M&A Investors Luxembourg SA has launched its first Luxembourg-domiciled investment company, M&A Capital Fund SICAV- SIF SA. M&A Capital has scheduled the closing of its first sub fund, M&A Dynamic Return Europe Fund, for May 2014.
M&A Capital’s launch marks the expansion and continuation of the proven track record of M&A Investors Luxembourg SA fourteen years of investments throughout Europe. The investments of M&A Dynamic Return Fund will be managed by a dedicated team of experts comprised of the management of M&A Investors Luxembourg, which will co-invest equity in the fund, and renowned external real estate professionals based in Zurich, London, Luxembourg and Prague.
M&A Capital targets to raise Eur 100 million that will strategically be invested to provide capital-solutions to residential, commercial and mixed-use real estate developers with strong ongoing projects but requiring capital for completion. The Fund will invest in the forms of equity, preferred-equity and mezzanine loans in projects based in Switzerland and wealthy north European markets.
The fund will seek to generate premium returns through its expert added-value contributions by targeting wise investments and utilizing the team’s unparalleled network of local and global real estate and financial services professionals. M&A Capital has the unique ability to proactively source the best off-market deals before they become public.
“We aim to capitalize on the growing demand for capital in the real estate credit markets by providing capital to best in class developers, participating in the project management, and providing our financial engineering and deal structuring expertise for each investment development “, says Marc E. Cottino, Chairman of the Fund.
A resurgent construction industry, the U.S. energy renaissance, the evolution of technology and a second iteration of health care reform are likely to create opportunities for investors in 2014, according to the U.S. Small Cap Growth Team for The Boston Company Asset Management (TBC). TBC is BNY Mellon‘s Boston-based equity specialist.
The team published its forecast in Investment Themes for 2014. In addition to the four themes related to energy, construction, technology and health care, the small cap team also said it sees investment themes related to manufacturing and the rotation of funds into U.S. equity markets.
On the macro side, the report said that tapering of the quantitative easing program combined with a continuing accommodative monetary policy could reduce pressure on the dollar, help draw money into U.S. markets from emerging markets, and also help to reduce commodity prices. The team also said it expects that the prospect of rising interest rates could shift money from bonds to stocks.
Looking at specific sectors, the team cited the energy renaissance, driven by meaningful improvements in extracting hydrocarbons, as a major positive development. Todd Wakefield, senior portfolio manager on the small cap team, said, “We see the energy sector as a leader in job creation and capital spending. Furthermore, the country’s move toward energy self-sufficiency is resulting in structural changes to our trade deficit and foreign policy.”
Other factors worth considering for 2014, according to the report, are a potential increase in spending on both commercial and residential construction, in addition to continuing developments in technology.
Regarding housing, the TBC small cap team said the inventory overhang from the previous housing bubble has diminished, although household formation continues to be slowed by poor employment opportunities for the 25-to-34-year-old age group. Household formation is an important driver of housing, the report said. TBC said it expects improving employment in this age group will drive higher household formation, fueling housing demand.
Opportunities in technology
In technology, TBC sees growing opportunities in security, Big Data, cloud-based computing systems and social media technology. TBC also said it expects the Internet of Things to proliferate as more appliances, vending machines and other non-traditional computing devices are linked to the Internet so they can be better controlled and monitored remotely.
TBC said it also expects opportunities to develop in health care and manufacturing. “Millions of people are joining the health care system while reimbursement will be reduced for many providers as a result of the new regulation,” Wakefield said. “In the sector, we are focused on innovative companies that have pricing power.”
In manufacturing, the report notes that 3D printing has the potential to dramatically change production processes, although it will be difficult to select the firms that will dominate the business.
Photo: Milei.vencel . WE Family Offices Leads Miami RIAs with 2.7 Billion Dollars in Assets
With 2,7 billion dollars in assets under management WE Family Offices takes the leading spot amongst Miami’s RIAs (Registered Investment Advisor). According to BrightScope, the financial information company, the firm, which was founded just over a year ago by a large group of professionals from Genspring Family Offices, surpassed the figure of 2 billion dollars in assets under advisementjust six months after its launch in January 2013, and currently boasts 2.7 billion dollars.
