Peter Stockall, courtesy photo. Peter Stockall se une a iM Global Partner, fortaleciendo su plataforma de distribución internacional
iM Global Partner, a leading investment and development platform focused on acquiring strategic investments in best-in-class traditional and alternative investment firms in the U.S., Europe and Asia, appointed Peter Stockall to lead sales in the US Offshore and Latin America region.
Peter, based in Miami, will enhance iM Global Partner’s international expansion, spearheading the business development efforts in this very important region within the Americas. He will offer US Offshore and Latin America investors access to a wide range of strategies managed by the outstanding partners of iM Global Partner, ranging from US equities to liquid alternative strategies. Peter will report to Jose Castellano, Deputy CEO and Head of International Business Development.
Castellano said: “I am delighted to welcome Peter to our international sales team to support our rapidly developing Latam and US Offshore platforms, which have already been in place for more than a year. His experience covering the Americas will be a valuable asset in helping to develop the operational distribution capability of our current and future U.S., European and Asian Partners.”
Peter has 16 years of experience working for leading asset managers. Before joining iM Global Partner, Peter was responsible for sales of the Carmignac Mutual Fund range in the US. He spent four years, between 2012 and 2016, as Offshore regional Sales Consultant for Pioneer Investments, where he was responsible for sales of offshore mutual funds and alternative investments to financial advisors across all channels in the Southeast, Caribbean, and Panama territories. Peter started his career at Merrill Lynch providing Financial Advisors with sales support and investment guidance in both New York City and Asia regions. Peter has also been part of the Oppenheimer Funds and Capital Group sales teams.
Courtesy photo. Los diferenciales de los bonos híbridos y subordinados pueden estrecharse más durante el primer semestre de 2020, según Nicoló Bocchin de Azimut
A year ago, when Nicoló Bocchin, Head of Fixed Income of the Italian manager Azimut, started to manage the AZ Multiasset Sustainable Hybrid bonds fund, one of the main changes he introduced was to add subordinated bonds of financial companies, especially insurance companies, to its portfolio of corporate hybrid bonds.
“Hybrid bonds allow European issuers to finance themselves without jeopardizing their rating, if they follow the methodology established by the rating agencies, while insurance companies issue subordinated bonds for solvency reasons, but have features in common”, explains Bocchin in an exclusive interview with Funds Society.
Thus, by introducing insurance subordinated bonds, they enhance diversification thanks to instruments “that have almost the same structure as a corporate hybrid bond and provide the same spread,” explains the manager.
For this same purpose, the manager explains that recently they have also added AT1 instruments, known as CoCos in the portfolio, because it is “an asset class that we use tactically to enhance the return of the portfolio and that we like a lot. It is more volatile that hybrid and insurance but again it provides us with diversification nad coupon flows that are very helpful for the time being,” explains Bocchin.
Currently, the portfolio of the AZ Sustainable Hybrid fund is composed of 45% corporate hybrid bonds, 27% subordinated bank bonds and 24% insurers. Bocchin explains that there is generally one or two notches difference between the hybrid or subordinated bond rating and the issuer’s rating, depending on the degree of subordination and that in this type of asset “the investor is rewarded for the subordination, in a title with greater volatility, but with a spread similar to that of the High yield segment and an investment grade default risk.”
Short on underlying interest risk
Another characteristic of its investment style is that it is managed based on spreads, not yield, which implies that the two components that make up the total yield are broken down. The quality of the issuer and the macro environment and the impact on the government yield are analysed separately. Consequently, based on this approach and its current outlook for interest rates, they have recently reduced the sensitivity of the portfolio.
“In Europe we are in negative yield environment in the German curve which we think is not fully justified. We have mid to long term view in the way we manage our portfolio,we think that negative rates is a distortion of the market and perhaps in 2-3 years’ time with a bottoming out of growth and a pick up in inflation, which can occur, interest rates will slowly go from negative back to zero,” says the manager.
