Pixabay CC0 Public DomainHotel Bahía Grand Panamá . The Latin Private Wealth Management Summit Will be Held Next October
The Latin Private Wealth Management Summit is back in Panama City this Fall! Between October 8-9, 2018, leaders from Latin America’s leading single and multi-family offices and qualified service providers will come together at The Bahia Grand Panama Hotel | Panama City.
The attending providers are leaders in the provision of investment products, services, technology and information to the Family Office executives. They will provide cutting edge solutions to forward-thinking investors, interested in staying ahead of the market.
Attendees have included:
Alfonso Carrillo, socio de Family Office Mexico SC
CC-BY-SA-2.0, FlickrEsteban Zorrilla. Esteban Zorrilla Joins Citi Private Bank in Miami
Esteban Zorrilla has recently joined Citi Private Bank in Miami as a senior investment counselor for UHNW clients after almost 8 years in HSBC Private Banking.
In his new position, Zorrilla will report to Sonia García-Romero, managing director at Citibank Latin America, and will focus his work on serving the most affluent clients in Latin America, while also focusing his efforts on increasing the client base.
He brings to the firm more than 20 years of experience in International Private Banking in Spain, Switzerland, the Dominican Republic and the United States, with a focus on investment strategies, financial vehicles and market analysis.
Before joining HSBC in 2010, he worked in other international entities such as Banco Santander and Morgan Stanley. Zorrilla, with a degree in Business Administration and Management from the University of Deusto (Bilbao), has a master’s degree in Banking Management from the Carlos III University of Madrid.
Nick Sheridan, courtesy photo. Nick Sheridan: “Politics has Taken Centre Stage in Europe Over the Past Few Months, With Italy the Most Recent Epicentre"
For Nick Sheridan, manager of the Janus Henderson Horizon Euroland, Europe remains a key and essential market in the global portfolios of investors. In his opinion, periods of uncertainty and volatility of the European market, mainly led by geopolitical issues such as Italy and Brexit, are always to be expected.
What is your forecast for European equities in the remaining months of the year?
While recent sentiment towards Europe has been undermined by political uncertainty, the trading environment for companies in the region remains positive and valuations, when compared to other developed markets, appear attractive. We believe that the European Central Bank (ECB) is limited in its scope to continue with quantitative easing into 2019, which could have a material impact on ‘safe haven’ bond yields and the factors driving equity markets. Nonetheless, world GDP growth remains at levels conducive to a good environment for corporate Europe.
We see that investors are increasingly taking on more risk and many of them have moved from fixed income to variable positions. How are you tackling this from a fund manager and portfolio perspective?
This has little impact on an equity manager, but we tend to agree that bonds offer little value at present.
Are politics still a risk for Europe? What is your assessment of how the European equities market has reacted to events such as Italy, Brexit negotiations and Catalonia?
Politics has taken centre stage in Europe over the past few months, with Italy the most recent epicentre. The unlikely alliance between the populist Five-Star Movement and Lega parties caused a bond market collapse, exacerbated by the potential for fresh elections (where the issue of euro membership would most likely be front and centre). While in the US, the Trump administration has started what could turn into a tit-for-tat tariff escalation on world trade.
Periods of market uncertainty, such as this, are always to be expected, although the specific factors that precipitate short-term falls may differ. Over the longer term, periods of short-term negativity are nothing to be feared for longer-term strategies, often providing an opportunity to invest in quality companies at an attractive entry price.
Regarding Brexit, do British equities represent an opportunity at the moment?
The UK market is busy de-rating relative to other markets and relative to where it has been in the past, because investors are running away from Brexit-related uncertainty. At some stage that will change, but I do not think it is going to change any time soon, because negotiations are ongoing, and the Eurozone seems to be playing its cards extremely well. The UK government’s handling of Brexit seems dysfunctional, which is adding to uncertainty – a particular problem when the clock is steadily ticking.
What are the most attractive markets in Europe? And their valuations?
Geographic exposure is driven primarily by bottom-up stock selection, although we do pay attention to more significant factors, if we believe they can impact on the broader investment rationale behind holding a stock.
In light of the current change in the economic cycle and landscape (rate hikes, return of volatility, increasing inflation), how are you modifying your portfolio to adapt to this new scenario?
Stock selection for my value-biased strategy is driven by analysis of individual companies and market data, rather than short-term market ‘noise’. We look for stocks that have strong franchises but are priced such that growth is undervalued, offering a higher than average return on equity, and normally an attractive dividend policy. Real value investing also requires a longer term horizon and we assess companies first and foremost on their underlying qualities, rather than the potential impact of short-term market trends or news.
What do you think makes your Janus Henderson Horizon Euroland Fund stand out against other funds in the sector?