Santiago Ulloa, president of WE Family Offices, explained to Funds Society in this respect that over the last 12 months, “we have worked to strengthen our team of consultants across the board, in the financial, family governance, and tax and estate planning areas. The team’s strength is helping us to grow rapidly, having experienced a growth of over 1 billion dollars in the past year.” Ulloa stated that theirs is a long term plan, however, and that they are not transferring any pressure at all in order to grow.
This year’s list of the top firms in Miami shows a strong increase in assets under management, “which proves that local investors’ confidence in the market has increased,” said Brooks Herman, BrightScope’s Managing Director for Data and Research. The previous list was published in 2012.
The second place, with 2.6 billion dollars under management, is held by Lipper Advisory Services, a company whose largest shareholders are A. Michael Lipper and Sean Walsh. Lipper Advisory Services provides management services to wealthy families, pension plans, and charitable organizations.
Lipper is renowned for being the promoter of the Lipper Growth Fund Index, the first of the current range of Lipper indices, which analyze the performance and average of various categories of mutual funds. After selling his firm to Thomson Reuters in 1998, Lipper has focused on managing investments for his friends and clients.
After Lipper, the third place in the list is held by Guggenheim Partners Latin America, with 1.6 billion dollars under management. Guggenheim Partners Latin America is an enterprise of Guggenheim Partners and certain former managers of Guggenheim Investment Advisors. The company offers wealth management and family office services to high net worth individuals and foundations. Guggenheim Partners is an independent and private firm.
Guggenheim is followed by Evensky & Katz with 759.1 million dollars; Genesis Investment Advisors, with 756 million; London and Capital Investment Advisors, with 605.7 million; Investor Solutions, with 604.9 million; Gentrust Wealth Management, with 523.9 million; Gables Capital Management, with 499.7 million and Foldes Financial Management, with 497.2 million dollars.
After the aforementioned companies the list is as follows:
Photo: wGiovanni Dall'Orto. Blackstone Closes $7 Billion European Real Estate Fund
Blackstone has announced that it has closed its fourth European Real Estate Fund at its cap of €5.1 billion ($7 billion). This makes it the largest ever dedicated European Real Estate fund.
Ken Caplan, Head of European Real Estate at Blackstone, said: “We are hugely grateful to our investors for their continued support. The fact that we raised €5 billion in just six months from first to final close is testament to the ability of Blackstone’s 60-strong team dedicated to investing in European Real Estate.
Caplan says they have had “a successful 17 year track record in Europe” and they are “excited about the opportunities to continue executing investments across Europe, delivering unparalleled speed and certainty to sellers and the expertise to add value to our properties.”
Foto cedida. Macquarie Mexican REIT cierra la compra del centro comercial City Shops del Valle
Macquarie Mexican REIT today announced that it has completed the acquisition of City Shops del Valle, a 15,914 square meter (171,297 square foot) retail center located in the Mexico City Metropolitan Area, in Colonia del Valle.
MMREIT had previously announced in July 2013 its agreement to acquire City Shops del Valle as part of an acquisition of a portfolio of six properties. The acquisition of the City Shops del Valle property was conditioned upon completion of construction.
“We are pleased to add this new center to our portfolio of high-quality retail properties,” said Jaime Lara, Chief Executive Officer of MMREIT. “City Shops del Valle is an urban infill property strategically located in one of Mexico City’s most affluent neighborhoods where there is limited room for additional commercial development. The property includes strong anchor tenants serving the growing needs of the surrounding communities. We look forward to working closely with them to ensure that their property management needs are met and that their customers, in turn, have a rewarding shopping experience.”
Tenants of the City Shops del Valle retail center include Superama, Bed Bath & Beyond, Cinemex, and Sports World among others. The center is nearly fully leased with an occupancy rate of 99.6% as of March 2014.
