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Federal Reserve Board Announces Civil Money Penalty and Issues Cease and Desist Order Against Credit Suisse

Credit Suisse se declara culpable de fraude fiscal en EE.UU. y pagará una multa de 2.500 millones — Photo: Varnent. Federal Reserve Board Announces Civil Money Penalty and Issues Cease and Desist Order Against Credit Suisse

The Federal Reserve Board on Monday announced that Credit Suisse will pay a $100 million penalty for unsafe and unsound practices and failure to comply with the federal banking laws governing its activities in the United States. The Federal Reserve also issued a cease and desist order requiring Credit Suisse promptly to address deficiencies in its oversight, management, and controls governing compliance with U.S. laws. This action is taken in conjunction with actions by the Department of Justice and the New York State Department of Financial Services for violations of the federal income tax laws and various New York State laws. The penalties issued by the agencies total $2.6 billion.

The Board’s cease and desist order and assessment of civil money penalty against Credit Suisse, a foreign bank that is subject to the International Banking Act and other U.S. federal banking laws, are based on the institution’s inadequate risk-management and compliance program, and its failure to conduct and accurately report to the Federal Reserve the operations of its New York representative office in compliance with U.S. banking laws. These failures contributed to the violation of the International Banking Act, the U.S. income tax laws, and the U.S. securities laws. Credit Suisse’s New York representative office was closed in 2009. Credit Suisse continues to operate a branch office in New York, which is covered by the enhanced policies and procedures required by the order.

The order requires Credit Suisse to complete its ongoing efforts to implement programs and policies to ensure that Credit Suisse conducts its operations in the United States and worldwide in full compliance with U.S. banking laws and the contemporaneous orders of the Department of Justice and the New York State Department of Financial Services.

As part of the order, Credit Suisse has agreed to terminate its relationship with, and not re-employ or otherwise engage, nine individuals who were involved in the actions that resulted in the violation of U.S. laws. Apart from the actions with regard to the institution, the Federal Reserve is investigating whether other specific individuals that may have been involved in the actions that resulted in violations of U.S. banking laws during the relevant period should separately be subject to actions by the Federal Reserve. These actions could include fines and orders prohibiting specific individuals from participating in the business of banking, including working for any institution subject to the jurisdiction of U.S. federal banking supervisors. Credit Suisse has agreed to cooperate in these investigations, but is not the subject of these investigations.

At a press conference, Deputy Attorney General James M. Coleannounced the guilty plea in Credit Suisse offshore tax evasion case, an historic guilty plea by the bank and the largest monetary penalty of any criminal tax case ever. “Today’s guilty plea is an appropriate resolution, given the duration and breadth of Credit Suisse’s conduct. Credit Suisse engaged in serious wrongdoing, first, when it aided and abetted U.S. tax evasion, and then when it failed to take immediate steps to remedy this conduct and cooperate in our investigation. Today Credit Suisse has admitted that conduct and faces significant consequences for it. Its agreement to pay fines and restitution in excess of 2 and a half billion dollars reflects both the significance of the problem at the bank and the bank’s acceptance of responsibility for it”.

Credit Suisse is taking the appropriate steps to put its criminal conduct behind it and move toward a new era of compliance. Through this guilty plea and Credit Suisse’s civil resolutions with the Securities and Exchange Commission, the Federal Reserve, and the New York Department of Financial Services, Credit Suisse has committed to working with U.S. law enforcement and banking regulators in order to ensure that its wrongdoing remains in the past. “We acknowledge Credit Suisse’s efforts in this regard, and I expect that as the Bank moves forward, it will continue on its new path of compliance with U.S. tax laws”.

More Swiss banks

“In several public statements, I have promised additional public developments with respect to the Department’s investigations into the use of secret offshore bank accounts in Switzerland and elsewhere, and one of those developments has come to pass with today’s plea. But there have been many other notable actions in the past few months in our ongoing efforts to combat the use of foreign bank accounts to evade U.S. taxes. Eight individuals affiliated with Credit Suisse have been indicted by the United States Attorney’s office for the Eastern District of Virginia for their role in conspiring to assist U.S. clients in concealing their income and assets from the IRS. Two of them have pleaded guilty in recent weeks. In January 2013, Wegelin Bank, another Swiss bank, pled guilty to conspiracy to evade taxes. We have targeted 13 other Swiss banks for similar conduct”, adds.

