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European Frontier Markets: Focus on Romania Prior to its Presidential Elections

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.

Credit Suisse Makes Changes in the Leadership of the Investment Banking Division

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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

Regardless of Who Wins the Election, Brazil is Likely to go Through a Challenging Time in the Years to Come

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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 K2 Alternatives Sicav Opens to International Investors

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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 GI Launches AR Fixed Income Team

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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.

#wealthplanning #privateclientslatam #actnow

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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

Oppenheimer Operations Expand Across Multiple Sectors in New York, San Francisco and Houston With Six New Hires

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The Investment Banking division of Oppenheimer & Co. Inc., a unit of Oppenheimer Holdings, is pleased to announce six new executive hires to the healthcare, rental services and logistics, energy, technology and real estate teams.

The new hires include: Alexander Lim, Managing Director – Healthcare; Neha Motwani, Executive Director – Healthcare; Fred Larsen, Managing Director – Rental Services and Logistics; Ramzi Nassar, Managing Director – Oil Field Services; Blake Williams, Managing Director – Hardware and Emerging Technology; and Steven Cheng, Executive Director – Real Estate.

The recent hires underscore the firm’s recent growth, particularly in investment banking. Oppenheimer’s capital markets business segment, including investment banking, generated $150 million through the first six months of 2014, a 13% increase over last year, according to the company’s most recent quarterly release.

“We are very pleased that our multi-product, multi-sector focus is not only resonating with our clients, evidenced by our recent growth, but is also attracting such talented bankers to our platform,” said Bruce McCarthy, Managing Director, Co-Head Investment Banking and Head of Mergers & Acquisitions. “We are very excited with the addition of these senior bankers,” said Marc Thompson, Managing Director, Co-Head Investment Banking and Head of Technology. “They each bolster our ability to deliver our middle-market clients a combination of tremendous domain expertise and Oppenheimer’s best-in-class service offerings.”

About the profiles…

Alex joins the firm from Lazard Freres, where he was responsible for origination as well as leading client overage and execution for companies in the biotech, diagnostics and life science tools sector. He will continue his focus on the Healthcare Life Sciences sector and is based in Oppenheimer’s San Francisco office.

Neha joins Oppenheimer from Stifel, where she covered companies in the life sciences sector. During her 15-year career, she has been involved in more than 70 equity and financial advisory transactions. She continues to focus on Healthcare Life Sciences and works out of the company’s New York office.

Fred joins Oppenheimer from Henley Associates, an independent financial advisory firm that he helped found. Before that, he was at Piper Jaffray where he was responsible for global transaction origination, execution and client coverage for middle market transportation and logistics firms. He joins Oppenheimer’s Rental Services & Logistics group and is based in New York.

Ramzi joins the company from the Global Energy Investment Banking of Citigroup Global Markets. He previously worked at an engineering firm and was General Manager and President of eLinear Solutions Middle East FZ in the United Arab Emirates. Ramzi began his investment banking career at Morgan Stanley, and then worked at CIBC World Markets’ M&A Group. He joins Oppenheimer’s Energy group and will continue to focus on the Oil Field Services sector out of Oppenheimer’s Houston branch.

Blake joins Oppenheimer’s Technology group from Cowen, where he was responsible for client relationships with mid-cap domestic and international companies in the semiconductor, capital equipment, emerging technology and optical sectors. Prior to Cowen, Blake spent nine years with Piper Jaffray as a Managing Director in the Technology, Media and Telecommunications Group and as Head of Semiconductor, Component and Communications. He is now based in San Francisco.

Steve moves to Oppenheimer from Big Ocean, a boutique investment banking firm. He began his investment banking career at RBC Capital Markets in 2005. He will continue his focus on the Real Estate Investment Trust (REIT) sector and work out of the New York office.

Oppenheimer & Co. Inc. (Oppenheimer), a principal subsidiary of Oppenheimer Holdings Inc. and its affiliates provide a full range of wealth management, securities brokerage and investment banking services to high-net-worth individuals, families, corporate executives, local governments, businesses and institutions.

