Wikimedia CommonsCusco from Sacsayhuamán ruins. FIAP Organizes its International Seminar 2014 in Cusco
The International Federation of Pension Fund Administrators (FIAP) and the Peruvian Association of Private Pension Fund Administrators (AAFP) are pleased to welcome you to the 12th International Seminar FIAP and the 1st International Conference of the AAFP, entitled “Reinforcing the Foundations of the Individually-Funded Pension System to Ensure its Sustainability”. The event will take place on May 15 and 16, 2014, at the Cusco City Hall Convention Center, in the archeological city of Cusco, Peru.
The topics to be discussed, based on the principles of economic freedom and individual savings, aim at identifying the mechanisms that enable underpinning the foundations of the sustainability of the individually-funded pension system. The selected topics are highly relevant internationally for the members of the individually-funded pension system, pension fund administrators and government authorities.
FIAP and AAFP have invited speakers and panelists of the highest professional standing, who will discuss the key factors affecting the development of the individually-funded pension system, such as low pension coverage and retirement saving patterns; the returns on of the managed funds and the tools available for managing risks in unpredictable situations; the degree of efficiency and competence of the industry and its impact on administrative costs, and the type and quality of pensions; corporate government practices, transparency and relationships with members and pensioners; and finally, the coexistence of alternative contributory pension systems.
This event coincides with the celebration of the XXI Anniversary of the Private Pension Funds System in Peru and the XVIII FIAP Annual Assembly. As on former occasions, the event will be attended by participants from different parts of the world (FIAP members and others), including government authorities, congressmen, officials of international agencies, and representatives of pension fund managers, investment funds, mutual funds and insurance companies, as well as other personalities related to the financial and social security sectors.
Photo: Intel Free Press. Deal Activity Continues in Emerging Markets as Private Equity Investors See Opportunity in Adversity
Private equity investment activity held steady for emerging markets in 2013, and despite a sluggish start to the year, deal volume gained momentum in the last six months, according to the Emerging Markets Private Equity Association (EMPEA). This investment activity led to an overall capital flow of US$24 billion in emerging markets last year, representing 883 deals and a 7% decline in capital year-over-year from 2012. While fundraising was down with only 150 funds raising US$36 billion in 2013, a 19% decline in total capital raised compared to 2012, the relatively constant deal volume indicates that private equity investors continue to find investable companies across a diverse array of markets.
“Fundraising in private equity follows a cyclical pattern and we are still in a downturn phase of the cycle. The investment side is the real story, however, because where others see adversity, private equity investors see opportunity,” commented Robert van Zwieten, President and CEO, EMPEA. “Private equity continues to be the optimum way to tap into emerging market investment opportunities. We expect that these markets will adapt, greatly diverse as they are, to the new economic realities of a moderate Chinese economic slow-down and US interest rates rising gradually over time. For the time being, with asset re-pricing underway and local currencies depreciating in many emerging markets, this is a favorable time for highly discerning fund managers to put capital to work in select sectors.”
According to EMPEA’s data, some of the biggest year-over-year gains from 2013’s deployment of capital went to markets beyond the BRICs– including those in Southeast Asia, East Africa and Latin America (ex. Brazil) – a strong indication of where investors are seeing the most promising prospects for growth. Taking a closer look within each region, the following ten notable emerging markets private equity (EM PE) investment trends stood out from the past year.
There was greater diversity in the types of deals executed across emerging markets, with venture capital (VC) investment accounting for 43% of deal activity in EM PE, following an annual upward trend since 2009, when VC made up only 17% of deals.
While Emerging Asia accounted for 78% of VC deal activity across emerging markets, the largest disclosed VC deal took place in Latin America for Panama-based online language school Open English.
US$2.2 billion was invested through 61 deals in Southeast Asia in 2013, a six-year high in terms of activity and a 39% increase in capital from 2012.
In China, deal activity rebounded in the fourth quarter, with 89 investments executed—the most in a single quarter for the country since Q3 2011.
PE investment in India proved resilient, increasing 11% in volume and holding flat in total capital, year-over-year. Investment in the country was robust in part due to a 33% increase in the number of VC deals.
CEE and CIS showed healthy exit activity with six liquidity events valued at an estimated total of US$3.5 billion, according to third-party data. Three of the six exits were in Russia-based companies.
Russia and Turkey accounted for 48% of deal flow in CEE and CIS.
Seven PE deals closed in Tunisia and ten in United Arab Emirates, comprising 45% of MENA investment activit.