Just recently, a Swiss asset management firm, Swisspartners Group, entered into a multi-million-dollar settlement with the U.S. Attorney’s Office for the Southern District of New York, and produced account files of its clients. “We have also had over 100 Swiss banks come forward as part of a program we put in place with the support of the Swiss government. Under this program, these banks, which were not under investigation, will pay penalties for the violations of US law that were committed at their institutions, and provide us with information that will lead to the identification of their US clients who evaded paying their taxes. We also have had over 43,000 US taxpayers enter into the IRS voluntary disclosure program and pay over $6 billion in back taxes and penalties to the United States Treasury”.

The Department is committed to robust enforcement in the offshore area, not just in Switzerland, but wherever in the world it is found. “We have taken public actions in India, Israel, Luxembourg, the Cayman Islands and several other Caribbean countries. And we are engaged in law enforcement actions around the world that are not yet public”.

Financial Advisors Overlook or Misread Fundamental Client Behavior

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Financial advisors (FAs) and their clients in the Americas do not always see eye to eye when it comes to identifying key elements driving their relationship, according to EY’s third annual Wealth Management Survey. The survey identifies three key themes that will help wealth management firms and their financial advisors improve client acquisition, service and retention.

“Often, wealth management firms listen only to financial advisors when they seek to understand client preferences and the important trends, issues and challenges facing their industry. Unfortunately, this provides an incomplete view of the needs and desires of wealth management clients,” said Juan Carlos Lopez, Executive Director, Wealth Management at Ernst & Young LLP. “This year, we elicited comprehensive feedback from both advisors and their clients to compare and contrast views on key trends driving the industry and identify gaps and opportunities to improve relationships across the client lifecycle.”

The survey identifies three key areas of opportunity for wealth managers to improve and grow their businesses.

Advisors overestimate the importance of their role

Financial advisors tend to overvalue the importance of their relationships with clients, while misreading the relevance of factors like firm reputation, fees, segment specific strategies and product access.

In fact, after years of focusing on liquidity and wealth preservation post-2008, portfolio performance regains the top spot on clients’ minds, ranking well above the relationship with their advisor among the factors keeping clients with their wealth managers. Furthermore, clients value a firm’s reputation over that of the individual advisor when choosing a new wealth manager, which emphasizes a need for advisors to have a strong brand backing them to help attract new clients.

Additionally, clients indicated that while competitive fees are less important when choosing a new wealth manager, they become more important later in the relationship and they are the top reason they choose to switch to a new advisor. Clients ranked competitive fees second only to poor portfolio performance when it comes to reasons they switched wealth managers.

Trends in holistic goal-based planning and generational wealth transfer

Advisors and clients agree that holistic goal-based planning and generational wealth transfer are two of the most relevant trends but wealth managers are yet to implement effective strategies to capitalize on these areas of opportunity.

While holistic goal-based planning is cited as the most important factor driving clients’ assets to wealth managers, clients see little differentiation across the industry when it comes to an individual firm’s approach to goal-based planning. Furthermore, clients perceive low value from their current firm’s goal-based planning offering. This represents a tremendous opportunity for wealth management firms to provide not only a differentiated offering, but one that delivers value across the lifecycle to improve retention and wallet share.

Generational wealth transfer is also top of mind for clients, and it is the number one factor ranked by advisors as driving the future of their businesses. Wealth transfers are particularly timely as the last of the Baby Boomer generation enters retirement. Compounding this is the fact that a large percentage of Baby Boomer advisors are preparing to retire as well, with little thought to client transition strategies. Therefore, wealth transfers pose a tremendous risk as well as an opportunity for wealth management firms to retain assets. Acquiring and training the next generation of FAs and giving them the tools to acquire the next generation of clients will keep risk of flight assets in check. Firms need to better prepare their advisors on wealth transition execution strategies to capitalize on this critical trend.

