Schroders Capital partners with iCapital to widen access to semi-liquid global private equity strategy

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Schroders Capital and iCapital announce a strategic partnership that enables Schroders Capital to broaden access to the wealth management channel for its semi-liquid global private equity strategy. 

Through this collaboration, Schroders Capital will leverage iCapital’s cutting-edge technology platform and operating system to manage the investment and education experience at scale. 

By listing the Schroders Capital semi-liquid global private equity strategy on iCapital Marketplace, a one-stop-shop connecting wealth managers, financial advisors, and their clients to a wide selection of alternative investment opportunities offered by the world’s leading asset managers, Schroders Capital gains access to iCapital’s global network of wealth managers, enabling its distribution strategy to be efficiently expanded.  

With $93.7 billion in assets under management, Schroders Capital offers a broad range of private market investment opportunities to institutional investors and private wealth investors, including a series of semi-liquid funds. The partnership with iCapital, which initially focuses on markets in Latin America, Asia and Switzerland, is testament to Schroders Capitals’ aim to support access to private markets for private wealth clients. 

Georg Wunderlin, Global Head Private Assets, Schroders Capital, said: “The partnership between Schroders Capital and iCapital is an important step in our strategic priority of ensuring we are a leading partner for wealth managers and private banks to better access private markets. The Schroders Capital semi-liquid global private equity strategy provides an even broader set of investors with the means to invest in some of the most established global private equity open-ended funds worldwide. With a multi-year track record and a strong focus on small-mid buyouts in Europe and North America and growth investments in Asia, this sets it apart from many other comparable private equity funds in the market.” 

Gonzalo Binello, Head of Latin America, Schroders, said: “During the last decade or so we have seen the Private Assets investment market growing in demand and evolving in its pipeline to new heights. Latin America has not been an exception to this global trend, and we have seen this growth evidenced in the strong demand from the region for our global private equity ‘evergreen’ Luxembourg-based strategy two years ago, especially from countries such as Chile, Costa Rica, Peru, Mexico and the US market. Schroders Capital has been building a compelling range of next generation ‘evergreen’ private assets strategies, that we have the intention to bring to Latin America in due course to continue working for our client’s benefit.”

Marco Bizzozero, Head of International at iCapital, said: “We are delighted to partner with Schroders Capital, a leading private markets manager with over 25 years of private equity investment experience, to support them in their mission to be at the forefront of unlocking new private markets investment opportunities to the wealth management channel. 

 

BofA’s AI Assitant Surpasses 2 Billion Interactions

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Bank of America’s virtual financial assistant, Erica, has surpassed 2 billion interactions since its launch in 2018. The advanced and widely available virtual assistant has become a personal concierge and mission control for Bank of America’s clients.

Erica’s capabilities have expanded over the past six years to support individual and corporate clients across the company, including within Merrill, Benefits OnLine, and the award-winning CashPro platform.

Erica is a great example of applied innovation in language processing and predictive analytics to deliver a valuable and empowering customer experience.

Erica has responded to 800 million inquiries from more than 42 million customers and provided personalized information and guidance more than 1.2 billion times.

Like Bank of America’s 213,000 teammates, fostering a personal relationship with customers is a priority for Erica.

Bank of America’s data science team has made more than 50,000 performance updates to Erica since its launch, fine-tuning, expanding, and refining natural language understanding capabilities. This ensures that answers and insights remain timely and relevant.

Regional Markets, Credit and Cash on the Move in Focus

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In Q1 2024, global equity markets rose by 8% in USD terms, continuing their strong performance from 2023.

In contrast, developed-market sovereign bonds declined just over 2% due to persistent inflation concerns, eroding much of the previous year’s gains. With continued uncertainty around the speed and timing of central banks’ interest-rate pivots, and because substantial capital has remained on the sidelines in money-market funds, a potential shift of cash into riskier assets, such as longer-duration bonds, corporate credit and equities, could be in scope over the balance of the year.

In last quarter’s edition of Markets in Focus, the report explored the changing relationship between government bonds and equities. In this quarter’s post, we focus on the relationship between corporate bonds and equities. Considering the continued bull market in stocks, MSCI examine the prevailing risks in the U.S. markets and the implications for investors choosing to move out of cash positions in 2024. This quarter also marks the start of our integrating fixed-income commentary into this quarterly analysis, to provide a comprehensive view into public markets.