Mexico witnessed a five-year high in capital invested and also saw one of the year’s top ten largest deals for emerging markets: Axis Capital’s US$200 million buyout of Oro Negro.
For Sub-Saharan Africa, capital invested reached a five-year high of US$1.6 billion, a 43% increase since last year, and East African deals increased by 29%.
Morningstar has announced the agenda for the Morningstar Ibbotson Conference taking place Feb. 20-21 at the JW Marriott Desert Ridge in Phoenix, Arizona. The conference, Morningstar’s premier event for institutional investors, will feature thought leaders from academic institutions, the financial services industry, and Morningstar. They will discuss the changing investment landscape and some of the latest advancements in investing and financial planning with a focus on delivering better financial outcomes.
David Laibson, Ph.D., Robert I. Goldman Professor of economics at Harvard University and research associate at the National Bureau of Economic Research, will discuss different kinds of risk, and how investors can improve their asset allocation by increasing investments in good risks while decreasing investments in bad risks.
Additional general session speakers include:
Nardin Baker, chief investment strategist for Guggenheim Partners, who will share his latest research about the benefits of low volatility investing in markets around the globe, and how investors can take advantage of these opportunities;
Roger Ibbotson, Ph.D., founder of Ibbotson Associates (which Morningstar acquired in 2006), professor of finance at Yale School of Management, and partner at Zebra Capital Management, who will examine how to use stocks with less popular characteristics—small cap, value, illiquidity—to get more return while taking on less risk;
Harvey Rosenblum, Ph.D., executive vice president and director of research for the Federal Reserve Bank of Dallas, who will provide his outlook for the U.S. economy;
Sam L. Savage, Ph.D., executive director of ProbabilityManagment.org and consulting professor at Stanford University, who will discuss the flaw of using averages when modeling uncertain situations and new techniques for making more accurate predictions;
James Upton, senior portfolio specialist and chief strategic officer for Morgan Stanley, who will explore the outlook for emerging markets and growth prospects for various countries.
A series of breakout sessions, a number of which will feature new research, will include the following topics:
Time Diversification—Evaluating whether equities really become less risky over longer investment periods and the implications for investors;
Quantitative Equity Ratings—Overview of Morningstar’s forward-looking quantitative ratings for equities;
Controlled Volatility Strategies—Approaches for managing volatility without using guaranteed products and the pros and cons for those with no liability to hedge;
Momentum, Acceleration, and Crash—New research about the contribution of accelerated stock prices to crashes;
Time-Varying Return Estimates—Estimating capital market assumptions when expected returns are not constant;
Economic Policy Reform in China—Analysis of the risks and opportunities from new economic reform in China;
Global Economic Outlook—Morningstar’s outlook for the global economy;
Persistence in Mutual Fund Performance—Do some mutual funds show consistent performance and how can investors improve their odds of successful fund selection?
Do Fund Flows Signal Future Performance—Do fund asset flows serve as a contrarian indicator for intermediate-term performance?
Jazz, Firefighters, and Hedge Funds—How to improvise in dynamic, uncertain environments;
Industry-Specific Human Capital, Outside Wealth, and Optimal Portfolio Choice—How do an investor’s occupation, geographic location, and pension benefits affect his optimal portfolio allocation?
“The U.S. stock market has been on a tear over the last five years, but the trend may not be sustainable in the long run. Developed markets are looking at rising debt and rapidly aging populations, while emerging markets could hold promises and pitfalls,” Thomas Idzorek, president of Morningstar Investment Management, a unit of Morningstar, said. “For two days, we’ll bring together some of the leading minds in the financial service sector to share new ideas and techniques for managing risk and pinpointing bright spots in the capital markets.”
Philip Apel, Head of Fixed Income at Henderson. Short Term Squalls But Long-Term Outlook Still Fair
It was unlikely that the relative calm that had characterised markets in the latter part of 2013 was going to last. Most notable has been the correction in equities, with the bullish tone punctured, perhaps only temporarily, by the US Federal Reserve pursuing its tapering of asset purchases and fresh fears about the strength of emerging markets.
Citi’s widely-followed US economic surprise index has dipped slightly but its still elevated level betrays the fact that the media have been quick to promote negative stories and linger on earnings disappointments even when much of the hard economic and earnings data remains positive. This is not too surprising given that a change in tone is eminently more readable than a continuation of yesterday’s news.
