Vicent Steenman, nuevo coordinador mundial de Análisis de Carmignac. Foto cedida. Carmignac Appoints Vicent Steenman Global Coordinator of Analysis, a newly created position
Carmignac Group today announces the creation of a Global Research Coordination role as well as promotions in the European and Emerging Markets teams for the benefit of the whole Funds range.
Vincent Steenman is appointed to the newly created role of Global Research Coordinator, whose objective is to increase cross-fertilization of investment ideas between the Paris and London research teams. Prior to this appointment, Vincent, 33, was in charge of the capital goods sector at Carmignac, partner at Zadig Asset Management, analyst at LVMH-Groupe Arnault Family Office. He graduated from Ecole Polytechnique in Paris and holds a Master’s degree in Finance from HEC School of Management in Paris.
Edward Cole is appointed today co-manager of the fund Carmignac Emerging Patrimoine (960M€). Edward will co-manage the equity component of the Fund alongside Simon Pickard and Charles Zerah who keeps managing the fixed income component. Edward, 38, so far analyst on EMEA at Carmignac, has seven years fund management experience co-managing emerging markets long-only and hedge funds at Ashmore Group and Finisterre Capital, and seven years as an EMEA equity strategist, notably at JP Morgan Securities. He graduated from the University of Bristol with a BSc in Politics and from the London School of Economics with an MSc in International Development.
Malte Heininger is appointed sole portfolio manager of Carmignac Euro-Entrepreneurs (413M€), a small and mid caps Fund he has co-managed with Muhammed Yesilhark since January 6th 2014, when they both joined Carmignac. Before Carmignac, Malte, 33, worked about 4 years at SAC Global Investors’ London office, where he was a member of Muhammed Yesilhark’s team, managing a large European equity portfolio, and was a former investment banker at Morgan Stanley. He graduated from ESCP-EAP in Paris.
Wikimedia CommonsMiguel Angel Suarez, manager of LarrainVial AM’s International Equities. Courtesy photo . LarrainVial AM is Committed to Spanish Recovery Through a Long-Only Fund
LarrainVial Asset Management has just launched the fund LarrainVial Spain, “which aims to provide local clients with exposure to Spanish recovery, through our fund, but in the hands of experts who provide fundamental analysis and a focus on the long-term opportunities, as well as ample knowledge of companies, managers and the dynamics of each of that country’s sectors,” explained Miguel Angel Suarez, manager of LarrainVial AM’s International Equities, and the fund’s portfolio manager to Funds Society.
As to why a fund on Spain, Suarez said it comes at a time when “the upward phase in the Spanish economy’s cycle is just beginning. We must remember we are beginning to emerge from a troubled period of almost seven years duration, thereby there are still opportunities for buying cheap businesses, when the cycle is normalized (in 2 or 3 years), they are going to cost a lot more … So, as soon as domestic demand strengthens, credit ratingscontinue to improve, unemployment begins to decrease slowly, and credit begins to flow, the possibility of further repricing in that country is very high.”
The manager also added that the recovery has come earlier than was announced, and is being stronger than what everyone expected. “Exports to different destinations are growing at high rates, the labor market has eased, thanks to a positive and profound reform, and the financial sector has been almost completely sanitized. In addition, the tax reform announced some days ago lowers corporate taxes and creates a tax system which greatly favors entrepreneurs and investment and competitiveness, which has now improved greatly as compared to that of their European counterparts,” he said.
The new instrument, which was launched in June with daily liquidity, is aimed at institutional investors and high net worth individuals in Chile. In terms of strategy, Suarez explained that it is an actively managed, long-only fund, with high conviction that is agnostic to benchmark, and therefore has no major limitations in terms of sectors, market capitalizations or weight in the index. The portfolio turnover is low and is concentrated only in the best ideas (15 to 20) where the highest value is seen for its future appreciation potential.
