Foto cedidaSophie Del Campo, responsable de distribución para el Sur de Europa y Latam de Natixis IM. . Natixis IM nombra a Sophie Del Campo responsable de distribución para el Sur de Europa y Latam
To increase proximity with local clients and partners and meet 2024 development ambitions, Natixis Investment Managers (Natixis IM) continues to execute on its strategy to strengthen key business regions. In this context, the asset manager has announced the appointment of Sophie Del Campo as Head of Distribution for Southern Europe & LATAM.
In her new role, she will be responsible for expanding Natixis IM’s footprint in the Southern Europe & LATAM region andwill oversee Iberia, Italy, LATAM and US Offshore. She is based in Madrid and reports to Joseph Pinto, Head of Distribution for Europe, Latin America, Middle East and Asia Pacific, at Natixis IM.
“Sophie’s appointment contributes to reinforce our regional capabilities and reflects our commitment to keep closer to our clients and better meet their specific needs. Since she joined Natixis IM in 2011, Sophie has achieved significant milestones. She successfully led our development in Spain, she drove our expansion in Andes, Southcone, US Offshore, and more recently in Brazil”, commentedPinto.
He also claimed to be confident that Del Campo’s “strong leadership and experience” in business development across countries and client segments will help her to succeed in her new role and to achieve their ambitions in the Southern Europe & LATAM region.
Meanwhile, Del Campo said she is pleased to take on more responsabilities: “I am looking forward to pursue our goals, together with my team. Our purpose in Southern Europe & LATAM is to deliver high quality services to our clients and offer them the investments that suit their long-term requirements. We’ll accomplish that, by following a selective and diversified development strategy, leveraging on the high-value solutions from our affiliated investment managers. We’re committed to further expand into the Retail & Wholesale market through strategic distribution partnerships, and to increase our portfolio of large accounts”.
Del Campo has 20 year experience in the asset management and financial industry. She started her carreer at Deloitte Consulting Group and then worked at ING Direct to develop a mutual funds broker-on-line in Spain. In 2001 she joined Amundi in Spain where she led the wholesale distribution until 2006, and she became Head of Distribution for the Iberian market. From 2008 to 2011, she was Head of Spain and Portugal at Pioneer Investments. Del Campo was most recently Head of Iberia, US Offshore and LATAM at Natixis Investment Managers. She holds an Master in Finance from IEP Paris, and a Master Degree in Economy from the University of Sorbonne Paris.
Pixabay CC0 Public DomainDólares estadounidenses . Taper Tantrum
The U.S. stock market started 2022 with the S&P 500 hitting an intraday record high on January 4 as the Omicron variant’s disease severity was downgraded. The next day, when the minutes of the December 15 FOMC meeting revealed a tightening bias that included the “run off” of the Fed’s $9 trillion balance sheet, the financial markets turned negative abruptly. Stocks declined sharply and the ten-year U.S. Note yield spiked higher. ‘Taper Tantrum’ 2022 was underway.
So far, how does the May 2013 Bernanke quantitative tightening surprise compare? To date 2022, the S&P 500 is down 5.6% vs 4.9% in 2013 and the ten-year U.S. Treasury yield is 27% higher vs 35% in 2013. In 1955, Fed Chairman Martin said the Fed’s job is ‘to take away the punch bowl just as the party gets going.’ How will Jerome Powell compare to Paul Volcker? On Saturday, Oct. 6, 1979, Fed Chairman Volcker held an impromptu evening news conference, dubbed the ‘Saturday Night Massacre.’ Mr. Volcker declared war on inflation and announced the Fed’s monetary policy would now control interest rates by targeting the money supply, with markets setting interest rates. The post-war Keynesian era of big government run economic policy was fading.
Job creation estimates for the January U.S. payrolls report released on February 4 were far below the actual data as the labor market recovery strengthened and the Omicron surge slowed. Bottom line: the U.S. job market is tight and wages are rising. The FOMC’s December 15 minutes also said the job market is ‘very tight.’ The next inflation data release is the CPI estimated to have annualized at 7.3%, the largest rise since 1982 when Mr. Volcker was ‘slaying the inflationary dragon.’
Market volatility remained throughout the month of January, with the S&P 500 declining as much as 11.5% for the month, while the technology-heavy Nasdaq slid as much as 16%. The volatility spilled over into merger arbitrage markets where spreads widened as investors’ risk appetites were tested, and downsides recalibrated. Despite volatility in markets, widened merger arbitrage spreads, and regulatory setbacks, we come out of a challenging month optimistic about the opportunities ahead. M&A activity remains robust in 2022 including the announced acquisition of Activision by Microsoft for $74 billion, and the acquisition of Citrix Systems by Vista Equity for $17 billion.