Diminished diversification benefits from credit carried into Q1

Current conditions in global credit markets have been shaped by the tailwinds of high coupons, the possibility of impending rate cuts and growing confidence in a U.S. “soft-landing.” We believe vigilance is warranted, however, given the lingering effects of shocks related to the COVID-19 pandemic, the report said.

MSCI’s head of portfolio management research, Andy Sparks, discusses the relationships within the bond markets across the credit spectrum, as well as between bond and equity markets, in the four years leading up to 2024 and during the first quarter of the year.

Using the MSCI Multi-Asset Class Risk Model, its observed that correlations between corporate spreads and government bonds remain elevated, suggesting a continuation of diminished diversification benefits from debt investments. Around the world, both investment-grade and high-yield credit markets have become more closely coupled to equity markets.

Why 2024 Could Be a Hot Year for M&A

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After a slowdown in 2023, mergers and acquisitions activity is poised for a rebound this year. Morgan Stanley Research predicts a 50% increase in M&A volumes compared with 2023, as growing corporate confidence and easing concerns about inflation and recession globally are helping fill deal pipelines.

“Last year’s strong market performance masked a dismal deal environment. Global M&A volume fell 35% last year, the second consecutive decline and the lowest level since 2004,” says Andrew Sheets, head of corporate credit research at Morgan Stanley. “This has created pent-up demand for deals in 2024, especially as companies become more confident about growth, giving those that spent the past two years building strategy, evaluating prospects and engaging preliminary discussions an opportunity to strike as the market turns.”

A number of cyclical and structural factors are likely to propel deal activity. Non-financial companies have amassed $5.6 trillion in unallocated capital, and private market investors hold another $2.5 trillion, which are ready to fuel an M&A comeback.

In addition, companies are looking to improve efficiencies, expand market share or add capabilities such as AI expertise and energy transition technology. At the same time, more private companies and private-equity portfolio assets are either putting themselves up for sale or looking to shed assets.

And while the projected rise in 2024 deal activity is coming off this lower base, it reflects both necessity and opportunity. For example, private equity firms are holding more than 1,200 “unicorns” — startups with valuations of $1 billion or more — that they need to monetize.

Industries Primed for Deals

Analysts have flagged six areas to watch for M&A in the coming year.

1.      Banks: The U.S. banking system has been consolidating for several decades, and it remains highly fragmented compared with many other countries. In addition, regulatory requirements and supervision are becoming stricter, increasing the need for stronger internal controls. As a result, analysts see a growing need for scale, which could drive consolidation over time.

2.      Energy: Despite last year’s slump in M&A volume, 2023 did include two of the largest energy acquisitions in more than a decade, and it could be a sign of more to come. Energy companies are looking for well-structured deals that will help them create value as the future of the industry moves toward fewer, yet higher-quality, companies.

3.      Healthcare: Lower interest rates, a desire for growth and, in the U.S., a need for consolidation are likely to drive transactions. Large European biopharma companies may be on the hunt for deals given their strong balance sheets.

4.      Hotels: Hotels have low valuations in Europe, and large transactions in the past have created significant value by reducing expenses and travel-agent costs. However, the industry remains fragmented. The five biggest hoteliers control just 25% of the market and the biggest player operates just 7% of all rooms globally. With one large merger already in discussions, a broader consolidation could follow.

5.      Real estate: Eleven deals with a value of $61 billion for publicly traded real estate investment trusts (REITs) were announced in 2023, which resulted in greater economies of scale, higher earnings and better portfolios. The market appears ready for more, especially in subsectors such as self-storage, apartment, office, retail, health care and industrial REITs.

6.      Technology: Technology may offer the best deal prospects in 2024, especially in software, which had five transactions last year. Tech still attracts significant amounts of private investment, and companies are looking to expand platforms rapidly in sectors such as communications software.