Traditional channels are here to stay

Traditional channels are and will continue to be the primary medium though which clients interact with advisors over the next three to five years. Digital channels – such as social media and tablets – will play a complementary role. Still, both clients and advisors rank face-to-face communication, whether in or outside of a branch, as the highest and most relevant interaction.

Furthermore, clients and advisors agree that telephone and email correspondence will continue to be key channels, especially for convenience. While digital channels rank lower for both clients and advisors, opportunities for technology to expand and improve client-advisor interaction exist. However, this will not replace traditional interaction options for clients. Neither clients nor advisors find digital communication to be a key factor in the acquisition, servicing or retention stages of the relationship lifecycle, and social media has yet to gain ground.

Channel preferences do, however, vary across wealth segments, illustrating the need for wealth management firms to invest in segmented channel offerings:

Ultra-high net worth clients (defined as those with investable assets of $25 million and over) see the branch as their preferred channel for interacting with an advisor.
High net worth clients (defined as those with investible assets of between $1 million and $25 million) expect more out-of-branch interactions to become their primary channel in the future, but they will continue making significant use of in-branch meetings.
Mass affluent clients (defined as those with investible assets between $250K and $1 million) prefer the telephone and e-mail over face-to-face interactions. They are, and will continue to be, the heaviest users of smartphones.

“Changing economic conditions and a burgeoning retirement demographic are putting the wealth management industry through a period of great change and great opportunity,” said Nalika Nanayakkara, Principal at Ernst & Young LLP. “Wealth management firms that truly understand client and advisor needs, and the gaps in advisors’ understanding of their clients, will be in a prime position to optimize their go-to-market strategy and capitalize on these opportunities.”

EY’s 2014 Wealth Management Survey contains data based on the responses to 19 questions from advisors and clients from varying geographies, wealth segments and demographics. The questions were designed to measure the importance of a broad set of wealth management industry topics such as client service and retention, communication, marketing, investing strategies, satisfaction and asset allocation.

Why ‘Abenomics’ is Running out of Steam

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Razones por las que el Abenomics se queda sin gas — Photo: Bantosh. Why ‘Abenomics’ is Running out of Steam

Japan’s trillion-dollar experiment with ‘Abenomics’ is now running out of steam, and more monetary stimulus may be inevitable if the economy is to avoid recession.

That is the warning from Robeco’s chief economist, Léon Cornelissen, as the all-important ‘third arrow’ of economic stimulus by Japanese Prime Minister Shinzo Abe – structural reform to a deeply entrenched economy – appears to falter.

Following the VAT hike last month which was designed to stimulate spending in the first quarter, Abe is now running out of options, says Léon Cornelissen. This raises fears that Japan could fall back again into deflation, which was a key factor in Japan’s ‘lost decade’ in the 1990s. Deflation means goods become cheaper in the future, so people defer spending, triggering recession.

Cornelissen cites Japan’s recent failure to strike a bilateral trade agreement with the US as an example of how hard it is to reform Japan. A deal was necessary to rekindle negotiations that would enable Japan to join the 12-nation Trans-Pacific Partnership, which promotes tariff-free trade between members. However, Abe wanted to retain import tariffs on farm products, which hurt US producers, as he didn’t dare to put too-heavy burdens on Japan’s highly protected farmers.

Third arrow misses target for structural reform

“This failure to strike a deal is symptomatic for the lack of progress on the so-called third arrow of ‘Abenomics’ – supply side reform to increase Japan’s structural growth rate,” says Cornelissen. “It could be argued that the third arrow of ‘Abenomics’ is a long-term issue and therefore not relevant for the short-term growth prospects of the Japanese economy.”

“But lack of reform could mean that the world would have much more difficulty in accepting a further weakening of the yen. Japan’s position has been dubbed by the International Monetary Fund as an ‘over-reliance on monetary stimulus’ which could hinder a rebound of investment by Japanese companies in their country. This in itself is a necessary condition for self-sustaining growth and the ultimate success of Abenomics.”