January was a difficult month across the markets and convertibles were no exception. With growth multiples moving lower, many equity sensitive convertibles moved lower with stocks. Additionally, with interest rates rising, the fixed income equivalents in the market trended lower as well. While this hurt performance for the month, we believe it presents an opportunity as there are now some convertibles trading at more attractive levels than they have in some time, and underlying equity valuations have become more reasonable.
We are of the mind that security selection will be key to performance this year. Typically convertibles do well in a rising interest rate environment, but there are two factors that could cause things to be somewhat different this time. First is the large amount of convertibles with 0 yield and high premium. Most of these are trading below par and are now considered a fixed income equivalent. These will be weak in a rising interest rate environment as investors demand greater yield to maturity. Additionally, given the majority of convert issuers are growth oriented, a continued re-rating of growth stock multiples could weigh on the equity sensitive side of the market. Given that backdrop our focus remains on total return convertibles with some high conviction equity sensitive names.
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To access our proprietary value investment methodology, and dedicated merger arbitrage portfolio we offer the following UCITS Funds in each discipline:
GAMCO MERGER ARBITRAGE
GAMCO Merger Arbitrage UCITS Fund, launched in October 2011, is an open-end fund incorporated in Luxembourg and compliant with UCITS regulation. The team, dedicated strategy, and record dates back to 1985. The objective of the GAMCO Merger Arbitrage Fund is to achieve long-term capital growth by investing primarily in announced equity merger and acquisition transactions while maintaining a diversified portfolio. The Fund utilizes a highly specialized investment approach designed principally to profit from the successful completion of proposed mergers, takeovers, tender offers, leveraged buyouts and other types of corporate reorganizations. Analyzes and continuously monitors each pending transaction for potential risk, including: regulatory, terms, financing, and shareholder approval.
Merger investments are a highly liquid, non-market correlated, proven and consistent alternative to traditional fixed income and equity securities. Merger returns are dependent on deal spreads. Deal spreads are a function of time, deal risk premium, and interest rates. Returns are thus correlated to interest rate changes over the medium term and not the broader equity market. The prospect of rising rates would imply higher returns on mergers as spreads widen to compensate arbitrageurs. As bond markets decline (interest rates rise), merger returns should improve as capital allocation decisions adjust to the changes in the costs of capital.
Broad Market volatility can lead to widening of spreads in merger positions, coupled with our well-researched merger portfolios, offer the potential for enhanced IRRs through dynamic position sizing. Daily price volatility fluctuations coupled with less proprietary capital (the Volcker rule) in the U.S. have contributed to improving merger spreads and thus, overall returns. Thus our fund is well positioned as a cash substitute or fixed income alternative.
Our objectives are to compound and preserve wealth over time, while remaining non-correlated to the broad global markets. We created our first dedicated merger fund 32 years ago. Since then, our merger performance has grown client assets at an annualized rate of approximately 10.7% gross and 7.6% net since 1985. Today, we manage assets on behalf of institutional and high net worth clients globally in a variety of fund structures and mandates.
Class I USD – LU0687944552 Class I EUR – LU0687944396 Class A USD – LU0687943745 Class A EUR – LU0687943661 Class R USD – LU1453360825 Class R EUR – LU1453361476
GAMCO ALL CAP VALUE
The GAMCO All Cap Value UCITS Fund launched in May, 2015 utilizes Gabelli’s its proprietary PMV with a Catalyst™ investment methodology, which has been in place since 1977. The Fund seeks absolute returns through event driven value investing. Our methodology centers around fundamental, research-driven, value based investing with a focus on asset values, cash flows and identifiable catalysts to maximize returns independent of market direction. The fund draws on the experience of its global portfolio team and 35+ value research analysts.