Janus Capital Group Agrees to Acquire Exchange Traded Product Provider VelocityShares

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Janus Capital Group has announced it has agreed to acquire VS Holdings Inc., the parent company of VelocityShares, LLC, a provider of institutionally-focused exchange-traded products (ETPs), including exchange-traded funds. VelocityShares is focused on developing instruments that enable investors to manage risk and has been delivering innovative products for a wide range of global investors since its launch in 2009.

The transaction includes an initial upfront cash consideration of $30 million and is expected to close in the fourth quarter of 2014. Closing of the transaction is subject to certain conditions, including regulatory approval.

“This acquisition positions Janus within the rapidly growing rules-based and active ETF universe, enhancing the customized solutions we can provide to our clients and enabling us to work with the growing segment of financial advisors and institutions focused on these instruments,” said Richard M. Weil, Chief Executive Officer of Janus Capital Group. “Today’s announcement is a continuation of our strategy of intelligent diversification, adding new talent to support innovation and smart solutions for our clients. We are excited to have the VelocityShares team join our organization, and we are confident their expertise and product innovation capabilities will be beneficial to our clients and shareholders.”

VelocityShares was founded in 2009 and is managed by Nick Cherney, Richard Hoge and Steve Quinn. VelocityShares’ initial growth was driven by the development of exchange-traded notes in the volatility and commodity space. The company quickly developed a market leading position in tactical trading products serving short-term investors and traders by focusing on helping clients develop sophisticated trading strategies and volatility management solutions. These productswill continue to be distributed by the VelocityShares team through its existing distribution channels.

VelocityShares has more recently leveraged its expertise to launch a second business around innovative and intelligent ETFs for diversified long-term investment portfolios, currently focused on volatility hedged equities and equal risk weighted solutions. These ETF offerings, along with future product innovation, offer significant synergies between VelocityShares and Janus.

VelocityShares is headquartered in Darien, Connecticut and employs 11 professionals, many of whom are ETF industry veterans and have extensive product development, product structuring and sales experience. As of September 30, 2014, it has raised $2 billion in assets.

“Janus’ global distribution network and commitment to product development creates very unique opportunities to deliver institutional quality ETFs to a wide range of investors,” said Nick Cherney, Co-Founder and Chief Investment Officer of VelocityShares. “Our combined company will be well positioned to grow our ETP business and continue to be a leading provider in the market place.”

Janus Capital Group Inc. was advised by Wells Fargo Securities LLC and Paul, Weiss, Rifkind, Wharton & Garrison LLP, and VS Holdings Inc. was advised by Freeman & Co. Securities LLC and Stoel Rives LLP.

The Evolution of the Secondary Market for Private Company Stock

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Ever since secondary market trading of Facebook shares began, various industry participants have debated whether the market would continue and how it would (or if it should) evolve. Three years later, the debate continues in the press, but investors continue to vote with their investment dollars for its growth. NYPPEX, a private equity advisor and research firm, has projected that the secondary market will facilitate $17.7 billion worth of transactions this year, up 43% from 2013.

The nature of the secondary market has also changed with an increasing number of investment company giants actively participating in an increasing number of transactions. Second Markets, once an active marketplace for individual investors, has changed its business model to execute these institutional transactions and reported a few weeks back that they had executed nearly $1 billion in private company stock transactions in the first half of the year.

