Pixabay CC0 Public DomainPhoto: AMAFORE. Afores will Have to Wait in Order to Invest in International Mutual Funds
It had seemed that the beginning of 2018 would mark a big milestone in the way the Mexican Pension Plans, or Afores, invest. At the end of 2017, the ‘Comisión Nacional del Sistema de Ahorro para el Retiro’ (CONSAR), or National Commission for the Retirement Savings System decided, among other things, such as making CERPI more flexible or including SPACs, to include Mutual Funds with active strategies as an additional investment vehicle. This decision was published in the official bulletin in January 2018.
As Carlos Ramírez, President of the CONSAR, commented, “When looking to invest with an international asset manager, we look for better yields and this is what we have seen with the mandates that have paid a good return… Mutual funds are a reflection of the mandates and what we are really doing is opening another option for investing abroad, especially with the small and medium Afores in mind.”
However, in a recent interview with Funds Society, which will be available in the printed magazine this October, Ramírez commented that, unfortunately, this resolution has as yet not been implemented waiting for its authorization in a pending CAR, or Risk Committee meeting, “which would formally give life to mutual funds, and which to date was unable to be held for various reasons. I hope it can be achieved before the end of the administration so that we can see closure on an issue that we have been working on for a long time, which is a very deep analysis of the benefits of Afores being able to invest in mutual funds, and which we hope to be able to complete before this administration ends. It‘s practically ready, all that’s missing is that CAR meeting.”
Meanwhile, Carlos Noriega Curtis, President of AMAFORE, told us prior to the Third Afores Convention that this meeting will most likely not go ahead until the next administration is in power: “If during the transition stage, within the next two months, there is communication between the incoming and outgoing governments, the CAR will meet, if not, it will meet as soon as it is able to do so following the transition.” The executive added that they are watching very closely how the situation develops. “All the information has been prepared. We, as an association, have been supporting the importance, the necessity, and the convenience of being able to invest in mutual funds… we are convinced of this, and we are doing everything possible to achieve it,” concluded Noriega.
CC-BY-SA-2.0, FlickrPhoto: CASCAID Americas. Asset and Wealth Management Firms Join Forces With CASCAID Americas
CASCAID Americas is another example of the industry turning its attention to supporting others. It’s an initiative set up in 2017 in UK that brings the asset and wealth management community together to raise money for charities.
What is CASCAID Americas all about?
It’s really about bringing people together to support great causes whilst enjoying networking. It’s led by 30-40 Ambassadors – people from around the industry. Ambassadors range from CEOs of asset and wealth management firms to new graduates and Investment 2020 trainees.
On a practical level, Funds Society, with the help of MiP in the UK, sits at the heart of it, helping to organize events and with all the logistics (on a pro bono basis of course).
How do you raise money?
In any way we can think of! We will have one gala at the end of the fund raising period (June 2019), which is supported by investment firms. This can raise significant sums. Then we have other group events such as a darts evening, fun runs, wine tastings and sporting tournaments. And Ambassadors (and others) also do their own challenges – these are wide-ranging, from running marathons, to swimming lakes, to walking thousands of miles. Anything goes!
What charities do you support?
In 2017, CASCAID UK raised money for Cancer Research UK. The target was £1 million but it managed to exceed £2.35 million. For CASCAID Americas, based on the much smaller size of the offshore industry, we are setting an initial goal of US$150k, though we actually hope to beat our British counterparts, at least on a relative basis. For the 2018-2019 campaign CACSCAID Americas is raising funds for The SEED School of Miami. It’s important to remember that all monies go direct to SEED Miami – CASCAID Americas isn’t a charity itself, it’s just a brand name that acts as an “umbrella” to bring all our activities together.
Why The SEED School of Miami?
We want to help local charities with a strong social impact in our community. The SEED School of Miami definitely fits that bill – as South Florida’s only public, college-preparatory boarding school, it impacts on the lives of the 210 young under-resourced students that are currently enrolled in the program, who spend 24 hours a day in a safe, structured and predictable environment from Monday to Friday —three healthy meals a day; consistent relationships with excellent role models; daily academic challenge and support; and extensive programs in athletics, visual and performing arts, and service. The national results for the SEED schools program speak for themselves. 90% of the students enrolled in 9th grade graduate high school; 93% of these student attend college with full scholarships, and 80% of these students are first generation college-bound students in their families
CC-BY-SA-2.0, Flickr. National Conference Series Sets Sights on Miami
Geraci LLP is launching their Captivate East conference, a two-and-a-half-day event that melds high net worth individuals with top sponsors and event attendees. Captivate East will take place from October 16-18, 2018 at the Fontainebleau Miami Beach, a world-renowned resort where modern luxury is met with glamour. But what will you do at Captivate East? Prior to the event, all attendees will have the opportunity to network with each other via a mobile app – and during the event, keynote sessions will be met with lender presentations and insightful panel discussions. Investors who are hungry to close their next business deal will mingle with attendees during hosted meals and lavish events.