GAMCO is an active, bottom-up, value investor, and seeks to achieve real capital appreciation (relative to inflation) over the long term regardless of market cycles. Our value-oriented stock selection process is based on the fundamental investment principles first articulated in 1934 by Graham and Dodd, the founders of modern security analysis, and further augmented by Mario Gabelli in 1977 with his introduction of the concepts of Private Market Value (PMV) with a Catalyst™ into equity analysis. PMV with a Catalyst™ is our unique research methodology that focuses on individual stock selection by identifying firms selling below intrinsic value with a reasonable probability of realizing their PMV’s which we define as the price a strategic or financial acquirer would be willing to pay for the entire enterprise. The fundamental valuation factors utilized to evaluate securities prior to inclusion/exclusion into the portfolio, our research driven approach views fundamental analysis as a three pronged approach: free cash flow (earnings before, interest, taxes, depreciation and amortization, or EBITDA, minus the capital expenditures necessary to grow/maintain the business); earnings per share trends; and private market value (PMV), which encompasses on and off balance sheet assets and liabilities. Our team arrives at a PMV valuation by a rigorous assessment of fundamentals from publicly available information and judgement gained from meeting management, covering all size companies globally and our comprehensive, accumulated knowledge of a variety of sectors. We then identify businesses for the portfolio possessing the proper margin of safety and research variables from our deep research universe.
Class I USD – LU1216601648 Class I EUR – LU1216601564 Class A USD – LU1216600913 Class A EUR – LU1216600673 Class R USD – LU1453359900 Class R EUR – LU1453360155
GAMCO CONVERTIBLE SECURITIES
GAMCO Convertible Securities’ objective is to seek to provide current income as well as long term capital appreciation through a total return strategy by investing in a diversified portfolio of global convertible securities.
The Fund leverages the firm’s history of investing in dedicated convertible security portfolios since 1979.
The fund invests in convertible securities, as well as other instruments that have economic characteristics similar to such securities, across global markets (but the fund will not invest in contingent convertible notes). The fund may invest in securities of any market capitalization or credit quality, including up to 100% in below investment grade or unrated securities, and may from time to time invest a significant amount of its assets in securities of smaller companies. Convertible securities may include any suitable convertible instruments such as convertible bonds, convertible notes or convertible preference shares.
By actively managing the fund and investing in convertible securities, the investment manager seeks the opportunity to participate in the capital appreciation of underlying stocks, while at the same time relying on the fixed income aspect of the convertible securities to provide current income and reduced price volatility, which can limit the risk of loss in a down equity market.
Class I USD LU2264533006
Class I EUR LU2264532966
Class A USD LU2264532701
Class A EUR LU2264532610
Class R USD LU2264533345
Class R EUR LU2264533261
Class F USD LU2264533691
Class F EUR LU2264533428
Disclaimer: The information and any opinions have been obtained from or are based on sources believed to be reliable but accuracy cannot be guaranteed. No responsibility can be accepted for any consequential loss arising from the use of this information. The information is expressed at its date and is issued only to and directed only at those individuals who are permitted to receive such information in accordance with the applicable statutes. In some countries the distribution of this publication may be restricted. It is your responsibility to find out what those restrictions are and observe them.
Some of the statements in this presentation may contain or be based on forward looking statements, forecasts, estimates, projections, targets, or prognosis (“forward looking statements”), which reflect the manager’s current view of future events, economic developments and financial performance. Such forward looking statements are typically indicated by the use of words which express an estimate, expectation, belief, target or forecast. Such forward looking statements are based on an assessment of historical economic data, on the experience and current plans of the investment manager and/or certain advisors of the manager, and on the indicated sources. These forward looking statements contain no representation or warranty of whatever kind that such future events will occur or that they will occur as described herein, or that such results will be achieved by the fund or the investments of the fund, as the occurrence of these events and the results of the fund are subject to various risks and uncertainties. The actual portfolio, and thus results, of the fund may differ substantially from those assumed in the forward looking statements. The manager and its affiliates will not undertake to update or review the forward looking statements contained in this presentation, whether as result of new information or any future event or otherwise.
Pixabay CC0 Public Domain. El darwinismo digital está en un punto de inflexión disruptivo para los inversores
Internet connectivity and digital tools have transformed everything from retailing to how we watch movies, learn, order food, and experience healthcare, forcing countless companies across industries and sectors to evolve to new digital realities or risk extinction in an ongoing process that has come to be known as Digital Darwinism.
Now, this trend is at a tipping point that will make the disruption of the past two decades seem like table stakes, with myriad implications for investors
Today, software and hardware advances coupled with artificial intelligence (AI) have accelerated to such an extent that technology is creating unprecedented opportunities for innovation, impact and disruption across countries and economic sectors. This global phenomenon will sweep some businesses aside, allow others to gain dominant market share and impact the world’s geopolitical order. It’s also an opportunity for investors to profit from disruption and to contribute to positive real-world change.
