Why is CalPERS Eliminating its US$4bn Hedge Fund Program?

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The California Public Employees’ Retirement System (CalPERS) has announced that it will eliminate its hedge fund program, known internally as the Absolute Return Strategies (ARS) program, as part of an ongoing effort to reduce complexity and costs in its investment program.

The staff recommendation, supported by the Investment Committee, will exit 24 hedge funds and six hedge fund-of-funds valued at approximately $4 billion.

“We are always examining the portfolio to ensure that we are efficiently and cost-effectively achieving our risk-adjusted return goals,” said Ted Eliopoulos, CalPERS Interim Chief Investment Officer. “Hedge funds are certainly a viable strategy for some, but at the end of the day, when judged against their complexity, cost, and the lack of ability to scale at CalPERS’ size, the ARS program is no longer warranted.”

Following the 2008 global financial crisis, CalPERS began examining ways to ensure it was less susceptible to future large drawdowns. The System restructured its investment operations, improved its internal oversight and control functions, and refocused some of its investment programs. In February 2014, the CalPERS Board adopted a new asset allocation mix that reduces risk to the portfolio, while still being able to achieve its return goal of 7.5 percent. CalPERS earned 18.4 percent during the 2013-14 Fiscal Year and has averaged a 12.5 percent return for the past five years and an 8.4 percent return for the past 20 years.

In September 2013, the CalPERS Board adopted a set of Investment Beliefs to inform the strategic decision making of the System. Investment Belief 7 states that “CalPERS will take risk only where we have a strong belief we will be rewarded for it.” Investment Belief 8 notes that “Costs matter and need to be effectively managed.”

“The Investment Beliefs exist to provide a compass for the System’s work to achieve its strategic goals,” said Henry Jones, CalPERS Board Member and Chair of the Investment Committee. “While the ARS analysis was no simple matter for CalPERS, the Investment Beliefs provide guidance for a straightforward and principled conclusion that fits our needs.”

CalPERS will spend approximately the next year strategically exiting current investments in a manner that best serves the interests of the portfolio. Existing ARS staff will be reassigned within the Investment Office.

“The staff dedicated to our program have worked diligently and we will ensure that their talent can continue to help CalPERS meet its investment objectives,” said Eliopoulos.

CalPERS is the largest public pension fund in the U.S., with approximately $300 billion in assets. CalPERS administers health and retirement benefits on behalf of 3,090 public school, local agency, and state employers. There are more than 1.6 million members in the CalPERS retirement system and more than 1.3 million in its health plans.

Why Interest Rates Will Rise

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Some strategists have argued that we are in a long-term period of low interest rates.  The Fed has an incentive to keep interest rates near zero indefinitely.  Unemployment and underemployment rates exceed historical norms.  The national debt will keep the United States as a net borrower and gives the government reason to minimize its cost of borrowing.  The pundits that have been calling for rising interest rates have erred for two years running.  The predictions have been dead wrong.  Interest rates have declined, not risen.  Aren’t we in a new paradigm of permanently low interest rates?  Don’t believe it. 

The long-term direction of interest rates is up.  The current interest rates for the 10-year Treasury and the 30-year Treasury are 2.37% and 3.12%, down approximately 65 basis points and 85 basis points from 3.02% and 3.97% on January 1st.  The interest rates of the 5-year Treasury and short Treasury issues have changed little.  The temporary declines in long-term interest rates have resulted from a change in perception, partly because of a harsh winter, which caused a seasonal drop in GDP.  At the beginning of the year investors feared that the Federal Reserve would raise the Fed Funds rate in early 2015.  The consensus expectation has now moved into the third quarter of 2015.  The question is not whether interest rates will rise, but when.

Interest rate forecasts from major investment banks all indicate rising interest rates in 2015 and beyond.  Economists surveyed by Bloomberg project the 10-year Treasury will reach 3.46% by the fourth quarter of 2015.  Strategists at other investment banks agree.   In August economists at Nomura and Barclays both predicted a rate increase by June 2015.  Their colleagues at Merrill Lynch cited a similar time frame. 

