Deutsche Bank announced it has reached the USD 100 million commitment target for Global Commercial Microfinance Consortium II, a first-ever fund to support the growth of microfinance institutions (“MFIs”) that pursue a high level of client care, transparency of operations and pricing, and product innovation.
Consortium II’s goal is to encourage and facilitate a renewed focus on client service and product innovation in microfinance, while continuing to develop the field of social investing. To date, Consortium II has supported more than 30 client-focused MFIs operating in Eastern Europe, Latin America, and Asia. In addition to loan capital, Consortium II borrowers have access to technical assistance to improve customer service and achieve Smart Campaign certification for the Microfinance Client Protection Principles, which aims to embed client protection practices into the institutional culture and operations of the microfinance industry.
Consortium II also provides new opportunities to invest in social enterprises in the fields of healthcare, education, energy, agribusiness and technology that operate at the base of the economic pyramid. Consortium II has already disbursed a USD 2 million loan to the Indian School Finance Company.
Consortium II represents a partnership with investors who share a focus on responsible microfinance, including AXA France VIE, AXA Germany, Calvert Foundation, CNP Assurances, Développement international Desjardins (DID), Everence Community Investments, KfW, Left Hand Foundation, Money in Motion LLC, Overseas Private Investment Corporation (OPIC), State Street, Swedish International Development Cooperation Agency (SIDA), Storebrand and University of Denver’s Daniels College of Business.
“Global Commercial Microfinance Consortium II aims to provide access to much-needed capital for microfinance institutions that make customer service a priority,” says Jacques Brand, Chief Executive Officer, North America, Deutsche Bank.
Wharton Research Data Services (WRDS), the data research platform and business intelligence tool for corporate, academic and government institutions worldwide, has announced the winners of the Southern Finance Association (SFA) Best Paper Award for Empirical Research. Andy Naranjo, Bank of America Associate Professor; Jongsub Lee, Assistant Professor; and Stace Sirmans, Ph.D. student, all from the Department of Finance, Insurance & Real Estate in the Warrington College of Business at the University of Florida, were recognized for their research paper, The Exodus from Sovereign Risk: Sovereign Ceiling Violations in Credit Default Swap Markets. The paper examines how private sector firms can delink from sovereign risk. WRDS presented the award to the researchers at the Southern Finance Association conference on November 22, 2013.
In the aftermath of the global financial meltdown, firms’ abilities to raise capital have been impacted dramatically by sovereign risk. In credit default swap (CDS) markets, Naranjo, Lee and Sirmans found that geographic location of holdings and cross stock listings impacted a firm’s ability to delink from sovereign risk and maintain better credit ratings than those more closely linked to sovereign risk. Their findings can help investors determine actual risk in CDS markets, especially in this post-crisis stage. In addition, credit agencies could utilize CDS data – including sovereign linkage, firm location and location of assets – to determine credit ratings faster and more accurately than by relying purely on sovereign ceiling violations data.
“WRDS has a long and strong commitment to the research community, and we are constantly adding datasets and resources to support researchers and serve academic, corporate and government users better,” said Robert Zarazowski, Senior Director of WRDS. “For WRDS, advancing the field of academic research is a win for everyone.”
The researchers relied on Markit CDS Datasets, which are available through WRDS. Their research adds significantly to existing explorations of sovereign ceiling violations; international linkages and the impact of cross listings; and the role of local market characteristics and country-specific rules on credit risk. The scope of data collection necessary to conduct research for the paper was complex, including micro-details on country-specific rules for over 2,300 firms in 54 countries.
Wikimedia CommonsPhoto: Yorick Petey. Carmignac Gestion Group Appoints European Equities Team in London
Carmignac Gestion Group has appointed a new four-man European equities team, headed by Muhammed Yesilhark. The team is based in the London branch of the Group and will assume management of EUR1.6 billion of European funds: Carmignac Grande Europe, Carmignac Euro-Patrimoine and Carmignac Euro-Entrepreneurs. Muhammed and his team previously managed a large European equity portfolio for four years at SAC Global Investors’ London office, with a strong track record.
“We’re bringing on board a talented team under Muhammed Yesilhark’s leadership to underscore our commitment to generate strong investment performance in European equities. The objective is to raise our European funds to first quartile. Their experience in long-short management will help us to perform in all market conditions and will complement our risk management. Muhammed Yesilhark and his team will also contribute to the firm by originating investment ideas for use across the Carmignac Gestion Group funds range”, says Carmignac Gestion Group’s Founder and Chairman, Edouard Carmignac.
Muhammed Yesilhark started as an analyst at Lazard in Frankfurt. He then helped to build York Capital’s hedge fund business for five years before joining SAC in 2009. He studied Finance and Management at the European School of Business in Reutlingen. Muhammed will run the Carmignac Grande Europe fund and the long-short Carmignac Euro-Patrimoine fund.