This survival of the “digitally fittest” exposes weaknesses in firms lacking technological prowess while enabling others—sometimes small firms—to dominate. While Digital Darwinism to date has been most prominent in the consumer sector, now it is permeating everything in a moment of exponential growth, bringing society ever closer to what Ray Kurzweil calls Singularity, the moment where the power of man and machine converge.
The evolution is evidenced by the shortening life cycle of companies: The longevity of an S&P500-listed company was 30-35 years in the 1970s but is expected to shrink to 15-20 years during this decade, according to Huron Consulting.
Amid this paradigm shift, three trends to which investors should pay particular mind stand out:
Data and connectivity
Three decades ago, few people had Internet access, now 60% of people are online, accelerating disruption by generating 2.5 quintillion bytes of data daily. That data is being used to improve goods and services. The Internet of Things (IoT) highlights the pace of change, growing 9% in 2021 alone to 12.3 billion connections. More and more of the global economy is now digital: Within the MSCI All Country World Index, digital firms generated about $7.4 trillion of revenue in 2020 versus $2.2 trillion in 2001. That number is forecast to reach as much as $30 trillion by 2040, creating opportunities in everything from the metaverse to networking, connectivity infrastructure, semiconductors, cloud storage and cybersecurity.
Man-and-machine
This concept starts with the notion that the human body is hardware and DNA its software code. For example, the speed, innovation and collaboration that led to the rapid development of COVID-19 vaccines suggests scientists and technologists can meaningfully advance how we deal with all manner of diseases. Nanotechnology scientists are installing microelectrodes to help the blind see. Beyond health, the man-and-machine age holds vast potential too. As the metaverse blurs the lines between physical and digital experiences (spurred by Internet connectivity, virtual reality and the blockchain) shopping, entertainment, culture, and payments will be revolutionized. Imagine standing in your renovated kitchen before construction begins or test-driving a car at home. In education, students can be immersed in a culture or place. Imagine learning about the pyramids in Egypt by “visiting” one in the metaverse. Media, too, will change inexorably. Today in the US, consumers engage with 11 billion days of digital content annually and watch another 14 billion annual days of TV.
Climate tech
Addressing climate change is our biggest challenge today but it creates opportunities for investors to support positive change. In the year to June 2021, $87.5 billion was invested in firms combating the climate crisis, up from $24.8 billion the year before, according to PwC. As more capital is spent on the transition, significant investment will flow to technology innovators. US climate change envoy John Kerry forecasts that half of the cuts needed to achieve net-zero emissions will “come from technologies we don’t yet have.” Investors can support everything from AI-powered marketplaces for carbon offsets to improved power infrastructure.
All this could shake up the geopolitical world order as leading economies such as the US and China use technology to vie for dominance in the vital industries of the future, from making solar panels to semiconductors and robotics. As all this shakes out, there will be volatility as certain countries gain marginal power and advantages in particular sectors. On balance, however, I would expect to see the formation over time of stable global alliances that will facilitate disruption without onerous volatility.
These trends are challenging traditional equity investing approaches, as they too, after all, are not immune to Digital Darwinism. In this light, the evolutionary approach to buying stocks looks set to be thematic in nature, where investors can allocate capital via such themes as AI, the metaverse, clean-tech, healthy living, food security or water, instead of strictly based on industries, sectors or regions. This process could also help allocate capital more efficiently during the transition to a more sustainable world by allowing portfolios to invest for impact, both contributing to solutions while potentially benefitting from the volatility caused by the inevitable disruption.
A column by Virginie Maisonneuve, Global Chief Investment Officer Equity at Allianz Global Investors
As demand increases for ESG investing, several key trends are emerging—from climate change to human rights. The global pandemic, in particular, has turned the spotlight on the interconnectedness of sustainability issues and financial market performance. In this Q&A, we ask Thornburg’s Director of ESG Investing & Global Investment Stewardship, Jake Walko, for his insights on ESG trends that will emerge or continue in 2022.
As sustainable investing has become relatively entrenched in Europe and is becoming more mainstream in the U.S., many asset managers have been actively integrating ESG considerations into their investment processes. There are many ways to do this. What is Thornburg’s approach?
Our philosophy centers first and foremost around appreciating the complexity of the world and the ESG issues that exist. As investors with the goal of supporting the transition to a more sustainable world, the most important thing is the ability to determine the materiality of ESG factors—in other words, teasing out material ESG factors that stand to significantly impact a company’s long-term performance. In contrast to this, there are salient ESG issues that may be anecdotally and morally important, such as human rights issues, but do not currently impact the financial performance of a company in a consistent or well understood way. So, the question then becomes: How does one determine materiality?