Consequently, its current position is that they have a long credit portfolio and short underlying interest rate risk Bocchin explains, “the current duration of our portfolio is 4.5 years, but the interest rate sensitivity of the portfolio is less than 3 years because I am almost 2 years short in futures both in the German curve and the small component in the Italian curve.“
Implementation of ESG Criteria
Another differentiating aspect of his management style is the application of ESG criteria in selecting the securities that are part of the portfolio. “Since we started managing the fund, the percentage of issuers that meet ESG criteria has increased from 75% to 95%,” says the expert, who applies this filter based on the criteria established by his external provider Vontobel.
In the same line the manager adds that, although these types of instruments are mostly issued by European entities, he predicts a great development of ESG issuers in emerging markets in the coming years and confirms that Azimut has the necessary resources and experience to take advantage of this opportunity.
2020: A year to Benefit from the Carry
In terms of return of this type of assets, the fund has had a very significant one during the year, although Bocchin points out that the profitability of the year 2019 has to be seen together with that of 2018 due to the strong spread widening at the end of 2018 and its subsequent recovery during 2019. Based on this good performance, in July 2019 they slightly reduced the risk of the portfolio by decreasing its exposure in AT1 and reinvesting in corporate hybrids and some insurers.
With respect to 2020, the manager points out that the profitability of 2019 will be very difficult to replicate. However, although the spreads are at levels close to 200 basis points, the manager believes that there is still room for further reductions, especially during the first half of 2020.
“With the QE the ECB is buying Investment Grade credit so investors see a squeeze in spreads and yield among IG, and they need to look for yield in the lower part of the capital structure,” explains the manager.
In short, by 2020 they expect a return between 2-4% in euros (that is, between 4.6% and 6.6% in dollars) under optimistic scenarios, although they do not rule out periods of volatility caused mainly by disappointment regarding Chinese growth .“2020 is the year where you should appreciate the fact that this type of instruments have a carry. We don’t expect a big spread compression, although there will be some, and the performance will be basically the yield of the portfolio”, concludes the manager.
Since 2018 China A-Shares have been included in MSCI Indices. Improvements in accessibility are expected to accelerate further inclusion of the China A-Shares in the near term. In this Q&A, Matthews Asia Portfolio StrategistJeremy Murden offers his views on this and China’s motivation to increase accessibility.
What Changes have been made to the MSCI Indices?
With the rebalance on November 27, 2019, index provider MSCI has completed the planned increase of both the weighting and breadth of China A-shares exposure in its emerging markets index as well as its China index and other regional indices.
In 2019, the inclusion factor rose to 20% from 5% through a three-step implementation process of 5% increments that began in May. In addition to the increase in allocation to the existing securities, MSCI also increased the breadth of the securities by including ChiNext shares as well as mid-cap stocks. Following the rebalance, Chinese A-share securities now make up approximately 4.2% of the MSCI Emerging Markets Index, an increase from 0.72%, and China exposure including A-shares now makes up approximately 33.6%.
Why were these changes made?
The move follows the successful implementation of the initial 5% inclusion of China A-shares in 2018 and wide support for the weight increase from international institutional investors. MSCI consulted with a large number of international institutional investors, including asset owners, asset managers, broker/dealers and other market participants worldwide as part of its review process.
Additionally, there was significant growth in the adoption of A-share investment by international investors as the number of northbound Stock Connect accounts grew from 1,700 before the June 2017 inclusion announcement to over 7,300 in February 2019. The Stock Connect programs in recent years linked the Shanghai and Shenzhen stock exchanges to the Hong Kong Stock Exchange and enabled foreign investors to buy A-shares with fewer restrictions.
Are further increases expected?
Yes. While no future increases are currently scheduled, MSCI is in regular contact with the China Securities Regulatory Commission (CSRC) regarding the proposed improvements in market accessibility that would lead to an increase in the inclusion factor.
What are key improvements the CSRC would need to make before inclusion is increased?