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A naive forecast would expect the yield on the 10-year Treasury to at least remain close to 3.46%, if not significantly exceed it, in 2016 and beyond.  The reason is that interest rates follow long-term, 25-year to 35-year cycles.  We have been in a period of declining interest rates since 1981.  Between 1946 and 1981 the yield on the 10-year Treasury rose from 2% to 15%.  Between 1920 and 1946 the yield declined from 5% to 2%.  As we seem to be at the end of a long-term period of low interest rates, it would be logical to expect interest rates to increase over the next ten years or so. 

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Within these long-term cycles the Fed manages interest rate policy over the shorter-term economic cycle.  The boom-to-bust cycle usually lasts five to seven years.  This present recovery is longer than most because of the depth of the 2008-2009 recession and the weakness of the ensuing expansion.  Now the economy is finding its legs with GDP growth of4.2% in the second quarter. Once it starts to hike interest rates, the Fed is likely to continue to increase them.   This pattern has prevailed throughout its history.   No examples exist where the Fed increased interest rates only one time.   The probable scenario is for the Fed to increase interest rates for two years or more.  Economic necessity requires the Fed to manage inflation and to prevent labor markets and the economy from overheating.  The impetus for the Fed to change course from its current zero interest rate policy to a non-zero policy would be a realization that stimulative monetary policy no longer serves the interests of the economy.

After six years of expansion we are close to that inflection point.  Forecasts of economic growth and inflation suggest that the Fed will need to be wary.  Consensus forecasts show an expanding economy and rising inflation.  Economists at Barclays and BNP Paribas forecast that GDP will increase from 2.0% in 2014 to 2.7% and 2.8% respectively in 2015.  The median forecasts of GDP growth among 78 economists in a Bloomberg survey are 3.0% in 2015 and 2.9% in 2016.  Inflation is likely to increase too.  Barclays forecasts the CPI will rise from 1.9% in 2014 to 2.1% in 2015.  A strengthening economy and higher costs will put pressure on the Fed to act sooner rather than later.

According to most economists, the recent meeting of the Fed in Jackson Hole marked a turning point in Fed policy.  Although her comments were balanced, Janet Yellen’s speech indicated a shift toward policy normalization, an end of the low volatility policy framework, and an emphasis on data dependence.  In short, if the economy expands, as most economists expect, the Fed will raise interest rates.  The speech also suggests that markets should see increasing volatility in interest rates as the risk of a Fed hike has moved forward in time.

Treasury yields over two-years out have already widened by 10 to 15 basis points in September.  I would expect the yield on the 10-year Treasury to keep increasing from now on.  Given the recent GDP numbers, the speed at which interest rates will change could surprise people.  I could easily envision the 10-year Treasury exceeding 4% by late 2015 and 5% by mid 2016.  We have just begun a long, upward march that will continue for the next few years. 

What do higher interest rates mean for high yield bonds?  Overall, higher interest rates will cause some erosion in value.  The effect will depend on what happens to the credit spread – the interest paid to investors for assuming credit risk.  If the credit spread narrows, the overall effect may be slight.  If it widens, the market could be hit with a double whammy.  Historically, the credit spread has narrowed when real interest rates have gone up.  This time could be different.  Investors in Merrill Lynch’s September 15th Credit Survey expect credit spreads to widen over the next 12 months.  That should put pressure on high yield. 

Even so, high yield offers a safe harbor versus other fixed income assets.  It yields more and reacts less to interest rate movements.  Some sectors, however, offer better protection than others.  As with investment grade, longer-duration high yield bonds are the most vulnerable.  Lower quality bonds are also less interest sensitive than higher quality bonds so that “B” bonds should outperform “BB” bonds.  Default rates and inflation should remain muted for the next year or two.  The best bet is to target short-duration, lower quality high yield bonds.  This sector should remain relatively immune whatever happens to interest rates.

Thomas P. Krasner, CFA – Principal and Portfolio Manager at Concise Capital Management, LP

 

What Is The Future of Fund Distribution? ALFI Event Gives Answers

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El principio de la segregación de activos en la legislación de Luxemburgo: qué es y cómo afecta a los tomadores de seguros
Foto: JimmyReu, Flickr, Creative Commons. El principio de la segregación de activos en la legislación de Luxemburgo: qué es y cómo afecta a los tomadores de seguros

Ahead of the Association of the Luxembourg Fund Industry’s (ALFI) Global Distribution Conference in Luxembourg on 23 and 24 September, fund industry leaders share their views on the top priorities, opportunities and emerging trends in international fund distribution.

