Credit Suisse has announced that DLJ Merchant Banking Partners, the bank’s mid-market leveraged buyout business, has spun off into an independent advisory firm, aPriori Capital Partners L.P. established by the existing DLJ MBP management team led by Colin Taylor and Susan Schnabel.
aPriori Capital will manage the DLJ Merchant Banking Partners III, L.P. and DLJ Merchant Banking Partners IV, L.P. private equity funds, collectively representing approximately $2 billion of value across 22 portfolio companies as of December 31, 2013. Colin Taylor and Susan Schnabel, Co-Heads of DLJ MBP, will continue to manage the MBP Funds and lead aPriori Capital.
All other investment professionals comprising the DLJ MBP management team are joining aPriori. As the new general partner and investment manager of the MBP Funds, aPriori, is expected to be a strong platform for the DLJ MBP team to manage and maximize the value of the MBP Funds as well as raise capital in the future. The new firm will continue to operate from offices in New York, Los Angeles and London.
Nicole Arnaboldi, Vice Chairman of Credit Suisse’s Asset Management business, said, “We are pleased to have completed this spin-off and are grateful for the efforts and performance of the team over many years at DLJ and Credit Suisse. We wish aPriori Capital much success in the future.”
“The team is excited by the opportunity to establish an independent fund advisory business and a new platform for the future. We appreciate the strong support we have received from our investors throughout this transition and in particular would like to thank Credit Suisse for their partnership and support over the past 14 years,” said Colin Taylor and Susan Schnabel, Co-Heads of aPriori Capital.
This spin-off is part of Credit Suisse‘s previously announced divestment plans.
CenterSquare Investment Management, the suburban Philadelphia, PA-based real estate specialist for BNY Mellon, has launched CenterSquare Value-Added Fund III, L.P. The fund will invest in middle-market, transitional real estate assets in the U.S., focusing on the office, multifamily, retail, industrial, parking and hospitality sectors.
The fund, which is limited to qualified purchasers, is expected to raise $500 million, with the first closing date anticipated in the second quarter of 2014 and the final closing date anticipated in the second quarter of 2015. CenterSquare said the fund plans to acquire properties with total capitalizations ranging from $25 million to $75 million.
The fund will implement a value-added strategy, focusing on acquiring and improving assets that require physical upgrades or revisions in their capital structures. “We believe that a middle market, value-add real estate strategy represents the most attractive space in the market for creating value and reducing risk,” said P.J. Yeatman, head of private real estate for CenterSquare. “Fund III will be an acquirer of transition and a seller of stability.”
CenterSquare said that it will leverage the capabilities of its national network of local real estate operating partners to source, underwrite, and execute attractive value-add investment opportunities. CenterSquare also said that the fund is being designed to employ a total return strategy that may include a significant current yield component.
EFG Asset Management (EFGAM), an international provider of actively managed investment products and services, has launched the New Capital Swiss Select Equity Fund, an open-ended equity fund that will invest in 35 to 45 Swiss stocks across all market capitalisations.
The fund will be managed by Urs Beck, a highly experienced Zurich-based Swiss equity fund manager who recently joined EFGAM. Urs will combine his expertise in bottom-up stock selection with EFGAM’s top-down sector analysis without the constraints of a benchmark or specific investment style. Prior to joining EFGAM, Urs was head of Swiss equities at Zuercher Kantonalbank (ZKB), running both institutional and retail Swiss equities mandates for seven years. During his tenure at ZKB, Urs received the FERI award for best fund in the Swiss equities category in both 2013 and 2014.
EFGAM strongly believes in the opportunities presented by the Swiss market, whose stable platform and international exposure will allow for continued unique investment opportunities. The New Capital Swiss Select Equity Fund is the eighth sub-fund in its New Capital mutual fund range – the New Capital UCITS Fund PLC – and joins the New Capital Dynamic European Equity Fund as part of the New Capital portfolio of European funds. The fund is currently open to institutional and qualified investors only but will be available to retail investors pending registration in Switzerland, UK, France, Germany, Netherlands, Luxembourg and Sweden.
Patrick Zbinden, CEO, EFG Asset Management Switzerland: “We are very pleased to have an experienced portfolio manager of Urs’ calibre and proven track record join the New Capital family of funds. The development of Swiss equities as one of our core competencies further underlines our commitment to investment management in Switzerland.”