“The M&A resurgence will be a global story, with optimism for European equities and a cyclical rebound in Japan driving deal activity in those regions,” says Sheets. “In North America, companies are looking to grow by acquiring smaller players in their markets.” He notes that activity also appears poised to accelerate in Australia, India, Korea and Japan, where the drive for corporate efficiencies is particularly strong.

Even so, risk factors remain. Recession fears, though diminished, still linger and regulatory challenges remain a concern. Analysts say these risks seem manageable given growing indications that central banks will successfully tame the last mile of inflation without triggering a recessions. That could create opportunities for investors as equity prices may not fully reflect the M&A resurgence.

Amerant Bancorp Announces Sale of Texas Operations

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Amerant Bancorp announced that its wholly owned subsidiary, Amerant Bank, entered into a definitive purchase and assumption agreement under which MidFirst Bank, based in Oklahoma City, will acquire Amerant Bank’s banking operations and six branches in the Houston, Texas metropolitan area. The transaction includes approximately $576 million of deposits and $529 million in loans.

“As part of our strategic planning process, we reviewed our current business model of operating in both Florida and Texas. While we have appreciated the opportunity to serve our customers in Houston and see the potential for growth there, we recognized that additional investment would be needed to gain the scale necessary for our Houston operations to materially contribute to future results,” said Jerry Plush, Chairman and CEO.

Plush added: “With the tremendous growth opportunities we see here in Florida, we believe it is prudent to focus on the execution on our ongoing expansion plans in South Florida and Tampa, and continue to work toward achieving our goal of being the bank of choice in the markets we serve.”

The transaction is subject to customary closing conditions, including regulatory approvals, and is expected to close in the second half of 2024.

Stephens Inc. served as financial adviser and Squire Patton Boggs (US) LLP provided legal counsel to Amerant. Raymond James & Associates, Inc. served as financial adviser and Covington & Burling LLP provided legal counsel to MidFirst Bank.

Grupo Pacífico Joins UBS in New York from Morgan Stanley

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UBS International has announced the arrival of Grupo Pacífico at its New York offices.

The group, led by Fernando Massaro, includes Daniel Gonzalez Lucar, CFA, Richard Gonzalez, Michael Presta, and Luis Reyes, all from Morgan Stanley.

“Please join me, Michael Sarlanis and the entire New York International Leadership team in welcoming Fernando Massaro, Daniel Gonzalez Lucar, CFA, Richard Gonzalez, Michael Presta and Luis Reyes to UBS,” posted Fabian Ochsner, Market Director of Wealth Management Americas’ international office in New York, on LinkedIn.

Grupo Pacífico brings extensive experience and knowledge of the estate planning needs of non-resident U.S. investors, including technology entrepreneurs, business owners, executives, and their families, primarily focused on countries in Latin America and the United States, according to the company’s press release.

Fernando Massaro has been at Morgan Stanley since 2016 and holds an MBA from New York University.

On the other hand, Daniel Gonzalez Lucar is returning to UBS after a stint at Morgan Stanley from 2021 to 2024. The senior wealth advisor previously served at the Swiss bank between 2017 and 2021 and at J.P. Morgan from 2009 to 2016, according to his LinkedIn profile.

Richard Gonzalez, with about eight years of experience, worked at firms like Wells Fargo and Morgan Stanley. Additionally, Michael Presta spent the past four years at U.S. Bank as a Hedge Fund Operations Associate, at Glazer Capital, and Morgan Stanley.

Luis Reyes, for his part, joined Morgan Stanley in 2020 where he worked as a wealth management operation analyst and then client service associate.

Insigneo Announces Inauguration of Flagship Houston Office

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Inauguration of Insigneo's Houston office | LinkedIn account of María Elena Orantes, Consul General of Mexico.

Insigneo was opened its flagship office in Houston, Texas. This occasion marks a significant milestone for Insigneo as it materializes its presence in Texas, the firm said in a press release.

The inaugural event served as both the opening of Insigneo‘s new office and the 2024 Q2 Quarterly Call. This dual-purpose gathering brought together clients, leadership team, and peers, providing an opportunity to explore the new office environment and gain valuable insights directly from Insigneo’s CIO, Ahmed Riesgo.

The event, which commenced on April 10th, has the speeches from Raul Henriquez, Chairman and CEO of Insigneo Financial Group, and Maria Elena Orantes Lopez, Consul General of Mexico. 

