Standish, the Boston-based fixed income investment boutique for BNY Mellon, has launched a bundled solution for U.S. insurance companies that includes asset management, global custody, and insurance accounting and reporting.
Custody, insurance accounting and reporting are being provided by BNY Mellon’s asset servicing business. The new comprehensive offering meets the needs of insurance companies that require asset management and asset servicing to be bundled.
“Developing synergies between our investment management and investment services businesses enables us to meet the unique needs of the insurance segment, while also demonstrating the power BNY Mellon brings to bear across the investment lifecycle,” said Christine Todd, president of Standish and head of its insurance and tax-sensitive groups. “This is our initial offering of investment management and investment servicing as a single solution.”
The new offering enables BNY Mellon to provide investment management and investment services to a broader range of insurance companies, according to Vince Pacilio, executive vice president, BNY Mellon, and head of the insurance segment.
“We’re seeing more insurance companies looking for bundled solutions as they would rather partner with providers that offer a holistic and more comprehensive set of services,” Pacilio added.
Foto: MarcioCabraldemoura, Flickr, Creative Commons. El grupo de private equity EQT abre oficinas en Madrid
In light of the current round of “stress tests” on European banks, global investors are looking for distressed real estate debt and asset opportunities across Europe. Spain is among the most appealing European countries for such strategic investment opportunities.
K&L Gates organizes an informative program on investment opportunities in Spanish distressed real estate assets. The panelists will discuss the key opportunities and risks that such global investors should consider:
Opportunities in distressed real estate assets: from non-performing loans to real estate owned assets in Spain.
Practical aspects of the acquisition process: the view of the local experts.
Legal and tax aspects of structuring deals: investment structures for a U.S. investor.
Presenters include banking, real estate, legal, tax and policy professionals from the following companies:
Grupo Arcano – Spanish Independent Advisory Services Firm
Aguirre Newman– Spanish Real Estate Consultancy
CMS Albiñana & Suárez de Lezo – Spanish Law Firm
K&L Gates– U.S.-based Global Law Firm
The panel discussion will be followed by a Spanish wine and tapas reception. The event will take place on June 5th, 2014, in K&L Gates, 599 Lexington Avenue, New York, from 5 pm to 8 pm. Please RSVP by clicking this link. To RSVP, also contact the New York Events Team, or visit the event page on the Web.
On Monday, May 19, the Financial Stability Oversight Council (Council) hosted a conference on the asset management industry and its activities to help inform the Council’s ongoing assessment of potential risks to U.S. financial stability. During the conference, practitioners – including CEOs, treasurers, and risk officers – as well as academics and other stakeholders discussed a variety of specific issues that relate to the industry.
Opening the conference, Treasury’s Under Secretary for Domestic Finance Mary Miller noted that the Council was established to “bring regulators from across the financial system together to collectively identify, monitor, and respond to potential threats to financial stability.” She went on to note that Council members did not “come to today’s conversation with any predetermined outcome.”
Under Secretary Miller emphasized that if the Council identifies risks to financial stability posed by asset managers or their activities, it has a number of policy responses. She said: “the Council’s authorities include highlighting potential emerging threats in its annual reports to Congress, making recommendations to existing primary regulators to apply heightened standards and safeguards, and designating individual firms on a company-specific basis. If we identify risks that require action, we will seek to deploy the most appropriate remedy.” However, “it is possible that at the end of this comprehensive review, the Council may choose to take no action.”
Following her remarks, and before moving on to the panels, Norm Champ, the Director of the Division of Investment Management at the Securities and Exchange Commission (SEC), gave an overview of the asset management industry. The SEC’s presentation is available here.
The conference then moved on to the panels, each of which was moderated by a senior official of a Council member agency. The first panel, which was moderated by John Worth, Chief Economist, National Credit Union Administration, provided a discussion of investment activities and risk management practices within the asset management industry. The panelists were Kent Daniel, Professor of Finance, Columbia Business School; William De Leon, Global Head of Portfolio Risk Management, PIMCO; Itay Goldstein, Joel S. Ehrenkranz Family Professor, Professor of Finance, The Wharton School of the University of Pennsylvania; Michael Mendelson, Portfolio Manager, Risk Parity Strategies, AQR; and John Rogers, President and CEO, CFA Institute; Member, Systemic Risk Council.