Urs Beck, on his fund: “Launching a focused Swiss equity fund for the New Capital fund family is an excellent opportunity for me to leverage my expertise so as to benefit EFG’s clients and professional investors seeking investment opportunities in Switzerland. I am delighted to be part of the team.”
China. Foto: WillHastings, Flickr, Creative Commons.. Nordea logra autorización como inversor institucional extranjero cualificado en China
Nordea Asset Management has been approved as Qualified Foreign Institutional Investor by the government in China. It means that Nordea Asset Management is licensed to trade directly on the stock exchanges in Shanghai and Shenzhen in the so-called China A-share market.
The China A-share market is ranked as the third largest equity market in the world with around 2.500 shares listed and a total market cap of approximately USD $4.0 trillion, nearly equivalent to the size of the Tokyo Exchange. However, foreign investors, such as Nordea, hold less than 2 percent of the trading.
“Essentially, we have acquired a very exclusive access to a stock market, which is expected to grow considerably and become more open to foreign investors in the coming decades, and which is currently priced at attractive valuations,” says Allan Polack, Nordea’s head of asset management.
Nordea Asset Management has furthermore entered into an investment management agreement with Libra Capital Management, an investment advisor specialised in the China A-share market and with offices in Hong Kong and Shanghai.
“Equipped with this license and the partnership with Libra, we are able to provide institutional and retail investors with the opportunity to invest directly into the China A-share market in a responsible and prudent manner,” Allan Polack says.
The investment index compiler MSCI plans to include China’s mainland-based A shares into the MSCI Emerging Markets Index from May 2015, and it will announce a firm decision in June 2014, when the consultation process with investors is completed.
New office in Munich. Photo: Pictet. Pictet Opens Munich Branch and Set for Major Expansion of UK-Based WM Business
The Swiss-based Pictet Group has announced that it is to open an office in Munich. Pictet has embarked also on a major expansion of its UK-based wealth management presence. In the coming months, it will be adding a number of senior private bankers, as well as reinforcing services such as wealth and portfolio structuring for clients.
To accommodate this growth, Pictet’s London wealth management team, currently in the City, are moving to bigger premises in Mayfair with effect from Monday 31st March, 2014. Already the financial capital of Europe, London is rapidly becoming the global financial centre of choice for individuals and entrepreneurs of exceptional wealth. Recent research shows that the UK is home to more UHNWIs than any other world city and that this is likely still be the case in a decade’s time.
Heinrich Adami, a Group Managing Director of Pictet, commented: “The UK, and London in particular, is exceptionally well-suited to the needs of the ultra-wealthy. Key attractions for our clients are the improving economic climate, the robust legal system, an entrepreneurial spirit and a predictable fiscal regime. These advantages, together with a vibrant international culture, world class services, and renowned private education system, make it the destination for such clients.”
He continued: “The biggest change we have seen in recent years is that international and UK domiciled clients see the UK as the preferred location for their primary financial relationship. Our clients have historically been UK resident, non-domiciled, but this is changing. Many young entrepreneurs and start-up founders who have created large fortunes are based in London and need a wealth manager that understands their needs and way of life. We have adapted our services for this new generation, without losing our expertise in looking after more traditional families, whose primary aim is preservation of capital.”
Office in Munich
Regarding the open of the Munich’s office, the office will, legally speaking, be a branch of Pictet & Cie (Europe) SA’s registered office in Frankfurt. With its head office in Luxembourg, Pictet (Europe) S.A. acts as the parent company for all of the Pictet Group’s banking activities in Europe, while the Frankfurt office coordinates these activities in Germany.
Marc Pictet, one of the Pictet Group‘s Managing Partners, commented on the new branch opening: “The opening of an office in Munich is a natural step in the Group’s development following several years of very positive growth in our business in Munich and Southern Germany. Our presence will therefore enable us to strengthen our links in this area.”
Armin Eiche, Head of Wealth Management for the Pictet Group in Germany, added: “Among clients who have now assimilated the lessons of the financial crisis we are seeing a growing need for independent client servicing coupled with international expertise provided by a highly reputable bank. We feel that this combination definitely gives us a competitive edge.”
Ole Hagen Jørgensen. Photo Linkedin. Ex-World Bank Economist Joins Global Evolution
Global Evolution has announced that Ole Hagen Jørgensen joins Global Evolution as Research Director. Ole will be responsible for further deepening Global Evolution’s emerging markets research and intelligence on regional and country-specific macroeconomic and political issues.
