Wikimedia CommonsFibra Inn's hotel.. Fibra Inn Announces Investor Events in New York City and Mexico City
Fibra Inn, a Mexican real estate investment trust specializing in the hotel industry serving the business traveler, will host an Investor Day at the St. Regis Mexico City, on March 4-5 and at The Hotel Intercontinental Barclay Midtown in New York City on Wednesday, March 19, 2014.
Both events will feature presentations by management, featuring Mr. Victor Zorrilla, Chief Executive Officer; Mr. Joel Zorrilla, Chief Operating Officer; and Mr. Oscar Calvillo, Chief Financial Officer.
This event is by invitation only for portfolio managers and sell side analysts. For electronic registration and the agenda, please visit www.fibrainn.mx
For more details please contact i-advize Corporate Communications at (212) 406 3691 or by emailing mbarona@i-advize.com.
Fibra Inn is a Mexican trust formed primarily to acquire, own, develop, operate and rent a broad range of hotel properties in Mexico. Headquartered in Monterrey, Fibra Inn has a portfolio of high-quality hotels and geographically-diverse located in twelve states throughout Mexico, comprising approximately 4,118 rooms, which 664 are under construction. The Company has signed Franchise Agreements with IHG to operate its global brands Holiday Inn, Holiday Inn Express, and Holiday Inn Express & Suites; with Hilton to operate its brand Hampton Inn by Hilton; and is in the process with Starwood Hotels & Resorts Worldwide to operate the brand Aloft. Additionally, Fibra Inn has agreements with IHG, Marriott International and Wyndham Hotel Group.
Photo: JLPC. IEB and WSBI Launch an International Initiative to Build a More Responsible Financial System
IEB, centre focused on financial training, and WSBI (World Saving Banks Institute), in collaboration with the London School of Economics (LSE), launched the first international initiative aimed at building a more responsible financial system: the ‘Responsible Banking Challenge’.
The main objective is to encourage financial professionals to send their proposals to contribute to the development of a financial system that is more responsible society, the environment and the world economy. This is an opportunity to build a more ethical system worldwide, in which banking professionals are committed to social development.
Some of the fields where these proposals can be developed are, for example; financial integration (according to the World Bank, universal access to financial services contributes to poverty reduction); CSR activities; improvements in a bank’s good governance strategy; financial entities’ good practices manual; or the creation of indicators capable to of evaluating the ethical and responsibility level of financial institutions.
The best initiative will obtain a scholarship to study the Master in Responsible Banking from IEB and WSBI, an online programme in English, taught in collaboration with the London School of Economics Executive Education (LSE). The other selected candidates will be awarded a 30%-50% scholarship to study the programme.
Furthermore, the Master Programme alumni will receive during the course coaching sessions in order to put in practice the knowledge acquired during the lessons and to improve their personal development, and will be part of a mentoring course with professionals specialized in the field.
Financial professionals interested in taking part should submit their proposals to mrb@ieb.es by April 22th. Written formats should not exceed 1,500 words (4/5 pages) or 10 Power Point slides. An audiovisual should not last longer than 3 to 5 minutes. Further information can be obtained at twitter @IEB_Spain / @IEB_Alumnos
Brazil will take centre stage in June when the FIFA World Cup kicks off. Stadium construction delays and concerns that the country’s poor infrastructure will be unable to cope have led to accusations that the country is ill-prepared for such a big event. Later in the year there will be elections. Dilma Rousseff is predicted to hold on to the Presidency, but an embarrassing World Cup or a renewal of the social unrest that marred last year’s Confederations Cup could quickly change her fortunes.
In general, the business community would welcome political change, but fear of defeat could prompt the current government to resort to populist policies that lead to a further deterioration in the fiscal deficit. One crumb of comfort is that persistently high inflation has put the central bank ahead of the curve in raising interest rates compared to other countries with vulnerable currencies. Hence, although this will ensure economic growth remains muted in 2014, Brazil is further through the adjustment process than most.