MMREIT estimates that the six property portfolio will generate approximately Ps.246.8 million (US$19.0 million) of net operating income (NOI) and approximately Ps.157.5 million (US$12.1 million) of funds from operations (FFO) on an annualized basis. NOI includes forecast rental income plus maintenance recoveries and parking income, minus property operating expenses (including the estimated property administration fee) for the full year 2014. FFO is equal to NOI minus corporate general and administrative expenses, debt service and management fees. US dollar figures are based on an exchange rate of 13.00 Ps/USD.
MMREIT paid approximately Ps.2.8 billion (US$216.9 million) for the six properties, excluding transaction costs and taxes, with a potential earn-out of up to approximately Ps.84.4 million (US$6.5 million) payable to the sellers based on additional lease up. Property taxes and transaction costs totaled approximately Ps.200 million (US$15.4 million).
The transaction, including VAT, was funded with approximately Ps.257.4 million (US$19.8 million) of senior debt drawn on an existing facility with GE Capital Real Estate México (GECREM) and approximately Ps.364.3 million (US$28.0 million) of available cash. The GECREM facility bears interest at a rate of 90-day USD Libor + 3.85% per annum.
Following the closing of the acquisition, MMREIT’s portfolio consists of 259 industrial properties and 8 retail/office properties, totaling 2.7 million square meters (28.5 million square feet) and 253.1 thousand square meters (2.7 million square feet) of gross leasable area across Mexico, respectively.
. Amundi and Tikehau Sign Partnership Agreement to Push Private Debt Funds
Amundi y Tikehau today announced a strategic asset management partnership.The two companies will focus their cooperation on private debt management to offer institutional and retail clients high value-added products for their investment return needs in a low interest rates environment. Leveraging on its strong international presence, Amundi will provide its clients with access to Tikehau IM’s innovative and bespoke product range.
This agreement will enable Tikehau to accelerate the development of its asset management platform, Tikehau IM, targeting all client segments from retail clients to institutional investors and sovereign funds. Together, the two companies will also be able to launch new products marketed under the Amundi / Tikehau dual brand. Finally, both companies will jointly explore future avenues of cooperation in all their areas of expertise.
Under this partnership, and subject to the supervisory authorities’ approval, Amundi will acquire a 12.8% stake in the management company Tikehau IM, in line with long standing partner Arkéa, and become a shareholder of Tikehau Capital Advisors, the head structure of the Tikehau group, with 7.3% of the capital, alongside its Partners and Unicredit.
Yves Perrier, Chief Executive Officer, Amundi, said: “This partnership is perfectly in line with Amundi’s product policy, offering its clients a broad range of high-quality expertise tailored to the needs of each client segment. In addition to its in-house asset management, Amundi will be able to offer products from external partnerships. Since its creation, Tikehau has proven the excellence of its expertise and its innovation capacity, especially in private debt. Thanks to this agreement, Amundi, the European leader in Fixed Income with more than €400 billion assets under management, reinforces its private debt funds offering, which already represents €4 billion. This operation also confirms Amundi’s commitment to develop Paris’ asset management industry together with its most innovative entrepreneurial players.”
Antoine Flamarion, President and founder of the Tikehau group, declared: “This agreement marks a major milestone in the development of Tikehau. We are very pleased to welcome Amundi as a new strategic partner alongside our long-standing partners. As a player in Asset Management, Amundi has a reputation for excellence among investors. Together, we will be able to offer many clients bespoke, innovative and high value-added products, especially in the private debt area where Tikehau has established a renowned expertise in recent years in Europe.”