The second panel focused on industry characteristics and the interaction of asset management activities with the broader financial system, and was moderated by Nellie Liang, Director of the Office of Financial Stability Policy and Research at the Board of Governors of the Federal Reserve System. The panelists were Sarah Breeden, Head of Market Sectors and Interlinkages Division, Financial Stability, Bank of England; Ken Griffin, CEO, Citadel; Barbara Novick, Vice Chairman, BlackRock; David Scharfstein, Edmund Cogswell Converse Professor of Finance and Banking, Harvard Business School; and Kim Schoenholtz, Professor of Management Practice, New York University Stern School of Business.
Finally, the third panel discussed key operational functions and what obstacles, if any, exist to resolving a failing manager or fund in a rapid and orderly manner, and was led by Lawranne Steward, Senior Counsel of the Commodity Futures Trading Commission. The panelists were John Gidman, Chief Information Officer, Loomis, Sayles & Company; Alan Greene, Executive Vice President, U.S. Investor Services, State Street Corporation; Andrew Metrick, Deputy Dean & Michael H. Jordan Professor of Finance and Management, Yale School of Management; Philip Prince, Treasurer, Pine River Capital; and Peter Stahl, Associate General Counsel, Fidelity Investments.
For additional information on the Council, please visit this link
Foto cedidaXaviera MV . Biscayne Art House Showcases the Photography of Artists Pia Bracco and Xaviera MV
An exhibition showcasing the colorful work of Xaviera MV and Pia Bracco opened May 15, at Biscayne Art House on Brickell. The opening night reception attracted a glamorous and diverse crowd of art lovers. The show, which runs through June 3, features an exciting collection of photography by these two extraordinary artists.
Xaviera MV, who has always found inspiration in nature, shares her artistic perspective through photography. “Some people believe that we have to travel far away to find beauty for inspiration; the truth is we can find it just by looking out the window,” said the artist.
Argentine native Pia Bracco uses art and photography to share her love for plants, flowers and animals, showing details that typically go unnoticed by the naked eye. The vibrant feathers of a bird, the expression in its eyes, the bright colors; these details along with her “less is more” philosophy are the essence of Bracco’s extrarordinary work.
The exhibition at the Biscayne Art House runs through June 3, 2014. It is open to the public Monday through Friday, from 9 am to 5 pm, by appointment only.
CC-BY-SA-2.0, FlickrFoto: Patrick Feller. ¿A qué se debe el rally de los bonos?
U.S. Treasuries rallied last week, pushing yields to new 2014 lows – but why did it happen? According to the blog followPioneer.com, by Pioneer Investments, war fears seem an unlikely explanation: gold and oil were well-behaved, and equities were flattish. U.S. economic fears couldn’t explain it – the data wasn’t bad – but low Eurozone GDP growth might have contributed. The trading desk buzz is that we’re seeing a short squeeze – there just aren’t enough bonds to go around.
Pioneer Investments thinks that domestic services may be starting to put upward pressure on core CPI and PPI. There’s little inflation visible in globally traded goods (import prices are down 0.3% year over year (y/y) and export prices are up 0.1%). Headline CPI rose 0.3% in April; core rose 0.2%. April CPI was up 2.0% y/y, while core was 1.8%. Nevertheless, the methodology used to calculate PPI has changed. The old Producer Price Index has been “PPI total final demand”. Let’s call it “new PPI”. New PPI rose 0.6% in April, far above expectations. Core was up 0.5%. Headline new PPI was up 2.1% y/y. Excluding food & energy, it was up 1.8% y/y. This is not just food and energy inflation—it’s also in the core. Sam Wardwell, CFA, Senior Vice President and Investment Strategist at Pioneer Investments notes that Alan Greenspan had this to say: “I don’t know whether or not that is other than a blip, but if inflation is beginning to pick up, it’s got to start somewhere, and it usually starts the way we’re looking at it.”
Jordi Comas, CEO at Andbank.. Andbank Aspires to be within the Top 5 Private Banks in Latin America in the Next Decade
Since 2008, when Andbank’s management was put into the hands of Jordi Comas, CEO, and Tubau Ricard, managing director, the bank has gone from being centered in Andorra to its internationalization, leading to a significant leap in Spain and Latin America, undoubtedly driven by the legislative change in the Principality of Andorra. This change has shifted Andorra from being a tax haven, with bank secrecy as its greatest asset, to becoming a low tax jurisdiction; a situation which has forced Andbank to find markets abroad in which to continue growing.