At Thornburg, we think the best approach is to first leverage the expertise of the Sustainability Accounting Standards Board (SASB) as a starting point to guideustowardthemostmaterial and actionable ESG factors. From there, we overlay our own internal analysis and research to develop a holistic ESG viewpoint on individual companies we’re interested in.Due to our commitment to the ESG space, we have a team of ESG specialists that work collaboratively and organically with our investment team. As partners, our portfolio managers, analysts, and ESG specialists discuss how we can invest in a more responsible manner while simultaneously delivering excess returns for our clients.
How big of a role do you think ESG factors, such as climate risk, generally play in determining a company’s financial performance?
Carbon emissions are likely one of the most universally material current ESG factors that can alter a company’s ESG profile. In an effort to rapidly cut emissions, many countries are turning toward policy tools, such as levying a carbon tax, in order to encourage companies to adapt and make meaningful changes to reduce their carbon footprint. While the U.S. may not be close to imposing a carbon tax, American companies from all sectors are facing pressures to reduce emissions. In this instance, the combination of tighter government regulations and increased penalties has transformed climate risk into a source of business risk for companies, which then translates into a level of investment risk for investors as well.
From a financial-performance perspective, we do not expect ESG factors to have an immediate influence on a company’s stock—any related drag on a company’s earnings or share price will be fairly incremental, occurring over an extended period of time. The exception may be such unpredictable idiosyncratic risks as petrochemical disasters, like a major oil spill, which can result in short-term abnormal losses for a company.
How useful are third-party ESG data and ratings, and do you use them as part of your process?
As interest grows in ESG criteria, investors increasingly need a way to access an objective assessment of a company’s ESG performance. While we believe ESG data can be useful in helping investors identify financially material ESG risks to a business, there’s no single data point that can inform us whether a company is a good or bad ESG citizen. Accordingly, a comprehensive ESG assessment needs to incorporate both quantitative and qualitative information about a company’s current and forward-looking ESG strategy and goals. Managers with strong commitment towards ESG investing excellence, like the one we have at Thornburg, will be better positioned to do this and can provide a richer picture of a company’s current and future ESG impact. While we leverage third-party ESG data as a starting point, we rely on our own internal research to determine our forward-looking ESG viewpoints on companies.
For example, some companies that we see as opportunities may not be obvious “good” ESG companies today, but they have the potential to be tremendously impactful in the future when it comes to moving along such ESG goals as mitigating climate risk. We believe that understanding how a company helps the transition to a more sustainable future is more important than its ESG score or label at a particular point in time.
Do you see any transformative technological innovations on the horizon? What are the key opportunities and risks to keep an eye on?
Financial markets have witnessed a general mindset shift from concern around managing ESG risks to a more opportunistic and return-driven approach: finding companies that will take on the role of creating value in this sustainability era. We think there are many potentially transformative innovations scattered across a variety of industries that have the potential to solve huge sustainability issues.
As an example, there is strong demand for a wide variety of clean-energy technologies, and these will be needed to decarbonize many parts of the economy. The electrification of cars is a popular technology that has gained a lot of traction over the years, although other promising developments include the use of hydrogen as a renewable energy source. Hydrogen, when produced sustainably, can be used as a high-efficiency fuel that has little to no environmental impact. And wind, solar, and even nuclear energy are all opportunities on the table that deserve close attention.
Thornburg is a global investment firm delivering on strategy for institutions, financial professionals and investors worldwide. The privately held firm, founded in 1982, is an active, high-conviction manager of fixed income, equities, multi-asset solutions and sustainable investments. With $49 billion in client assets ($47 billion AUM and $1.9 billion AUA as of December 31, 2021) the firm offers mutual funds, closed-end funds, institutional accounts, separate accounts for high-net-worth investors and UCITS funds for non-U.S. investors. Thornburg’s U.S. headquarters is in Santa Fe, New Mexico with offices in London, Hong Kong and Shanghai. For more information, please visit www.thornburg.com.
Xavier Pardo Y Lelo de Larrea, Executive Director de Morgan Stanley
Copyright: LinkedIn. Foto cedida
Xavier Pardo Lelo de Larrea joins Morgan Stanley this Friday as Executive Director, according to BrokerCheck.
Pardo manages more than $300 million in client assets with about 40 high-net-worth and ultra-high-net-worth relationships, industry sources told to Funds Society.
He has more than 16 years of experience at Citi and was most recently Director of Wealth Management at the firm, according to his LinkedIn profile.