Prior to joining Global Evolution, Ole worked with the World Bank since 2005 in various capacities and still acts as a consultant. In Washington D.C., Ole worked for the World Bank on low and middle income countries in Latin America, Eastern Europe, Asia, and Africa – and specifically as a country economist and team leader responsible for a World Bank project and lending portfolio in seven frontier markets.
Ole holds a Ph.D. in economics and has been visiting Harvard, Stanford, and Brown Universities as a scholar on development economics. Ole’s research has been published in World Bank journals and by Cambridge University Press among others. Ole activates a comprehensive global IMF and World Bank network of country economists in emerging and frontier markets that will further strengthen the investment process of Global Evolution.
Global Evolution is a dedicated and specialist emerging and frontier markets boutique investment manager with an established track record based on a long history of investment in emerging and frontier markets.
. Nomura Partners confía a Matthews Asia los activos del fondo de renta variable japonesa más antiguo de EE.UU.
Matthews Asia announced this week that the Board of Directors of Nomura Partners Funds has approved the merger of the Nomura Japan Fund into the Matthews Japan Fund. Regarded as Nomura Partners Funds’ flagship fund, the Nomura Japan Fund has been investing in Japanese equities since 1962, and is the oldest open-ended Japanese equity fund incorporated in the U.S. The decision to entrust Matthews Asia with the Nomura Japan Fund shareholders’ assets is in recognition of Matthews Asia’s reputation, depth of expertise and long history of investing in Japan.
Subject to and following the approval of a charter amendment by Nomura Partners Funds shareholders, Nomura Partners Funds will transfer all of the assets and specified liabilities of the Nomura Japan Fund (NPJAX, NPJCX, NPJIX, SJPNX) to the Matthews Japan Fund (MJFOX, MIJFX). In the interim, the Nomura Japan Fund remains closed to all purchases and exchanges. Shareholder approval is expected later this year, soon after which time Nomura Japan Fund shareholders will become shareholders of the Matthews Japan Fund and the Nomura Japan Fund will be liquidated.
Matthews Asia is a specialist investment manager located in San Francisco. With $24.9 billion in assets under management as of February 28, 2014, the firm focuses on investing solely in Asia. It currently manages the Matthews Japan Fund, an open-ended Japanese equity fund incorporated in the U.S. With a 15-year track record, it follows a similar investment objective to the Nomura Japan Fund which is to generate long-term capital appreciation through investment of at least 80% of its assets in securities of Japanese issuers. The Nomura Japan Fund had assets of $169 million and the Matthews Japan Fund had assets of $451 million as of February 28, 2014.
William Hackett, Chief Executive Officer, commented: “Since the launch of our first two regional Asia equity strategies, Japan has been a core part of our portfolios and given its importance as an investment destination, a stand-alone Japanese equity fund was launched in 1998.”
Robert Horrocks, PhD, Chief Investment Officer, commented: “As the third largest economy in the world, Japan continues to have an important standing within the international market place. As a long-term investor in Japan for over 20 years, we also believe the country still represents an important part of an investor’s portfolio.”
In the last five years, there has been an increasing appetite for risky assets. Giordano Lombardo, Group Chief Investment Officer at Pioneer Investments, talks in its latest letter to investors about Investment Process going forward.
At the beginning, it was a consequence of the search for yield and return enhancement in a low interest rate environment. More recently, it translated into a deeper exploration of yield opportunities in the riskier side of risky assets, featuring high-yield bonds and small-cap stocks.
According to Lombardo, two key questions for the investment strategy going forward are: is it still worth being long risky assets? And, is the investment approach adopted so far the most appropriate for meeting investors’ needs and new market challenges?
“While we felt it was appropriate to take a decisive long exposure to risky assets until last year, now we believe that building more balanced and diversified portfolios would be a better strategic choice for the scenario unfolding”, states Lombardo.
There are basically two “active” ways to improve the expected portfolio returns: make the overall exposure to markets more diversified (manage the “beta” component), and increase the portfolio manager’s ability to generate extra-returns versus the benchmark, while keeping a strong focus on risk (act on “alpha” generation).
Starting with beta diversification, Lombardo explains that there are basically three ways to work along this line:
Broadening the range of asset classes as it happens, for example, with Multi-Asset strategies.