In addition to Spain, Andbank now has a presence in Luxembourg, Switzerland, Monaco, Bahamas, Miami, Mexico, Panama, Brazil and Uruguay, and it intends to continue to grow as long as good opportunities arise. It should be remembered that in 2008 only 5% of its business came from Latin America, whereas currently the region represents a third of its total business.
Last year, the bank grew an average of 30% in each Latin American country in which they are present. With a clear commitment to becoming a highly diversified bank and within the strategy set by Andorra, Comas declared that in seven to ten years time, the bank aspires to be within the top 5 private banks in Latin America, where they not only have set a goal of growth, but also to add value.
During an interview with Funds Society, Comas reviewed the banking institutions’ progress, the results achieved during the 2013 financial year, submitted at the beginning of May, as well as Andbank’s plans for 2014, when the bank hopes to continue with the growth rates registered last year. In 2013, the bank’s profit grew by 13.3% in comparison to 2012; this was due primarily to the consolidation of its private banking model and to the strong development of its international business.
Likewise, clients’ assets under management grew by 22% in the previous year to reach €13,5 billion, (about US$18,5 billion). The group’s international area represents almost 60% of the clients’ resources, and the bank maintains a high solvency ratio of 20.69%.
Comas said that, despite the “dramatic environment registered at the economic and taxation levels”, 2013 was a good year for the bank and hoped to continue to grow at the same rate in the coming years.
It should be remembered that in 2013 Andbank reinforced its presence in Spain with the acquisition of Inversis Bank’s private banking business, an operation which allowed Andbank to add another €4.5 billion in one stroke to the €1 billion raised during its first year in Spain, where they arrived in early 2012 with the purchase of Medivalor, a small securities brokerage agency.
Implementing the Inversis platform model in Latin America
As for its plans for Latin America, where they’re still committed to continued and strong growth. Comas commented that they plan to implement the Inversis platform model to Latin America, where it’s difficult for the average investor to access products that are only available to the large investor and only through the larger banks. The CEO stressed that they will be paying particular attention to Mexico and Brazil, where “there’s no online platform which brings together third party products.” Comas stresses that the organization not only aims to do private banking, but also to democratize it given the region’s “very clear potential”.
As to whether they will continue with its acquisition policy and its partnerships with other firms as they have been doing in recent times, the company’s CEO clarified that they don’t regard neither of those operations as an incorporation of assets, but as a way to attract talent. “That’s why we find it so difficult to make acquisitions.”
Currently Andbank aims for continued growth in the 10 jurisdictions in which it operates and, should opportunities present themselves, Comas has no doubts that they will pursue them. “We are acquirers by nature, especially in Latin America, and especially in Miami, Mexico and Brazil, where we believe we have to make a strong commitment to growth.” It should be noted that earlier this year, the bank acquired the Miami firm, Swiss Asset Advisors, led by Michael Blank who, together with his team, joined Andbank’s Miami office.
“We don’t put a ceiling to our growth. Our limit is to find excellent professionals who want to join our project. We try to recruit the best … Our goal is to grow soundly and with the best people,” stressed the CEO, who insisted on Latin America’s importance for the group’s business.
In this respect, the CEO referred to Uruguay’s example, where they are present through a representative office in Punta del Este, which was recently joined by a team from HSBC. For Comas, the Southern Cone is a very important region because it is an area of great development, in the same way as Miami and Panama. Comas explained that a number of bankers have recently joined Andbank Panama, and the same has happened in the Bahamas, where earlier this year the bank also changed their head office, appointing Juan Iglesias, from Julius Baer as the CEO in charge.
With ‘mutual recognition’ of investment products between Hong Kong S.A.R and the People’s Republic of China set to transform these markets, regulators and market participants need to consider the conditions that will allow the benefits of this impending policy to take full effect for the region’s growing exchange traded funds market. Rex Wong, Managing Director within BNY Mellon‘s Asia Asset Servicing business, describes the market infrastructure, product developments and aspects of investor education that are needed to bring about the full potential of mutual recognition for exchange-traded funds (ETFs).
“There’s great potential for mutual recognition to make life easier for ETF promoters and drive product design and development as they expand their footprint in the Asia-Pacific region. But success in building the ETF market in China and sustaining product development also requires changes in local market infrastructure and, most importantly, regulatory reforms.