Pardo arrives to Morgan Stanley with a team of five Citi former advisors who work with clients in Mexico, Argentina, Chile, Ecuador and Central America.
The new team will review nearly a billion dollars in assets.
In recent weeks, several senior Citi officials have left the company after the firm announced its exit from the offshore Wealth Management business in Uruguay and Asia.
Michael Averett, Fernando Campoo and Alex Lago, also left the firm few days ago.
Foto cedidaPascal Blanqué, presidente de Amundi Institute y miembro del Comité Ejecutivo de Amundi.. Amundi crea la división Amundi Institute y reúne en ella sus actividades de análisis, estrategia de mercado y asesoramiento en asignación de activos
Amundi has announced the creation of the Amundi Institute, a new division to strengthen the advice, training and day-to-day dialogue to help their clients better understand their environment and the evolution of investment practices in order to define their asset allocation and help construct their portfolios. In this sense, the management company is responding to needs that it had been detecting for some time.
The Amundi Institute’s objective is to strengthen the advice, training and day-to-day dialogue on these subjects for all its clients – distributors, institutions and corporates – regardless of the assets that Amundi manages on their behalf, explained the firm in a press release. This new division brings together its research, market strategy and asset allocation advisory activities.
The Amundi Institute will also be responsible for conveying Amundi’s convictions and its investment and portfolio construction recommendations, thereby furthering its leadership in these areas. This new business line will continue to serve Amundi’s investment management teams and will contribute to strengthening their standards of excellence.
With an initial staff of around 60, the Amundi Institute will soon be strengthened to serve these new objectives. Pascal Blanqué has been appointed as Chairman and will supervise this new business line. He will be supported by Monica Defend, who will be Head of Amundi Institute.
“Inflation, environmental issues, geopolitical tensions… there are many structural regime changes underway. Investors across the board expect a deeper dialogue and sophisticated advice to build more robust portfolios”, said Blanqué.
Vincent Mortier will succeed Pascal as Amundi’s Group Chief Investment Officer. Mortier commented that the creation of the Amundi Institute will enhance the contribution of research to all of Amundi’s asset management activities so that they can “continue to create highperforming investment solutions over the long term, adapted to the specific needs of each client and taking into account all the parameters of an increasingly complex environment.”
Lastly, Matteo Germano, Head of Multi-Asset Investment, will be Deputy Chief Investment Officer.
Michael Averett, Head de Business Development y complex manager de Bolton Global Capital
Copyright: LinkedIn. . Foto cedida
Bolton Global Capital has announced the hiring of Michael Averett as the Head of Business Development. He will also serve as a member of the firm’s Executive Committee and as the Complex Manager for Bolton’s Miami and Weston, Florida offices.
Throughout his 21-year career at Citibank, Averett has held multiple senior-level positions in the firm’s wealth management complex, most recently as Regional Director of Sales for the International Personal Bank (IPB) division, has highlighted Bolton in a press release. In this role, he led a team that managed $10 billion in client assetsand generated annual revenues in excess of $100MM for Citi’s high-net-worth offices in Montevideo, San Juan and San Francisco.
Prior to that, Averett managed IPB’s Client Solutions team and served as IPB’s Sales Head for all of its U.S.-based offices.
“We are delighted to bring on board a professional with such broad knowledge and experience in the international wealth management business”, stated Ray Grenier, CEO.
Established in 1985, Bolton Global Capital is an independent FINRA member firm with an affiliated SEC registered investment advisor. The firm manages $12 billion in client assets for US based and international clients through 110 independent financial advisors operating from branch offices in the US, Latin America and Europe.
Credit expert Stéphane Rüegg at Pictet Asset Management discusses what’s on the mind of his clients, the nascent green bond market and his very personal view of responsible investing.
Why does investing sustainably matter to you?
My awareness came about in different ways. First of all, watching the Rio Summit as a teenager, I vividly remember Brazilian indigenous leader Chief Raoni talking about the preservation of the Amazon forest. Also, I am a history buff and it occurred to me that lots of battles in military history would have had very different outcomes with climate change. The French were victorious at Austerlitz because the lake was frozen and they fired cannonballs that broke the ice; that lake has now dried up. A harsh winter during the battle of Teruel in the Spanish Civil War saw temperatures drop to minus 20 – nowadays they climb to 10 degrees in January. One contributing factor to the French Revolution was the poor harvest of 1788 which caused food shortages and high prices. These examples abound. Finally, I have lived in Asia and there are very few places where you can drink tap water, except perhaps Japan and Singapore. People drink from plastic bottles, which are not recycled. These different thoughts have made me reflect about the environment.