“We identified Miami for our East Coast launch because it is an enticing destination to travel, and we want to meet our audience where they are. South Florida is growing at a rapid pace. Whether it be startups, tech or real estate investors flock to this area because the demand is here,” stated Anthony Geraci, founder of Geraci LLP.
South Florida-based Carlo Barbieri, founder and CEO of Oxford Group, will be participating in a panel focused on Raising Money from Latin American Capital Markets. “I am looking forward to speaking about the changes that occurred in Latin American Countries such as Mexico, Chile, Argentina and Colombia, and how those changes have impacted South America and its economy. Since the conference will be taking place during the election period in Brazil, our panel will also address the economy and political issues that may occur depending on which candidate is elected,” stated Barbieri.
The two-and-a-half-day event will begin on the 16th with a welcome reception, and continue the next day with a hosted breakfast accompanied by speed networking. Geraci’s goal for the conference is to help attendees feel comfortable while mingling with investors, lenders, and attending top-tier sessions and discussions. If one is looking to identify investors and mingle with high net worth individuals, decision makers, 100+ investors, and fund managers, this is an event they will not want to miss.
Pixabay CC0 Public DomainPhoto: Abanca. Abanca to Open an Office in Miami Before the end of 2018
Abanca has obtained the license from the Federal Reserve of the United States (Fed) to open an office in Miami and operate in the United States.
The license that comes into the project after a year of work enables the Spanish bank to develop total activity with companies and non-residents and, in certain circumstances, to develop activities with residents of average and high incomes. Miami is a city with a large presence of Latin American, Spanish and Portuguese non-residents, groups that will focus on Abanca’s growth strategy.
With this new opening, the firm’s objective is to continue to grow in markets with high potential and, as in the case of Portugal, in the company segment and medium and high income.
The Miami office, located in the Brickell financial zone, will open before the end of 2018 and will have 12 employees, four Spanish and the rest of the United States.
Abanca is present through representations in Brazil, Mexico, Panama, Venezuela, France, Germany and the United Kingdom. In addition, the entity has centers in Portugal, with its own bank card and Switzerland, where we have offices with both modalities.
Pixabay CC0 Public DomainPhoto: James Ross (right) Tim Stevenson (left) . Tim Stevenson, To Retire From Janus Henderson
After 32 years with Janus Henderson Investors, Tim Stevenson, Director of Pan European Equities, has decided to retire from the industry. According to the company, Tim will remain with the team on a transitional basis through the first quarter of 2019.
James Ross, his co-manager on the Janus Henderson Horizon Pan European Equity Fund will continue to manage the fund. “The fund will follow the proven strategy that has delivered success over the long term by investing in high quality European companies. The investment process and objective will not change.”
James has worked directly with Tim co-managing Pan European Equity portfolios since August 2016 and has worked alongside him as a member of the European Equity Team for many more years in an earlier role as a UK equity fund manager. James Ross has 11 years of financial industry experience and holds the Chartered Financial Analyst designation.
Stevenson says: “James has impressive enthusiasm for, and knowledge of, the companies and the opportunities that exist from investing in Europe. The job of the European fund manager requires energy, brains, determination and skill. James has all of these and I am so pleased that he is taking on the full responsibility of looking after clients’ money in the complex but exciting area of Europe. I want to take this opportunity to wish him the very best of luck, and to thank clients for their support and patience over so many years. Finally, I would like to also thank all the great colleagues with whom I have worked in my career at Janus Henderson.”
Ross says: “I have thoroughly enjoyed working alongside Tim for the last few years; I am excited at the prospect of taking over sole responsibility for our mandates after his retirement. Tim will leave behind a legacy of consistent value-creation for clients; a record that I will seek to emulate.”
