixed income has a similar potential to outperform cash instruments this time around.
By combining the return generators of coupons and the “pull-to-par” effect as rates potentially fall, investors may outperform Treasury bills, CDs, and money market funds in the months and years ahead. We believe active management remains valuable for capturing these excess returns and potentially adding alpha over benchmark indices. Many fixed income securities with attractive risk and reward characteristics, such as shorter-dated, investment-grade rated bonds within the asset-backed securities and residential mortgage space, sit outside of benchmarks and represent some of today’s most compelling opportunities.
The concept of earning coupon plus the pull-to-par represents a valuable opportunity for fixed income investors as the Fed considers rate cuts. By understanding how this phenomenon impacts fixed income securities’ total return, investors can capitalize on the current opportunity it presents. When combined with effective active management strategies, the pull-to-par effect may serve as a powerful tool to achieve outperformance and enhance overall returns. But timing is of the essence. Yields today still look to be interesting even in a high-quality portfolio. So now is the time to make those moves, not to wait until yields fall further
Opinion article by Rob Costello, client portfolio manager in Thornburg Investment Management.
The European Fund and Asset Management Association (Efama) highlights in its document “The EU Must Adopt a New Deal to Mobilize EU Savings” that, according to the European Commission, more than €600 billion must be invested annually to achieve a successful green transition, as well as additional billions to support the digital transition. In light of this reality, Efama calls for the creation of the necessary investment conditions to address these challenges.
What exactly do these measures to create the “necessary investment conditions” entail? According to Bernard Delbecque, Senior Director at Efama, “a decisive shift in EU policies is needed, particularly in competition and industrial policies, to improve investment opportunities, boost the valuation of Europe-based companies in global stock indices, and increase investments from asset owners into EU companies. Once asset owners see more promising prospects in the EU, they will increase their investments in the region, thereby supporting the financing of the green and digital transitions.”
The report prepared by Efama states that to unlock private investment and finance the EU’s capital needs, it is crucial to leverage the potential of the Single Market and develop an effective Capital Markets Union (CMU) that offers more opportunities and better outcomes for European companies and savers. Additionally, it is imperative to redirect the European Commission’s Retail Investment Strategy to encourage EU citizens to invest more in capital market instruments and promote retirement savings, thereby increasing the pool of available savings to support the EU’s ambitions.
Impact on UCITS Funds
Efama sees addressing these challenges as urgent, as its report demonstrates that this situation is impacting the growing allocation of UCITS assets to U.S. equities, attributing this trend to the superior performance of U.S. stock markets. “By the end of 2023, 44.6% of UCITS equity portfolios were invested in U.S. assets, compared to 19.2% in 2012. The high exposure of European UCITS equity funds to foreign assets is specific to Europe, according to the study. In 2023, equity funds domiciled in the EU and the UK had 27% and 29% of their portfolios invested in local stocks, respectively, compared to 78% and 84% for equity funds in the U.S. and the Asia-Pacific region,” the report argues.
The document outlines several factors that may explain the lower domestic bias among European investors, such as the benefits of cross-border investments, the role of financial advisors, the development of fund platforms facilitating investments in funds tracking global indices, the relatively small size of EU stock markets, and the enthusiasm for leading U.S. tech companies.
“The strong performance of U.S. markets, which led to an increased allocation of equity assets to U.S. stocks, reflects a combination of factors and policies, including robust population growth, higher spending on research and development, substantial fiscal stimulus, and lower energy prices,” the report explains.
A Matter of Competitiveness
Efama’s main conclusion is that, to compete effectively on the global stage and foster the emergence of industrial leaders based in Europe, the EU must embark on a transformative path to boost economic growth, improve investment opportunities, generate higher investment returns, and increase the market capitalization of European companies. In their view, these are necessary conditions to attract more investment capital to the EU and ensure that European companies have access to financing throughout their development.
“This, in turn, could initiate a virtuous circle where higher economic growth strengthens asset owners’ confidence in the EU economy, thereby bolstering the ability of asset managers to provide a critical source of stable, long-term financing for European governments, companies, and infrastructure projects,” Efama concludes.
