Civic leader and business executive Marielena Villamil has been named the 22nd member of BBVA Compass‘ National Advisory Board, which is made up of executives from across the bank’s Sunbelt footprint.
Villamil is the co-founder and president of The Washington Economics Group Inc., an economics consulting firm based in Coral Gables, Fla. Villamil, who serves on several community boards, earned her master’s degree from Vermont’s Middlebury College and her bachelor’s degree from St. Mary’s Dominican College in New Orleans. She will continue to serve on the bank’s South Florida board, which she joined last year.
“Marielena has done an amazing job promoting the bank in South Florida during the past year, and she’s even attended a BBVA shareholder’s meeting in Spain to learn more about the bank,” said BBVA Compass South Florida Market President Roberto R. Munoz. “We’re so proud to have someone from Miami sit on our national board.”
National board members help generate business for the bank and provide BBVA Compass leaders with insight about financial needs in specific markets and industries.
Foto: Dennis Jarvis. El filántropo medio UHNW dona 25 millones de dólares a lo largo de su vida
Wealth-X and Arton Capital released this week a report that reveals that the typical ultra-wealthy philanthropist donates US$25 million over the course of his or her lifetime, is 64 years old, has an average net worth of US$240 million, and an average liquidity of US$46 million.
These are some of the findings of the inaugural Wealth-X and Arton Capital Philanthropy Report 2014 that examines the full spectrum of ultra high net worth (UHNW) philanthropic activities, identifies trends in UHNW giving, provides the profile and traits of ultra wealthy philanthropists, and highlights their motivations in contributing to charities across a range of areas and sectors.
The Wealth-X and Arton Capital Major Giving Index, which tracks trends in UHNW charitable giving, shows that the level of traditional philanthropic donations remains strong. The index has risen in the past few years, reaching a level of 220 in 2013 – making it the strongest year for UHNW giving since the 1997-8 global financial crisis, and only 12 points below the all-time high of 232 in 2006.
However, the report reveals that UHNW philanthropists are expanding their philanthropic approaches and activities, shifting from major giving towards self-sustaining projects and entrepreneurialism.
Here are some other key findings:
Major giving to educational causes accounts for 40 per cent of all UHNW donations, three times more than the amount given to health causes.
Individual gifts by UHNW female major donors, on average, is 26 per cent larger than their male counterparts.
The global UHNW population, which comprises 0.003 per cent of the world’s population, holds 13 per cent of the world’s total wealth.
Nearly 70 per cent of UHNW philanthropists are self-made and actively contribute to programs that aim to increase entrepreneurialism.
Impact investments, such as social bonds, will account for 1 per cent of professionally managed assets within the next 10 years.
On average, American households donate US$3,000 annually to charity. A UHNW philanthropist with a net worth of between US$30-49 million typically donates at least US$60,000 annually.
Billionaires give the most to charity. On average, members of this top-tier wealth segment have donated US$108 million in their lifetime.
Philanthropic bequests are expected to reach US$86 billion in the next 10 years.
The report is supported by knowledge partners, Charities Aid Foundation, Global Citizen Foundation, International Youth Foundation and Population Services International, who provide commentary and case studies.
“Globally, we are witnessing an evolution of philanthropy as it expands from ‘traditional’ philanthropy – involving financial contributions and donations – to cutting-edge approaches such as venture philanthropy, microfinance, impact investing and job creation,” said Mykolas Rambus, CEO, Wealth-X. “Ultra wealthy philanthropists are increasingly focusing on philanthropic initiatives that provide long-term solutions by enabling the less fortunate to seize opportunities through entrepreneurialism, and using their own business acumen to measure the effectiveness of their philanthropic endeavors and to maximise their returns.”
“This is another initiative in our corporate strategy to encourage the discussion about the responsibilities of global citizens in addressing the social and economic dimensions of sustainable development,” said Armand Arton, President and CEO, Arton Capital. “Our strategy includes sharing more and more information about the role of the wealthy in these important processes. One of our strategic goals is to engage all involved stakeholders in a constructive dialogue on how to more efficiently interconnect global citizens so that their joint efforts become a force for bridging the widening socio-economic gap.”