“We wish Tim well with his retirement and look to James and the wider European equity team to help build on his long-term success. If you have any questions about this announcement or any other investment-related queries please speak to your usual Janus Henderson representative.” The company concluded
CC-BY-SA-2.0, FlickrPhoto: Nicolas de Camaret. No More Samba in Brazil
Jair Bolsonaro has come out in the lead in the Brazilian presidential elections with 46%. Looking beyond his very divisive views on certain issues in Brazilian society (status for women, LGBT), on the Paris Agreement and the corruption of previous governments, along with his aim to end Brazil’s endemic violence by allowing Brazilians to take up arms, are there any economic foundations for his likely victory? (see here the Brazilian context of these elections) This victory has very clear economic explanations. The Brazilian economy has been suffering since 2014 and the collapse in commodities prices. The recession over 2014-2015 and 2016 lasted a very long time, and was followed by a lackluster recovery, which was more of a stabilization than a real rebound. GDP in the second quarter of 2018 still fell 6% short of the 1Q 2014 figure.
This drastic situation can be attributed to two factors. The first is the country’s high dependency on commodities. Brazil enjoyed a very comfortable situation at the start of the current decade when China became its primary trading partner. Opportunities increased and commodities prices soared, so revenues were buoyant and did not encourage investment, creating a phenomenon known as Dutch disease, whereby commodities revenues were such that there was no incentive to invest in alternative businesses. But when Chinese growth began to slow and commodities prices took a nosedive, the Brazilian economy was unable to adapt, so it seized up and plunged into a severe recession.
The other factor is that Brazil devoted hefty financial resources to financing the football World Cup in 2014 and then the Olympic Games in 2016, so in a country with a massive current account deficit, this put a lot of pressure on financing. Funding for public infrastructure replaced investment in production, thereby making the country’s Dutch disease even worse. The Brazilian population has paid a high price for the country’s brief moment of glory.
Yes – the job market contracted and inflation stepped up, and if we look at the Markit survey indicator, employment has not returned to 2015 levels, especially in for services, while jobs have stabilized in the manufacturing sector over the past year, albeit at a low level. So Brazilians are still paying for the recession
What can we expect for the Brazilian economy in the short term?
The Brazilian economy is still very shaky and the latest surveys suggest that recessionary risk remains high. More broadly speaking, the slowdown in the world economy will not help drive economic momentum, while in the commodities sector, only oil prices are on an upward trend. The new president has a tough job ahead as the country has very high expectations, but Brazil is not the US: it is no longer a powerful economy and must first rebuild, which will be a long drawn-out process. There is a risk that change will not be fast enough to keep Brazilian voters happy at a time when the authorities are also taking a tougher line to maintain law and order.
Pixabay CC0 Public DomainNunu_Lopes. Is the Market Satisfied with Bolsonaro's Victory in the First Round?
Despite the possible risks and populisms, the market’s hopes and expectations were fulfilled and Jair Bolsonaro (PSL) moves to the second round of the presidential elections in Brazil; where he will be tested in both support and popularity against Fernando Haddad, the Worker’s party (PT) candidate. The result, while reassuring for the market, does not dispel all risks.
Although final election results will not be revealed until next October 28th, this is a clear indication of in which direction the political winds are blowing in Brazil.
“Losing the presidency is really in Bolsonaro’s hands. Today there will be a strong rebound of Brazilian assets, as financial markets assume that Bolsonaro will become the next President of Brazil in the second round of elections later this month. More than anything, it’s a sigh of relief for the market that leftist candidate Haddad, whose policies would not have helped Brazil out of its current economic hole, will almost certainly not become President,” says Edwin Gutierrez, Head of Emerging Markets Sovereign Debt at Aberdeen Standard Investments.
The reason is simple: much of Bolsonaro’s appeal is the fact that he is not part of the political establishment, which has completely lost its credibility in recent years. “He also has a credible plan of how to deal with two of Brazil’s most pressing economic problems: the cost of its pension system and its debt stock. Addressing these issues has probably become more difficult as a result of these elections. His party has won a larger bloc in Congress than what it had previously and the unfortunate results of other parties could lead to some defections, which should help him,” adds Gutierrez.
This result has allowed Brazilian markets to continue with their recent rally, as they were worried that the Workers’ Party could return to occupy the presidency. However, Paul Greer, Portfolio Manager at Fidelity International, observed that Brazil has challenges that go beyond achieving a new government. In his opinion, if Bolsonaro wins in the second round, the post-electoral euphoria would soon disappear. “Bolsonaro’s controversial far-right opinions will make it difficult for his administration to approve legislative measures given the limited presence of his party, the PSL, in the Senate (5% of seats) and in the lower house (10%).”
According to the analysis carried out by the Fidelity International portfolio manager, elections aside, “we believe that Brazil’s fiscal balances will continue to deteriorate and that the sovereign rating will continue its decline towards a B rating over the next 12 to 18 months. The country’s growth is still below its potential level and we expect it to continue at that slow pace in the near future.”