In Mexico, last year was characterised by positive reform headlines but disappointing economic activity, resulting in Mexico’s economic growth being below that of Brazil. This makes 2014 critical for two reasons. First, in the face of higher taxes, Mexico has to deliver on expectations for a rebound in growth, through an increase in government spending and aided by continued recovery in the US. Second, the hard work of ironing out the finer details of the reforms, in particular the energy reform, needs to be completed. Success on both these fronts will give investors confidence in a structural improvement in Mexico’s long-term growth rate.
Elsewhere in the region, the peripheral countries of Venezuela and Argentina have created headlines for the wrong reasons already this year, both having effectively devalued their currencies. This has added to the nervousness surrounding exchange rates in Latin America that began last summer with talk of the US Federal Reserve tapering its quantitative easing programme. Although this is painful in the short term, it is happening because growth in the US is on a firmer footing, which will lead to stronger demand for the region’s exports.
Valuations in Latin American equities are approaching very attractive levels: like a Mexican piñata, the more hits they take, the closer we get to a gift in the form of a compelling buying opportunity being opened up.
Nicholas Cowley, Investment Manager, Global Emerging Markets at Henderson Global Investors
Soros has committed to be anchor investor of Hispania socimi, by contributing 50 million euros. International Investors Rush to Spanish Real Estate Through SOCIMIs
The bursting of the housing bubble in Spain and the subsequent financial crisis have left Spanish real estate prices at levels which, for the first time in years, investors are beginning to consider attractive. Therefore, the asset’s positioning begins to pick up, either directly or through listed vehicles such as the SOCIMIs, the Spanish REITs.
“The question which investors were asking themselves in recent years, on whether the time was right to invest in Spanish real estate or not, is no longer relevant. The question now is the type of asset in which to invest, and in which market. The response will depend on investors’ risk profiles, their expectations on the return and the investment term,” as told to Funds Society by Juan José Zaragoza, managing partner ofExan Capital, a real estate advisory and management independent firm based in Miami. The expert believes that “property deals currently offered in Spain and investors’ return expectations finally fall together.” And, in his opinion, some of the clearest opportunities are “in some types of assets which offer investors attractive returns with adjustments in both asset prices and rents or leases in prime areas of Spain’s two main markets (Madrid and Barcelona).”
Bankinter also points out that the Spanish property market will be an attractive investment opportunity over 2014. The recovery will begin this year with a stabilization, followed by a significant recovery in demand and prices in 2015, and development reactivation in 2016. They particularly mention that there will be structural changes: the demand will not be the same as it was in the past and the prices of poorly located homes will continue to fall. They remind investors to consider a long-term vision. “It will be an attractive investment opportunity once again but taking a five to ten year timeframe into account.”
Gross and Soros, the Interested Gurus
This period of recovery is attractive to all investors. “It is not just international vulture funds or foreign real estate investors who wish to invest in the Spanish real estate market, but also the local investors,” Zaragoza pointed out. Nevertheless, the recovery is currently relying on large institutional investors and international fortunes.
Thus, over the past few weeks, we are seeing how the big international investors have put the Spanish real estate sector in the spotlight. Just days ago Bill Gross, guru of the largest fixed income manager in the world, Pimco, agreed to purchase five million shares in the new Grupo Lar SOCIMI, or REIT, which will begin trading on the Spanish market on March 6 in the hands of the Pereda family; representing an investment of 50 million Euros and a fund weight of 12.5%.
More recently, it was made known that George Soros, the U.S. investor who bought 3% of FCC some months ago, has committed with the Azora team, to be anchor investor of Hispania Activos Inmobiliarios, its 500 million Euro SOCIMI, by contributing 50 million euros, equivalent to 10% of the fund. Currently, and as explained by the institution, Hispania is undergoing talks with several major global financial investors in connection with their participation as anchor investors.
On Thursday, Hispania Activos Inmobiliarios, a newly established Spanish real estate company, announced its intention to launch an offer for subscription of shares to obtain a capital of 500 million Euros through global positioning for qualified and sophisticated investors, with Goldman Sachs International and UBS Limited as coordinators for the offer. The company intends to build a portfolio of quality real estate assets by investing primarily in residential properties, offices and hotels in Spain. The company, which prompted the listing of its shares in the Spanish stock market after having obtained the approval of the prospectus by the CNMV, will be managed and advised by a company of the Azora Group (over 2,000 million Euros in assets under management).