CC-BY-SA-2.0, FlickrFoto: Jesus Alenda. Las últimas ventas en high yield no representan un cambio de escenario
The recent sell-off in high-yield bonds has many investors wondering whether this is another big buying opportunity—like prior sell-offs have been—or the start of something more ominous.
As we see it, the decline in high-yield bonds was mostly due to technical influences: outflows from retail high-yield funds teamed up with record-setting issuance to soften markets. Add in a couple company-specific credit problems…and the high-yield market was down more than 2% in September. Of course, retail flows could continue to exit high yield, pressuring returns. But from our view, most of the selling has been by broker-dealer firms and hedge funds—not long-term investors.
No Case for Allocation Shifts
If longer-term investors start to sell, we could see a more meaningful correction. But issuance is slowing down—a few large issues are still interested but the groundswell of issuance we saw in September is gone. On the demand side, many retail and institutional investors see 6%-plus yields as a tactical opportunity to top up allocations and invest marginally, but they don’t necessarily view them as the time to make a big move back into high yield. Based on this more favorable supply/demand balance and fairly strong underlying fundamentals, our view is that the weakness is unlikely to continue.
That said, while this may be a tactical investment opportunity for some, we don’t see this as an opportunity for investors to get overly excited and shift assets toward high yield. Yes, overall yields and spreads—or the extra yield versus Treasury bonds—are higher than they were at the start of September, but they remain below long-term averages (Display). And while fundamentals are still relatively strong, we’re in the latter innings of the credit-market cycle and are seeing some deterioration. There are no great opportunities available and no massive dislocations to capitalize on. That’s why we think that a conservative, diversified approach to high yield makes the most sense.
Our biggest concern: the lowest-rated credits. CCC-rated bonds have recently begun to underperform, but these are the most fragile companies with the most leverage. It doesn’t take much for these companies to fail—they often do so even before the broader market starts to see real deterioration. Investing in lower-rated credits requires extensive research—and a big expected-return hurdle to make it worthwhile. Since CCC yield spreads don’t compensate investors for average historical credit losses, defaults would have to be well below average over the next five years to make them profitable.
While near-term defaults don’t appear imminent, forecasting defaults beyond the next 18 months is tricky. Betting on a very different outcome than what we’ve seen historically doesn’t seem prudent. Also, returns on CCC bonds will fall long before actual defaults turn up. So, while the lower default rates expected in 2015 provided a great reason to buy CCCs in 2013, they provide far less comfort to us in terms of return expectations over the next 12 months.
A Balanced, Diversified Approach
On balance, the events of September don’t really change the long-term story for high-yield bonds, in our view. The good news is that the power pendulum has swung back to investors. They now have the upper hand in negotiating the yields and terms of new deals with issuers. In many respects, continued market turmoil may be an investor’s best friend: it extends the credit cycle, making companies more careful and thoughtful with their resources while at the same time increasing expected returns.
We think investors should continue to take a global, multi-sector approach when it comes to high yield—but maintain a cautious outlook in the months ahead.
The views expressed herein do not constitute research, investment advice or trade recommendations and do not necessarily represent the views of all AB portfolio-management teams.
Ivan Rudolph-Shabinsky is a Portfolio Manager of Credit and Gershon Distenfeld is Director of High-Yield Debt, both at AllianceBernstein.
Andrea Favaloro, director de Ventas y Marketing de Generali Investments Europe. Generali Investments Europe abre el fondo Absolute Return Credit Strategies a nuevas inversiones
Generali Investments Europe SpA SGR – the main asset management company of the Generali Group with €355 billion of AuM – has recently opened for new investments the Generali Investments SICAV Absolute Return Credit Strategies fund. The fund is now available to investors looking for solutions and instruments to reach their investment return targets in a low interest rate scenario without running high volatility risks typical of an equity exposure.
By profiting from Generali Investments Europe’s extensive expertise in fixed income and absolute return strategies, the AR Credit Strategies fund uses all yield sources offered by the fixed income and credit markets in order to seek to achieve above-average performance. The fund targets a 4% yearly return.