In our view, little has fundamentally changed. Our key strategic themes remain as previously. We continue to expect the global recovery to strengthen, led by the US, Japan and the UK. Europe should be better in 2014 than last year albeit still facing the headwinds of a banking system that needs to shrink and the ongoing requirement to implement structural reforms to improve fiscal sustainability.
Whilst core government bond yields pulled back in January, they are likely to resume their rising trend if, as expected, the US economy continues to improve and tapering is completed by the end of the year. That said, we are closely watching inflation, which is forecast to remain at low levels, particularly if disinflationary forces emanate from emerging market economies.
The current environment lends itself to some key themes within our portfolios. Core European bonds are expected to outperform US bonds given the divergent growth and monetary policies of the two regions – Europe is at an earlier stage to the economic cycle than the US and this gives the European Central Bank greater capacity for further monetary policy accommodation. We expect higher yields in the long end of the UK rates markets. We also expect a steeper European yield curve (rates lower for longer at the short end but longer maturity bonds underperforming) versus a flatter yield curve in the US where we expect the 5-year part of the curve to come under pressure as an improving economy puts upwards pressure on rates.
In emerging markets, we have been relatively cautious on local debt markets in general, although expressing bullish views in Mexico. We started to acquire some short maturity bonds in selected emerging markets that are offering value i.e. where we do not expect the degree of rate hikes currently priced in to be delivered, for example in South Africa. We may have been a little early, given the broader emerging market sell-off but we have kept some powder dry because of just such a possibility.
At the currency level our preference is to be long the US dollar, whilst short the Australian dollar, Euro and yen.
Within credit markets, the longer-term theme of low interest rates and improving economic data continues to lead demand for higher-yielding corporate securities, particularly in Europe. With low default incidence and good corporate liquidity, that should sustain the popularity of lower-rated corporate bonds over 2014. We are, however, aware that credit markets have been more resilient than equities in the latest shake-out so there is some near term vulnerability for credit should the ‘risk-off’ phase be prolonged.
In our Euro credit strategy, we are continuing to favour subordinated bonds, BBB-rated bonds and high yield because these sectors of the market have a higher spread and lower interest rate sensitivity. Investment-grade non-financial sector valuations are less compelling than a year ago and consequently we are more cautious about these sectors, particularly the cyclicals. Another aspect of non-financials is the degree of potential event risk from merger and acquisition activity and re-leveraging, especially in the telecoms sector. This may offer some upside in the high yield market but in investment grade the key will be to avoid the poor performers rather than picking winners.
Looking ahead, with duration the bigger threat to bond returns than defaults, floating rate and multi-asset credit strategies are likely to remain in vogue given their lower rates sensitivity and attractive yield.
Fred Thompson, David and Julia Koch. Top 10 Wealthiest Individuals in America’s Oil and Gas Sector
Charles y David Koch of Kansas are the wealthiest individuals in America’s oil and gas sector, with a combined net worth of US$83 billion, according to a Wealth-X Top 10 list that includes billionaires from Texas, New York and Oklahoma.
Charles, Koch Industries’ chairman and CEO, and David, executive vice president, are the principal owners of the Wichita-based company founded by their father Fred in 1940. Charles and David Koch each own 42% of Koch Industries, which is involved in the manufacturing, refining and distribution of petroleum, chemicals, polymer and other materials.
Four billionaires from Texas appear on the list: Milane Frantz (one of two females on the list), Ray Hunt, Jeffrey Hildebrand and William Hunt. Kansas is home to three oil and gas billionaires, the two Koch brothers as well as Elaine Tettemer Marshall, who inherited her fortune from her late husband, Everett Pierce Marshall, (who had holdings in Koch Industries).
Photo: Daniel Christensen. Mauricio Sanchez Mendez Named Complex Manager At Wells Fargo Advisors, Miami
The International Private Clients Services Group of Wells Fargo Advisors has announced that Mauricio Sanchez has joined the Miami International Office as Complex Manager. Mauricio will be responsable for day-to-day operations of the Miami International Complex and its 71 Financial Advisors.
“We are delighted to have Mauricio Sanchez joininig the International Private Clients Service team. He is a seasoned executive who knows and understands the needs of our internatinal clientes; his experience is also fundamental to continue supporting our Financial Advisors covering the Latin American region”, said Alberto Gonzalez Saint Geours, Managing Director of the International Private Client Services Group.