This expansion underscores Insigneo‘s dedication to extending its services to the Mexican clientele and broadening its geographic footprint across Texas. Following the acquisition by PNC, Insigneo has strategically expanded its presence, with additional locations in San Antonio, El Paso, Laredo, and San Diego.

“This moment marks a significant milestone in our journey as an investment firm, expanding our reach and commitment to serving our clients with excellence and dedication.” said Maria G. Hernandez, Insigneo Market Head Texas/US SW. “As we embark on this new chapter, we are grateful for the opportunity to further strengthen our presence in this vibrant city and contribute to its thriving financial landscape. With the support of our talented team and the trust of our clients, we look forward to achieving even greater success together.”

This expansion underscores Insigneo’s commitment to international wealth management, driven by state-of-the-art technology and continuous innovation, the statement concludes.

 

BlackRock and Santander Partner on $600 Million Private Infrastructure Financing

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BlackRock and Santander announced that funds and accounts managed by BlackRock will provide financing on a $600 million diversified portfolio of infrastructure credit across communications, energy, power and transportation sectors via a structured transaction.  

BlackRock’s private debt franchise provides differentiated, flexible and scalable financing solutions to a broad network of global financial institutions and corporate relationships.

Through the breadth of BlackRock’s over $50 billion of infrastructure client AUM across equity, debt, and solutions, the firm has built one of the market’s leading infrastructure debt franchises, sourcing, structuring and managing client assets with the potential for income generation. 

“Our infrastructure debt franchise aims for win-win financing transactions that solve the needs of financial institutions and corporates, while generating returns for long-term investors. We have a longstanding relationship with Santander and look forward to providing flexible capital to support the growth of its global project finance franchise and all sectors of the burgeoning infrastructure economy,” said Gary Shedlin, Vice Chairman, BlackRock.

“We are pleased to announce this transaction, which underscores our commitment to private debt mobilization. By proactively rotating our assets, we not only strengthen our financial position but also generate capital for additional profitable growth. This approach is fundamental to our strategy of sustainable growth and value creation for our stakeholders,” commented José García Cantera, Group Chief Financial Officer at Banco Santander.

UBS Private Wealth Management hires William Wright and Matthew Hoffman

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UBS Private Wealth Management announced that William Wright and Matthew Hoffman will be joining the firm in New York City, along with Senior Wealth Strategy Associate Audrey Kaus.

The team will be located in the firm’s 1285 Avenue of the Americas Private Wealth Management office and will report to Market Directors Thomas Conigatti and Neal Cooper.

“We’re thrilled that Will, Matt and Audrey will be joining our team, and we look forward to supporting them as they build and grow their careers here at UBS,” said Tom Conigatti, Market Director at UBS Private Wealth Management. “Their combined talents and dedication to client success make them a great addition to our culture and will help us to continue delivering unparalleled financial advice to our clients.”

“Will and Matt have extensive experience and deeply understand their clients’ sophisticated financial needs,” said Neal Cooper, Market Director at UBS Private Wealth Management. “With our firm’s global resources and capabilities now at their disposal, I’m confident that they will be able to provide even greater value for clients throughout their financial journeys.”

Wright and Hoffman advise high-net-worth individuals, entrepreneurs, business owners and corporate executives on all aspects of their wealth, including trust and estate planning, philanthropic giving and asset management advice.

The team offers access to opportunities beyond day-to-day portfolio management, including next generation education programs, innovative philanthropic and legacy planning strategies, and family office experiences that incorporate lifestyle services.

William Wright will join UBS from J.P. Morgan Private Bank as a Managing Director and Private Wealth Advisor. Will has more than 18 years of industry experience and began his career in financial services with Goldman Sachs in 2006. He serves a select circle of families whose significant wealth creates ongoing and often complex considerations. Through a deep understanding of each client’s balance sheet and expected cash flows, Will strives to provide clients with the clarity and guidance to make smart decisions. Will earned a Master of Business Administration from Duke University’s Fuqua School of Business and holds a bachelor’s degree from Syracuse University. He is also holds the Certified Public Accountant (CPA) designation. Will lives in New York City with his husband and dog. His interests include history, dogs, gardening in pots, wine collecting, music and fitness, as well as traveling to the mountains for skiing and hiking.