Moving into illiquid asset classes.
Adopting a risk-parity approach.
According to Pioneer, just adding asset classes in a diversified portfolio is not a wise option when correlation among them is high, as they all move in the same direction. For illiquid assets, such as hedge funds or private equity, Pioneer notes that taking volatility as a sole measure of risk is not appropriate and may be misleading.
In essence, the beta diversification is a valuable option to enhance returns “and it is going to be more important going forward, because of low expected returns.” However, Lombardo highlights that it has to be played carefully because it brings some risks (liquidity, leverage) that are not captured by traditional risk measures such as volatility.
For this reason, he believes that working to improve the alpha component is extremely important. “This approach emphasizes the role of portfolio construction, based on an efficient combination of multiple low-correlated alpha strategies, and changes completely the way in which a portfolio is built and visualized.”
As an example, Lombardo considers a fixed-income portfolio with an aggregate bond index as a benchmark: “the traditional way to represent it is a combination of government bonds and investment-grade bonds, broken down into countries, credit rating and duration. With a portfolio construction approach, the same portfolio is visualized as a combination of low-correlated alpha strategies.”
Pioneer Investments has spent the recent years strengthening the culture of alpha generation through proprietary portfolio construction tools and risk budgeting. Pioneer Investment thinks this framework will become even more crucial in the new challenging investment landscape. “We see our investment approach not as something set in stone but as an evolving process based firmly upon our active, research-driven and risk-aware investment culture.”
Pioneer currently adopts this approach in a large part of their Fixed Income and Multi Assets teams, and is committed to extend it further into equities and new capabilities that they will be designing to meet current and new investors’ needs.
You may access the full CIO Letter through this link.
Judges Walk (London). Cartica Files Lawsuit against Alvaro Saieh, CorpGroup and CorpBanca
Cartica Management has filed a Complaint in the United States District Court of the Southern District of New York against the following defendants: CorpBanca S.A., its controlling shareholder, Álvaro Saieh, Saieh’s holding companies (CorpGroup), and CorpBanca’s directors, its Chief Executive Officer, and its Chief Financial Officer.
The Complaint asks the Court to declare the Defendants in violation of anti-fraud provisions and disclosure requirements of the United States Securities Exchange Act of 1934, and to enjoin the closing of the Banco Itaú Chile–CorpBanca combination. Cartica Management, LLC, through separate managed investment funds, collectively beneficially owns approximately 3.2% of the outstanding common shares of CorpBanca (including shares represented by American Depository Receipts).
The Complaint alleges that Saieh and CorpGroup, together with CorpBanca, its Directors, CEO and CFO, committed fraud in the orchestration and execution of an agreement to sell CorpBanca to Itaú Unibanco (the “Itaú Transaction”). The Complaint specifically alleges that Saieh used fraud to extract a control share premium for his majority stake in CorpBanca as well as numerous other short- and long-term benefits that accrue to him, his cronies and private companies to the detriment of all minority shareholders. As part of this fraudulent scheme, Saieh and the other Defendants also failed to file any disclosures regarding the sale that are required of major company investors effecting a change in control.
Saieh and CorpBanca made public disclosures in November 2013, December 2013, and January 2014 that they were receiving and evaluating offers to enter a corporate transaction to benefit all shareholders equally. Defendants also assured investors that they were seeking a deal that would secure maximum value for shareholders and would benefit all shareholders equally. In truth, instead of acting consistent with their disclosures, Defendants were actively negotiating, designing, and securing a transaction that gives control of CorpBanca to Itaú Unibanco in exchange for a rich array of valuable short- and long-term benefits that accrue singularly to Saieh and to no other shareholders.
The Complaint articulates a clear motive for Defendants’ fraud—namely, the financial bailout of Saieh and CorpGroup. Saieh and CorpGroup control several companies, including the publicly held bank, CorpBanca, and privately held supermarket chain, SMU. Throughout the past year, Saieh and CorpGroup suffered significant losses in connection with SMU, which itself lost almost $1 billion. SMU’s financial failures in turn tainted publicly held CorpBanca, driving its credit ratings and stock price downwards. In response to CorpGroup’s and SMU’s financial spiral, Saieh, along with the other Defendants, devised Defendants’ fraudulent scheme to recoup Saieh’s losses and refill CorpGroup’s coffers via the sale of CorpBanca.