Prior to joinin Wells Fargo Advisors, Mauricio served as a Private Wealth Management Sales Manager, Domestic and International at Morgan Stanley, New York Branch. He has over 25 years experience in the financial services industry. Mauricio held different management positions at Merrill Lynch Wealth Management in Geneva, Montevideo, Buenos Aires and Santiago de Chile.
Mauricio Sanchez holds a bachelor Degree in Accounting from Universidad de la República de Uruguay. Mauricio is relocating from New York to Miami.
Wells Fargo & Company is a financial services company with $1,4 trillion in assets.
París. Foto: zoetnet, Flickr, Creative Commons.. La Française y Forum Partners dan paso a la plataforma LFF Real Estate Partners
Following their recently established strategic partnership and formation of a European direct real estate investment joint-venture, La Française and Forum Partners have announced their acquisition of Cushman & Wakefield Investors (CWI), the investment management business of Cushman & Wakefield (C&W). This acquisition, subject to regulatory approval, will be jointly owned by La Française and Forum, 66.6% and 33.3% respectively, and will operate under the brand La Française Forum Real Estate Partners (“LFF Real Estate Partners”).
CWI executives David Rendall (CEO) and Jens Göttler (Managing Director), together with their current team, will continue to manage the business and investments. All existing service arrangements between Cushman & Wakefield and CWI will be transferred to LFF Real Estate.
CWI provides a complete investment management service in both direct and indirect commercial property investments for a wide range of international clients across the UK, continental Europe and in Korea. CWI is a recognized specialist in core and core plus real estate investment strategies throughout Europe, most notably the French, German, UK and Swedish markets. Building on over 30 years of investment management experience, CWI has over $1.2 billion of assets under management from separate accounts and the PURetail Fund, in a joint-venture with Scottish Widows Investment Partnership (SWIP). PURetail is a closed-ended pan-European (France, Germany and Sweden) real estate fund focused on urban retail assets. Existing local teams will remain in place and will continue to operate out of Paris, London and Frankfurt.
Just four months ago, La Française and Forum Partners announced their partnership and aspiration to become a leading European real estate investment manager and advisor. The acquisition of CWI enables La Française and Forum Partners to provide a variety of solutions for investors seeking European core real estate exposure.
Patrick Rivière, Managing Director of La Française, commented: “When screening partners, we are extremely sensitive to their corporate culture. La Française is what it is today because employees and directors have a vested interest in customer satisfaction, which in the end determines our success. That same dedication to service and quality emanated from CWI and its people. It was a natural fit. As a real estate investment manager focused predominantly on France, we now possess a demonstrated and recognized pan European direct real estate expertise.”
Russell Platt, CEO of Forum Partners, commented: “We are thrilled to welcome David Rendall, Jens Göttler and their team as senior management of our new direct real estate venture with La Française. Their impeccable credentials, market knowledge and pan-European resources will bring immediate benefits to both firms and accelerate the development of our collaborative efforts.”
Commenting on the sale of CWI, Carlo Sant’Albano, CEO Cushman & Wakefield, EMEA said: “At Cushman & Wakefield we remain focused on executing our plan which is critical to growing our business and for delivering high quality, value-added services to our clients. With a number of high priority strategic growth initiatives underway at present it is not the right time to invest substantially in building out the CWI platform. In the best interests of the existing CWI client base, we are pleased to have reached an agreement to sell the business to LFF Real Estate Partners which is looking to increase its European exposure and can provide CWI’s clients with access to a larger investment management entity and importantly, continuity of service.”
As a result of this acquisition, La Française and Forum Partners can now offer a complete range of bespoke Pan European real estate investment solutions (direct real estate, listed and unlisted real estate investment funds, private and public equity and debt) to retail and institutional investors worldwide. The new combined platform will have total assets under management amounting to close to $20 billion, of which $14 billion are direct core European real estate investments.
Chile. Foto: @Doug88888, Flickr, Creative Commons.. Las clases medias en América Latina suman dos décadas de crecimiento, pero los retos continúan
The Credit Suisse Research Institute this week released a report entitled Latin America: The long road. The report looks at the growth trajectory of Latin American economies, explores their challenges and strengths on the road ahead, and outlines investment opportunities in the region.
The report highlights that over the last two decades, Latin American economies have significantly narrowed the economic and social gap with more advanced economies. The region has come a long way from the recurrent financial crisis, rampant inflation, stagnation and persistent impoverishment that in the past characterized many Latin American countries.