A key driver of the increase to 20% from 5% inclusion was the significant advancements in accessibility, including a tightening of the trading suspension rules and a quadrupling of the daily Stock Connect quota in 2018. MSCI highlighted nine potential improvements as a road map to a potential 100% inclusion.
The four areas that MSCI views as most pertinent to increasing the inclusion factor beyond 20% are:
Access to hedging and derivatives as the lack of listed futures and other derivatives products hamper investors’ ability to implement and risk-manage a large-scale inclusion
Change the current settlement cycle of T+0/T+1 to the emerging market standard of T+2 as the current short settlement period presents operational risk and tracking challenges
Align the trading holidays of onshore China and Stock Connect as the misalignment creates investment frictions
Create the availability of Omnibus trading mechanism in Stock Connect to better facilitate best execution and lower operational risk.
The next tier of improvements that MSCI communicated to the CSRC are:
Further reduce trading suspensions. There have been visible improvement lately, but trading suspensions in the China A-shares market remain unique when compared to other emerging markets
Improve access to the Chinese renminbi for stock settlement as direct access to the renminbi for stock settlement could represent a more-efficient foreign-exchange option for global investors
Improve access to IPOs and ETFs as both remain outside the scope of Stock Connect.
Open stock lending and borrowing. While short-selling is technically allowed, there currently is no functioning stock lending and borrowing market
Improve the stability of the Stock Connect universe as changes can create turnover issues in the maintenance of indexes.
What are potential next steps?
According to Sebastian Lieblich, MSCI’s Global Head of Equity Solutions, MSCI has been pleasantly surprised by the pace of accessibility improvements that have been implemented by the CSRC over the past 12 to 18 months. Beijing has indicated that access to derivatives and the alignment of holiday schedules are likely to be addressed in the near term. The change in settlement time is more complex, but still could be implemented swiftly. If the present momentum continues, “in a relatively short time frame, the launch of a public consultation on a major change could be announced.”
While the 2019 increase has been a move from 5% to 20%, Mr. Lieblich felt that given the pace of improvements, moving forward there is no need to grow the inclusion factors in 15% to 20% increments. He stated there is no prescribed path from here and the timing and extent of further inclusion will be directly driven by the timing and extent of accessibility improvements. While nearly all of the second-tier steps would need to be completed to reach 100% inclusion, incremental improvements will accelerate inclusion in the near term.
In addition to an increase in the inclusion factor, MSCI could continue to broaden the universe of A-shares to include the small-cap universe in indices to align China A-shares with the global standard of 85% of adjusted free float market cap. Beyond that, the securities trading on the new Shanghai Stock Exchange’s Science and Technology Innovation Board (STAR Market) could be included if they meet requirements of the MSCI GIMI Methodology and the eligibility of the stock connect programs linking the mainland markets and Hong Kong.
Finally, the exposure of Chinese A-shares in MSCI indices is still limited by the current 30% foreign ownership limit. Any opening from that limit would result in an increase to the adjusted free float market cap of all A-shares at the next index rebalance without any action by MSCI. Depending on the scale of the increase, it could have a multiplicative effect on the increase in A-share inclusion.
What is China’s motivation to increase accessibility?
China is primarily driven by a desire to draw institutional assets into its domestic market, according to our MSCI source. While many developed equity markets are 80%+ institutionally owned, China remains the inverse with only 20% institutional ownership. That has led to higher volatility as annual turnover in the A-share market in 2017 was 222% versus 116% for the U.S. Access to a larger pool of institutional capital, which tends to be more stable and long term in nature, would help reduce volatility in the market.
What would a move to 50% inclusion and beyond mean for the MSCI emerging market index?