Almost 25% is invested in the industrial sector, followed by banks with 23%. Media accounts for 19% and insurance and cyclical consumption weigh around 14% each. Finally, technology and telecommunications closes at 5%.
“The banking and insurance sector is the one which currently carries most weight in the portfolio, and we still see much upside there due to the recovery in domestic demand and lower bank’s funding costs. Especially in the case of the medium sized Banks, which are less covered by analysts outside Spain and more exposed to domestic recovery,” added the fund manager.
As for the expected return, although he added that they don’t have any expected returns, Suarez, said they are “very positive and we believe that given the timing of the business cycle in Spain, there is substantial potential of appreciation going forward.” In fact, he added, “We are firmly convinced that, in the coming years, the Iberian stock market should exhibit markedly higher returns than the European average, thereby strengthening the attractiveness and value currently available in equities, especially in medium sized companies, which are not as closely followed by analysts and where any increases in performance or valuations are sometimes very fast and difficult to anticipate,” he said.
Foto: Mattbuck. Henderson launches the Henderson Horizon Global Natural Resources Fund
Henderson Global Investors has added to its Horizon range with the launch of the Henderson Horizon Global Natural Resources Fund. The Luxembourg domiciled SICAV will be sub-advised by Australian based fund management group, 90 West. Henderson acquired an initial 32.3% shareholding in May 2013 and increased the holding to 41.4% in May 2014. Executive Chairman, David Whitten, will be lead fund manager.
The Fund will primarily invest in high quality liquid assets from a universe of more than 1,000 global natural resource companies with a market capitalisation in excess of US$2bn. The portfolio will typically consist of 40 – 60 global natural resource stocks operating in the mining, energy and agricultural sectors.
David Whitten, says, “The 90 West team believes opportunities in the sector are heavily dependent on the quality of the resource itself. The long-term trends of increasing population, prosperity and urbanisation, particularly among developing economies, are leading to a rising global consumption of natural resources. These demands, combined with a constrained supply for certain commodities, provide a favourable investment climate and are captured through the investment themes within the fund.”
David Whitten was head of global resources at Colonial First State from 1997 – 2010. He has managed the 90 West Global Natural Resources Fund (distributed in Australia only), which is run on a similar basis as the Henderson Horizon Global Natural Resources Fund, since July 2012.
The 90 West investment team includes three specialists with more than 80 years’ combined experience.
Photo courtesy of Banco Ficohsa. Banco Ficohsa cierra la compra de la banca de consumo de Citibank en Honduras
Banco Ficohsa announced it has completed the purchase of Banco Citibank de Honduras and Cititarjetas de Honduras, after receiving the required regulatory approvals. The transaction does not include Banco de Honduras, which conducts Citi’s corporate banking business in Honduras.
The acquisition is the largest transaction of its kind undertaken by a Honduran bank. Ficohsa now becomes the largest bank in Honduras and one of the top 10 banks in Central America.
The deal included an US$ 80-million capital contribution, which brings Ficohsa’s total net worth to approximately US$ 350 million, which represents 21% of Honduras’ total financial system’s net worth. The contribution is comprised of tier 1 and tier 2 capital.
“We are pleased with the regulators’ decision and thank them for their vote of confidence. This is a very important step in our expansion and growth strategy,” said Camilo Atala, president of Grupo Financiero Ficohsa. Atala added, “This transaction, and the associated capital contribution, reaffirm our continued commitment to the development of the country.”
The combined entity will have a loan portfolio of US$2 billion, a deposit base of over US$1.6 billion and US$ 2.7 billion in assets, which represent 20% of the total assets of the Honduran financial system (using pro forma figures of the companies combined as of March 31, 2014.)
The acquisition strengthens Ficohsa’s service offering, which will become the most robust consumer banking portfolio in the country, while complementing its primary focus on the corporate segment. It will also strengthen its footprint, reaching 450 ATMs (the largest in Honduras) and 150 service points.