Marc Saluzzi, from ALFI, comments: “Our top priorities in terms of opening up new distribution markets are Australia, Brazil, China and Mexico. We believe that they offer – by far – the largest potential for fund centres going forward.”

Pervaiz Panjwani, Citibank International: “With the changes in demographics and the squeeze in public finances, we will see income-generating products and also alternatives being the two megatrends that will rise in the future.”

Georges Bock, KPMG Luxembourg: “If you want to know what the world is going to be, ask your kids. Their present today is virtual. So, in order to reach them, the distribution platform of the future has to be digital.”

Ulrika Hasselgren, Ethix SRI Advisors: “The market for sustainable and responsible investment has matured nicely, with a majority of investors today applying strategies in line with investment belief, time horizon and consideration of relevant environment, social and governance factors. I think that we will see more of this.”

Theresa Hamacher, NICSA: “Fund managers have to make a decision. Do they focus on the investors who have the most assets today? Or investors whose assets are growing most quickly? Or do they try to do both?”

Anouk Agnes, ALFI: “Participation in the ALFI Global Distribution Conference is becoming a megatrend in its self. We see that investment fund professionals see the conference as a must.”

ALFI Global Distribution Conferencewill take place on Tuesday 23rd September and Wednesday 24th September 2014at theCentre de Conferences Kirchberg, Luxembourg.

To attend the conference, please RSVP to communications@alfi.lu

For more information, including the conference agenda, visit the event page on the ALFI website here.

Ana Patricia Botín: “My Ambition Is to Continue This Success Story, to Which I Will Dedicate My Greatest Efforts”

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Ana Patricia Botín reconoce que "no será fácil" continuar con la trayectoria de éxito de las últimas décadas
Ana Botín, executive chairman of Banco Santander, had “a very special tribute to the memory of Emilio Botín" at the Extraordinary Shareholders' General Meeting last Monday. Courtesy photo.. Ana Patricia Botín: “My Ambition Is to Continue This Success Story, to Which I Will Dedicate My Greatest Efforts”

The extraordinary shareholders’ general meeting of Banco Santander approved on Monday the proposal from the board of directors to increase share capital for the acquisition of all Banco Santander Brazil shares not held by Grupo Santander, representing 24.75% of its share capital. The transaction, announced on April 29, will be paid for in Banco Santander shares, with those of Banco Santander Brazil valued at the market price on the day prior to the announcement of the offer plus a 20% premium.

The offer is voluntary and is not subject to a minimum level of acceptance. In the event that all Santander Brazil shares held by minority shareholders respond to the offer, Banco Santander shares equivalent to 5.62% of the bank’s share capital would be issued. Santander Brazil shares will continue to be listed on the Sao Paulo stock market, and a request will be made to list the shares of Banco Santander as well.

The executive chairman of Banco Santander, Ana Botín, began her speech to shareholders with a tribute to the former chairman, Emilio Botín, after his death. “In almost thirty years as the chairman of the bank, he made Santander the number one bank in the eurozone, and one of the top ten banks worldwide in market capitalization. His achievements came from a clear vision: prudent risk-taking, focus on the client and on commercial banking, and agility so as to move forward and take advantage of opportunities for growth. Today, thanks to his vision, Santander is not only larger, but more diversified and more solid, as shown by its resilience throughout the financial crisis, being one of only three large international financial institutions to go through the crisis without incurring losses during even a single quarter.”

She also underlined that “his support for initiatives in education and culture has also been outstanding, with Santander’s commitment to academia and to society making it a benchmark institution both in Spain and in all the markets in which Santander operates. Looking to the future, we will follow the same strategy and work to further strengthen the Santander culture, which is the basis for sustainable growth. It is a culture focused on commercial banking, on being close to our clients and offering them the best service, and on seeking to contribute to social and economic progress. My ambition is to continue this success story, to which I will dedicate my greatest efforts.”