After entering the Itaú Transaction, Saieh and the other Defendants compounded their fraud through further deliberate and coordinated misstatements, omissions, and delayed and incomplete disclosures.
The agreements with Itaú make clear that Saieh—through a parade of inequitable special benefits accruing only to Saieh and the other Defendants—effectively extracted the control share premium he promised shareholders he would not pursue, and accomplished a bailout for Saieh, CorpGroup, and SMU. Saieh used the Itaú Transaction to give himself a windfall that includes, among other benefits: hundreds of millions of dollars in cash from a sale of CorpBanca Colombia shares; a below-market-rate loan of almost one billion dollars; call options that bear no downside risk but provide huge potential for profit over the next five years; effective guaranteed dividends for CorpGroup alone over the next eight years that come at the expense of the post-merger bank’s growth and the restriction of its capital structure; tag-along, first offer, and share liquidity rights; a right to share in future Itaú Unibanco business opportunities in certain Latin American countries; and a prestigious job for his son as Chairman of the post-merger bank.
Based on these actions, the Complaint alleges that Saieh, CorpGroup, CorpBanca, and its Directors, CEO, and CFO violated Section 10(b) of the Exchange Act and Rule 10b-5 thereunder by disseminating or approving materially false and misleading statements and by employing devices, schemes, and artifices to defraud CorpBanca shareholders in connection with effecting the Itaú transaction. It further alleges that Saieh, his holding companies, and the Directors, CEO, and CFO violated the antifraud provisions of Section 20(a) of the Exchange Act. The Complaint also alleges that Saieh and CorpGroup violated Section 13(d) of the Exchange Act.
The lawsuit asks the court to enjoin the Itaú transaction in order to (i) prohibit Defendants from benefiting from the fruits of their deception, (ii) ensure the Bank’s capital is not artificially restricted for years to come by Saieh’s preferential deal terms, and (iii) shift the great, if unquantifiable, value of the special benefits Saieh anticipated from the deal back to all CorpBanca shareholders on an equal basis—as Defendants originally led minority shareholders to believe would occur.
“This attempt to rob minority shareholders has gone on long enough,” said Cartica’s Managing Director, Teresa Barger. “We have brought the fraudulent acts of Álvaro Saieh, CorpGroup and CorpBanca before a Federal court because they, along with Itaú, have so far failed to take advantage of the opportunity to voluntarily call off this disastrous deal and replace it with a transaction that benefits all shareholders equally. Today’s action, however, is simply the first of many we intend to take to defend the rights of minority shareholders, including holding Directors of CorpBanca liable for the harm they have caused and will cause the minority shareholders.”
Cantor Fitzgerald Wealth Partners, an affiliate of Cantor Fitzgerald & Co. serving the private wealth management market, and Wilshire Funds Management, the global investment management business unit of Wilshire Associates Incorporated, have entered into a strategic advisory partnership.
WFM will advise CFWP’s Investment Management Committee and collaborate with CFWP to deliver customized investment advisory solutions for CFWP’s high-net-worth clients. Wilshire Funds Management will also work closely with CFWP advisors to conduct in-depth manager research utilizing its proprietary research process and analytical tools. In addition, Wilshire plans to deliver a suite of outcome-oriented model portfolios that includes traditional and non-traditional asset classes and investment strategies.
“CFWP is committed to providing best in-class investment services, centered on objective advice and carefully selected solutions that enable our advisors to help their clients achieve their unique financial goals,” said Stan Gregor, President and Chief Executive Officer of Cantor Fitzgerald Wealth Partners. “We look forward to applying WFM’s insights to provide a customized and exclusive offering for our clients, while aggressively expanding our platform through acquisitions of wealth management companies, Registered Investment Advisors (RIAs) and some of the industry’s finest and most successful Financial Advisors.”
Cantor Fitzgerald and Wilshire have more than 100 years of combined experience serving some of the world’s largest institutional clients, and have expanded their breadth of services to focus on the unique needs of individual investors.
“Cantor Fitzgerald Wealth Partners and Wilshire Funds Management both strive to impart institutional best practices and to empower financial advisors with sophisticated research and advisory support that foster scale and improve investment outcomes for individual investors,” said Jason Schwarz, President of Wilshire Funds Management. “Our shared vision and purpose makes this partnership very exciting.”