We look for solid, dependable firms capable of creating value for investors, rather than following the latest market trends or fashions. Entry price is key and my investment strategy is designed to follow the value, wherever it is, judging companies first and foremost on their underlying qualities. What differentiates the fund from many of its competitors is our pragmatic approach to valuing stocks, which includes looking to gauge the value of potential growth within each stock. This is a major feature that differentiates the fund from conventional ‘deep value’ funds.
CC-BY-SA-2.0, FlickrFirst Ringing Bell Ceremony. Mexico Launches Stock Exchange Focused on the Middle Market
“We welcome the era of market democratization and market inclusion in Mexico,” commented Maria Ariza, BIVA’s CEO, at the event commemorating the start of operations of BIVA, ‘Bolsa Institucional de Valores’, (Institutional Securities Exchange) whose first order was made by Finamex .
According to the CEO, there is currently a breakthrough in company’s feelings towards approaching the stock markets, which is why she is optimistic about market growth. To achieve this, Ariza plans to continue striving for the authorities to make regulatory changes with recommendations of a fiscal and regulatory nature, as well as flexibilization. BIVA is also dedicated to improving value and service by making the listing and information disclosure processes easier, whilst maintaining quality.
Meanwhile, Santiago Urquiza, President of Central de Corretajes (CENCOR), the group to which BIVA belongs, mentioned that “the market should grow and this has a direct impact on the country’s economic growth.”. Currently there are only 250,000 active accounts on the stock exchange and BIVA will seek to inform the retail market about the benefits of investing in equities in order to quadruple that number.
According to Urquiza, Mexico has a very active private equity market and within this new ecosystem, companies will seek an exit through the stock markets. Such is the case of BIVA itself, which has LIV Capital as one of its main shareholders, so that, through its CKD, in which Afore Citibanamex, Afore Pensionissste, Afore Coppel and Profutro invested, “over 20 million Mexicans, or one in four adults, is a BIVA shareholder.”
Urquiza added that “the market has a lot of potential. The companies we are looking at are medium-sized companies from different sectors,” and went on to comment that after the political uncertainty that the country experienced prior to the elections, the foundations are being laid to see IPOs in the country once again.
The event was attended by the (SHCP) Secretario de Hacienda y Crédito Público (Finance Minister), José Antonio González Anaya, who commented that: “The stock market is and has been a fundamental engine for Mexico’s growth. Today a fundamental action becomes a reality. The entry of a new competitor is a crucial step and I believe that the players complement each other in order to grow and to create a securities market for all.” Also attending wereBernardo González Rosas, President of the National Banking and Securities Commission (CNBV), José Ramón Amieva, Mexico City’s Head of Government, José Méndez Fabre, President of the Mexican Association of Stock Market Institutions (AMIB), and Juan Pablo Castañón Castañón, President of the Business Coordinating Council (CCE), who mentioned that: “We are living in a historic moment… competition is always healthy… in view of the new challenges that we face as a country today, having access to competitive financing becomes a platform for the country’s growth”.
Among the congratulatory messages, which included a video with messages from various stock exchanges around the world, Eduardo Carrillo Madero, Chairman of the Board and CEO of Finamex Casa de Bolsa, told Funds Society: “At Finamex Casa de Bolsa, we congratulate (BIVA), Bolsa Institucional de Valores on their start of operations today in our country, something that excites us because we will have the opportunity to continue being an ally, with the courage to support people’s financial education. Likewise, we are very proud of having being at the forefront of this new source of corporate financing, which provides another option for investors. We wish BIVA much success in its operations.” George Boone of EDM added that he is confident that BIVA’s entry will help to broaden the local market. Meanwhile, President Enrique Pena Nieto wrote in his twitter account: “Today was the start of operations for @BIVAMX, the new Institutional Stock Exchange that is the result of the #ReformaFinanciera (Financial Reform). With state-of-the-art technology, this Stock Market will support Mexican companies and entrepreneurs so that they can grow and develop.”
CC-BY-SA-2.0, FlickrNico Gómez, Courtesy photo. BlackRock: Latin American Investors are Increasingly Buying More UCITS iShares
“At 20% growth globally, ETFs represent the fastest growing part of asset management and Latin America is no exception. In fact, last year they grew by 23%,” says Nicolás (Nico) Gómez, who heads BlackRock’s iShares efforts in the LatAm and Iberia Region.
According to the manager and to the Greenwich Associates Latin America Survey – commissioned by BlackRock, Latin American institutional investors will continue to play a leading role in the growth of the industry, which according to BlackRock, will reach 12 trillion dollars in 2023 and 25 trillion dollars in 2030.