As a next step, Banco Ficohsa must submit a merger plan to the regulator, whose primary objective is to ensure a smooth transition for customers and employees of both institutions. The merger plan requires regulatory approval prior to its implementation.
The two entities will be fully merged once all assets are transferred. This is expected to take place during the first quarter of 2015. In the meantime, both entities will continue to operate independently with no change in current operations.
“Citi has been present in Honduras for almost 50 years and we are committed to the country,” said Reina Irene Mejía, Citi’s Country Officer in Honduras. “We are not leaving Honduras. Our strategy is to focus our operations on our Corporate Banking business to strengthen our position and continue offering top quality services in those areas where we can add the most value, backed by Citi’s unique global network.”
Today, July 1 2014, is a ‘dark day for the 7 million Americans living overseas and for U.S. firms that operate globally’, according to the chief executive and founder of deVere Group, Nigel Green.
The assessment from Nigel Green, founder and CEO of deVere Group, which has 80,000 mainly expat and international investor clients, comes on the day America’s controversial global tax law, FATCA, (Foreign Account Tax Compliance Act) is officially brought into effect after years of delays.
Under FATCA, all non-U.S financial institutions are required to report the financial information of American clients who have accounts holding more than $50,000 directly to the IRS.
Mr Green comments: “It is claimed by its proponents that this new tax act is designed to catch tax evaders who illegally shelter money offshore. This is a noble aim. But FATCA cannot possibly tackle this important global issue effectively due to its dragnet, untargeted approach.
“Instead what it does – because of its plethora of serious unintended adverse consequences – is to brand Americans who choose to live and/or work overseas as financial pariahs. U.S. expats are now routinely rejected from foreign financial institutions (FFIs), such as banks in their country of residence, because FATCA’s costly and onerous regulations mean Americans are now typically deemed more trouble than they are worth.
“Similarly, American businesses working in international markets are now often branded with a leprosy-like status. Clearly, this can only be detrimental to their global competiveness and could, in turn, hit American jobs and the long-term growth of the U.S. economy – which would then, of course, have far-reaching consequences beyond the U.S.
“All this to ‘recover’ an estimated $1bn per year, which is enough to run the federal government for less than two hours. “July 1 is indeed a dark day for the 7 million Americans living overseas and for U.S. firms that operate globally. “Thankfully, there are ways qualifying U.S. expats can mitigate FATCA’s adverse effects. One such solution is for the U.S. taxpayer with assets abroad of more than $50,000 to create a tax-efficient, supplementary overseas pension contract.”
The deVere Group CEO adds: “There are other important questions to be asked too about the wholly imperialistic nature of FATCA. Countries and FFIs have been coerced into complying with FATCA’s expensive, burdensome, privacy-infringing, sovereignty-violating regulations by the U.S. – or have to face heavy penalties. In effect, these countries and FFIs are now working as de facto IRS agents.”
Foto: Presidencia de la Nación Argentina. Argentina a través de los ojos de los bonos
Argentina’s long-running legal battle with a group of holdout bondholders is now in its penultimate stages. The US Supreme Court’s decision to deny its appeal, closes one of the key doors that could have led to a neat, market-friendly solution to the holdout problem.The outcome remains uncertain and much will depend on the pragmatism of the government. Price action is likely to remain poor while uncertainty prevails.
Accroding to Vivienne Taberer, portfolio manager at Investec Asset Management, it is a harsh ruling which neither the government nor the market expected, given the negative price action of the past few days. In an address to the nation, President Cristina Fernandez de Kirchner called the ruling, which could result in claims against Argentina of up to US$15 billion, “extortive”. There is support for this view in the country, with the opposition backing the government position to some extent but making it clear that a negotiated settlement would be the best outcome.