Muhammed will co-manage the small and mid-caps Carmignac EuroEntrepreneurs fund with Malte Heininger who has been working with him for more than three years and is a former investment banker at Morgan Stanley. Malte graduated from ESCP-EAP in Paris.
The team also includes two analysts: Huseyin Yasar joined Muhammed’steam in 2011 from Goldman Sachs’ M&A division, and graduated from the European School of Business in Reutlingen and from Dublin City University. Saiyid Hamid worked for three years at Private Equity firm TA Associates, and graduated from Harvard Business School before joining Muhammed’s team at SAC in 2013.
Wikimedia CommonsJosé Darío Uribe. Photo: Bank of the Republic, Colombia. José Darío Uribe appointed Chair of the BIS Consultative Council for the Americas
The Board of Directors of the Bank for International Settlements (BIS) has appointed José Darío Uribe as Chair of the BIS Consultative Council for the Americas (CCA). Mr Uribe is Governor of the Bank of the Republic, Colombia.
Mr Uribe’s appointment is for a term of two years as from 9 January 2014. He succeeds Agustín Carstens, Governor of the Bank of Mexico, who has chaired the Council for the last two years.
The CCA comprises the Governors of the BIS member central banks in the Americas.It was established in 2008 to facilitate communication between these central banks and the BIS Board and Management on matters of interest to the central banking community in the region.
The BIS Representative Office for the Americas, located in Mexico City, provides the Secretariat for the CCA.
My last visit to Beijing happened to coincide with the Communist Party’s Third Plenum Meeting. General business sentiment was just as upbeat as it had been earlier last autumn. But through my discussions with different businesspeople, I came away with a distinct new optimism over the leadership’s more market-oriented stance on policies.
To give an example of the new administration’s improved focus on marketplace best practices, let us look at policies that have impacted China’s toll road operators. As car ownership has grown with rising incomes, China’s toll road industry has experienced consistent growth in recent years. However, in 2012, major toll road operators were negatively affected by a government policy enacted by China’s former administration that mandated toll exemptions on all major Chinese holidays.
Besides contributing to severe traffic congestion on the country’s main roads, the holiday policy failed to stipulate any compensation measures to offset losses that toll road companies would have to endure. While China’s new administration has maintained the toll exemption policy for major holidays, immediately after taking office, new government officials began working with the industry to offer compensation that may help offset any related losses. During my trip, I got the sense that toll road operators are generally pleased by the new administration’s understanding of their concerns.
The current leadership seems very committed to reducing government intervention in the economy. One of the highlights that came out of the Third Plenum communique is a government endorsement for the market to play a more “decisive” role in allocating resources. In addition, the new administration will further deregulate sectors that have traditionally been dominated by large state-owned enterprises (SOE). It plans to adopt an approach to allow private investments in most industries unless they are on the official list of industries restricted from private and/or foreign investment. The government also promised to simplify business registration and approval processes and level the playing field for non-SOE companies to better compete.
While I am encouraged to see an ambitious reform package coming from China’s new leadership, the key to the country’s future success will lie in implementation. Counter to the new initiatives (and not long after the Third Plenum meeting), several cities in China rolled out some administrative measures that aimed to curb increasing local housing prices. Different localities may continue to struggle with more market-friendly reforms, but in general, we are hoping the broad business environment in China will gradually move in the direction of a market-oriented economy. If so, non-SOE companies could become major beneficiaries of this long-term trend.
Henry Zhang, CFA, Portfolio Manager 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.
Giorgio Pradelli . EFG Internacional nombra a Giorgio Pradelli co-CEO
In order to allow John Williamson, CEO of EFG International, to devote more of his time to the development of the five regional private banking businesses, as well as investment and wealth solutions, Giorgio Pradelli, Chief Financial Officer, will in future focus on EFGI’s operational and risk platform and additionally take on the role of Deputy CEO. This applies with immediate effect.
The composition of EFGI’s Executive Committee remains unchanged, although the reporting lines of the Chief Operating Officer, Chief Risk Officer and Group General Counsel transfer from John Williams on to Giorgio Pradelli.
“Since joining us in June 2012, Giorgio has made a significant contribution to the conclusion of our busiess review, in particular the strengthening of our capital position and overall risk profile. His promotion to Deputy CEO is well deserved and allows for a clear focus of responsibilities within the executive team to support our objective of controlled, profitable growth”, says John Williamson, Chief Executive.
Photo: Mailer. Falcon Private Bank to Sell Hong Kong Branch to EFG Bank
Swiss wealth management boutique Falcon Private Bank announced that it has reached an agreement to introduce its clients and certain employees of its Hong Kong branch to EFG Bank, the Asia business of the international private banking group EFG International.
Following a strategic review, Falcon Private Bank has decided to exit its Hong Kong private banking business and sharpen its emerging markets focus on the Middle East, Africa and Eastern Europe. The Hong Kong branch will be liquidated upon completion of this process. Falcon Private Bank’s Singapore branch will continue serving as a private banking hub in Asia.