Holding all other factors constant, a move to 50% inclusion from 20% inclusion would increase the exposure of A-shares in the MSCI Emerging Markets Index to 9.8% from its current level of 4.2% and increase China exposure to 37.5% from 33.6%. At full inclusion, China would represent 43.1% of the benchmark, 17.8% of which would come from A-share exposure. Looking ahead further, if South Korea and Taiwan, which are already considered to be developed economies, were to graduate to developed- market status per MSCI, China would make up 48.2% of the index at 50% inclusion and 54.0% at full inclusion.
How could this benefit investors?
The current Chinese exposure within the MSCI Emerging Markets Index and other indices is heavily weighted to mega-cap internet companies and large Chinese banks. This and future increases in A-shares exposure, and a further broadening of the universe to include small-cap stocks, will allow the indices to better reflect the opportunity set within Chinese equities.
Additionally, there was an estimated $1.9 trillion in assets that track the MSCI EM Index as of March 2019. While flows into A-shares from active managers are difficult to predict, the growth of the benchmark weight is likely to translate to inflows to the space and larger exposure from active managers who track the index.
Will pressure from U.S. politicians affect A-share inclusion?
While there has been pressure from U.S. policymakers, led by Florida Senator Marco Rubio, to remove Chinese stocks from indices, MSCI remains focused on the needs of global investors. Per MSCI, all indices use a fully transparent rules-based methodology. MSCI stated it will not make changes to existing indices or delay a planned allocation due to political pressure, only to changes in market access.
Additionally, the U.S. Thrift Savings plan at the center of the political pressure recently announced its decision to maintain its current benchmarks and China exposure after its board and consultant concluded maintaining the exposure to China was in the best interest of plan participants.
How much experience does Matthews Asia have with China A-shares?
Matthews Asia has extensively studied and invested in China’s domestic A-share companies for many years. In 2014, our firm was awarded a Qualified Foreign Institutional Investor (QFII) license and quota that enabled us to invest directly into China’s domestic securities market, including the market for China A-shares. We also have participated in A-shares via the Stock Connect programs.
We continue to be attracted by the fundamentally sound merits of many local companies listed in China. We realize that many quality A-share companies in growing industries can be priced at rich valuation multiples, however, which makes our experience of carefully vetting them critical. We believe long-term investors can benefit from exposure to A-shares.
At Matthews Asia, our focus has always been on taking a fundamental approach to finding leading A-share companies that are poised to benefit from the country’s structural shift toward its domestic economy.
Toy Drive. El Comité de Liderazgo de Mujeres de FIBA prepara un Toy Drive para niños ciegos
The Florida International Bankers Association’s Women’s Leadership Committee (WLC), in partnership with the Next Gen and the Community Relations Committees, will be partnering with the Miami Lighthouse for the Blind and Visually Impaired this holiday season.
As they have done in the past three years, they will be sponsoring a Toy Drive, “so we humbly ask that you help us in our mission to bring holiday joy to the children served by this organization. The holiday events from the last years were true successes, which we would not have been able to accomplish without your generous support!”
All funds collected will be used to purchase the type of toys needed to fulfill the special needs of the children. The toys will be distributed by FIBA’s Committees to the children of Miami Lighthouse for the Blind and Visually Impaired during the December 21st Holiday event. They ask that you please make your donation by December 13th to allow them enough time to buy the toys for the children in time for their holiday event distribution on Saturday, December 21st.
Babies and children are among the most rapidly growing populations experiencing vision impairments in the Miami Lighthouse rehabilitation programs. The Miami Lighthouse has developed specialized programs for visually impaired children from birth through 13 years of age. This includes the recently launched new learning center for visually impaired children from birth through pre-kindergarten that will provide specialized early intervention and training to help “level the playing field” when these visually impaired children enter the public school system.
“Please assist us in bringing joy to the Miami Lighthouse for the Blind and Visually Impaired children this holiday season. We thank you in advance for your generous contributions. We wish you a blessed and joyful holiday season to you and your families.” Concludes the WLC.