Enrique García Candelas, senior executive vice president and head of Santander España and Javier Marín, Banco Santander's CEO.. Santander Launches Santander Advance, a Global Strategy to Become SMEs’ Partner for Growth
Banco Santander’s CEO, Javier Marín, today announced the launch of Santander Advance, a project that places SMEs at the centre of the group’s business strategy and aims to make Santander their partner of choice for growth in all its markets. Under this initiative, which starts today in Spain and will be operating in all the group’s main markets by 2015, the bank expects to expand SME lending by more than 10% in each of its markets this year. It will also improve its internal processes to cut down response times and enable it to provide a more specialised service to the sector.
As well as the additional financing and specific product line for SMEs in each of its markets, Santander will offer a range of tools to help small companies develop and overcome obstacles to growth. For this, the bank is launching the Santander Advance Development programme with four basic pillars: recruitment and training, international expansion, employment and connectivity. The bank’s objective is to provide support to 200,000 companies under the Advance Development programme between 2014 and 2016.
With this project, which includes the group’s good practices in this segment of markets such as UK (Breakthrough), Santander aims to share the advantages of belonging to a global group with a strong international presence. As well as providing the services, products and tools that companies need to expand internationally, the bank will launch the Santander Passport in the next few months. This is an identifier that guarantees companies doing business abroad access to specialist local support and gives Santander customers the same advantages they’d have in their market at any of the group’s subsidiaries in other countries.
Santander’s chief executive Javier Marin said, “Santander Advance will become the new model for the whole group’s relationship with small and medium-sized companies. The bank is making progress in segmenting its business and deepening its focus on customers. It can now share with SMEs the advantages of being part of a well-capitalised and highly liquid international group, with a strong presence in key markets. SMEs are a strategic segment for Banco Santander and we want to be partners with them in their growth plans. We want more customers, who are also better linked and more satisfied”.
Within this comprehensive offer, Marín also announced the Advance Fund, a financing vehicle for medium- and long-term projects, mainly by investing in the SMEs through subordinated debt. It will start in Spain with EUR 250 million for projects of at least EUR 1 million. The model will then be extended to other markets.
Launch in Spain
Enrique García Candelas, senior executive vice president and head of Santander España, explained the plans for Spain, where the bank expects to provide EUR 30 billion of new lending, implying an increase of 24%. Its target is to grow its customers base by 22% on top of the 280,000 it already has (including small, medium and micro companies, but excluding retailers and the self-employed). The bank also wants to raise the number of linked customers by 29%. In addition to extra lending, lower interest rates for linked customers and competitively priced products designed specifically for SMEs, Santander España will make its approval processes more agile and provide specialist advisors exclusively for SMEs.
Regarding Santander Advance’s development programmes in 2014, over 20,000 SMEs will have access to training, internationalization and employment initiatives in Spain. Santander will offer 5,000 scholarships to university students for internships in SMEs.
“We have the most complete product range in the market,” García Candelas said. “We want to stand by SMEs as they grow, help them through all the financial and non-financial difficulties they encounter and accompany them in their internationalization.” To ensure the success of the strategy, Santander España has taken a number of specific steps in recent months to improve its model of customer service, its price and riskmanagement, its human resources structure, increasing the number of specialist sales staff for this segment, the technical platform and all the processes needed to guarantee faster response times.
Santander España will provide a digital platform, www.santanderadvance.com, where SMEs can find useful contents and tools to improve their training through online and classroom courses. The platform will provide information about credit lines and banking products, public sector financing available (through the European Investment Bank and Spain’s Official Credit Institute). It includes a link to www.santandertrade.com, a site designed for companies looking for opportunities in international markets.
Foto cedidaPhotos: Biscayne Art House. Spanish Celebrities Shine at Biscayne Art House’s “Faces” Opening
Spanish celebrities gathered at Biscayne Art House last Friday March 14 to celebrate the opening of “FACES,” an exhibition showcasing the work of renowned Spanish actor and artist Jordi Mollà and guest artist Antonio Del Prete. Guests at the opening night cocktail included Nacho Cano, former member of the famous ´80s rock band “Mecano;” Shaila Dúrcal, singer, composer and daughter of singer Rocío Dúrcal; Antonio (el Junior) Morales, singer and actor; and artist Ana Obregón.