The main concern for Renta 4 Banco is that, regardless of the final result on October 28th, no party has a clearly reformist plan. It would be necessary to control public accounts and reform social security and pensions. “Even so, and as we have seen in Mexico, where the new government seems to be orthodox in its economic decisions, we do not rule out that something similar happens in Brazil, which in turn could translate into a recovery of the Brazilian Real and be positive for securities with high interests in the area,” the financial institution points out in its latest report.
CC-BY-SA-2.0, FlickrEduardo Mora, Armando Senra y Jordie Olivella. BlackRock Opens New Miami Office Consolidating its Presence in the US Offshore and LatAm Markets
Up to 40 industry professionals gathered at the end of August to celebrate the opening of BlackRock’s office in Miami, which is located at 701 Brickell Avenue and which will bring together the firm’s entire workforce within the same workspace.
“For me, this is a testament of our commitment to Miami, and to Latin America, and we will conclude the year with a team of 300 people dedicated to the LatAm and Iberian regions, and the greatest part of our growth has come from the Americas, which is the region with the fastest growth of our entire company,” Armando Senra, Managing Director and Head of Latin America & Iberia for BlackRock pointed out. Based in New York, he wanted to be present at the opening of this new office.
The new office addresses the need to better serve investors in the Miami area. It has state-of-the-art technology and will welcome all employees of the firm, including the offshore sales team, the official institutions’ group, and the Separately Managed Accounts product team.
“I believe that with this office we are solidifying our presence in this market. For us, Miami goes far beyond the local market, we believe that it is a point from which we can affect BlackRock’s influence, not only in the US Offshore market, but also in the rest of Latin America, it’s a very special moment for us, “explained Eduardo Mora, Co-Head of BlackRock’s Offshore business, with a special focus on Home Office and Key Accounts, during the typical inaugural ribbon-cutting ceremony.
Miami Presence
BlackRock already had a broad presence in Miami since 2013, the year in which it started with a staff of 5 people and which now totals 12 industry professionals. During these 5 years, the international asset management company has seen its assets under management grow at an average annual rate of 17%.
This is your home and I would like to welcome you,” said Jordie Olivella, Co-Head of BlackRock’s Offshore business with a special focus on US Offshore Field Sales, addressing the cocktail audience. “We are committed to the market, to the city, and to our clients and their success. That is our focus every day and the spirit of BlackRock. “
Carlos Varela da Costa. Carlos Varela, in Charge of LatAm's Institutional Clients for JP Morgan AM
Carlos Varela da Costa, Managing Director of JP Morgan Asset Management, has assumed the management and direction of the firm’s business with institutional clients in Latin America.
In his position, as Head of Institutionals for the region, Varela will provide advice to central banks, sovereign funds, supranational organizations, pension funds and insurance companies in LatAm.
The JP Morgan executive is also in charge of the development of the asset management business in Mexico.
Varela, based in New York, has an extensive career of more than 20 years at JP Morgan, where his stage as Executive Director, Head of Sales Iberia, between 2009 and 2015, particulary stands out.
Pixabay CC0 Public DomainOadtz. Julius Baer Group and Nomura Holdings Join Forces to Tackle the Japanese Market
Julius Baer Group and Nomura Holdings have announced a strategic partnership, with Nomura acquiring a 40 per cent shareholding in Julius Baer Wealth Management. As a result, Julius Baer will introduce JBWM’s bespoke discretionary mandate services to Nomura’s high net worth client base in Japan. In doing so, Nomura will complement its comprehensive domestic product offering with JBWM’s tailor-made international mandate services.
JBWM specialises in the provision of discretionary investment services for Japan-based clients with a successful 20-year track record. The portfolio management team, based in Zurich, provides discretionary mandate services via its senior relationship management professionals in the Tokyo office. The investment process pays particular attention to currency risks, and the team has been adept at navigating market cycles, aiming to preserve client capital during times of financial market distress.
Upon completion of the transaction, JBWM’s name will be changed to Julius Baer Nomura Wealth Management Ltd. to underscore the strategic partnership.
Bernhard Hodler, CEO of Julius Baer Group, commented: “The strategic partnership with Japan’s premier securities firm represents a major milestone in our business strategy for Japan. Global financial markets are becoming increasingly complex, requiring skilful risk management, which is at the core of our offering in Japan. Working together with Nomura and its comprehensive domestic network and knowledge, we can best share our internationally diversified offering with a new audience and maximise the value of our presence in Japan.”