“Today, Hong Kong and China together account for around 35% of total ETF assets under management (AUM) in the region, with Japan accounting for approximately 45%. The Asia-Pacific ETF market as a whole is seeing growth of 15%-20% annually. Once the right structures are in place, we expect the ETF market in Hong Kong and China to outpace the growth of the broader Asia-Pacific region. Mutual recognition may accelerate the growth, leading to AUM in Asia-Pacific’s ETF market to grow by as much as 50% to reach US $250 billion by 2016 from its base of roughly US $165 billion today.
“We start from the premise that mutual recognition cannot be viewed in a vacuum. It will exist as part of – and because of – the success of other efforts that the Chinese government has put in place to liberalize its financial sector and facilitate cross-border capital flows. The pillars of this system include the expansion of the Renminbi Qualified Foreign Institutional Investor (RQFII) program, raising investment quotas for RQFII holders, opening new asset classes to foreign investors, such as interbank debt, and free trade zones.
“All of these programs need time to develop in order to create the right environment for ETF promoters to take full advantage of mutual recognition. In the interim, mutual recognition will mostly benefit mutual funds, as the market infrastructure requirements are less complex than for ETFs.
“However, I believe we will see some ETF developments in the early days of mutual recognition, especially in the area of China A-share ETF products listed in China thanks to the continued interest of Asian investors in the country’s domestic market. In the medium term, investors will also be able to access more diverse asset classes including international equities, bonds and commodities. That will give them an exchange-listed option to gain exposure to global markets and other asset classes that do not currently exist today in their home market.
“But these are modest developments, essentially low hanging fruit. New market infrastructure is needed in order for China’s ETF market to reach a stage of development that resembles the big ETF markets in Asia-Pacific, which are Japan, Hong Kong and Korea.”
Promoting ETF liquidity and enhancing the ease of currency transfers
“First, we need to see more broker-dealers act as ETF market-makers and their active participation to provide liquidity is essential to the survival of ETFs. The ETF market making business in China is relatively new. However, many global broker-dealers already have a presence in Hong Kong, and can step into this role if regulation so permits it. They can bring their global trading platforms and expertise, and promote the development of this sector in China.
“Second, an ETF that uses multiple active market makers that can access multiple liquid alternative hedges in addition to its basket would make it easier for the ETF to attract assets and to survive in the ETF space. There needs to be a diverse range of futures and options and a liquid derivatives market for ETFs. This will be an important inducement to market-makers as it allows them to hedge their exposure for the products in which they are providing liquidity.
“Third, removing restrictions on short-selling of ETFs would lower the cost that market-makers face and improve their ability to provide liquidity in the market.
“Finally, there needs to be a more streamlined process for transferring RMB across borders to make it more of a real-time process. This point is crucial. Restrictions on and delays in RMB transfers can prevent fund managers from investing in the underlying index shares. This introduces the risk that ETFs will suffer ‘tracking error,’ which can undermine their appeal, especially to institutional investors. A system for real-time RMB transfers or enhancement to the existing cross-border transfer process will alleviate this pain point and really allow the industry to take full advantage of mutual recognition.”
Achieving the full benefits of mutual recognition
“Once the regulatory and infrastructural foundations are in place, the market will be able to support a greater number of ETFs and investment styles covering a variety of industry sectors, asset classes and investment strategies.
“We are seeing some innovative products today, like fixed income, sector, style, gold, cross-exchange and cross-border ETFs in China, but enhanced infrastructure, on the back of regulatory reforms, will really allow the market to develop further. Korea has been very progressive and has seen products such as inverse and leveraged ETFs come to market and we have seen Japan follow suit. Nevertheless, unless the current regulation is relaxed, we will not see the same level of innovation in China or Hong Kong.
“While regulatory reforms remain the key to the development of Asia’s ETF market, investor education will play a vital role. The ETF promoters can foster wider and deeper usage of ETFs by showing how they facilitate asset allocation and portfolio building. And with trading in China’s domestic markets dominated by retail investors, fund sponsors need to encourage institutions to see ETFs as instruments that can be used both tactically and strategically. Institutional and retail participation will be critical for the ETF market’s growth.”
As summer approaches, employees are busy planning long-awaited vacations. But a new Robert Half survey shows 39 percent of workers won’t use all the paid vacation time they’re given. The reasons: 38 percent are saving days in case they need them later, while 30 percent fear falling behind at work.