Jordi Mollà wowed the crowd on Friday with his “FACES” collection, a series of mixed media pieces depicting his face in various states of emotion with graffiti-like markings over the pictures. Mollà is known not only for his art, which he has shown in prominent art fairs such Art Basel, but also for his roles in films like Blow, Bad Boys II, Colombiana and other Spanish titles.
Italian artist Antonio Del Prete joined the exhibition, showcasing his version of serious classical paintings with a whimsical twist of pop culture and political commentary, which he uses to critique the contradictions of today´s society.
“It is an honor for us to host artists like Jordi and Antonio. We love enriching Miami’s art scene with the works of international artists,” said Ana Maria de Piña, manager of Biscayne Art House.
Biscayne Art House is sponsored by BiscayneCapital™, a boutique wealth assessment firm and one of the preeminent providers of banking services to high-net-worth individuals and families in Latin America. “We are proud to sponsor such a unique art center that shares international culture with its community” said Roberto Cortes, CEO of Biscayne Capital.
Mario Draghi. Photo: World Economic Forum. ECB’s Options are Limited, Unless Ukraine Erupts
The ECB’s options are limited, barring a serious economic shock that could come from an escalation of the Ukraine crisis, Léon Cornelissen, Chief Economist at Robeco, advises investors in his monthly outlook for March.
The central bank did not add to stimulus at its regular 6 March meeting, even though it had earlier raised expectations, tempting a third of analysts to predict a rate cut. This disappointed many investors who believe that drastic action is still needed to invigorate the sluggish Eurozone economy. There were even forecasts for a cut in the deposit rate to below zero, introducing negative savings rate in Europe for the first time since the 1970s.
“And so the ECB is on hold for all practical purposes and will continue to remain on hold, barring a severe negative economic shock,” says Cornelissen. “Could the Ukraine crisis be such a shock? Probably not – unless we see a serious military escalation.”
Three reasons for sitting on the fence
Cornelissen says there are three reasons why the ECB did not act: the threat of deflation has abated; the Eurozone economy is gaining strength; and the ECB doesn’t have much room for manoeuvre anyway with hitting the ‘nuclear option’ of unconventional stimulus.
The good news is that deflationary fears are waning as prices rose last month. Although headline inflation is still hovering within the ECB’s stated ‘danger zone’ of between zero and 1.0% and is far removed from its target rate of ‘close to 2.0%’, the flash estimate for February was a comfortable 0.8%, slightly higher than the 0.7% inflation rate for January.
“Headline Inflation seems to have bottomed out at around 0.9%-0.7% since October, despite all the talk about increasing deflationary risks. So deflation is not a problem and there was and is therefore no urgent need to act,” Cornelissen says.
Unusually mild winter helps
Secondly, the Eurozone economy is gradually gaining strength, partly helped by the unusually mild winter – a sharp contrast to the US, which has been battered by snowstorms. Retail sales rose a seasonally adjusted 1.8% in January compared to December. German factory orders rose 1.2% and French unemployment dropped.
“These developments allowed the ECB to raise its forecast for Eurozone GDP growth by 0.1% to 1.2% for 2014 – still too conservative in our opinion – and keep its 2015 forecast unchanged at 1.5%,” he says. “The Eurozone economy is mending slowly but surely, so the need for additional monetary stimulus is absent.”
Thirdly, the ECB’s room for manoeuvre has become very limited in terms of conventional monetary stimulus, he says. “Unconventional stimulus like a negative deposit rate, a new Long-Term Refinancing Operation (LTRO) with a fixed rate, or even generalized quantitative easing is possible, but they would be highly unpopular with German policymakers. These have to be considered as measures of the last resort, only to be used in conditions of severe stress.”
“The Eurozone economy is mending slowly but surely”
Main risk is China, though Ukraine is the new wild card
Such severe stress could come from an escalation of the crisis in Ukraine, where Russia has sent troops to Crimea, much to the anger of the west. Cornelissen says sanctions that are being imposed by the US and EU could damage the Russian economy and inflame tensions further.