The Appeal of the SOCIMI (REIT)
These last two are a couple of examples of the appeal which the SOCIMI have as a vehicle to channel investors’ interest for Spanish real estate beyond direct investment. “It can be a very interesting vehicle for families as well as for the international investor. Now is the time to have SOCIMIs within the product portfolio,” said Juan Antonio Gutiérrrez, CEO of the Wealth Management Company Mazabi Gestión de Patrimonios, at a recent conference organized by iiR. These vehicles are fit “for investors in Latin America and elsewhere.”
Experts believe they have already laid the legal and taxation foundations for their development and that they shall continue to grow in numbers. According to Mazabi, there are international investors with Spanish real estate who are considering entering or forming a SOCIMI; and he estimates that by the end of 2015 there could be between 15 and 20 companies of its kind in the Spanish market, both of domestic and international investors. “There are currently many families working on the establishment of SOCIMIs” confirms Enrique López de Ceballos Reyna, RHGR-ONTIER partner. One of the key advantages is the liquidity which they can provide in the future, when they go public, an activity for which there is a two year margin. Taxation wise they are very advantageous, although they are required to distribute 80% of rental earnings in dividends, which are taxable.
It is precisely those dividends which could be the attraction for investors. “A lot more money will flow in when SOCIMIs are clearly invested: pension plans and other institutional investors will want to access the coupon provided by the SOCIMI,” explains Gutierrez.
Two Types of SOCIMIs
In late November, the new segment trading SOCIMIs in the Alternative Stock Market (MAB) was launched in Spain, with the addition of Entrecampos Four SOCIMI S.A., and Promorent a few days later. Although at Mazabi they believe that there are two types of SOCIMI: those promoted mostly by families with low assets of less than 100 million euros and which seek tax status or liquidity for their real estate, and others promoted by institutional investors, with assets above 300 million, seeking tax breaks and as Soros does, seeking to benefit from the rules of a game which is well known to them to enter the asset. As the cost of the SOCIMI is around 100,000 euros, scalable depending on the volume, and they require great administrative work, Gutierrez relies more on the development of the latter, or SOCIMIs formed by integrating several family groups with higher volumes.
Dan Norman, responsable del equipo de Senior Bank Loans en ING IM. Los Senior Bank Loans se beneficiarán de la búsqueda de rentabilidad en 2014
Senior Bank Loans set to benefit from hunt for yield in 2014. Dan Norman, Group Head Senior Bank Loans’ team at ING IM said: “We expect the current year to look a lot like the one just passed. Market technical in terms of demand relative to new issue supply should remain strong given the natural desire on the part of both institutional and retail investors, for floating rate assets to balance out the rate risk in their portfolios. Moreover, unless economic conditions take an unexpected and material turn for the worse, concerns over a rogue spike in default activity should remain on the back burner”.
ING IM notes that, given the average Index bid is close to par with most good loan assets at or slightly above, potential price upside is, by definition, limited. As for credit spreads, the investment manager recognises that they could tighten a little more from here, but it remains hopeful that most of the activity has taken place in terms of how it impacts the average Index and portfolio yield.
Dan Norman continues: “In sum, we fully expect the global hunt for yield to continue, and the loan asset class is well positioned to deliver on that thesis. If 2013 was best categorized as a “coupon plus a little” year, then 2014 is likely to be one in which investors should expect, realistically, the coupon. As such, our total return expectation for 2014 falls within the 4%-5% band.”
ING IM continues to find this return rate attractive on both an absolute and relative basis, especially when factoring in the outlook for longer rates and the likely value destruction in duration-rich investments. Furthermore the team believes this is also attractive considering the moves towards a lift in short-term rates, an environment in which the floating rate loan asset class has historically risen to the top of the return rankings.
Newton, part of BNY Mellon, has announced the appointment of Jim Wylie as Head of North America for Newton Capital Management, responsible for leading and developing Newton’s North American distribution and client servicing business. Based in New York, Wylie reports to Helena Morrissey, CEO of Newton Investment Management.