What are Argentina’s options from here? There are essentially four possibilities. The first and least likely option would be to default and restructure all outstanding debt. We believe that this has effectively been ruled out as the president has pledged to meet Argentina’s debt obligations, which arose during the Kirchners’ respective terms in office. This option would have the biggest impact on prices, resulting in sizeable further falls in bond prices from here. Despite the government’s recent statement that it would not pay the 30 June coupon to the holdouts, the asset manager do not expect a default on all outstanding debt. However, the likelihood of a technical default has risen, given the limited time between now and the end of the grace period for the coupon payment to be made.
The second option would be to pay the holdouts their US$1.5 billion claim in full. In our opinion this is also unlikely. The government, not unreasonably, believes that this could pave the way for more claims, from other holdouts and from holders of the restructured debt that could amount to as much as US$15 billion.
The third and fourth alternatives open to Argentina remain the most likelyand the ones which we believe the government will pursue concurrently. This is likely to result in volatile price action that will ultimately lead to further underperformance of Argentine bonds, and particularly those issued under New York law.
The third option would entail negotiating with the holdouts through the court of Judge Griesa. Argentina has based its opinion on Griesa’s statement that his ratable payment order does not force the country to default. The judge, however, is not in a position to force a settlement on the parties. Serious questions remain as to the holdouts’ willingness to accept a lesser settlement and Argentina’s willingness and ability to offer better terms than those received by the restructured bondholders.A deal that settles somewhere between meeting the holdouts’ demand for full payment and a price that reflected the same terms as received by the restructured bondholders would no doubt be significant and ultimately lead to a material rally in bond prices.
The last option would entail the government attempting to facilitate a local law swap and seek a way to continue paying the restructured bondholders. It is not at all clear how this would work in practice, and there are not insignificant risks that such a move could challenge Judge Griesa’s order. Given that Argentina is sending lawyers to negotiate with the holdouts, a swap of this nature will likely only happen once a default, even if it is only technical, has already occurred. If this happened, we would expect to see continued pressure on bond prices.
In summary, the direction of bond prices from here remains very uncertain, with risks skewed to the downside. Investec believe the Argentine administration is a lot more pragmatic than it has been in the past and that ultimately the long-term outlook for Argentina is improving. However, they also believe that yields can widen further from here, and that until the situation becomes clearer the asset manager will maintain their underweight.
Fhoto: Innovation Tower. Venture Partners Mexico Launches Its Second Fund
Venture Partners Mexico announces the first closing of its second fund, Venture Innovation Fund II. The firm will focus on service innovation in health care, financial services, mobility and consumer internet; while its investment criteria will weight scalability, superior management, sustained traction and exit potential.
Mexico is among the most promising countries of the emerging economies. In a year, the Federal Government sponsored over 20 reforms that will foster economic competition, foreign investment and boost credit to SMEs. Additionally, its middle-income population is expected to double by 2025. Moreover, its evolving market structures will bring more scalable models to traditional industries. The combination of this larger potential customer base with an innovative business model or the application of technology will create outstanding investment opportunities.
With its second fund, Venture Partners consolidates its position in the Venture Capital industry. Northgate Capital, the premier American Venture Capital fund of funds participates as anchor investor. Among other private investors, Mexico Ventures, the Mexican development bank’s fund of funds, will also participate. The Multilateral Investment Fund, an arm of IDB, and the National Institute for the Entrepreneur, INADEM, are both expected to invest in a second closure.
“We are very excited to have such renowned investors on board. Their combined experience is very knowledgeable both local and globally”, said Fernando Lelo de Larrea, Managing Partner of Venture Partners.
“Venture Partners is uniquely positioned in the Venture Capital industry to take advantage of the resulting opportunities. I believe it is the most active and solid fund and trust that it will be a great investment”, said Eduardo Mapes, Principal in Northgate Capital Mexico.
Federico Antoni, Managing Partner of Venture Partners, mentioned: “Mexico presents a great investment opportunity. Through Series-A investing we will enable entrepreneurs to create new markets”.