Matthew Hoffman will join UBS from J.P. Morgan Private Bank as a Private Wealth Advisor. Matt began his career in financial services in 2015 and advises a limited number of C-suite executives, entrepreneurs and high-earning professionals with multigenerational wealth. By understanding clients’ long-term objectives, Matt is able to provide objective advice around clients’ balance sheets and cash flows. Matt earned a Bachelor of Arts in Economics from the University of Michigan. He resides in New York City where his interests include golf, tennis, and NY sports. Matt enjoys getting out of the city on the weekends to hike and fish.

Audrey Kaus will join UBS from J.P. Morgan Private Bank as a Senior Wealth Strategy Associate. In her role, she will be responsible for managing all team operations and client requests, while supporting overall business development for the team. Since beginning her career in 2022 at J.P. Morgan, Audrey has led with a client-centric mindset, centered around delivering a personalized experience that is both effective and tailored to each client’s individual goals. Audrey earned a Bachelor of Arts in Business-Economics and a Bachelor of Arts in Spanish from The University of Chicago. She lives in New York City, and her interests include fitness, country music, cooking, animals, and travel.

One-quarter of Working Women Fear They Are on the Wrong Track for Retirement

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In a year where more Americans are reaching 65 than ever before, lingering economic concerns are casting a shadow over many workers’ retirement prospects. A research from the Nationwide Retirement Institute® (NRI) reveals a gender disparity in retirement confidence and readiness among current U.S. workplace savers as women report more challenges than their male colleagues.

NRI’s In-Plan Protected Retirement survey of 1,200 employer-sponsored retirement plan participants revealed one in four women (23%) feel they’re “on the wrong track” for retirement, versus 15% of men, and 41% hold a negative or neutral outlook on their retirement planning compared to just 29% of men.

This gender disparity is further demonstrated by the fact that women are less likely than men to have reached key savings milestones, like saving enough for an emergency fund or adjusting their retirement investment allocations.

Today’s macroeconomic landscape may be throwing women retirement savers off course. The report found that women are more likely to be concerned about a recession or economic downturn and the impacts of rising costs or market volatility on their retirement savings.

As a result, more than half of women are concerned about outliving their income in retirement (52%). However, only 13% have diversified their investment portfolio and only 15% looked for other investment options that offer protection during economic uncertainty.

“Women are actively participating in their employer-sponsored retirement plans alongside their male counterparts, but they’re also facing a variety of challenges that can make navigating their retirement journey more complex,” said Cathy Marasco, leader of Protected Retirement for Nationwide Retirement Solutions. “Women are likely to live longer in retirement, so it’s understandable that fear of outliving their income would be a source of anxiety. The good news is there are new solutions available for employers to help plan participants address concerns about income in retirement.”

Outliving savings is a top concern, but protected retirement solutions can help

In addition to navigating the current macroeconomic landscape, another top challenge for 60% of women savers is determining how long they will need their retirement savings to last. Only 11% have created a plan to convert their savings into income in retirement.  They also have other common concerns about their money, including the cost of health care (69%), Social Security not being there when they’re ready to retire (68%), and being able to manage expenses and lifestyle choices during retirement (52%).

Because of these challenges and concerns about their savings, many are interested in solutions that can help. Three in four women say they wish their 401(k) provided a “pension-like” income stream and nine in 10 women say that they would be at least somewhat likely to roll over their money into an in-plan protected retirement solution if it was offered to them.

“Women who participated in our study say a pension-like income stream would reduce their stress, increase their financial security and improve their peace of mind,” said Marasco. “This sentiment aligns with our research showing pension holders are more financially confident and less concerned about outliving their money than those without pensions. It’s time for employers to extend those same benefits to today’s workers by offering a guaranteed lifetime income investment solutions through their qualified employer-sponsored plan.”

To learn more about Nationwide’s Protected Retirement solutions and how they can offer plan participants guaranteed income for life and protect against market volatility, visit Nationwide’s resources for financial professionals and plan sponsors.