Wylie has an extensive global institutional and retail sales background and was most recently chief marketing officer and executive managing director of Turner Investment Partners. Prior to that, he was global head of sales at Acadian Asset Management.
Morrissey commented on the appointment: “Jim joins us with a wealth of relevant experience and will add leadership and strategic vision complemented by extensive global institutional and retail sales knowledge. He is highly respected within the industry and we are confident that he will significantly strengthen our distribution capability. As well as leading on all Newton’s strategic initiatives in North America he will also assume leadership of the current team of US-based sales, distribution and client service professionals. We are looking forward to working with him.”
Subject to regulatory approval, Wylie will be appointed as member of the Newton Board.
Wylie holds a BA in international relations and economics from Colgate University in New York and an MBA in Finance from Fuqua School of Business, Duke University in North Carolina.
Over 80% of institutional investors expect risk management to play an even greater role in the investment decision process in the future, according to a new study published by BNY Mellon, a global leader in investment management and investment services, in collaboration with Nobel Prize-winning economist Dr. Harry Markowitz. In addition, over the next five years 73% expect to spend more time on investment risk issues, while 68% expect to spend more time on operational risk issues. Only 25% of respondents, however, had a chief risk officer.
Entitled New Frontiers of Risk: Revisiting the 360° Manager, the new study looks at a broad array of risk-related topics and issues, including: market risk; investment risk measures; performance vs. liabilities; credit risk management; emerging markets and non-domestic investing; alternative investments; asset allocation; diversification vs. returns; liability-driven investing (LDI); operational risk management controls; operational risk insurance; liquidity risk; political risk; regulatory change; and best practices.
“Institutional investors are up against some formidable risk pressures, from new regulations to transparency concerns to investment risks across the board,” said Debra Baker, head of BNY Mellon’s Global Risk Solutions group. “For many, risk management has been a puzzling proposition – just when they think most risks have been measured, managed and mitigated, new ones emerge and old ones evolve. We see the need for a collective risk management framework that incorporates all areas of risks, their impact on each other, and one’s overall investment program. Using some form of quantitative scoring across major risk categories may be the next frontier of risk management.”
The new study arrives almost a decade on from the publication of BNY Mellon’s 2005 white paper New Frontiers of Risk: The 360°Risk Manager for Pensions & Nonprofits, which also included input from Dr. Markowitz. The 2005 paper highlighted how the need for more structured and holistic risk management was just beginning to be recognized, and the new study finds that, in the wake of the 2008 financial crises, risk management has now become a key priority of almost all institutional investors.
Dr. Markowitz notes: “The crisis of 2008 was different. So was the crisis that started in March of 2000 with the bursting of the tech bubble. So will be the next crisis. The moral is that one will never be able to put the portfolio selection process on automatic. The trusted quant team needs to constantly evaluate the current situation. It should also make sure that higher management understands what assumptions are being made, how and by whom any exotic asset classes being used have been evaluated, and what the vulnerabilities are of the general approach that is being taken. Furthermore, the push to integrate risk-control at the enterprise level, rather than at the individual portfolio level, should be continued.”
Key findings of the new study, which surveyed more than 100 institutional investors, including pension funds and endowments & foundations, with approximately $1 trillion in aggregate assets under management, include:
No more chasing alpha: it is down with alpha and up with targeted returns. Institutional investors are placing greater emphasis on achieving absolute return targets as opposed to outperforming a market benchmark. Risk budgets, matching liabilities and avoiding downside risk all play an important role in this shift.
Increased use of alternatives: survey respondents have expanded their use of alternative investments to improve diversification and potentially help with downside risk. Institutional investors plan to increase their allocations to alternatives over the next five years.
A re-awakening of risk awareness: the 2008 financial crises caught many institutional investors off guard. The risk management procedures then in place were widely perceived to be insufficient for a crisis of such magnitude. The drive for more effective, holistic risk management was soon on.
Analytical tools on the front lines of risk management: analytical tools based upon risk-return analysis and performance attribution continue to be the most commonly used to model, analyze and monitor investments. Total plan/enterprise risk reporting tools are on the rise to encompass traditional and alternative investments, as well as liabilities.
