Photo: kuhnmi. Credit Suisse Sells its Wealth Management Business in Italy to Banca Generali
Credit Suisse Italy and Banca Generali have announced that they have reached an agreement for the sale to Banca Generali of the Italian affluent and upper affluent private banking operations of Credit Suisse Italy.
The transaction will entail the sale of the business line including, inter alia, the agency contracts of about 60 financial advisors of Credit Suisse Italy, accounting for a current total portfolio of over €2 billion AUM. Consideration for the sale will fall within a range of €47 to €50 million and will be determined on the effective date of the transaction, planned for November 2014. Taking advantage of favourable market conditions, with rates at a low, Banca Generali will finance the acquisition primarily through debt, with the remainder in cash. The transaction is subject to prior authorisation by the Bank of Italy, as well as satisfaction of the additional contractually established conditions.
Through this acquisition, Banca Generali aims to meet the growing demand for qualified investment advice in Italy by speeding the development of its network of financial professionals and private bankers, who are compatible and well matched with their colleagues at Credit Suisse in terms of their profiles, portfolio size and geographical positioning. Through the deal, Banca Generali will further reinforce its presence in strategic areas in Italy.
Credit Suisse is expediting the implementation in Italy of its global strategy of focusing its asset management business on entrepreneurs and large families who can benefit from its integrated advisory model with both asset management and investment banking advice.
The CEO of Banca Generali, Piermario Motta, commented: “We are extremely satisfied with the agreement reached with Credit Suisse. This deal is a further step forward in the extraordinary growth process on which we have embarked in Italy. I am proud to have the opportunity to welcome to Banca Generali a group of colleagues with a strong track record from a highly prestigious international company. They will help us reach our investors with increasingly broad, effective coverage.”
Giorgio Riccucci, Head of Private Banking Market Area Italy, Credit Suisse, stated: ”I am highly satisfied with the agreement reached with Banca Generali, a strategic acquirer with which we share the same values, along with a high degree of proficiency and experience in best serving our clients with dedication. This deal, along with the recent acquisition of Morgan Stanley’s private banking operations in Italy, will allow us to actively pursue our project of focusing on HNWI and UHNWI clients. In the UHNWI segment alone, we recorded inflows of assets under management of over €1 billion in the first six months of 2014. We will continue in this direction. We have planned significant investments of both an organic and non-organic nature. I would also like to thank all of my colleagues who have contributed to the development of Credit Suisse’s private banking business in Italy. I am certain they will find Banca Generali to be a cutting-edge partner with which to continue their professional growth in the long term.”
China Qing Dynasty Flag 1889. Matthews Asia Awarded QFII License to Invest in China’s A-Share Market
Matthews Asia has been awarded a Qualified Foreign Institutional Investor (QFII) license by the China Securities Regulatory Commission (CSRC) and a US$100 million quota from the Chinese State Administration of Foreign Exchange (SAFE).
The award of a QFII license and quota enables the firm to invest, on behalf of its clients, up to US$100 million directly into China’s domestic securities market, including the market for China A-shares. Currently, direct investments into this market by foreign investors can only be made with a QFII license and quota. The quota will be made available to funds managed by the company, including its US-domiciled open-ended equity mutual fund family, Matthews Asia Funds.
China’s A-share market is the fifth largest public equity market in the world. It consists of over 2,300 companies totalling approximately US$2.6 trillion in market capitalization1 and offers investors the opportunity to invest directly into a growing market of companies that are benefiting from China’s economic transformation. The breadth and depth of the market also presents a much bigger pool of investment opportunities compared to Chinese companies listed on the H-share market in Hong Kong or the B-Share markets in Shanghai and Shenzhen.
The A-share market is considerable, but Matthews Asia believes that significant improvements in corporate governance standards are still required. The firm believes this supports the need to conduct extensive due diligence on prospective investments and highlights the value of taking a long-term active management approach.
Matthews Asia is a specialist investment manager located in San Francisco. With US$26.6 billion in assets under management as of June 30, 2014, the firm focuses on long-term investing solely in Asia.
Daniel Diaz. Foto: Linkedin. Dani Díaz Leaves JP Morgan and Joins Credit Suisse as a Senior Banker
According to information provided to Funds Society by sources familiar with the appointment, Daniel Diaz Torroba has joined the ranks of Credit Suisse as a senior banker serving UHNW clients in Latin America.
With over 17 years experience in the private banking industry, he joins the Swiss institution, from JP Morgan, where he has worked for almost five years as executive director specializing in high net worth families and institutional clients. Previously, Diaz held various positions in private banking and investment banking in such well-known firms as UBS and CITIBANK.