Pixabay CC0 Public Domain. Aberdeen Standard Investments prevé una recuperación del crecimiento global en forma de L “y no de V” en 2020
Tentative signs have emerged that a trough in global economic activity growth is beginning to form, although the strongest evidence is coming from soft rather than hard data at present, says Aberdeen Standard Investments in a recent publication. Their global growth forecasts support that sentiment, driven by the expectation that geopolitical uncertainty will moderate at the margin, while the significant monetary support delivered this year supports the real economy. However, they expect any recovery in global growth to look “much more like an L-shape than a V”.
The fundamental drivers of geopolitical risk are still in place, constraining business investment, and monetary policy efficacy is lower than at earlier stages of the current expansion. “Indeed, we expect the world’s two largest economies (the US and China) to actually slow further in 2020, which will lessen the scope for improvement in those economies that were much weaker in 2019″.
Although markets have priced in growth stabilisation, the asset manager doesn’t think they price in a moderate recovery in industrial output and corporate earnings. As such, it expects further gains in the price of risk assets as we roll forward into 2020.
The strategy in global markets
When it comes to global markets, ASI identifies an “upside asymmetry” for some higher carry investments. “Risk assets are rallying and diversifiers are selling off, but changes in ‘hard’ data seem too insignificant to be the catalyst yet”.
However, the direction of ‘soft’ information has been noticeably more positive as optimism is rising that US-China trade tensions will abate; monetary easing from the Federal Reserve and other central banks has been substantial; and there has been an uptick in some leading indicators.
“As investors, our perennial question is whether markets have accurately adapted to these changes or overshot economic reality”, the asset manager points out. Its “tactical asset allocation process” offers a useful way to consider this.
In this respect, in August, they defined their ‘late cycle slowdown’ scenario as a world where the Global PMI was below 50, global EPS growth was somewhat negative and US core inflation was materially below target at 1.5%. “That was fairly close to the economic reality at the time and yet, under that scenario, we forecast equity returns of only a further 5% decline”.
By contrast, their ‘moderate recovery’ scenario began to reflect equity upside of 10-20%, depending on the region. This asymmetry had been widening at the same time that investors were widely considered to be bearish in mindset (AAII surveys) and positioned in quite a risk-averse way (BAML Fund Manager Survey).
“The relief rally we have seen has therefore been in line with the modest improvement in trade rhetoric, the ongoing easing in monetary policy and the apparent basing in leading indicators that catalysed an improvement in investor sentiment”.
Looking forward, ASI thinks they must assess whether asymmetry still exists or whether further momentum can only come from hard-data improvements. Their economists forecast that growth is going to trough but that the recovery may look more L-shaped than V-shaped, so, for their tactical asset allocations scenarios, their expectation is for “an environment that looks more like a ‘moderate recovery’“. This would see the global PMI rise a little further, a return to modest earnings-per-share growth (single digit) and gently rising inflation.
“Despite this scenario being more optimistic than a continued slowdown, the rally we have already seen leaves us forecasting only a further 5% upside in the US, Japanese and European equity markets in the near term”. If growth does improve, the asset manager sees potentially more upside in UK and EM equities (10-20%) given their more elevated risk premiums.
Importantly, ASI considers the previous asymmetry of upside-to-downside equity returns has now evaporated and, at this stage of the recovery, sees more asymmetry in their credit forecasts than for equities. In that sense, they believe spreads in high-yield and EM are still fair and their carry returns more backstopped by monetary easing. “As a result, we see these credit markets as providing better risk-adjusted returns, even though we continue to benefit from some equity exposure in particular markets”.
Pixabay CC0 Public DomainFoto: MarcusWoeckel. MarcusWoeckel
In 2018, 20 CKDs and 18 CERPIS were issued, totaling 7,584 million dollars in committed resources. In 2019 (as of November 25), only 4 CKDs and 6 CERPIs, totaling 1,818 million dollars, have been issued, which shows a significant drop in amount and number compared to the previous year.