Avoidance of unintended bets: a desire to avoidunintended leverage and to better understand underlying investments has grown markedly since the 2008 financial crisis and appears to be driving institutional investors toward solutions offering greater investment transparency.
Respondents to the 2013 survey indicated that the market events surrounding the 2008 financial crises and subsequent recession represent their biggest motivator when it comes to focusing on risk. More than 60% said increased management awareness of the growing field of risk management caused their firm to institute risk management practices.
Over the last five years, 59% of respondents felt their firms had benefited through the evolution of risk management, though many remained undecided about the impact, with results varying markedly by region.
In a significant shift since the 2005 survey, respondents rated “under-achieving overall return targets” and “underperforming versus liabilities” as their two most important risk policy measures. Between the 2005 and 2013 surveys, these two measures increased more than any other response within this category.
Photo: Dirtsc. Heptagon Capital Brings Two Global Equity Strategies to UCITS Investors
Heptagon Capital, the London-based investment management firm with $8.4bn assets under management, has just launched two new Global Equity funds on its Irish UCITS platform: the Oppenheimer Global Focus Equity Fund and the Kopernik Global All-Cap Equity Fund. This takes the number of funds on Heptagon’s $2.8bn AUM UCITS platform to five.
The Oppenheimer Global Focus Equity strategy is now available to professional UCITS investors. The strategy combines a thematic approach to idea generation with fundamental company analysis. Randall (Randy) Dishmon, the portfolio manager based in New York, started the strategy in October 2007. He looks for durable businesses, regardless of where they are located, with sustainable structural tailwinds and good economics. Entry points are critical; Randy seeks to buy when there is a large gap between market price and what the company is worth to an informed buyer. The investment horizon of 3-5 years is sufficiently long to allow real value to materialize. Although this is a high-conviction, actively-managed, benchmark-agnostic strategy (with an ‘Active Share’ of 96%), its risk profile is limited by the portfolio manager’s focus on price. Randy is an employee of OFI Global Asset Management, a wholly owned subsidiary of OppenheimerFunds, Inc.
The success of Randy’s approach can be seen by the recent ‘Best-in-Class’ award for his Oppenheimer Global Value Fund (GLVYX) Y shares at the 2013 Lipper Fund Awards in the US, beating the 75 other funds in his category. His strategy has continued its outperformance, and for the five-year period ended 12/31/13, Randy has achieved a 5 year annualised return of 28.33%, compared to 14.9% for the MSCI all country world equity benchmark.
The other fund that was launched is the actively managed Kopernik Global All-Cap Equity Fund, and its investment portfolio is being managed by Dave Iben of Kopernik Global Investors, LLC in Tampa, Florida. The strategy pursues a truly global, bottom-up, research driven, fundamental evaluation approach that focusses on identifying market inefficiencies through independent analysis. Dave and his team look for undervalued and unloved stocks that will significantly reward the long term, patient investor, who truly understands a company’s business, and where more normal, stable valuations for a business will eventually be achieved.
Commenting on the new fund launches, Tarek Mooro, Managing Partner and CEO of Heptagon noted: “We are extremely pleased to have brought two such high quality investment managers to the UCITS market. In line with our philosophy of identifying high-conviction, benchmark agnostic, outperforming managers, we feel very confident that these funds will significantly reward stakeholders over the coming years.”
Heptagon Capital LLP is based in London’s Mayfair and was founded in 2005 by former Morgan Stanleydirectors, including Tarek Mooro, Eran Ben-Zour and Fredrik Plyhr. Heptagon caters to institutional and Ultra High Net Worth investors, providing them with creative, class-leading investment ideas and risk management, across traditional and alternative asset classes.
David Wise wins gold in halfpipe in Sochi. Photo: Sochi 2014. Carrying the Torch for Retirement Security
I love everything about the Olympics, in particular what it showcases – sportsmanship, patriotism, and uncompromising dedication.
I can’t help being inspired by the countless examples of focus, endurance and strength. To me, the Olympics stretch the boundaries of what is possible. There is real human emotion, with the margin of victory often measured in hundredths of a second. Many of the athletes prepare for the better part of their lifetime for events that last just minutes, or less.