“Lack of reform means more difficulty in accepting further yen weakening”

Cornelissen says few concrete measures have been announced to support the third arrow, including the legislation needed to create special economic zones. Tax reforms, labor market deregulation and corporate governance reform could all support investments. An increase in the female labor participation rate and a relaxation of immigration requirements would also be welcome, but progress has so far been limited, he says.

Abenomics was launched in 2012 on the back of stronger exports, due to the weaker yen, and strong private consumption growth that was caused mainly by the boost to national wealth from higher equity prices. However, share prices have weakened this year (the Nikkei is down 8%) and the yen is stabilizing at around 102 to the US dollar.

IMF and central bank downsize growth forecasts

The IMF in April lowered its growth forecast for Japan for 2014 from 1.7% to 1.4%. The Bank of Japan (BoJ) also cut its growth forecast for the current fiscal year in its semi-annual report in April, now predicting that GDP will grow by 1.1 per cent in the fiscal year to March 2015 instead of the 1.4% forecast in January. The central bank blamed “sluggishness” in emerging economies for Japan’s muted export performance, though it admitted that the steady shift in production overseas has also been a factor.

“The VAT hike from 5% to 8% on 1 April is an important step towards fiscal consolidation,” says Cornelissen. “That is why it is supported by the BoJ, despite its negative impact on growth. Abenomics has so far been very successful in raising inflation and inflationary expectations, due to the dramatic monetary loosening by the central bank.”

“But inflation expectations now seem to have leveled off. This could be a reflection of continuing doubts that Abenomics will not be more than a temporary stimulus to the Japanese economy.”

“Inflation expectations now seem to have leveled off”

Wage developments are key

Cornelissen points out that in contrast to recent price developments, wage rises have been disappointing. Average monthly cash earnings rose only a meagre 0.7% on a yearly basis in March, and in real terms they are declining.

“The sluggish wage growth is partly due to structural developments, such as the shift from full-time to part-time workers,” he says. “However, it also suggests caution by employers who in general apparently remain unconvinced that Abenomics is having more than a temporary impact, and are therefore reluctant to raise fixed personnel costs. The outcome of the current wage bargaining round is of critical importance.”

“And so the eventual success of Abenomics at this stage remains in doubt. Key variables to watch are wage developments and investments. I believe that the overly optimistic Bank of Japan will be forced into additional monetary stimulus, probably in July, leading to a weaker yen vis-à-vis the US dollar.”

ETF Securities Hires Caspar Robson as Head of Marketing & Communications

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Caspar Robson, nuevo director de Comunicación y Marketing en ETF Securities — . ETF Securities Hires Caspar Robson as Head of Marketing & Communications

ETF Securities, one of the world’s leading, independent providers of exchange traded products (ETPs), has hired former Head of EMEA Marketing at the CME Group, Caspar Robson, as Head of Marketing and Communications. Based in London, Mr Robson will report to ETF Securities’ Chief Executive Officer, Mark Weeks.

In his new role, Caspar Robson will be responsible for the development and implementation of marketing and communications strategies across the group globally. He will work closely with business lines and regional leadership teams to further strengthen the company’s brand and presence to deliver accelerated growth.

Mr Robson brings more than 20 years of experience to this role and was most recently at the CME Group where he built the international marketing team and developed targeted marketing strategies in the EMEA region and Asia as a key part of its globalisation strategy. He previously spent 6 years at the London Stock Exchange where he held a number of marketing functions, including Group Marketing Strategy Manager. He played an instrumental role in developing the LSE’s centralised group marketing unit and created the marketing strategy team. Prior to this he worked as a marketing strategy consultant, after completing an MBA at Warwick Business School, and for Investec Bank.

Commenting on the appointment, Mark Weeks, Chief Executive Officer, ETF Securities said: “This is an important time for ETF Securities as our aim is to intelligently diversify the business beyond commodities. Caspar is a skilled marketing professional with an extensive experience in implementing global marketing strategies. His appointment is key to ensuring that we develop our marketing capabilities to meet the needs of our clients, business units and distribution teams internationally as the business continues to grow.”