Diaz has a degree in Business Management and Administration from the University of Navarra and has an MBA from Darden Graduate School of Business.
Foto: Mattbuck. Beamonte Investments entra en Kiwii Capital, una startup mexicana dirigida a pymes
Beamonte Investments together with its affiliates, “Beamonte”, a leading private investment firm in Boston, announced that it has invested in Kiwii Capital SAPI, a Mexico City start-up dedicated to providing factoring to SMEs. Kiwii was launched in late 2013 by the Mexico team of Beamonte Investments, but just recently finalized funding.
With Kiwii, Beamonte Investments opens its first operation as a company builder in Latin America. The format turns the typical startup formula on its head by identifying robust business models, selecting them as projects, and then getting the best entrepreneurs to partner with to implement them. Beamonte Investments offered the seed capital as well its global network to ensure proper financing. Beamonte has significant experience managing non-banking financial institutions in Mexico, having managed approximately 150 million US dollars in credit assets in the country.
Kiwii Capital is run by Salvador Gaytan, a veteran of commercial banking. “I’m thrilled to be part of this project with Beamonte Investments because the product that we offer helps SMEs to manage their cash flow to grow to the next level. In Kiwii we work with companies with Annual Sales between MXP 15 million to 70 million that provide products or services to large corporations.”
Kiwii Capital is specifically designed to serve small and middle market family-owned operating enterprises in Mexico. Kiwii offers Factoring with terms of 30, 60 and 90 days, helping small businesses to stabilize their cash flow. In factoring, the underlying assets are the seller’s accounts receivable, which are purchased by the factor at a discount. The remaining balance is paid to the seller when the receivables are paid to the factor, less interest. Kiwii will be raising USD 15M in the next 12 to 18 months .
Luis Felipe Trevino, Managing Director of Beamonte and Chairman of the Board at Kiwii Capital commented, “We are exited to build a company from the ground up. As with any other in our portfolio, Kiwii is going to receive our support, advice, network and expertise, but our team members will help Salvador to run the day to day operations. Over time, we will attract talent to grow the company to the next level.”
Foto: Dan Smith, Adrian Pingstone, Yann, Alexandra Studios. Compiled by Anonymous101. What the ECB’s Decision Means for Emerging Markets
The European Central Bank (ECB) introduced three measures aimed at loosening monetary policy further and at supporting lending to non- financial companies. These measures will not only address the deflationary concerns which policy makers are worried about, but also help boost domestic demand, growth, as well as external demand for imports, which will directly benefit emerging market countries. The three measures in more detail are:
1.Refinancing rate: It reduced its main refinancing rate, at which it lends the majority of liquidity to the banking system, by 0.10% to 0.15%.
2.TLTRO: It introduced targeted longer-term refinancing operations (TLTRO). This will enable ECB bank counterparties to initially borrow up to 7% of their loans to the euro-zone non-financial private sector, excluding mortgages.
3.QE: Last, but by no means least, the ECB announced that it would “intensify preparatory work” on a scheme promoting the purchase of asset-backed securities, a form of quantitative easing (QE).
What do these measures mean for emerging markets?
According to Peter Eerdmans Co-Head of Emerging Market Fixed Income and Werner Gey van Pittius Co-Head of Emerging Market Fixed Income at Investec AM, there are four key points:
1. Impact on emerging market central bank policy makers
Central bank policy makers from Mexico to China, Turkey to Hungary have been more dovish taking into consideration not only their domestic economic circumstances but also the prevailing global rate policy of the major central banks. The expectations for easier monetary policy in the euro zone have maintained the global trajectory of ample monetary liquidity among the major central banks.
2. Domestic growth in emerging markets
Lower domestic interest rates and cheaper funding for corporates and governments amid contained inflationary pressures should further boost domestic growth across the regions. This has been a particular long-term aim of politicians and policy makers who wish to rebalance their economies and diversify away from the traditional focus on exports to developed economies. Our view remains that these efforts will take some time to rebalance, and in the meantime exports will continue to be the largest driver of growth.
3. Trade and exports
As well as suppressing domestic interest rates, another benefit from global liquidity is an increase in growth and trade, which eventually drives emerging market exports.
So far, the picture on world trade seems quite favorable for emerging markets. The question remains, however, what impact would the ECB’s recent moves have for trade with Europe, and which regions in particular are likely to benefit from that.
4. Ample global liquidity, low volatility and search for yield
The last, but by no means least, impact of ECB policies on emerging markets is the continuation of ample liquidity. This has taken volatility levels to lows not seen since before the great financial crisis.