“Our fiduciary duty as asset managers is to educate the markets on international exposure and on the importance of investing more and more abroad,” says Nico, mentioning that “ETFs are the preferred instrument for Latin American investors for the construction of international portfolios.”
In his opinion, ETFs in the region are growing, maturing, and becoming more liquid mainly because, through internationalization processes, investors are looking for “country risk reduction, since most of their assets are in its same country”, where “local assets sometimes provide few options.”
“Another great feature driving the growth of ETFs is their ease of operation, which allows asset managers to take low-cost tactical positions.” For example, Nico mentioned that “This year saw some disinvestment in Europe and a little more investment in Asia, as well as a return to the US. Latin American investors also chose to increase their exposure to US short-term fixed income, as a dollarization process.”
Something important worth pointing out is that “the Latin American investor buys three types of iShares: those domiciled in the US, those in their country, and increasingly, iShares domiciled in Europe, UCITS iShares, and they are buying them there because they are becoming more and more liquid, but the main reason is their tax efficiency.”
Looking into Brazil
Mexico is the country with the most iShares in the region, with around 30 billion dollars in assets under management. It’s followed by Colombia with 12 billion, Chile with 11, Peru with 9, and Brazil with 5 billion. However, the survey sample concentrated 30% of respondents in Mexico, and 27% in Brazil. “In Brazil, we are seeing a market that previously invested almost 100% nationally and which is now going abroad due to the drop in rates,” concluded Nico.
. William Lopez Joined Jupiter as Head of Latin America and US Offshore
William Lopez joined Jupiter on 18 June as Head of Latin America and US Offshore. He will lead the distribution efforts in Latin America and US Offshore markets, working closely with Matteo Perruccio, Head of Global Key Clients and Strategic Partners, with a view to developing strong coverage across the region and driving growth in sales.
He will also lead and manage third party relationships for the region.
Jupiter mentioned that William is the first appointment dedicated to the region, as stated above he will be supported by the Global Key Client and Strategic Partners team which Matteo leads.
“I am very pleased to have joined Jupiter to lead the distribution effort for Latin America and US Offshore. I feel that Jupiter is a hidden gem in Latin America and there is a lot of scope to build on following a solid start in this very diverse market. The range of high alpha strategies which are targeted at both wholesale and institutional clients differentiate Jupiter’s offering to the investment community across Latin America.” William told Funds Society.
Lopez joins Jupiter following four years at Columbia Threadneedle where he was responsible for US Offshore and Mexico.
CC-BY-SA-2.0, FlickrPhoto: Jörg Schubert. Bolton to Open a New York Office
Bolton Global will open, next September, an office on Fifth Avenue to facilitate the transition of wealth management teams in the New York City area to the independent business model.
The independent broker dealer established presence in New York City through the signing of two teams with more than 500 million dollars in client assets: that of Ruben Lerner and Manuel Uranga, who came from Morgan Stanley in New York , and that of Michel Dejana and Adelfa Rosario, who arrived from Safra Bank also in the Big Apple.
Bolton will provide ready-to-work offices for the teams of the main banks and wirehouses to migrate from the traditional employee model to one in which they acquire the ownership and control of their business book, operating under their own brand.
The firm will place the firms’ premium office space, technology infrastructure, brand development and legal support for the NYC-based teams that are transitioning to the independent model.
Bolton successfully implemented this strategy in Miami, where it opened its own offices before recruiting more than 20 teams with client assets worth 3.5 billion dollars from Merrill Lynch, Morgan Stanley, Wells Fargo, JP Morgan and Citi.
Growth of assets
Bolton has capitalized on the growing migration of equipment from the main wirehouses to the independent business model in recent years. Recruitment by the firm has been concentrated in leading teams that serve international clients and has been successful with the transition of several high profile teams. Bolton’s comprehensive transition strategy has produced growth in AUM of more than 22% per year during the last 5 years.
Clients’ assets are held by BNY Mellon Pershing as custodian and clearing house, and Bolton offers a full range of wealth management products and services along with the security of financial institutions, with considerably improved compensation.
The firm’s new offices in Manhattan are located at 489 Fifth Avenue, where they will occupy the entire 21st floor.
Photo: Finizio. Schroders Launches Argentine Bond Fund for the International Market
Schroders has launched the Schroder Alternative Solutions (Schroder AS) Argentine Bond Fund – a strategy focused on investing across Argentina’s full credit spectrum. The Fund will provide access to bond issuers in a large, growing economy with the aim of delivering investors a high yield, total return strategy.
The strategy will take a research driven, bottom-up approach in order to build a diversified portfolio of issuances across Argentina’s over USD 300 billion investment universe, whilst also managing downside risk. The team will search for opportunities in sovereign debt, provincial debt, corporate debt and local currency. The Fund launched on 29 June 2018.