The average committed amount of the last 5 years (2014-2018) has been 3,697 million dollars per year, which means that in 2018 it rose slightly more than double the average and in 2019 it takes half.
Much of the explanation for the 2018 boom is because it was the year on the eve of the presidential elections held in July 2018 and that in January 2018, CERPIs were allowed to invest 90% of the resources globally leaving only 10% locally. The fall in issues of CKDs and CERPIs in 2019 is explained by the change in the government where institutional investors are being more cautious in new investments in private equity.
Of the resources committed between 2018 and 2019, the General Partners (GP) have called only 27% on average and the rest, they will receive it in the coming years.
The value of the resources committed through CKDs and CERPIs is 24,767 million dollars of which 19,176 million dollars are CKDs and 5,590 million dollars are CERPIs which means that, with only two years of having authorized global investments for CERPIs, they already represent 23% of investments in private equity that reflects AFOREs remarkable interest in diversifying globally.
The number of CKDs, between 2008-2014 it did not exceed 10, while since 2015 the issuers fluctuated between 15 (lowest number) to 38 (highest last year).
Currently, CKDs and CERPIs represent 6.0% of the resources managed by AFOREs at market value and if the committed resources that will be delivered to the GPs are considered, the percentage almost doubles to reach 11.3 %. The maximum limit that the AFORE have for investing in this asset class is 18% on average according to the limits that each SIEFORE has, which leaves room for investments in private equity to continue growing.
With the numbers observed in 2019, we must recognize that CERPIs are being an option that competes with CKDs.
Trade finance is one of the oldest forms of credit. Historical researchers have found some clay tablets from Babylon dating back to approximately 3000 B.C., showing samples of the first letters of credit. Trade finance flourished for several millennia driven by Italian lenders who financed the expeditions to the East in search of spices and other goods. After the fall of the Roman Empire, the industry mostly disappeared, until the fifteenth century. Around that time, the Trade Finance industry reemerged, led by European banks and financial institutions. However, it was only recently that it became accessible to private and institutional investors.
Currently, the term ‘trade’ has received some negative press. Since Donald Trump became U. S. President, we have seen many trade frictions, specifically between the United States and China. Nevertheless, global trade is still of enormous proportions. The value of global trade measured through export volumes exceeded US $19 trillion in 2018, reaching a new all-time high. Annual compound growth in the last 3 years stood at 6% and trade volumes are expected to continue this growth trend. This implies a massive financing opportunity. According to the World Trade Organization (WTO), only a small part of international trade is paid in cash in advance, since importers generally prefer to pay on receipt of merchandise in order to check for damages upon arrival, and exporters wish to receive payment on dispatch.
To bridge the gap between exporters and importers, a credit or payment guarantee is required. Trade finance provides this credit, guaranteed payment, and the necessary insurance to facilitate the transaction and establish the terms to satisfy both the exporter and the importer. Unfortunately, there are no comprehensive official statistics showing the exact composition and size of the global trade finance market, but the Bank for International Settlements (BIS) found that, in its broadest definition, the market is very large, well above US $12 trillion annually, and about 1/3 of this sector finances the trade in raw materials.
More importantly, after the Great Financial Crisis, traditional lenders such as banks have begun to withdraw from trade finance activity, driven by increased regulation and compliance costs, which has caused a shortage of financing. Small and medium-sized enterprises (SMEs), especially those that are located in emerging markets, suffer the most, because they face great obstacles to access financing under affordable conditions. According to the WTO, this is especially worrying, as SMEs contribute to more than 60% of total employment in developing countries and 80% in developed ones.
Currently, there is a need for unsatisfied trade finance worth trillions of dollars, particularly in emerging markets. Meanwhile, many investors have been desperate to find attractive returns in a world where traditional fixed-income instruments, such as corporate and sovereign bonds, offer very low returns, in some cases even negative returns for investors. In fact, the market value of bonds that offer negative returns is around 12 trillion dollars.