Ample liquidity, low volatility and a clear trajectory by central banks to keep monetary policy accommodative have accentuated the search for yield across global markets. We continue to see demand for yield and particularly for emerging market yield, which offers attractive valuations, stronger fundamentals than developed markets, and positive real yields. The one caveat is that historically these periods of sub-normal volatility have not lasted more than two to three years, but, in our view, policy makers are still a few years away from raising concerns on liquidity given benign inflationary pressures and output gaps.
In conclusion, Investec AM expects he latest ECB moves not only to maintain the increasing demand for exports from emerging markets, but also to boost growth dynamics within emerging economies through more dovish central bank policies, as well as improving market sentiment through ample liquidity, clear communication and low volatility.
Campaña publicitaria Bankinter . Jose Manuel Garcia de Sola Joins Bankinter as Non-Executive Chairman of Bankinter’s Asset Management Unit
Bankinter, a Spanish lender and insurer, hired Jose Manuel Garcia de Sola, a former senior executive vice-president of Banco Santander’s Banif private bank, said to Bloomberg four people familiar with the information.
Garcia de Sola will be non-executive chairman of Bankinter’s asset management unit, which oversees 11.4 billion, said the people. Garcia de Sola left Santander six months ago after a 15-year career at the bank including 11 years at Banif, where he worked alongside Santander Chief Executive Officer Javier Marin.
At Santander, Garcia de Sola most recently led business development at Santander’s asset management unit in the U.S. for the last two years.
Phil Apel, Head of Fixed Income and James McAlevey, Head of Interest Rates at Henderson. Recent Events Affecting Global Fixed Income Markets
James McAlevey and Phil Apel, members of the Henderson Fixed Income Strategy Group (ISG) discuss the big developments of recent weeks, including the 50 basis points interest rate cut in Mexico, the buoyant US non-farm payrolls number and the package of monetary policy measures announced by the European Central Bank at its June meeting. Discover what this means for portfolio positioning in terms of country exposures, yield curve positioning and currency preferences.
James focuses on recent developments:
50 basis points cut by Bank of Mexico (most favoured of our EM markets but lightened up some of the exposure after recent strong gains)
Non-farm payrolls print (first time four consecutive months of 200,000 plus net job gains occurred in last 10 years), underscores fact that US economy is at more advanced stage in economic cycle and facing greater interest rate risk
Aggressive policy package announced by European Central Bank. Will not see full impact of negative rates until fully enacted but could have meaningful behavioural consequences in terms of how economic participants react to being charged for holding deposits. Greater liquidity should help to anchor short rates lower for longer. Targeted Longer Term Refinancing Operations (TLTRO) is contentious: it is not clear that banks need the money or that enterprises are clamouring for the cash but the terms offered are attractive and the four year term is longer than expected.
Phil explains portfolio positioning:
Taking little interest rate risk and limiting exposure to US Treasuries, prefer Europe
Intermediate bonds (3-5 year part of curve) should benefit most from negative rates in Eurozone.
Peripheral eurozone govt debt beginning to behave like core govt bonds but with yield pick-up
Credit assets have performed well in Eurozone, seeing better relative value in sterling market
Within currency exposure, favour USD over euro
Portfolio positioning reflects ISG views and has direct relevance to the Henderson Unconstrained Bond Fund.
Foto: Rafa Esteve . MFS Introduces Managed Wealth Fund
MFS Investment Management announced the launch of MFS Managed Wealth Fund, a flexible equity fund that seeks to provide capital growth with moderate volatility. The fund also aims to mitigate the effects of significant declines in equity markets. In seeking to achieve its total return investment objective, the fund will invest in three underlying MFS funds — MFS Growth Fund, MFS Value Fund and MFS Institutional International Equity Fund — for exposure to US and international equities. The fund will also use derivative instruments to manage its net exposure to the equity market, based on its management team’s view of risk and reward opportunities.
Portfolio manager James Swanson, MFS’ chief investment strategist, will serve as the fund’s lead manager. Joining him are Michael W. Roberge, MFS president and chief investment officer, William J. Adams, co-head of MFS’ Fixed Income Department, Barnaby M. Wiener, an international equity portfolio manager and Robert M. Almeida, Jr., an institutional equity portfolio manager. These portfolio managers are responsible for determining the target strategic allocations to the underlying funds and actively managing the fund’s net asset class exposure.