The strategy will be managed by Fernando Grisales and James Barrineau and the 10 strong emerging market debt team in New York, and advised by the Argentina investment desk, led by Pablo Albina. Pablo is Country Head, Argentina and has 26 years of investment experience, including 20 years as a fixed income fund manager. The investment team is backed by Schroders’ global expertise, with a strong emphasis on local knowledge. The team has an on-the-ground presence in Argentina and local specialists to cover regional issuers in Argentina’s 23 provinces and the City of Buenos Aires.
Nicolas Giedzinski, Head of LatAm Intermediary & Discretionary US Offshore, said: “We have seen strong interest from international clients to have an Argentine bond product that can provide a compelling yield story in a country that moved from a frontier market into an emerging market category. The fund offers our clients a professionally managed, one-stop solution and the opportunity to invest in a specialised, high yield strategy. We have already been implementing this strategy in a local vehicle for a number of years, and now we are bringing our expertise packaged in an international vehicle.”
Fernando Grisales, the Fund Manager, said: “With an International Monetary Fund (IMF) agreement in hand and a stable policymaking framework in place, we believe that a single country fund for Argentina could be a great choice for investors seeking to capitalize on these structural improvements.”
Schroders has had a presence in Argentina since 1932 and is the number one independent asset manager in the country. It has the largest position in the Argentine debt market, currently managing more than USD 1.2 billion in Argentina long-only debt.
Victor Arakaki . Victor Arakaki has Joined Morgan Stanley Investment Management
Victor Arakaki has joined Morgan Stanley Investment Management as Vice President, Latin America and Offshore Client Engagement.
Based in Brazil, he will be responsible for relationship management across Brazil, Argentina, Uruguay and Chile (intermediary clients). Victor will be based out of the Sao Paulo office reporting directly into Carlos Andrade, Head of MSIM’s Latin America and Offshore Client
Engagement.
Prior to joining the firm, Victor was at Deutsche Asset Management/DWS and was previously at HSBC Global Asset Management as Senior Product Specialist for Latin American Equities & Business Development in Latin America for both the institutional and intermediary channels. He has fourteen years of industry experience.
Photo: WCM Investment Management . Natixis Investment Managers to Acquire Stake in WCM Investment Management
Natixis Investment Managers (Natixis) signed an agreement to acquire a minority stake in WCM Investment Management (WCM) and become their exclusive third-party distributor, subject to limited exclusions. The agreement establishes a long-term partnership that will allow Natixis to distribute WCM’s investment strategies globally, which in turn enhances WCM’s ability to grow and create opportunity for its clients and employees while upholding its focus on its culture and investment process.
Under the terms of the agreement, Natixis Investment Managers will acquire a 24.9% stake in WCM and enter into a long-term exclusive distribution agreement, subject to limited exclusions. WCM will retain its independence and autonomy over the management of its business, its investment philosophy and process, and its culture, while benefitting from a strong global partner. Paul Black and Kurt Winrich will remain as co-CEOs, and there will be no changes to management or investment teams. The impact of the transaction on Natixis’ CET1 ratio is estimated to be approximately -15 basis points (bps).
“We are pleased to become the global third-party distributor for WCM, whose strong track record and proven investment process make them an excellent partner and strong addition to our global offering,” said Jean Raby, CEO of Natixis Investment Managers. “Our investment in WCM exemplifies our commitment to adding high-conviction, highly active investment managers to our multi-affiliate platform in order to provide our clients with a wide range of unique investment opportunities.”
“We’re really excited to enter into this partnership with Natixis,” said Paul Black, Co-CEO of WCM Investment Management. “After a lot of thought and collective input, we concluded the smartest way to enhance our stability, and to guard our investment temperament, was to partner with a world-class global distribution platform. For some time now we’ve known that diversifying the product mix within the firm – by raising the profile of our global strategy, our emerging markets strategy, and various other investment strategies – is the key to making this happen.”
“Our culture starts with kindling an entrepreneurial spirit, driven by empowerment and transparency,” said Kurt Winrich, Co-CEO of WCM Investment Management. “We try hard to pay attention, seize opportunity, be smart, stay humble, and stay hungry. While working hard and caring for your people is essential, we strongly believe it doesn’t explain everything, and that success also involves being given some opportunities. Today, we have another opportunity placed before us. This partnership will allow us to stay focused on what we do best; namely nurturing and growing a vibrant, robust culture, and generating superior performance for our clients.”
With $29 billion of assets under management (as of May 31, 2018), employee-owned WCM is best known for managing low-turnover, alpha-generating equity portfolios with a focused, global growth approach.