“Our strategic ambition is to become a leading emerging markets private bank focusing our business exclusively on markets where we have a sharp competitive edge”, according to Eduardo Leemann, Chief Executive Officer of Falcon Private Bank.
Photo: Brocken Inaglory. OppenheimerFunds' Michelle Borré Joins Global Multi-Asset Group
OppenheimerFunds has announced that portfolio manager Michelle Borré and her team of analysts have joined the Global Multi-Asset Group (GMAG) led by Mark Hamilton, CIO Asset Allocation, effective January 1, 2014.
Ms. Borré joined OppenheimerFunds in 2003 as a senior research analyst on the Value Investment team. She is currently the portfolio manager of Oppenheimer Capital Income Fund and Oppenheimer Flexible Strategies Fund. The fundamental processes of both funds will remain the same. Ms. Borré’s team of three analysts will continue to report directly to her and she will report directly to Mr. Hamilton.
“Ms. Borré and her team will significantly enhance GMAG’s research and portfolio management capabilities with their fundamentally driven investment approach,” said Mr. Hamilton. “In turn, her team will benefit from access to resources and personnel as a part of GMAG. Together, the combination will foster continued investment success on behalf of our clients across all of the firm’s multi-asset products and solutions.”
The Global Multi-Asset Group works closely with portfolio managers and research analysts across OppenheimerFunds’ equity, fixed income and alternatives teams to develop and manage innovative portfolio solutions for clients.
Mobius leads the Templeton Emerging Markets Group.. Mark Mobius Expects Appealing Long-Term Investment Opportunities in Central and South America
As we embark upon a new year, the Templeton Emerging Markets Group headed by Mark Mobius believes 2014 could be an important year for many emerging markets, possibly establishing trends that could play out through much of the remainder of the decade. In particular, Chinese government reform initiatives announced in late 2013 could have far-reaching significance. And major elections in a number of countries in 2014 could bring dramatic (or not-so-dramatic) changes.
These are some of the thoughts about Latin America highlighted in Mark Mobius’ blog, Investment Adventures in Emerging Markets. According to Mobius, Central and South America also could continue to provide investors appealing long-term investment opportunities across a range of sectors and countries.
As consumption patterns in Brazil continue to evolve as per capita income increases, Franklin Templeton expects the country to become a leading consumer of products (both non-durable and durable) not only produced in Brazil but also those imported from regional and global markets. Moreover, Brazil will be hosting the World Cup in 2014 and the Olympics in 2016. “As a result, we have already seen and expect to continue to see the country investing significantly in infrastructure. This should help drive economic growth in the coming years as well as improve the basis for stronger sustainable growth in the long-term, in our view”.
Mobius highlights that the Mexican market has been benefiting from significant investor interest recently, especially as the outlook for the US, which is Mexico’s largest trading partner, has been improving. Mexico’s competitiveness to supply the US has also significantly improved over the last few years. Many companies have continued to grow their operations in Mexico to produce high value-added products such as automobiles, planes and medical devices.
“We expect this trend to continue developing in the medium and long term. A long period of increased economic and political stability has also allowed the government to concentrate its efforts on long-awaited reforms. We expect the implementation of important reforms to continue in the near future, which should have a more immediate impact on government finances and could improve GDP growth in the long run”.
Wikimedia Commons. Bankers Meet in Miami for Financial Crime and Anti Money Laundering Summit
FIBA, a non for profit trade association whose membership includes some of the largest financial institutions in the world who are active in international banking, will be holding its 14 Annual Anti Money Laundering Compliance Conference on February 20-21, 2014 in Miami. The program will help U.S. and foreign bankers acquire first-hand knowledge of the due diligence expectations of regulators and banks under a risk-based AML/OFAC compliance program.
“The key objective is to become aware of regulators’ expectations and that is where the upcoming 14th Annual FIBA AML Conference can help”, says David Schwartz, CEO of FIBA. “Last year’s conference, which attracted 1300 delegates from 40 countries, proved to be an outstanding learning and networking experience for the financial industry and established the type of conversation we want to create with the FIBA AML Conference. This year we plan to expand on that and there are certainly a lot of issues to cover”, concluded.
FIBA’s AML conference agenda will include a range of panels that will examine topics of concern to anti-money laundering compliance officers, regulators, lawyers, accountants and others.
The money laundering potential of Bitcoin and other digital currencies has attracted a lot of media attention in recent months. While the growth of such technology is worthy of examination, such innovation is by no means the sole, or even the most pressing, anti-money laundering issue faced by international banks today.
Of much greater concern to compliance officers, however are the many regulatory enforcement actions that in recent years have cited due diligence failures at banks engaged in international correspondent banking activity. Banks must figure out how to strike a proper balance and get to know their customers, and their customers’ customers, without the wasted expense of unwarranted measures. Additional topics to be covered include the evolution of cyber fraud; the direction of AML regulation; or what is happening to the risk-based approach.
For more information on the speakers, sponsorships, the program, or to register for the event, please visit the following link.