MFS expects the fund’s target allocation to be equally weighted among the three underlying funds. The management team will have the ability to reduce the fund’s exposure to the equity market and/or currency markets and potentially add exposure to additional asset classes primarily through the use of a tactical overlay. The overlay will use derivative instruments, including futures, forward contracts, options, structured securities and swaps. In addition, MFS may seek to limit the fund’s exposure to certain extreme market events.
View of Paseo de la Reforma in Mexico City. Photo: Alejandro Isla. José Santamaría Joins BBVA Compass’ International UHNW Client Division
As confirmed to Funds Society by sources familiar with the appointment, BBVA Compass has just recruited José Santamaría, a professional with over 20 years experience, to its international UHNW clients’ department. Santamaría has just taken up his new post in New York at the beginning of July.
The company’s international UHNW clients’ department is headed by Manuel Sanchez Castillo and depends on the international wealth management division, which in turn is managed by Hector Chacon.
Santamaría, a private banker specializing in high net worth clients, has extensive experience in asset management and investment banking.
Santamaría comes from Deutsche Bank, where he held the position of manager in New York for three years; his role also involved managing the bank’s relationship with Latin American private banking clients.
Prior to joining Deutsche Bank in 2011, Santamaría founded, and was CEO of Meridian Gestión Patrimonial in Madrid, a multi-family office specializing in wealth management solutions for European and Latin American families, as is listed on their Linkedin profile.
Before that, Santamaría was a banker for 14 years at JP Morgan Chase in New York, Geneva and Madrid, managing one of the biggest books of private banking clients. Santamaría also worked as a portfolio manager in Spain, Switzerland and the United States, where, amongst other functions, he was responsible for the creation of global discretionary portfolios, management of fixed income modules in discretionary accounts, and the creation and support of the Luxembourg mutual funds’ platform.
Santamaría has also worked at UBS in Switzerland, where he was responsible for Investment Consulting and Business Development for the Americas, besides being a frequent speaker on alternative investments at numerous events and conferences in the region. He was also a member of the Key Client Group for the Americas in Geneva.
Previously, BBVA Compass’ new member worked for Citibank in Zurich as a trainee, as risk manager for a hedge fund, and as bond portfolio manager for Latin American clients and prior to that for a real estate firm in Spain.
Santamaría has a degree in Business Administration from the Autonomous University of Madrid and has a Masters’ degree in Financial Management & Administration from the European Business Institute.
Foto: German Federal Archive. Asia's Thirst for Milk
When I was a boy growing up in Northeastern China, I recall waiting every morning for the fresh milk delivery. A man from a local “milk station” would ride up in a three-wheeled cart and hand a glass bottle of milk to my mother. She would then heat it, as was customary then, so I could have it with my breakfast. While I wouldn’t say the milk was necessarily a luxury item in those days, it was still considered precious enough that my parents never really drank it themselves, saving it instead for me and my sisters.
Asia’s per capita milk consumption is still very low compared to most of the developed world. But demand for dairy has increased over the years with income growth and changing tastes. As a result, the dairy industry across the region is flourishing, new brands are entering the market and expanded product lines are adding to the number of choices for consumers. Analysts have predicted that consumption of dairy products for the six main Association of Southeast Asian Nations (ASEAN)* should grow by 2.4% per year through 2020.
Today, I am amazed by the ever-widening selection of milk products my father purchases for my son when we visit him in China. He stocks up with boxed milk known as Ultra-High Temperature (UHT) milk, yogurts, flavored milk drinks as well as gallons of fresh milk in plastic containers. Milk is no longer the precious commodity that parents reserve for their children. Almost everyone at the breakfast table now drinks milk, and also seems to enjoy it later in the day.
A couple decades ago, milk in China typically came just from local dairies. More recently, regional and even, national firms have emerged. In the face of rapid growth, some manufacturers have had their share of misfortunes. Over the past decade or so, Japan and South Korea both have experienced sporadic outbreaks of foot-and-mouth disease, which harmed their respective dairy industries. The Korean government culled hundreds of thousands of cattle, which led to a shortage of raw milk and depressed the production of certain milk products.
Chinese firms were also marred by a series of scandals over milk and milk formula quality. Following the incidents, China’s government tightened regulations and inspections. Some dairy companies collapsed, and those that survived began to pay greater attention to safety issues in attempts to regain consumer confidence.
For the sake of quality control, many Chinese dairies have built their own cattle farms. While this has alleviated some supply shortages, it has also allowed firms to branch out into other areas such as cattle feed and alfalfa planting. Some farms have, thus, become more integrated, and may allow for greater profitability by capturing a broader spectrum of the value chain.
Companies today have expanded and are working toward creating strong brands. They seek to build the same level of trust among their consumers that my mother had in our local dairies.