Wikimedia CommonsFoto: BNP Paribas Paris. Foto cedida por el banco francés. BNP Paribas se declara culpable y acuerda pagar 8.900 millones de multa a EE.UU.
BNP Paribas announced a comprehensive settlement of the pending investigation relating to US dollar transactions involving parties subject to US sanctions, including agreements with the U.S. Department of Justice, U.S. Attorney’s Office for the Southern District of New York, the New York County District Attorney’s Office, the Board of Governors of the U.S. Federal Reserve System (FED), the New York State Department of Financial Services (DFS), and the US Department of the Treasury’s Office of Foreign Assets Control (OFAC), said the french bank in a statement.
The settlement includes guilty pleas entered into by BNP Paribas in relation to violations of certain US laws and regulations regarding economic sanctions against certain countries and related recordkeeping. BNP Paribas also agrees to pay a total of USD 8.97 billion (Euros 6.6 billion). Beyond what has already been provisioned, this will result in an exceptional charge of Euros 5.8 billion to be booked in the second quarter of 2014. BNP Paribas also accepts a temporary suspension of one year starting 1st January 2015 of the USD direct clearing focused mainly on the Oil & Gas Energy & Commodity Finance business line in certain locations.
BNP Paribas has worked with the US authorities to resolve these issues and the resolution of these matters was coordinated by its home regulator (Autorité de Contrôle Prudentiel et de Résolution – ACPR) with its lead regulators. BNP Paribas will maintain its licenses as part of the settlements, and expects no impact on its operational or business capabilities to serve the vast majority of its clients. During 2015, the activities of the perimeter concerned will clear US dollars through a third party bank instead of clearing through BNP Paribas New York and all necessary measures are being taken to ensure smooth transition and no material impact for the clients concerned. BNP Paribas notes that part of the Group’s USD clearing is already done today through third party banks.
Based on its estimates, BNP Paribas expects its fully loaded Basel III CET1 ratio as at 30 June 2014 to be at around 10%, consistent with the Group’s targets announced within its 2014-2016 business development plan. This estimate takes into account in particular solid underlying second quarter net results and pro rata temporis the current intention of the bank to adapt its dividend for 2014 to a level equal to that of 2013 (1.50 euros per share).
In advance of the settlement, the bank designed new robust compliance and control procedures. Many of these are already in force and are working effectively, and involve important changes to the Group’s procedures. Specifically:
A new department called Group Financial Security US, part of the Group Compliance function, will be headquartered in New York and will ensure that BNP Paribas complies globally with US regulation related to international sanctions and embargoes.
All USD flows for the entire BNP Paribas Group will be ultimately processed and controlled via the branch in New York.
As a result of BNP Paribas’ internal review, a number of managers and employees from relevant business areas have been sanctioned, a number of whom have left the Group.
Jean-Laurent Bonnafe, CEO of BNP Paribas, said: “We deeply regret the past misconduct that led to this settlement. The failures that have come to light in the course of this investigation run contrary to the principles on which BNP Paribas has always sought to operate. We have announced today a comprehensive plan to strengthen our internal controls and processes, in ongoing close coordination with the US authorities and our home regulator to ensure that we do not fall below the high standards of responsible conduct we expect from everyone associated with BNP Paribas”.
“Having this matter resolved is an important step forward for us. Apart from the impact of the fine, BNP Paribas will once again post solid results this quarter and we want to thank our clients, employees, shareholders and investors for their support throughout this difficult time”.
”The Group remains focused on implementing its 2014-2016 business development plan. We confirm our ambition to meet the targets of this plan announced in March this year. In particular, North America remains a strategic market for the Group where we plan to further develop our retail, investment solutions and corporate & investment banking franchise over the coming years”.
“BNP Paribas is a client-centric bank and we will continue to work every single day to earn the trust and respect of all our stakeholders in service of our clients and the economy”.