The national study was developed by Robert Half, the world’s first and largest specialized staffing firm, and conducted by an independent research firm. It is based on 436 telephone interviews with U.S. adults working in an office environment.
Workers were asked:“Do you typically use all of the paid vacation days you are provided by your company?” Their responses:
Yes
58%
No
39%
Don’t know/no answer
3%
Workers who answered “no” were asked: “What is the primary reason you don’t use all of your vacation time?” Their responses:
You want to save time in case you need it
38%
Too much work – you don’t want to fall behind
30%
You don’t like to take time off or vacations
12%
Don’t get any vacation time
10%
Your manager would frown upon it
3%
Something else
7%
“Whether you’re a vacation ‘saver’ or ‘spender,’ it’s important to have balance,” noted Paul McDonald, senior executive director of Robert Half. “All work and no play doesn’t just lead to burnout — it also erodes creativity, since stepping out of your routine frequently sparks innovation,” he said. “Fresh perspective is useful in just about any profession.”
McDonald added that managers should lead by example when it comes to saying “bon voyage” to the office. “Supervisors should encourage their teams to take a break and recharge, especially their top performers, who are often the most aggressive vacation savers and most susceptible to burnout. The best way to do this is by taking time off yourself,” he said.
Geopolitical risk and weather have been underpinning commodity prices at large since the start of the year. If the Ukraine-Russia tensions would abate certain segments within commodities like Energy, Precious Metals and Agriculture increasingly may face headwinds. Speculative positioning in WTI crude and Brent crude oil is still very high currently and at risk of reversal, according to ING IM. Within Precious Metals already, the trend in non-commercial net length is down. ING IM increased the underweight Gold (to -2). With ETP gold holdings turning South again and other arguments still in place (global cycle pulse, upward real yield pressure, still high non-commercial positioning, leveling off of Chinese physical demand,..) ING IM sees downside in gold prices.
Speculative length in Agriculture also is high, in particular in Corn. Some colder than normal US weather has delayed corn plantings somewhat. With some US weather normalization expected, US corn plantings will likely catch- up. US Corn acreage may be underestimated. ING IM is increasing its underweight to -2 (from -1).
In the background the theme of a developing El Nino weather pattern has been building. Typically El Nino leads to drought in SE Asia/ Australia and excessive rain in Western South America. Australian drought could hurt local wheat production substantially. Chinese demand for US wheat could rise in such a scenario and global and US wheat balances tighten. Soybean prices could also benefit from South American (Brazil) crop losses.
On the other hand, ING IM states that US Corn production typically outperforms under El Nino. By moving Wheat and Soybean to +1 against Corn -2 ING IM introduces some El Nino optionality in its portfolios.
You may access the full report in the attached pdf file.
Investcorp has announced that David Walsh has joined the firm’s Hedge Funds business. In his new role with Investcorp, Mr. Walsh’s responsibility will be to identify and source emerging hedge fund talent, and to structure and develop relationships with these managers. He will report directly to Nick Vamvakas, Head of Investcorp’s Single Manager Business. Investcorp’s Single Manager Business establishes strategic relationships with emerging managers, providing them with seeding and acceleration capital in addition to distribution and business support.
Commenting on the strategic hire, Lionel Erdely, Head and Chief Investment Officer of the Hedge Funds Group at Investcorp, said, “David has been identifying and working with early stage hedge fund managers for years in his prior roles. We believe his background will enhance our capabilities in identifying and sourcing new hedge fund talent early in their life cycle. His addition is a boost to our seeding and emerging manager program as we work to execute on our plans to significantly grow our investment universe.”
Before joining Investcorp, Mr. Walsh served as a senior member at UBS as part of their Capital Introduction Group, where he was actively involved in all aspects of the prime brokerage business – including originating prospects, sales, and relationship management. Earlier in his career, he helped UBS develop and structure products to provide investors access to alternative investments through the investment bank’s Funds Derivatives Group.
Investcorp is a leading provider and manager of alternative investment products. The Investcorp Group has offices in New York, London, the Kingdom of Bahrain, the Kingdom of Saudi Arabia and Abu Dhabi. Investcorp has three business areas: corporate investment in the US, Europe and the Gulf, real estate investment in the US and global hedge funds. As at December 31, 2013, Investcorp had $11.3 billion in total assets under management.