Newmark Grubb Knight Frank Opens New Offices in Argentina, Brazil, Chile, Colombia and Peru

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Buenos Aires. Foto: Enelson Rojas, Flickr, Creative Commons. Argentina: un deterioro lento pero permanente de la situación cambiaria y monetaria

Newmark Grubb Knight Frank has added 50 senior-level advisors in Argentina, Brazil, Chile, Colombia and Peru, while augmenting its capabilities within the Americas as the global economic recovery takes hold, CEO Barry Gosin announced.

“The economies of these rapidly developing South American countries are seeing organic growth in energy, financial services, pharmaceuticals, manufacturing, mining and other burgeoning industries, and are attracting intensive investment from outside the region,” said Mr. Gosin. “As NGKF clients increasingly seek out strategic opportunities in Latin America, we continue to boost our presence with the premier real estate advisors in the major markets. These additional executives have amassed an impressive record of success in executing the highest caliber of service on the global stage, and will be the force behind growing NGKF’s platform in South America.”

Seasoned top-level executives heading the offices are: Domingo Speranza, president of Newmark Grubb BACRE in Argentina; Marina Cury, president of Newmark Grubb Brazil; Camilo Fonnegra, president of Newmark Grubb Fonnegra Gerlein in Colombia; and, Manuel Ahumada and Jorge Didyk, managing directors of Newmark Grubb Contempora Servicios Inmobiliarios in Santiago, Chile and Lima, Peru, respectively.

According to Milton Chacon, NGKF regional manager for Latin America, their extensive resume of global clients has included industry heavyweights such as ExxonMobil, IBM, Johnson & Johnson, Morgan Stanley, Unilever, Sony, Avon and Nokia, along with major landlords like Hines and Brookfield.

“We’ve added substantial resources across our global platform to advise clients every step of the way,” said Mr. Chacon. “From valuation, appraisal and acquisitions to consulting, site selection, project construction and property management, our broader LatAm coverage is strengthened by this deep bench of stellar professionals.”

“NGKF seeks out only the top producers for growth and collaboration, as we have done in carefully selecting these South American executives,” Mr. Gosin says. “Attracting the best people in the business yields creativity and superior client service, and our consistency in delivering those results, across property types and markets, is the chief reason we have grown to become one of the leading and most advanced of the global real estate firms.”

Lazard Asset Management Launches Emerging Markets Income Fund

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Lazard Asset Management has announced the launch of the Lazard Emerging Markets Income Portfolio.

The Lazard Emerging Markets Income Portfolio seeks to deliver capital appreciation and income from exposure to emerging-market currency and local debt markets, with a short duration bias. The Portfolio is designed to have low correlation to broad equity and debt indices, which can provide favorable diversification benefits for investors, while its limited duration and credit risk profile distinguish its sources of returns from traditional fixed income assets. The identification of idiosyncratic macro-economic factors, policy variables, and market inefficiencies form the crux of the team’s fundamentally-based approach. The Portfolio is based on an existing strategy that the team has managed since inception in 2011.

The Portfolio is co-managed by Ardra Belitz and Ganesh Ramachandran, Managing Directors and Portfolio Managers on Lazard’s Emerging Income team, which manages short duration emerging markets local currency and debt strategies. Ardra and Ganesh have over thirty years of combined experience in the asset class. We believe this experience provides a unique advantage in their ability to identify well-compensated opportunities from a highly diverse, lowly correlated local market universe and produce superior risk-adjusted results.

“The Emerging Markets Income Portfolio offers an attractive solution for investors seeking yield-based total return from non-traditional sources, while the strategy’s low volatility mitigates entry-point risk relative to other emerging market asset classes,” said Ardra Belitz.

“The Portfolio has the potential to benefit in a period of rising interest rates as global demand conditions improve, given the favorable implications for emerging market local currency valuations following sizeable depreciation in recent years,” added Ganesh Ramachandran.

The Emerging Income team leverages Lazard’s deep emerging market resources across multiple disciplines, including over 60 investment professionals dedicated to emerging markets. As of March 31, 2014, Lazard Asset Management manages over $60 billion in emerging markets equity and debt assets on behalf of clients globally.