Andrea Favaloro, Head of Sales & Marketing at Generali Investments Europe, commented: “The re-launch of the AR Credit Strategies fund is another fundamental pillar of our strategy aimed at international third-party clients. AR Credit Strategies will provide them with a unique tool to fight the zero interest rate environment through high-potential fixed income investments while at the same time keeping risk and volatility to a minimum. Our investment choices are supported by a large and experienced in-house team with an outstanding proven track record.”
The AR Credit Strategies fund, whose core investment universe is composed of Investment Grade, High Yield, Emerging Markets and Convertible Bunds notes, is managed by a portfolio management team headed by Filippo Casagrande, Head of Investments at Generali Investments Europe. Casagrande has over 20 years of asset management experience and has been at Generali Investments Europe since 2009. He graduated in Economics from Bocconi University, Milan. Fabrizio Viola, 12 years of experience, will be deputy Portfolio Manager.
The portfolio management is supported by 12 macroeconomic analysts with 16 years of average experience who provide market outlooks and views. Furthermore, there are 12 credit analysts with 11 years of average experience who provide in-depth analysis on the corporate bond market. All activities are controlled by the risk management team, which is actively involved in the process, to ensure all risk guidelines – including a VaR capped at 6% – are met.
Since May 2014, Generali Investments SICAV Absolute Return Credit Strategies has more than doubled its fund volume to more than €520 million.
In September 2014 Global Evolution visited Romania to get better insight on whether there is any upside to the current slow growth environment in the coming quarters. With respect to the weak growth and low inflation Lars Peter Nielsen, Senior Portfolio Manager at the firm, was also interested in getting a stronger sense of the subsequent path of monetary policy. Furthermore he wanted to examine if the current IMF program is dead or if there is reason for optimism with respect to reactivating the program after it went off-track during the summer. Finally, the aim was to get a better sense of possible surprises in the presidential elections (1st round scheduled for 2 November), or if incumbent Prime Minister Victor Ponta is a certain winner.
During the trip Global Evolution met with Central Bank officials, government officials, IMF, World Bank, local banks and local asset managers. These are some comments by Lars Peter Nielsen on the key findings from this trip.
Recession in H1 2014
After a reasonably strong economic performance in 2013 growth has slowed dramatically in 2014 thereby leaving the country in technical recession in the first half of 2014 with two consecutive quarters of negative growth.
It is primarily investments that have taken a big hit in the last couple of quarters.
According to the Ministry of Finance we will see stronger public investments in the second half of 2014 as several projects co- financed with the EU will start coming online. Furthermore, the government has already announced that the “special construction” tax will be lowered again, which should help private investments as well. Finally private consumption is also expected to pick up. All that said it is unlikely that we will see a strong economic rebound and full year 2014 growth is likely to settle in the 1.5-2.0% range. For 2015 most market participants expect growth around 3%, which in our opinion would be a reasonable growth rate. However, we are also a bit skeptical since the government will have to tighten its fiscal stance further if it is to comply with the demands from EU.
Inflation running very low
Like most of Eastern Europe inflation is running very low and as for the rest of the region a lot has to do with declining food inflation, weak growth and deflationary pressure from the Euro zone. It is very difficult to see inflation in the short to medium term moving above the Central Banks target of 2.5% +/- 1%-point.
Expansionary monetary policy
The backdrop of weak growth and low inflation has seen the Central Bank pursuing a relatively expansionary stance which has resulted in a 725bps cut in the policy rate since the peak in 2008 of which 200bps have been cut since July 2014. Currently the policy rate stands at just 3%. The Central Bank will be very vigilant about the exchange rate and adjust the short term rate accordingly to secure a very stable EURRON in the 4.40 – 4.45 range. This means higher interest rates whenever there is pressure on the currency. The bank’s sensitivity towards the exchange rate is due to the high pass- through to inflation and the still relatively high level of FX denominated borrowing by households and companies. That being said we still believe the Central Bank is biased towards pushing rates lower whenever there is room for it.
IMF program off track
The current stand-by program (SBA) went off track in June when the IMF visited the country for the third review under the program. The disagreements are on some structural reforms, privatizations and not least uncertainties on the 2015 budget. The IMF is aware that it is impossible to make adjustments to the budget ahead of presidential elections in November so the fund has agreed to postpone negotiations till after the elections. From a funding perspective the program is not important but it is still a good anchor to have and it would be a negative signal if the program was cancelled. We think the program will come on track again even though the negotiations will be tough.