The executive chairman of Banco Santander went on to review the details of the acquisition offer for shares in the Santander Brazil subsidiary that are held by minority shareholders. “This transaction demonstrates the group’s confidence in Brazil and in Banco Santander Brasil. Brazil is a tremendous country, with strong potential for growth. It also has solid institutions, a quality business sector, and a well-managed and supervised financial system. All of this gives us confidence in the attractiveness of the Brazilian economy, and that the country will overcome the economic slowdown it is experiencing at this time.” She also highlighted the group’s confidence in “the capacity of Banco Santander Brazil to bolster its results – which today represent 20% of the group’s attributable profit – providing an appropriate return on our investment.”

Ana Botín gave a reminder that “this transaction is financially beneficial both for the shareholders of Santander Brazil and for those of Banco Santander.” For the former, because they will receive a 20% premium, but also because the offer is made up of Santander shares. “This will allow those accepting the offer to continue to benefit from the advantages of the group’s investment in Brazil as well as sharing in the strength and diversification of Banco Santander.”

It is also positive for Banco Santander shareholders, “as it will entail a 1.3% increase in earnings per share of the bank. This assumes both the market consensus regarding the 2015 earnings for Santander Brasil and an acceptance of the offer for all shares held by the minority shareholders.”

The executive chairman of Banco Santander indicated: “This step also strengthens the geographic diversification of Banco Santander, which will be key to consolidating this new phase of our growth in profits.” For that reason, she pointed to the bank’s results in the first half of the year, with a profit of EUR 2,756 million, 22% higher than the first half of the previous year. “We are particularly satisfied with the positive developments in revenues, cost control and the falling cost of credit, and with the decrease in non-performing loans across the whole group, and specifically their stabilization in Spain. At this time, the positive trends in group results are continuing.”

“I feel particularly committed to this challenge, and I also have an excellent team and the support of a board of directors with great experience. Maintaining the success story of recent decades will not be easy: the new competitive and regulatory environments are ever more demanding. However, we have a great opportunity and I approach this task with great confidence. I believe that we succeed because I know our teams well: their commitment to Santander, their highly qualified members, and their dedication to our clients. I have complete confidence that together we will make Santander the leading institution for employees, clients, shareholders and society.”

Banksville Partners Expands in Latin America Opening Buenos Aires Representative Office

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Banksville Partners LLC expands presence in Latin America with the opening of a representative office in Buenos Aires and the addition of experienced international banker Hugo Pezzoni.

“Pezzoni’s experience in structured transactions augments our capabilities to assist clients with strong revenue track-records who operate even in the more volatile of our regional markets,” said Daniel Casal, Banksville’s Senior Managing Director in charge of client origination.

In this new role, Hugo Pezzoni will be a Director and Representative of Banksville Partners, based in Buenos Aires, Argentina.  He will assist both Argentine clients and work on important assignments throughout the firm’s Latin American network.  Previously, Pezzoni was a senior banker at Rabobank International and JP Morgan Chase & Co. focused on Loan Syndications, Trade Finance, Capital Markets, Restructurings, Credit and Equity Investments.

“We are very pleased to add the breadth of Pezzoni’s financing experience to our team and fill the growing needs of our clients throughout Latin America“, said Banksville’s Hernan Narea, Senior Managing Director and head of structured finance in New York.

 

Clarien Bank Targets LatAm Market With Board Appointment

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Clarien Bank Limited has announced the appointment of Ronaldo Veirano as an independent director to its Board of Directors. Mr. Veirano will be responsible for advising on the Bank’s growth and strategic expansion into Latin America.

Mr. Veirano’s appointment constitutes an important Board addition for Clarien Bank as it develops towards its objective of becoming a preeminent, international financial institution offering an expanded range of products and solutions in corporate and investment banking, wealth and asset management to clients globally.

In his role as the founding partner of Veirano Advogados, in Brazil, Mr. Veirano brings a unique perspective on private wealth and institutional banking opportunities currently present in Latin America.

Mr. Veirano is also a key leader in the promotion of Brazil’s global business development and currently a member of the executive committee of both the Brazil-China Business Council and the United States Business Council.

Mr. Veirano joins three presiding board members, Buford Alexander, Michael Quinn and Gregory Slayton. They add to the long standing management team of local Board Directors, James Macdonald, James Gibbons, Hal Masters and Andrew Parsons. Keith Stock also remains Chairman of the Board representing Clarien Group Limited.