The inflow of liquidity continues to play a major role on the financial markets: risky assets such as equities and spread products continue to perform well, while the upward pressure on bond yields remains very slight.
Peripheral Eurozone equity and bond markets can continue to rely on the support of the central bank and consequently on persisting interest from investors.
Peripheral Eurozone bond yields substantially lower
ECB and economic data boost financial markets
Investor risk appetite has received several major boosts over the past few weeks. The announcement of fresh monetary steps by the European Central Bank was of course the main one.
Although expectations had been very high since May, the package of measures announced on 6 June proved to be even more comprehensive than anticipated. It demonstrated once more that ECB President Draghi is highly capable of managing market expectations. The positive confidence effect which resulted from the ECB’s actions was perhaps the most significant factor in the market’s response; more liquidity and a further decrease in the risk of a Eurozone break-up boosted equity and bond markets in the peripheral Eurozone countries in particular. These peripheral countries can continue to rely on the support of the central bank and consequently on persisting interest from investors.
Moreover, stronger evidence emerged that the slowdown in economic growth in the first quarter was probably a temporary dip. Global economic activity (measured by the global PMI) was up sharply in May, while economic figures in the US, Japan, China and the Eurozone were also positive.
Added to the fact that investor positions in specific asset classes are significantly less concentrated than they were at the start of this year and that the mood among investors is less euphoric, and we see sufficient arguments to retain our diversified risk-on positioning. This translates into significant overweights in equities and real estate and slight overweights in spread products and commodities.
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Wikimedia CommonsFoto: Atoma. Henderson Strengthens North American Business With Acquisition of Geneva Capital Management
Henderson Global Investorshas entered into an agreement to acquire the entire issued share capital of Geneva Capital Management. Founded in 1987, Geneva has assets under management of US$6.3bn (As at 31 May 2014) in Mid- and Small-Cap US growth equities.
An important strategic milestone in the development of Henderson’s North American business
Geneva will add US equity investment capabilities and extend US institutional client base
Initial consideration of US$130m; deferred consideration linked to revenue retention of up to US$45m; and growth-related earn-out of up to US$25m
Expected to be underlying earnings accretive in the first full year post acquisition.
North American business update
Henderson’s North American business continues to grow rapidly, doubling its AUM since 2011
In May 2014, the US Mutual fund range reached US$10bn for the first time, with net inflows of US$1.4bn in the year to date
A US based institution awarded a significant new mandate to the Henderson Global Equity team in May 2014
Having joined in 2013, the US high yield team has achieved 2nd percentile investment performance in its first full year of operation. Investment grade expertise has been added to the team to expand Henderson’s US and global credit platform
The acquisition of Geneva will enable Henderson to continue to build its North American business.
Acquisition of Geneva Capital Management
Accelerates delivery of Henderson’s strategy to grow and globalize its business
– Post acquisition, the North American business will have approximately US$18.3bnof AUM, representing nearly 15% of the Group on a pro forma basis
Geneva’s investment expertise in US growth equities fills an important capability gap for Henderson
– Geneva has a long track record in managing Mid- and Small-Cap growth equities, underpinned by a disciplined and consistent investment process
– The addition of Geneva will double Henderson’s number of US-based investment professionals
The acquisition will transform Henderson’s North American presence, bringing proven institutional distribution capabilities to complement Henderson’s successful retail franchise
– The acquisition will quadruple Henderson’s US institutional AUM
– It will create a well-balanced client base, split broadly equally between retail and institutional
Geneva’s principals have signed long-term employment contracts and have agreed to reinvest at least 30% of net sale proceeds into Geneva products
There is a strong cultural fit between the two firms and Geneva principals will become valued members of Henderson’s equity and North American management teams
Over time, the transaction creates opportunities to build new products with US content (e.g. Global Small-Cap and US All-Cap); launch new US equity retail products; and market Henderson capabilities more actively to US institutions.
This transaction is expected to close on 1 October 2014, subject to customary consents.