Therefore, it’s only logical that trade finance funds have emerged in recent years, allowing investors to benefit from the industry’s attractive dynamics, and alleviating, at least partially, the financial scarcity faced by importers and exporters.
Likewise, the risk / return profile of the trade finance sector has improved significantly. New practices and conventions have evolved to reduce risk for investors. For example, trade financers take the assets described in the contract as collateral and hire local agents to inspect and check the products in detail. Similarly, contracts have been standardized, typically using the law of developed jurisdictions, thus avoiding the risk of corruption in local courts. In addition, well reputed specialists in international warehouses ensure the existence and security of guarantees. Finally, multinational insurance companies cover the risk of accidents, weather, terrorism and fraud during shipping.
As a result, the risk to investors has been significantly reduced. In fact, in the past 20 years, default rates have been approximately 0.1% per year. And, given the high recovery rates in case of default, the annual expected loss rates are around 0.01%, which is much lower than the corporate bond risk. Meanwhile, expected returns are very attractive compared to corporate bonds. Most of the foreign trade funds have annual yields of between 5% and 8% in dollars, which is attractive, given the low risk profile, low volatility, and the fact that many trade finance funds offer investors monthly or quarterly liquidity. In addition, trade finance funds provide an excellent source of diversification for portfolios, given their low correlation with traditional asset classes and their low sensitivity to the economic cycle.
Tribune by Pascal Rohner, CIO at Katch Investment Group
Charles Schwab, which represents almost 50% of all independent RIA custody businesses, plans to buy TD Ameritrade according to CNBC sources.
Fox Business reported that Schwab would pay 26,000 million for the company.
In theory, the combined firm will be led by Schwab CEO Walter Bettinger, and TD Ameritrade chief financial officer Steve Boyle will lead his company until the agreement is completed.
It is not clear if the acquisition would face antitrust problems since Schwab and TD Ameritrade are the two largest publicly traded brokers and an agreement would create a giant with 5 trillion dollars in combined assets.
The discount brokers sector has been under pressure recently since the ‘zero commissions’ for the negotiation of shares, ETFs and options, arrived, which has caused brokers to struggle to find ways to up their profits, decision which gave Schwab an advantage, since the commissions represented only about 4% of its revenues, while for TD Ameritrade, the commissions represented more than 10% of the revenues.
For RIAs, whose custody business is an activity that generates 40% to 50% of the operating income of most discount brokers, the acquisition would eliminate an important option among custodians. Schwab is the leading custodian for RIAs, while Fidelity and TD occupy second and third place, followed by Pershing Advisory Services and E * Trade.
Cayman National Bank, together with its sister company Cayman National Trust Company, confirmed that it has experienced a data hack. Responsibility for the data theft was claimed on Sunday 17 November 2019 by the hacker or hackers known as Phineas Fisher, which is offering other hackers $100,000 to carry out politically motivated hacks. The bank reported it as soon as it was made aware and is in the process of notifying their customers of the data breach. It has also set up an email to deal with client inquiries.
“It is known that Cayman National Bank (Isle of Man) Limited was amongst a number of banks targeted and subject to the same hacking activity. A criminal investigation is ongoing and Cayman National is co-operating with the relevant law enforcement authorities to identify the perpetrators of the data theft. Cayman National takes any breach of data security very seriously and a specialist IT forensic investigation is underway, with appropriate actions being taken to ensure that the clients of Cayman National’s Isle of Man bank and trust companies are protected” the bank said in a statement.
The Isle of Man Financial Services Authority and Information Commissioner’s Office, along with the Cayman Islands Monetary Authority, have been informed and are working with Cayman National in the Isle of Man.
Any customers with questions in the meantime should email dataenquiry@caymannational.im. Periodic updates will also be available at www.caymannational.im
“Cayman National, along with virtually every other international banking group, is not immune from the constant attempts by hackers to gain access to confidential data”, stated Cayman National Bank (Isle of Man) Limited’s Managing Director, Nigel Gautrey. “In this instance, and despite the best efforts of leading data security consultants, this criminal hacking group has breached our system – although to date we have detected no evidence of financial loss to either our customers or Cayman National”.