Investors Doubt about Strength of Recovery as Cash Levels Rise Again

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Foto: Mostafazamani, Flickr, Creative Commons. Dentro o fuera de la Ley del Mercado de Valores: ¿qué conviene más a las EAFIs tras el RDL de MiFID II?"

Global investors have increased cash and scaled back risk-taking, amid fears of geopolitical instability and questions about the strength of the global economic recovery, according to the BofA Merrill Lynch Fund Manager Survey for May.

Investors are sitting on more cash and have reduced equity holdings compared to a month ago. Average cash levels have reached 5 percent of portfolios – the highest level since June 2012 and up from 4.8 percent in April. A net 22 percent are taking below normal levels of risk, up from 11 percent a month ago. The proportion of asset allocators overweight equities has fallen to a net 37 percent from a net 45 percent last month.

Respondents to the global survey are confident that both the world economy and corporate performance are improving, but question the rate of growth. A net 66 percent of the panel expects the economy to strengthen in the coming 12 months, up from a net 62 percent in April. A net 49 percent say that corporate profits will rise in the coming year, up five percentage points month-on-month. But nearly three-quarters (72 percent) predict “below trend” growth for the global economy, and a net 20 percent say it’s unlikely corporate profits will grow by 10 percent or more in the year ahead.

Investors also see two major risks to market stability. One-third of the global panel believes that the risk of Chinese debt defaults poses the biggest tail risk. And 36 percent say a geopolitical crisis is the greatest threat. “Investors are showing belief in the economy but with two big question marks: Are we on the brink of a disruptive event? And why, at this point in the cycle, isn’t this recovery stronger?” said Michael Hartnett, chief investment strategist at BofA Merrill Lynch Global Research.

“Specifically, within Europe, investors are all aboard the periphery train, and there’s now simply no margin for error. Spanish and Italian equities are preferred over those in the U.K. and Switzerland, while eurozone periphery debt is seen as the most crowded trade globally,” said Obe Ejikeme, European equity and quantitative strategist.

Momentum builds behind Europe

European equities have bucked the broader monthly trend of seeing allocations scaled back, and investors have indicated the positive flows should continue. A net 36 percent of global asset allocators say they are overweight eurozone equities, up from a net 30 percent in April. Allocations to other developed markets, namely the U.S. and Japan, fell month-on-month.

Europe is also the region most in favor looking ahead. A net 28 percent say that it’s the region they most want to overweight in the coming 12 months, up from a net 23 percent a month ago. A net 14 percent say that European equities are undervalued. The U.S. is the least-favored region with a net 18 percent saying it’s the region they most want to underweight, up from a net 9 percent in April. Forward-looking sentiment for emerging markets has improved slightly over the past month and a net 3 percent say it’s the region the most want to overweight.

Nonetheless, the panel has sounded two warnings about European assets. First is that significantly more investors say that being long EU periphery debt is the most crowded trade – 35 percent of the panel take that view this month, up from 19 percent in April. Investors also continue to see the euro as the most overvalued currency, with 58 percent of the panel taking that view ahead of ECB governor Mario Draghi hinting towards policies that could lead to weakness in the euro.

European investors’ view of their region reflects the global perspective. They forecast economic growth, but a net 30 percent predict less than 10 percent corporate profit growth in the region. Average cash balances have risen to 4.8 percent, from 3.8 percent in April.

Global sector switches reflect risk-off stance

Changes in global sectoral equity allocations from April to May reinforced the sense of investors scaling back risk. The biggest positive swings were towards Utilities and Energy, with a net 15 percent of investors increasing their allocations to these more defensive sectors. A net 14 percent of investors scaled back positions in Banks, and a net 8 percent reduced holdings in Technology.

Chicken and egg question over putting cash to work

While investors have increased their cash levels close to two-year highs, they remain keen to see companies put their cash to work. A net 66 percent of the global panel says that corporates are under-investing, up two percentage points on April’s figure. And 60 percent say that “increasing capital spending” is the best use of cash flow, up from 58 percent last month.