Keith Stock, Chairman of Clarien Bank Limited, said: “With Edmund Gibbons Limited as one of Clarien’s shareholders, the reappointment of James Gibbons to Co-CEO demonstrates the continued commitment to Bermuda by the Gibbons family and indeed to Clarien Bank. I look forward to James’s stewardship as Co-CEO, as he and Ian drive progress and further strengthen the Bank’s relationship with our local, and global community. Mr. Veirano’s highly regarded legal and business expertise will be a huge asset to Clarien and its Board of Directors. Specifically, his specialist knowledge of the Latin American market and his long standing relationships with organizations present in the region will be essential in driving forward strategic growth in the Bank’s private wealth and institutional banking divisions.”

Mr. Veirano commented: “Clarien Bank is clearly at a very exciting stage in its international growth. With years of experience working with institutional banking and private wealth professionals, I look forward to the opportunities that my position with the Bank’s Board of Directors will help develop, most notably in Latin America. “Over the last two decades there has been a positive change in the LatAm market. The rapid rise of entrepreneurs and ultra-high net worth individuals has resulted in a greater demand for sophisticated wealth management, corporate banking and investment services. Brazil alone presents a particularly strong opportunity. Not only will it be the world’s fourth largest economy by 2030, but at present there are more than 200 high net worth individual’s worth over $500 million dollars residing there.”

In 2008 Mr. Veirano was recognized by the government of Brazil and awarded the prestigious Order of Rio Branco, in acknowledgement of his significant contribution to the promotion of Brazil’s relations with the world.

Which Are The Trends which Chart The Path for Family Offices?

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¿Cuáles son las principales tendencias que dibujan el camino de los family offices?
FIBA WM Forum. Courtesy Photo . Which Are The Trends which Chart The Path for Family Offices?

One of the primary tasks of a family or multifamily office is to ensure good planning, largely through the coordination of external professionals serving the family, but perhaps the most important thing is to resolve any problems of governance in order to lay the foundations for a successful future in the preservation of capital and a smoother path in family wealth management.

Here are some of the issues brought to the table as part of the presentation “Family Office as a Client”, which was held last Tuesday as part of the FIBA Wealth Management Forum in Miami. The conference, chaired by Allison P. Shipley, principal of Tax- Personal Financial Services Practice at PwC, included the participation of Santiago Ulloa, managing partner of WE Family Office, Annette V.Franqui, managing director of ForrestalCapital and Drake Jackman, managing director and head of LatAm for Northern Trust.

For Ulloa, when the time comes to get to work with a family, what that family wants to do, and where they want to go, outweighs the size of their wealth, which means that their purpose of organization takes precedence. Hence, he stressed that the first thing to do is to solve any problems of governance and legal structure. Often, members of the same family live in different jurisdictions, and on many other occasions face a serious lack of organization which leads the family aimlessly. Also, but not less important, is the task of coordinating and managing the various external suppliers who serve the family. “The trend in this regard is to hire the top of the class. We have internal resources and we coordinate with outside professionals.”

In this respect, Franqui pointed out that a family office must work together with family office service providers and also ensure that the established plan is followed.

With regard as to which trends currently move the industry, attendees agreed that many of the families they work with have members of the same family in different jurisdictions; hence the need for structuring, and for working towards complying with the various tax jurisdictions. Another trend which is found among family offices is the increase in joint ventures with other families, as well as that, increasingly, the family is seeking control and further training.

Franqui underlined that those cases of families wanting to do things together are becoming more and  more common; and explained that in Southern Florida’s case, anetwork is emerging, and that this networking will eventually give significant results between now and 10-15 years. This is due to families who have been settling in the area in recent years, who already know, or are getting to know each other, and are laying business opportunities on the table.

For Ulloa, families are looking for direct investments because not everyone is willing to take the risk of investing in private equity. In this regard, Franqui agreed that closeness and knowledge take precedence over risk. “Thetendency to invest close, in those things that are familiar, still prevails,” hesaid.

Another important task of the family office is to “sit in on it” in order to gain a complete picture of the problems and needs of the family. “We manage any investments, from real assets such as the property management of real estate, to the most sophisticated, such as structuring a private equity,” Franqui said.