“Russia accounts for a third of EU gas supply, but at the end of this mild winter, Europe can live easily without Russian supply,” he says. “On the other hand, Russian exports to the EU are worth 15% of Russian GDP. Capital flight and the higher interest rates needed to support the ruble will damage the already weakening Russian economy. Russia can ill afford an escalating crisis.”
“So in the meantime, it’s wait-and-see for the ECB.”
He says the real threat remains a slowdown in China along with the credit bubble which caused the first corporate default last month.
“Uncertainties remain elevated, following the first onshore corporate default,” he says. “The worry about China is less a question about lacking ambition – Chinese leaders have reiterated the 7.5% growth target for 2014 – but more about the government’s ability to do the tricky balancing act of preventing a hard landing while deflating the credit bubble.”
Australia, which is among the largest polluters per capita in the developed world, is exploring ways to reduce its greenhouse gas emissions and has set a target for reducing emissions at 5% below 2000 levels by 2020. One of its current initiatives, the carbon pricing mechanism—often referred to as the carbon tax—requires polluters to pay an amount proportional to the carbon dioxide equivalent emitted during a given year.
However, Prime Minister Tony Abbott, who was elected in September, had made it an election pledge to revoke this controversial tax, which was adopted two years ago. In light of the potential change, the debate over how to achieve the 2020 emissions target is ongoing.
Under the present system, polluters must purchase carbon units up to the level of their emissions. These units were initially set at a rate of roughly US$21 (AU$23) per ton. In mid-2015, the number of units is scheduled to be capped and the applicable rate will thereafter be set by market forces via an auction format. Any excess emissions at this stage will be charged at a 100% premium to the auction price for the period, theoretically increasing the incentive for businesses to reduce pollution.
Proponents of the system argue it is the most cost-effective solution, with the increase in costs eventually being passed onto customers. However, a recent government report showed that during a 12-month period, ending in September, emissions dipped by a disappointing 0.3%, despite the US$6.3 billion cost to industry.
In light of its opposition to the current mechanism, the new government is promoting its alternative Direct Action climate policy. Details have been relatively scant thus far but a central element to the plan is a “reverse auction” mechanism in which a US$1.4 billion fund would be distributed to those firms that can reduce emissions at the lowest cost. Critics argue that under this system, the largest polluters would not be punished for failing to address harmful output and the true cost of reducing emissions would be greater than it is under the present mechanism.
Recent polls show that the public has not yet been won over by either option. General consensus appears to favor removing the carbon tax yet is skeptical on the adequacy of the Direct Action policy as a replacement. Given that 40% of carbon emissions are beyond the scope of the tax and would have little incentive under the proposed Direct Action policy, any resolution is unlikely to be a definitive solution.
As it stands, removing the carbon tax would relieve Australian corporates of a near-term burden, but concerns would still remain. Some say current reduction targets are insufficient, and global climate talks set for next year in Paris may place added pressure on the government to revisit its longer-term emission targets.
Colin Dishington, CA, Research Analyst at Matthews Asia
The views and information discussed represent opinion and an assessment of market conditions at a specific point in time that are subject to change. It should not be relied upon as a recommendation to buy and sell particular securities or markets in general. The subject matter contained herein has been derived from several sources believed to be reliable and accurate at the time of compilation. Matthews International Capital Management, LLC does not accept any liability for losses either direct or consequential caused by the use of this information. Investing in international and emerging markets may involve additional risks, such as social and political instability, market illiquidity, exchange-rate fluctuations, a high level of volatility and limited regulation. In addition, single-country funds may be subject to a higher degree of market risk than diversified funds because of concentration in a specific geographic location. Investing in small- and mid-size companies is more risky than investing in large companies, as they may be more volatile and less liquid than large companies. This document has not been reviewed or approved by any regulatory body.