Cayman National Bank (Isle of Man) Limited is a subsidiary of Cayman National Corporation Ltd (“CNC”). CNC, and its main banking subsidiary, Cayman National Bank Ltd. (“CNB”), are located in and operate from the Cayman Islands. All of Cayman National’s operations within the Cayman Islands, including CNB, are separate and distinct operations from the bank in Isle of Man. The two banks do not share common systems, databases, client information, or email platforms. CNC is confident that the theft is contained within Cayman National Bank (Isle of Man) Limited and Cayman National Trust Company (Isle of Man) Limited only, and does not affect CNB or any other operation in the Cayman Islands.
Pixabay CC0 Public Domain. Neuberger Berman crea un nuevo equipo de renta variable en Japón
Neuberger Berman announced its first Japan-based equities team, to be led by Keita Kubota, who joins as a Managing Director and Senior Portfolio Manager. The team will manage a “Japan Equity Engagement Strategy” seeking attractive returns through active engagement and constructive dialog with Japanese small/mid-cap companies in which the team invests. The strategy will be offered to both institutional and high-net-worth clients.
Kubota joins from Aberdeen Standard Investments, where he started his career over 13 years ago and most recently served as Deputy Head of Japan Equities. He was the investment director on Aberdeen Standard Investments’ Japan large cap strategy and small cap strategy, both of which were managed with an engagement strategy and offered to large institutional clients across Europe, Asia and Latin America.
Two analysts, one of whom will specialize in ESG investing, will support Kubota. Naoto Saito, joined Neuberger Berman in September as a Senior Research Analyst and has a generalist focus. Saito previously served in research roles and covered a broad range of companies across the Japanese equity market at Balyasny Asset Management, CLSA Securities and T. Rowe Price. With diverse experience as well as deep knowledge in ESG engagement, the team will seek to generate additional value by offering insights and knowledge sharing on ESG investing with portfolio companies.
“We look forward to the further expansion of ESG investing in Japan as companies have increased their awareness of corporate governance and other material factors. We think encouraging Japanese companies to improve their ESG factors through our active engagement can generate superior returns. Mr. Kubota and his team are bottom-up stock pickers with a focus on in-depth proprietary research,” said Ryo Ohira, Head of Neuberger Berman East Asia. “They are active, long-term investors who engage deeply and frequently with company management. Most importantly, Mr. Kubota has helped deliver long-term performance for his clients – which is our firm’s mission.”
Neuberger Berman has been in Japan for 15 years and currently manages over $53 billion in client assets locally having grown from $13 billion in 2015. For largely an institutional client base, the firm manages fixed income, alternatives and equity portfolios. Neuberger Berman is recognized in Japan as a leader in the ESG investing space, reflected in the firm winning the first ever Tokyo Financial Award for ESG Investing.
“We’re happy to welcome Mr. Kubota and team and know they are a fit our firm’s culture and core strengths. The group expands our global platform, bringing another long-term market perspective with a focus on active/ESG engagement in Japan, the third largest equity market in the world. We look forward to their capabilities helping client globally,” said Joseph Amato, President and Chief Investment Officer, Neuberger Berman.
In this respect, in August, they defined their ‘late cycle slowdown’ scenario as a world where the Global PMI was below 50, global EPS growth was somewhat negative and US core inflation was materially below target at 1.5%. “That was fairly close to the economic reality at the time and yet, under that scenario, we forecast equity returns of only a further 5% decline”.
“Despite this scenario being more optimistic than a continued slowdown, the rally we have already seen leaves us forecasting only a further 5% upside in the US, Japanese and European equity markets in the near term”. If growth does improve, the asset manager sees potentially more upside in UK and EM equities (10-20%) given their more elevated risk premiums.