Meanwhile, Jackman, from Northern Trust, noted the importance of establishing regular meetings between family members, in order to, amongst other things, educate them on the risks they take, and to take the opportunity to also start educating the next generation, “which must be encouraged to work and to find out which is the area in which they can add the most value.”

The second edition of FIBA Wealth Management Forum 2014 was held last week in Miami with the participation of over 200 professionals, who during the sessions were able to hear, first hand, the issues and problems concerning industry.

Latin America Sees the Most Significant Growth in the Size of its Billionaire Population

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The Wealth-X and UBS Billionaire Census 2014, shows that 155 new billionaires were minted this year, pushing the global population to a record 2,325 – a 7% rise from 2013.

The combined wealth of the world’s billionaires increased by 12% to US$7.3 trillion, which is higher than the combined market capitalisation of all the companies that make up the Dow Jones Industrial Average.

The Wealth-X and UBS Billionaire Census 2014 – the only comprehensive, global study on the composition and dynamics of this top tier of the global ultra high net worth (UHNW) population – shows that Europe, with 775 billionaires, is the region with the most billionaires and billionaire wealth (US$2.37 trillion). North America – the region with the most billionaire wealth in 2013 – was overtaken by Europe in terms of billionaire wealth in this year’s census.

Asia, however, boasted the largest billionaire wealth increase, with the region’s billionaires’ fortunes growing by 18.7% over the past year. The region is responsible for 30% of the net increase in global billionaire wealth in 2014. Asia’s billionaire population grew by 10% in 2014, with 52 new entrants into the billionaire club – 33 are from China.

The United States maintains its position as the world’s top billionaire country with a population of 571 billionaires in 2014, followed by China (190) and the United Kingdom (130), which took the third spot from Germany (123) on the Top 40 Billionaire Countries/Territories list.

Below are other key findings from the Wealth-X and UBS Billionaire Census 2014:

  • Europe is home to more than a third of the world’s billionaire population.
  • Latin America and the Caribbean is the region that saw the most significant growth in terms of the size of its billionaire population (37.8%) in 2014, but Asia saw the fastest growth in billionaire wealth (18.7%).
  • The billionaire population in the Middle East shrank by 1.9%, but total billionaire wealth in the region rose by 16.7%.
  • The size of Africa’s billionaire population decreased by 4.8%, but the region’s billionaire wealth increased by 12.9%.
  • There was no change in the billionaire population in the Pacific (34 billionaires), but the region’s total billionaire wealth dropped by 2%.
  • Nearly 35% of the world’s billionaires are concentrated in 20 cities. Billionaires are transnational. They move from city to city, rather than from country to country.
  • Only 5% of the world’s billionaires are worth more than US$10 billion.
  • The average billionaire‘s wealth rose by 4.4% this year to just over US$3.1 billion.
  • The average age of the typical billionaire is 63, one year older than it was in 2013.
  • There are 2,039 male billionaires in 2014, accounting for 87.7% of the world’s total billionaire wealth of US$7.3 trillion.
  • There are 286 female billionaires in 2014, accounting for a 12.3% share of global billionaire wealth.

The census – which looks at the global billionaire population from July 2013 to June 2014 – examines this top-tier wealth segment by geographical location, gender, sources of wealth and personal traits.

“Wealth-X is pleased to partner with UBS for a second consecutive year to produce the Wealth-X and UBS Billionaire Census,” Wealth-X CEO Mykolas Rambus said. “Expert commentary from UBS complements Wealth-X’s global intelligence on the world’s billionaire population, producing a report that demonstrates a true collaboration between the global leader in wealth management and the world’s leading UHNW intelligence provider.”

Download the report at www.billionairecensus.com

Lucelly Dueñas Joins Bessemer Trust’s Miami Office as SVP, Associate Fiduciary Counsel

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Lucelly Dueñas Joins Bessemer Trust’s Miami Office as SVP, Associate Fiduciary Counsel
Lucelly Dueñas. Foto cedida. Bessemer Trust suma a Lucelly Dueñas a su equipo de Miami

Bessemer Trust has announced that Lucelly Dueñas has joined the firm’s Miami office Legacy Planning team as Senior Vice President, Associate Fiduciary Counsel, reporting to Mark R. Parthemer, Managing Director, Senior Fiduciary Counsel for the Southeast region.