In stark contrast to the preparation of these Olympians, most workers dedicate little if any time to planning for retirement – an event that could last 20, 30 even 40 years. According to the Employee Benefits Research Institute, less than 2 percent of U.S. workers identify retirement planning as their most pressing financial issue, and 43 percent of workers reported that neither they nor their spouse are currently saving for retirement.[1]
I’m not saying that building a secure retirement is easy. It too requires discipline. Some of that discipline must come from within, as individuals shift some of their passion for spending to a passion for saving. Fortunately, some of that discipline can be automated, through participation in an employer-sponsored retirement plan such as a 401(k) account, with savings made automatically though payroll deduction.
In many ways, the keys to a secure retirement parallel the keys to success for Olympic athletes. Like athletes, savers must set goals, develop a game plan, make a long-term commitment and take action.
One of the winter Olympic sports I find most fascinating is the ski jump, because of the courage, control and composure it must take to ski down a hill at speeds in excess of 50 miles per hour, not to mention the part about flying through the air the length of a football field, then landing.
2014 marks the first time women will compete in this event. Just before year end, Jessica Jerome, age 26, became the first to win the U.S. Olympic Trials in women’s ski jumping. She didn’t decide at age 25 she wanted to be an Olympic ski jumper, this is something she’s been doing since she was 7 years old. And I guarantee her first jump was not off a 70 meter hill.
Her Olympic berth is nearly 20 years in the making. Secure retirements can take twice that long, but don’t demand anything near the intensity of effort. In building a retirement nest egg, starting early is key, but slow and steady wins the race. Saving just $5 per day, 365 days a year, for 40 years, translates into more than $500,000 in savings; at $10 per day you enter retirement a millionaire[2].
Perhaps what I love the best about the Olympics is that for most athletes, the journey started as a far-off and seemingly unattainable dream. There’s an opportunity for workers around the world to take inspiration from this, spending just a little more time defining what their medal-winning retirement would look like, and putting a plan into action to turn those dreams into reality.
[1] 2013 Retirement Confidence Survey, Employee Benefits Research Institute, March 2013.
Photo: Alvesgaspar. Encore Capital Group Takes Controlling Stake in Refinancia and Enters in Latam
Encore Capital Group, an international specialty finance company, has announced that it has taken a controlling stake in Refinancia, a leading debt purchaser in Colombia and Peru. Encore purchased 51 percent of the company in December 2013.
Encore’s acquisition of Refinancia establishes Encore’s presence in the high-growth Colombian and Peruvian markets, which together have nearly 80 million residents. Refinancia services distressed consumer debt, which it either purchases or services on behalf of others. It also offers merchant guarantee services, factoring arrangements, and a small credit card business in Colombia.
According to Ken Vecchione, Chief Executive Officer of Encore, the acquisition continues Encore’s purposeful expansion designed to capitalize on growth and consolidation opportunities both domestically and internationally. “This transaction opens up two new markets in which Encore can deploy capital at higher returns than are available in the U.S.,” he said. “In addition, Encore now has a beachhead in Latin America from which to expand, both geographically and into new specialty financial products designed for underserved consumers.”
Encore will bring to Refinancia its analytic strength, operational sophistication and deep knowledge of distressed consumers, creating opportunities for Refinancia to increase operating efficiencies and strengthen performance. Refinancia also shares Encore’s commitment to fair and ethical treatment of consumers.
Kenneth Mendiwelson, Chief Executive Officer of Refinancia, said, “We are excited to join Encore and gain the financial and operational support of a world leader. In turn, Refinancia provides Encore with immediate access to emerging markets in Peru and Colombia, and positions Encore for growth throughout the Latin American region. We look forward to working together to reach new levels of success.”
According to Vecchione, Encore has been deploying capital through Refinancia since late 2012 and plans to continue this activity. “We are taking the same approach with Refinancia that we took with Cabot, in which we acquire a controlling interest in the company with the expectation of increasing our ownership interest over time. In the meantime, the majority of the capital we invest is staying within the business to fund future growth.”