Politics – Victor Ponta most likely the next president
Current Premier Minister Victor Ponta remains favorite to win the presidential elections in November but it is not a given. Apparently the opposition candidate, Klaus Werner Iohannis, from the National Liberal Party is gaining ground and is now seen as a serious contender. Klaus Werner Iohannis has been the mayor of Sibiu since 2000 and is credited for turning Sibiu into one of the most popular tourist destinations in Romania. We don’t see the election as a real risk since either we will have more or less the status quo of Victor Ponta, albeit with changes to the government since Ponta can obviously no longer be prime minister, or we will have an even better outcome if Klaus Iohannis wins.
Valuations
Even though nominal yields have been on a long term downward path we still think that valuation is reasonably attractive since real rates have moved higher due to the very low inflation. That being said we are very much aware of a possible uptick in inflation later in the year and will react promptly to higher food inflation numbers.
The exchange rate also seems reasonably fairly priced if you look at long term REER trends with the current level very close to the 5 year moving average. Furthermore we believe the Central Bank will hold the currency very stable against the EUR in the 4.40 – 4.45 range for the remainder of 2014.
To conclude we are neutral on Romania FX vs. EUR but see further possible gains in the bond market during Q4, 2014. We will be very mindful for a possible uptick in food inflation that can put upward pressure on headline inflation and end the downward trend in nominal yields.
Lars Peter Nielsen, is Senior Portfolio Manager at Global Evolution.
Global Evolution, an asset management firm specialized in emerging and frontier markets debt, is represented by Capital Stragtegies in the Americas Region.
You may access the full report through the attached pdf file.
Tim O’Hara. Foto de Credit Suisse. Credit Suisse anuncia cambios en su Comité Ejecutivo y en su banca de inversión
Credit Suisse announced appointments to the Executive Board, changes to the leadership of its Investment Banking Division, and the appointment of a new CEO of Asia Pacific. These changes will take immediate effect.
Jim Amine and Tim O’Hara have been appointed to the Executive Board and will join Gaël de Boissard to head the Investment Banking Division.
Helman Sitohang will assume the role CEO of Asia Pacific.
Eric Varvel has decided to step down from the Executive Board and assume the role of Chairman Asia Pacific and Middle East Regions.
Gaël de Boissard, Jim Amine and Tim O’Hara will partner in leading the Investment Banking Division. Jim Amine will continue to have responsibility for the Investment Banking Department, while Tim O’Hara will continue to head the Equities business. Gaël de Boissard’s role remains unchanged. He continues to head the Fixed Income business and remains the CEO of Europe, Middle East and Africa and a member of the Executive Board. Jim Amine and Tim O’Hara will join the Executive Board and report directly to the CEO.
Helman Sitohang will assume the role of CEO of Asia Pacific, reporting directly to the CEO. He will also continue to retain his role as Head of the Investment Bank for Asia Pacific. APAC is the region with the highest economic growth and Credit Suisse is continuing to allocate additional resources to accelerate and maximize the growth opportunities in this region.
Eric Varvel will assume the role of Chairman Asia Pacific and Middle East with a primary focus on our most important clients and assisting senior management on strategy. Eric will step down from the Executive Board, but will continue to report to the CEO in his new role.
Urs Rohner, Chairman of the Board of Directors of Credit Suisse, said: “In our Investment Banking Division, Eric Varvel and Gaël de Boissard have been instrumental in adapting our business to the new market and regulatory environment. Jim Amine and Tim O’Hara have also been integral to the success of the division, with our Investment Banking Department and Equities businesses demonstrating strong results and great momentum. I believe that the combination of Jim, Tim and Gaël will provide the right partnership to drive the business forward.”
Brady Dougan, CEO of Credit Suisse, said: “Eric Varvel has done a great job as CEO of Asia Pacific and I believe will provide important continuity of management and with client relationships in the Chairman role. Helman Sitohang has been instrumental in the success we have achieved to date. Moving into the CEO role is a natural progression and I believe he, along with the strong management team we have in the region, will be able to produce excellent results, demonstrate growth and build on the impressive momentum we have in Asia Pacific.”