Ms. Dueñas is responsible for advising domestic and international ultra-high-net-worth families as they navigate the complexities of wealth. She will specifically focus on cross border and international matters related to legacy planning, family governance, tax minimization strategies, and the implementation of estate plans.

Ms. Dueñas earned an LL.M. in Estate Planning from the University of Miami School of Law in Florida, a J.D. from Indiana University School of Law, and a B.S. in Psychology and a B.A. in Criminology from the University of Florida. She is fluent in Spanish.

Before joining Bessemer, Ms. Dueñas was a wealth advisor at J.P. Morgan Private Bank, where she worked with high- and ultra-high-net-worth Latin American families on the strategic planning of their wealth. Previously, she was an associate at the law firms, Guttenmacher & Bohatch, P.A., and Stephen A. Taylor, P.L.

“Lucelly’s depth and breadth of experience in providing exceptional advice and unparalleled client service will help to strengthen Bessemer’s ties to ultra-high-net-worth families and individuals in South Florida and across Latin America,” said Michael Marquez, Managing Director and Florida Region Head for Bessemer.

Founded in 1907, Bessemer Trust is a privately owned wealth and investment management firm that focuses exclusively on ultra-high-net-worth families and their foundations and endowments. The firm oversees $97.5 billion for approximately 2,200 clients and provides an integrated approach to the investment, trust, estate, tax, and philanthropic needs of its clients.

Deutsche Bank Study Shows Investor Demand Fuelling Dramatic Growth of Hedge Fund Liquid Alternatives

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A Deutsche Bank study revealed the true extent of demand for liquid alternative investments, with the percentage of participating investors allocating to such products up from 28% to 51% year-on-year. The study – From Alternatives to Mainstream (Part Two) – saw almost three quarters of alternative UCITS investors and nearly two thirds of investors into alternative ‘40 Act mutual funds planning to increase their allocations.

Liquid alternative investments are now the fastest growing part of the asset management industry. Alternative UCITS assets have grown over 40% annually since 2008, whilst the hedge fund industry has grown 13% and the wider European UCITS industry only 2%. Alternative mutual funds have grown by 38% annually during this period, compared to 9% for US mutual fund industry.

Hedge funds have moved into the mainstream marketplace at an accelerated pace, bringing new products to market and driving asset growth.

Key findings of the study, which surveyed both investors and managers, include:

  • Liquid alternative investments are the fastest growing part of the asset management industry,having experienced a CAGR of roughly 40% since the 2008 financial crisis. Net inflows into liquid alternatives from survey participants are predicted to grow by 44% over the next 12 months, which translates to $49bn in new flows, compared to $34bn over the last 12 months.
  • In response to investor demand, hedge fund managers are quick to diversify their product offering, with 42% of responding managers currently offering liquid alternative products, up from 27% last year. A further 34% would consider including such products. One quarter of managers plan to launch at least one alternative UCITS product in the coming year, and 29% have similar plans for alternative ’40 Act mutual funds.
  • The move towards liquid alternatives has been most pronounced among large, well established managers, with more than two thirds with $5bn+ in AUM managing such product for more than three years. A third of these managers plan to launch at least one new liquid alternative product in the next 12 months.
  • Fundamental equity long/short is the most popular strategy for investors allocating to alternative UCITS and alternative ’40 Act mutual funds, which along with event driven and global macro represent the top three most sought after alternative UCITS strategies over the next 12 months. Fundamental equity long/short, fundamental equity market neutral and event driven are the top three most sought after alternative ’40 Act mutual fund strategies over the next 12 months.

Daniel Caplan, European Head of Global Prime Finance at Deutsche Bank,said: “The growth of liquid alternatives is a very real opportunity for investors who have previously been unable to access hedge fund strategies to do so in a liquid and regulated structure.”

Anita Nemes, Global Head of Capital Introduction at Deutsche Bank, said:Liquid alternatives are the fastest growing segment of the asset management industry. This presents a significant opportunity for investors to access better risk-adjusted returns, and also for hedge fund managers who are increasingly becoming solution providers to their investors.

The study surveyed 212 investor entities worldwide managing more than $804bn in hedge fund assets and 86 global hedge fund managers representing $6tn in firm wide assets.