Generali Investments Europe Names Andrea Favaloro Head of Sales and Marketing

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Andrea Favaloro is the new Head of Sales and Marketing at Generali Investments Europe, the Generali Group’s asset management arm with over €340 bn of assets under management. He will be responsible for the company’s global sales activities targeted at institutional and retail customers.

Santo Borsellino, CEO of Generali Investments Europe, said: “Having decided to widen the scope of this role to achieve a truly global orientation, we identified Andrea Favaloro as our top choice. Therefore, I am very pleased to welcome him to GIE. He brings a unique set of skills and extensive experience in distribution and asset management. I am sure he will give further boost to our third-party business, which we are strongly committed to.”

Andrea Favaloro joins Generali Investments Europe from BNP Paribas Investment Partners, where he became Global Head of External Distribution in 2011. Before that, he held senior management positions in Milan and London. Andrea Favaloro holds a B.A. in Business Studies from Brunel University London (UK).

Also, Generali Investments Europe has announced that, with effect from May 15th, Antonio Cavarero will strengthen the company’s Fixed Income team as the new Head of Fixed Income Italy. He will be responsible for a team of 12 portfolio managers managing approximately €160 bn of Italian domiciled fixed income assets. Fixed Income remains Generali Investments Europe’s key area of expertise, accounting for more than 80% of the company’s total assets under management.

Antonio Cavarero has extensive experience in the Fixed Income industry gained within top-tier global investment banking companies and, most recently, he held the position as Senior Inflation Trader at Deutsche Bank in London. Antonio Cavarero holds a Master in Business Administration from the Business School of the University of Torino, and a Degree in Economics and Commerce from the University of Pavia.

Antonio Cavarero will be supported by Fabio Cleva, who has been appointed Deputy Head of Fixed Income Italy. He joined Generali Group in 2003 as Fixed Income manager, and holds a Degree in Economics from the University of Udine.

Third-Party Distribution in Europe on the Rise

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Cerulli Associates data suggests that third-party distribution in Europe has grown by 2% in the past year, and it accounts for 33.9% of the total. In other words, one in three euros in the European mutual fund industry has come from intermediaries that are not affiliated with the fund manufacturer.

Since 2013, retail investors have made a comeback in the industry. Inflows have increased markedly-even in the most surprising places, such as the South. Spain and Italy have been driving inflows. An increasing proportion of the new money that finds its way into the industry is directed to third-party products.

And the main winners from this trend are the large, established cross-border managers. They roll out their expertise in more markets and are capturing increasingly higher marketshare in Europe. More often than not these are American companies, which put their best foot forward in Europe and have a lot of cash to spend on marketing and brand building.

The gradual change in mentality of distributors and institutions in continental Europe is partly why third-party distribution is on the rise. They recognize the weaknesses of their in-house asset management arms and instead use external managers.

“Some managers on the Continent cannot believe how much they struggle to sell products to their proprietary distribution channels. To them it would have been unheard of two or three years ago,” said Angelos Gousios, a senior analyst with Cerulli in London, and one of the main authors of Cerulli Associates‘ recent report entitled European Distribution Dynamics 2014: Responding to Change.

Northern Trust to Manage Investment Programs for Feeding America

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Northern Trust announced that it has been selected to provide OCIO (Outsourced Chief Investment Officer) services for Feeding America, the nation’s leading hunger relief organization.

“We feel privileged and proud to serve Feeding America,” said Darius A. Gill, Managing Director – Central Region, Northern Trust Foundation and Institutional Advisors. “We look forward to helping manage the assets of, and being a resource to, the Foundation for years to come.”

Foundation & Institutional Advisors is a dedicated practice within Northern Trust that serves nonprofit organizations through sophisticated investment management solutions, strategic insights and world-class resources.

Feeding America’s mission is to feed America’s hungry through a nationwide network of member food banks and to engage the country in the fight to end hunger. This is done by collective partnerships between Feeding America’s national office and local food banks with the goal of increasing efficiencies and maximizing impact.

As an OCIO, Northern Trust provides investment advice, asset servicing and other related services to help nonprofit organizations achieve their financial and philanthropic goals cost-effectively. Northern Trust collaborates with board and investment committee members to assist them with their investment oversight.