Composition of the Executive Board as of October 17, 2014 − Brady W. Dougan, Chief Executive Officer − James L. Amine, Head of Investment Banking – Investment Banking Department − Gaël de Boissard, Head of Investment Banking – Fixed Income; Regional CEO of EMEA − Romeo Cerutti, General Counsel − David R. Mathers, Chief Financial Officer and Head of IT and Operations − Hans-Ulrich Meister, Head of Private Banking & Wealth Management and Regional CEO of Switzerland − Joachim Oechslin, Chief Risk Officer − Timothy P. O’Hara, Head of Investment Banking – Equities − Robert S. Shafir, Head of Private Banking & Wealth Management and Regional CEO of Americas − Pamela A. Thomas-Graham, Chief Marketing and Talent Officer and Head of Private Banking & Wealth Management New Markets
Steve Drew, responsable de Crédito de Mercados Emergentes en Henderson Global Investors. Gane quien gane las elecciones es posible que Brasil se enfrente a años difíciles
Steve Drew, Head of Emerging Market Credit at Henderson Global Investors, has provided a brief analysis on the first round of the Brazilian elections over the weekend. He believes the incumbent, Dilma Rousseff, will be re-elected president. He added that voters are split between more of the same – an incumbent promising investment in social programs and infrastructure, or the promise of fighting inflation and reform. No matter who wins the election, Brazil is likely to go through a challenging time in future.
Steve Drew, Head of Emerging Market Credit at Henderson Global Investors said:
“As expected, the results of the voting on Sunday did not produce a clear winner in the presidential election, taking the battle to a second round vote on October 26 between the incumbent, Dilma Rousseff, and her rival, Aécio Neves.
The runoff campaign will be a battle between opposing visions for development in Brazil. Opinions are divided as to which candidate will ultimately win the presidency. Voters are split between more of the same, with an incumbent president that is promising investment in social programs and infrastructure, and one that aims to fight inflation and spur economic growth with much needed reforms. The winner on October 26 will likely be the candidate who can persuade the third-placed Marina voters that their program is good for the future of Brazil. Many investors are hoping the pro-business Neves will implement market-friendly policies, fight inflation and usher in badly needed reforms aimed at spurring growth in the country. There is evidence that investors are currently long risk assets in Brazil with big capital inflows primarily from Russia, but also from crossover US accounts.
While a ‘Neves win’ would initially lead to risk-on sentiment in the markets, a ‘Dilma win’ would do the opposite, as investors perceive that reforms are off the agenda. However, even the risk-on mood may be temporary as the reality bites of how Brazil can re-engineer growth in a faltering economy.
While it is likely that, in the case of a ‘Dilma win’, Brazil’s sovereign credit rating could be downgraded to junk within 12-18 months, a ‘Neves win’ may only push the downgrade further down the line as growth projections for Brazil for either candidate are not great enough for a country fighting inflation to escape a downgrade.
The downgrade would have negative consequences for Brazilian companies, where even the country’s biggest asset, the quasi-sovereign Petrobras oil company, would find it more difficult to refinance its c.US$140bn of debt. The conditions for other companies would be even tougher.
In the case of a ‘Neves win’, the initial risk-on reaction would create investment opportunities, the best of which will likely be found in liquid instruments — taking a view on the appreciation in the currency or short-dated local real bonds. The price of Brazil’s external debt would also rally as credit spreads would contract.
However, any depreciation in the currency will be largely good for the corporate sector, giving companies room to maneuver in cutting prices to raise export volumes. Companies such as Fibria and Suzano (pulp and paper), and Marfrig (food processing) are currently trading quite rich to their fundamentals and could be among those benefiting from the drop in the real.
Regardless of who wins the election, and currently it looks more likely that Dilma Rousseff will be re-elected as president, Brazil is likely to go through a challenging time in the years to come. Given the poor prospects for growth, with inflation above target and the massive underinvestment in infrastructure, badly needed reforms will simply not be coming soon enough.
“From a risk/reward stance, we believe Brazil should remain an underweight position for the foreseeable future. There will be times to go long the market, but it should happen on an opportunistic and tactical basis”, concludes Steve Drew, Head of Emerging Market Credit at Henderson Global Investors.