Even within Europe, there are some clear cultural distinctions around ESG
What are clients asking about?
Up until a few years ago, governance was the main ESG factor that influenced investments, and the environment mattered less because of the misalignment that former Bank of England governor Mark Carney calls ‘the tragedy of the horizon’: investment managers are judged on their 3-year track record while the impact of climate change will only be apparent in the coming decades.
However, with extreme weather events there has been a welcome realization that we are in a climate emergency. It has become a higher priority in Europe; Asian investors are looking at these developments and asking a lot of questions. Overall, clients’ main concern is ultimately driven by regulation. In Europe, we are moving towards a shared green taxonomy, but we will have to see how investors use it in the long run. It should not just be about hitting a threshold; we also need data that allows to track the progress of a company over the long term.
New standards will be gradually rolled out in Europe but even within the region, there are some clear cultural distinctions around ESG. German clients do not like nuclear power while others, like the French, think it’s necessary to make the transition to clean energy. In Belgium, home to many large brewers, the green label does not exclude alcohol.
Often, awareness about climate is the result of an environmental disaster, like Fukushima in Japan. In the US, the BP oil spill in the Gulf of Mexico helped change attitudes among American investors. The increased frequency of hurricanes and a spell of intense cold in Texas at the beginning of the year have intensified concerns about the environment across the US.
What risks investors in green fixed income should be aware of?
If I told you, imagine a bond with a social objective that allows people with little money to enter the property market and to integrate into society better, would you invest? Well, imagine it’s 2008 and I have just repackaged subprimes to you as a way to help American society reduce its fractures. So you have to be careful not to be dazzled by the green.
It’s a nascent market that requires you to have some major principles to guide your investments, like the moral compass that guides your personal life. You need to analyse the instrument as much as the issuer and follow up closely to ensure the company delivers on its promise. We are spoiled at Pictet because as a rule, we have what we think is the best supplier for each aspect of E, S and G – at the end of the day you need the data to understand ESG.
A broad-brush approach to evaluating companies’ ESG performance does not work, it is crucial to understand the dynamics of each sector. The environment is key for mining companies, for example, but the social aspect is equally important, in terms of accidents and working with local communities. A case in point is mining company Vale in Brazil where a lethal dam disaster caused the company to lose its position as the world’s largest iron ore extractor and sparked a governance and safety review. The way a company sets prices, or it treats customers or suppliers is just as important as the environment.
Are green ETFs an easy option for fixed income investors?
Green bonds ETF allow investors to dip a toe in the water, but they simply replicate an index. Bond index managers only include issuers that meet their eligibility criteria, so depending on data availability bonds may not be eligible for inclusion for a few months after issuance. When a company doesn’t report properly, it can take months to exclude the bond from the index.
And then it comes down to whether you agree with the benchmark. Do you include green bonds from companies that pollute? Do you include a green bond from an airport operator? When you buy an ETF you leave these decisions to the index provider. We think these are very important conversations to have with our clients.
It would be wrong to think that green bonds are the only way to gain exposure to virtuous companies. Companies in the business of blood testing or those in the health sector do not necessarily issue green bonds yet their contributions to society are important. Some companies may be ‘green’ but do not issue green bonds, such as this US water technology company we have in the portfolio. We bought the bonds because we were interested in the strategy of the company. Then they issued a green bond. On the other hand, we’ve had the example of an energy company promoting its sustainability credentials, then buying a shale gas company when the US energy market collapsed.
Does ESG change the job of professional investors?
In our team we have always cultivated a long-term mindset. Technological change and regulation are key inputs in our process because they can create new risks and opportunities and trigger a mini credit cycle in a sector. So, when ESG regulation started to come into force, we were not taken by surprise.
We also always have had a very fundamental investment approach of asking ourselves “why is the company making this acquisition/changing its business model by launching new products – does it make sense?” We may be opportunistic from time to time, but our approach is that we lend money to a company; we’re not traders.
We also talk to companies about our concerns. You can challenge company management during the meetings that you have with them, you don’t necessarily need defined engagements. Ultimately, governance is very important. You can’t trust a company on its environmental commitments if it doesn’t have good governance.
It would be wrong to think that green bonds are the only way to gain exposure to virtuous companies
Is the new generation more ESG-conscious?