Along with the strengthening of the manufacturing and services sectors, which are creating domestic opportunities, a primary driver of the region’s economic growth has been the rise of the middle-income class. The middle class in Latin America grew by 50% between 2003 and 2009, from 103 million to 152 million people, or 30% of the population. This has profound implications for the economy as well as the investment environment.
The report provides context for the current macroeconomic situation in the region and outlines investment opportunities across sectors, including e-commerce, retailers, financial services, and energy. By evaluating the structural changes in Latin America and how each country stands relative to the developed world, the countries’ potential for growth is revealed – allowing for the identification of sectors that are likely to offer the greatest opportunities.
“The report outlines the long-term outlook for the region by taking an in-depth look at demographics, infrastructure, intangible infrastructure, employment, and macro conditions,” says Stefano Natella, Co-Head of Securities Research & Analytics. “While the region as a whole is in a much better position to absorb a serious shock, Latin American governments and societies still face considerable challenges.”
The report concludes that underinvestment in infrastructure, low savings ratios, a growing income distribution gap and education are some of the key challenges affecting the growth outlook for the region. The next ten years will be crucial to consolidate the gains that have been made over the past two decades.
Foto: Tommy.chang, Flickr, Creative Commons. Los fondos estadounidenses crecieron un 20% en 2013, la mayor cifra en cuatro años
In 2013, total US mutual fund assets grew by nearly 20%, largely due to substantial asset growth in passively managed products. Across the board, equity products dominated the mutual fund landscape in 2013, capturing flows of greater than $232 billion year-to-date.
Total ETF assets expanded by 1.9% in December, ending the year with nearly $1.7 billion. ETF equity strategies also grew substantially in 2013, averaging net flows of $17.9 billion per month.
In the January 2014 issue of The Cerulli Edge – U.S. Monthly Product Trends, Cerulli explores vehicle use, including advisor adoption of exchange-traded funds (ETFs). January’s Monthly Spotlight reviews the best-selling mutual funds, ETFs, and Morningstar categories of 2013.
Managers wrestle with meaningful advantages and disadvantages tied to different MLP fund structures more than other investment strategies. Assets in excess of $8 billion are spread across different vehicles, including CEFs (37%), mutual funds (27%), ETFs (19%), and ETNs (17%), with some structured as C corporations and others as registered investment companies (RICs).
Trends in fees
According to the report, a barbell trend emerged in 2013. On one hand, hands-off passive management among indexed products fueled a fee race to the bottom. On the other, investors paid a premium to glean more specialized exposures, including short-duration and unconstrained fixed income.
Wikimedia CommonsLoretta H. Cockrum, fundadora, presidenta y CEO de Foram Group . Loretta Cockrum se suma al Consejo Asesor de Miami Finance Forum
The Miami Finance Forum (MFF), South Florida’s leading financial services networking organization, has announced that Loretta H. Cockrum, Founder, Chairman and CEO of Foram Group, has been elected to join the Advisory Board effective immediately.
An accomplished businesswoman and native Miamian, Loretta Cockrum has over 30 years of experience in the Real Estate industry. Ms. Cockrum transitioned from her duties as a broker to a trustee through her constant commitment to maintain and enhance the affluence of her clients and their future generations. She founded the Foram Group in 1978 to manage and develop Real Estate investment portfolios for families who have a multi-generational wealth preservation strategy.
“The Miami Finance Forum is honored to have Loretta join our advisory board,” said MFF Board Chairman Carlos Deupi. “She is a true visionary whose experience in the real estate industry and her commitment to our mission will be an incredible asset to our efforts of establishing South Florida as a focal point of global finance.”
“The Miami Finance Forum provides tremendous benefits to banking, finance and investment professionals seeking to do business in South Florida,” said Loretta Cockrum. Ms. Cockrum and her team developed 600 Brickell, a visionary office project, as it is the only high-rise building in the state that was awarded the first Platinum LEED ratings by the U.S. Green Building Council. Located in the heart of Miami’s financial district, it aims to revolutionize communication access and green development, as well as to serve as a model to exceed all expectations in technological and sustainable design.
Cockrum founded Foram Group in Atlanta in 1978 as one of the few woman-owned agricultural real estate companies in the U.S. She also founded the Foram Group Charitable Foundation to research sustainable methods of food production and nutrition education. Ms. Cockrum was also President of the Brickell Area Association and World Trade Center Miami, as well as a trustee member of the Greater Miami Chamber of Commerce.