Franklin Templeton Investments has announced that international investors can now access its first multi-manager, multi-strategy Luxembourg-registered Sicav fund focused on alternative investment strategies.
The fund, called Franklin K2 Alternative Strategies Fund, was soft-launched a month ago and follows a similar strategy to the US-registered Franklin K2 Alternative Strategies Funds.
Based in Stamford, Connecticut, the investment team consists of the fund’s co-lead portfolio managers David Saunders, co-founding managing director of K2 Advisors, Brooks Ritchey and Rob Christian, both senior managing directors, K2 Advisors.
The fund aims to combine Franklin Templeton’s top-down market views with low volatility and capital appreciation whilst providing a low correlation to traditional asset classes.
David Saunders commented: “In today’s volatile, low interest rate environment, many investors are looking for actively-managed investment solutions from established managers employing strategies that can help reduce volatility in unpredictable markets while providing attractive risk adjusted returns.”
Old Mutual Global Investors will open an office in Edinburgh as part of the formation of a Fixed Income Absolute Return Team, which will launch its activities in 2015, including supporting a new range of absolute return fixed income products.
Russ Oxley has been appointed head of Fixed Income Absolute Return Team, and be joined by Huw Davies, Joshua Heming, Adam Purzitsky, Paul Shanta and Jin Wong. The new team members have previously worked at Ignis Asset Management.
Oxley will report to Julian Ide, CEO of Old Mutual Global Investors.
OMGI currently has a nine strong Fixed Income Team, headed by Christine Johnson, who reports to Stewart Cowley, investment director, Fixed Income and Macro. That team will remain in place.
Ide said: “This is a very exciting development for Old Mutual Global Investors. By adding the investment skills of this new team to our existing highly regarded team, we will have one of the asset management industry’s most powerful fixed income operations. I look forward to working with all of this invigorated team next year.”
The manager has made a number of appointments over the past couple of years as it targets a top five market position in the UK, as well as expanding into other markets.
CFC rules, Anti elusive legislation and Automatic Exchange of Information are game changers for the wealth planning industry of private clients. This is notorious in Europe already. In Latin America, we are just starting to see the tip of a huge iceberg.
Only 2 years ago, most private bankers in Latin America did not believe that the OECD was serious. The majority claimed that this whole transparency movement was just for the press and that local authorities were not prepared to handle this. All of them have now realized that “something” has changed and are now keen to listening and gathering information. Some go even further and are taking actions (incorporating new platforms, new legal structures, hiring experts, being proactive in speaking to their clients about this, etc.).
What has changed?
Local authorities from Latin America´s most sophisticated countries started to pass comprehensive CFC rules combined with Anti Elusive legislation. To date, all the most developed countries except Brazil* have abided to these rules (Mexico, Peru, Chile, Colombia, Ecuador Argentina, Venezuela…). Even in Brazil, local lawyers are convinced that their country will include them soon.
In addition, early this year the OECD announced that in 2017 the world would have automatic exchange of information. Since that announcement, more than 70 countries pledge to this initiative. The OECD already prepared various reports on how this exchange will take place and in October more measures are expected to be implemented. Some claim that 2020 is more realistic than 2017…this could be, but it´s irrelevant. The point here is that it is coming and will be here very soon.
Last, in order to comply with FATCA, Latin American countries have started to sign intergovernmental agreements (IGA) with the EEUU to exchange information automatically.
What do clients need?
First, to become aware, they need to stop believing that nothing has changed. Second, they need quality advice. Many family offices in Latin America are including local and international experts as key players in their business, to provide them with the most adequate tax and succession planning in order to provide the best advice to their private clients.
Third, act in consequence. Clients need to sit with their Family Office and experts to evaluate if the current legal structure (companies, trusts, foundations, private funds, etc.) that they have in place is still good enough to obtain the objectives they want. “Why do it now if you can do it later…”
As a Latin American I am fully aware that most of us wait until the last minute to solve various issues. All of us do. The truth is that in this particular aspect, the changes have been so big and will continue to be, that the last available moment is already here. Later is now. The good news is that there is good and serious planning available, fully compliant with the new world.
Pedro Vargas Head of Wealth Planning Aiva – A member of the Old Mutual Group