While this has led some to think that individual investors are being shut out of this attractive market place, the truth is that as the market has grown, so have the alternative entry ways to participate. Clearly, the markets for Angel investing and crowdsourcing are well known and easy to find, but access to the growth and late stage companies with well-known names such as Palantir, DropBox and Uber can be found in a number of instruments for a range of investors:

Interval funds, mutual funds that offer daily purchase for investment but typically only quarterly liquidity, have been increasing in number as part of the Liquid Alternative movement. The SharesPost 100 Fund is perhaps the most familiar of this mutual fund type, which is open to all investors.
A large number of Closed-End Funds (CEFs) have also entered the marketplace in recent years, offering clients a variety of private company portfolios in which to invest. The investment stage of the underlying companies ranges from fund to fund, with some CEFs focusing on later-stage private companies and some investing across the entire venture capital range. Several have had good deal flow and have demonstrated a repeat ability to include marquee names within their portfolio.
Private Custom Portfolios are another option, although usually open only to Qualified Purchasers. These structures allow investors and their Advisors to select each investment in their portfolio at a specific price. These offerings, however, are more difficult to find as they typically cannot market themselves under the general solicitation guidelines of Rule 506(b) of Regulation D. NASDAQ Private Market, offers a similar investment opportunity into individual companies to Qualified Purchasers through their member Broker / Dealers.
Forward Purchase Contracts are also still used by many to invest in private companies, but are not for the faint of heart. In these contracts, the investor provides cash (typically to an existing or former employee of a private company) in exchange for the forward purchase contract. The contract obliges the seller to deliver a specific amount of their private shares after the company executes its initial public offering. The legal risk (usually spelled out clearly in the contract) is that the contract may be in direct violation to the seller’s employment contract with the company and the transaction itself is still subject to the company’s right of first refusal, which may not occur for several years out.

The secondary market is very likely to continue to grow, mature in its formal nature and increasingly win the favor of private companies themselves for a number of reasons:

Employee Recruitment and Retention are both improved by clarity in remuneration at private companies, just as they are in public ones. Companies that create liquidity plans to meet the internal demand to convert their paper wealth after an appropriate vesting period are likely to have more engaged employees and higher ratings in glassdoor.
Structured programs also lower legal and management expenses as they reduce the time and energy (and billable hours) of considering one-off secondary market sale requests.
Management control of insider liquidity also allows for control of the secondary market prices at which these trades are taking place, retaining the control of valuation communication to the management team and their VC-backers.
Another benefit to the company and its financial backers is that less money needs be raised if a greater percentage of the funding at the official rounds is funding company growth rather than meeting employee needs.
Reduction in the percentage of capital funding employee liquidity also reduces the perceived lack of commitment to the firm, which can be a significant depressant to a newly IPO’d stock price. Furthermore, Fenwick & West just released a report showing that VC-backed technology companies that went public in 2013 experienced a 24% reduction in stock price in the two weeks after the expiration of their waiting period compared with two weeks prior to the 180-day mark.
Finally, individual investors are increasingly driving market demand for access to alpha in their portfolios, which Family Offices, Pension Funds and Foundations have enjoyed for years. Not only is the desire for alpha driving this demand, but often a personal interest in a private company’s business model motivates the investment. After all, not only is an equity-interest in ZocDoc a good investment, it’s also fun.

Regardless of how an investor chooses to invest in secondary market shares of private companies, there is no doubt that demand will keep the market growing. And while the lion’s share of the market may continue to be the domain of large funds and endowments, Advisors and their investors, both accredited and not, are being given opportunity to invest alongside the behemoths. Where the jury is still out is how Private Companies themselves will choose to participate in these markets, despite the evidence that a structured approach is a win-win situation for all involved.

Michael Goering is a Managing Director at Buttonwood Group Advisors

Alken to Reopen Two Soft-Closed Funds

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Alken AM, the fund management company founded by Nicolas Walewski, has informed to its clients an important decision taken by the Board of Directors with regards to the Sub-Funds “ALKEN FUND – Absolute Return Europe” and “ALKEN FUND – European Opportunities”.

After careful analysis and consideration of the Sub-Funds’ current situation and their relevant markets evolution, as presented to the Board by the Sub-Funds’ Investment Manager, the Board, making use of the powers conferred upon it in the Company’s prospectus, has resolved to re-open the Sub-Funds to subscriptions from new investors, and to no longer limit the possibility of further subscriptions from the Sub-Fund’s existing shareholders.

These resolutions will be effective as of 3rd of November 2014.