I am not of the opinion that millenials believe in ESG much more than others. I think that each generation has its own biases and its blind spots. In the time of my grandparents, the harmfulness of tobacco was not taken into account at all. Today’s young people don’t understand the link between their streaming habits and the exponential growth of carbon emissions. Our ancestors saved water, used up all leftovers. Today we are in a much more wasteful society. My children don’t recycle. They have a sincerity about them, but they have blind spots, like all generations!
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Foto cedidaÁlvaro Palenga, Sales Director de AMCS. Foto cedida
AMCS Group has announced the promotion of Álvaro Palenga, CFA, to Sales Director and his relocation from Montevideo to Miami. He will be reporting to Andrés Munho, Co Founder and Managing Partner.
In a press release, the company has pointed out that Palenga is assuming the role “at an exciting time”, as the business is seeking to significantly grow the market presence of its three asset management partners, AXA Investment Managers, Jupiter Asset Management and Man Group, in the US Non-Resident channel.
In his new role, he will be focused on covering wirehouses, private banks and broker dealers in Miami and Texas, while providing additional support to the New York area market, which is currently serviced by Chris Stapleton, Co-founder and Managing Partner of AMCS.
“We are extremely excited with the promotion and relocation of Álvaro as our Miami-based Sales Director. He has made significant contributions to our business in a short period of time, and we’re confident his consultative, investment-centric approach will be well received by our North American clients”, commented Munho.
Reorganization of the team
The firm has also announced the hire of Santos Ballester Molina as Sales Associate, based in Montevideo. He will support the wider AMCS sales team across the entire Americas region, with a focus on the southern cone client group.
“Having Santos join us in Montevideo at a pivotal time for our business to be able to support the wider team’s efforts represents a key addition to our team, and we’re confident he is up for the task of adding value for our clients across the Americas. We all look forward to both of their contributions to our ambitious growth plans”, said Munho.
Ballester will report to Santiago Sacias, Managing Partner and Head of Southern Cone Sales, who is also based in Montevideo. He joins from Riva Darno Asset Management in Buenos Aires where he has worked since completing his bachelor’s in economics from the University of San Andrés.
As part of this reorganization of the AMCS sales team, Francisco Rubio has left the business “to pursue other opportunities”, the press release says. He leaves “with tremendous gratitude” from the firm for his significant efforts over the years”.
Despite shrinking headcount, the wirehouse channel boasts a more productive advisor base, averaging $198 million per advisor at an increase of 14.4% year-over-year.This compares to an average of $88.1 million across all channels, according to Cerulli Associate’s report U.S. Advisor Metrics 2021: Client Acquisition in the Digital Age.
As wirehouses prioritize productivity, other advisory channels are capturing marketshare. The wirehouse channel, which has now lost 6.2 percentage points in asset marketshare since 2010, is projected to cede an additional 6.5 percentage points of total asset marketshare by year-end 2025.
By 2025, Cerulli projects that 30.6% of the industry’s assets will be managed by advisors in the independent and hybrid registered investment advisor (RIA) channels. The national/regional broker/dealer (B/D) channel (15.2%) is already overtaking the wirehouse channel (14.9%) in headcount marketshare.
The report shows that wirehouses are focused on wealthier clients, technology enhancements, client acquisition, and equipping their advisors with robust specialized support services. “Wirehouses are playing to their strength and providing advisors with the tools they need to capture and grow wealth,” says Marina Shtyrkov, associate director.
As the most productive channel, wirehouses have designed internal resources, fully integrated workstations, and teams that include multiple specialists spanning global capabilities. “Outside of a few niche B/Ds, banks, and highly specialized RIAs and multi-family offices, this scale can be mimicked but rarely matched,” she adds.
Main challenges
Advisors most commonly identify new client acquisition (52%), compliance (40%), and managing technology (30%) as their practice’s primary challenges. Cerulli points out that wirehouses have leveraged their scale to minimize these productivity hurdles for their advisors and tailor the firm’s resources to address the needs of large practices working with affluent clientele.
As a result, mega teams -practices with $500 million or more in AUM- are most pronounced in the wirehouse channel, which accounts for 41% of the industry’s mega teams. “Advisors are frequently held back by competing priorities as they balance the daily needs of their clients and the operational aspects of their businesses. Instead of vying for headcount, wirehouses have concentrated on solving these organic growth challenges”, says Shtyrkov.
Firms looking to increase productivity should focus on winning greater walletshare, advisor teaming, and merger and acquisition opportunities. However, in Cerulli’s view, they cannot lose sight of the capital required to develop infrastructure to support these efforts, as well as to recruit and retain practices working upmarket.
