Glyn Jones, New Independent Non-Executive Chairman at Old Mutual Wealth

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Glyn Jones, New Independent Non-Executive Chairman at Old Mutual Wealth
CC-BY-SA-2.0, FlickrGlyn Jones . Glyn Jones, New Independent Non-Executive Chairman at Old Mutual Wealth

Old Mutual Wealth appointed Glyn Jones as the independent non-executive Chairman of the Old Mutual Wealth Board, subject to regulatory approval.

He will replace Bruce Hemphill, CEO of Old Mutual plc, who is stepping down as Old Mutual Wealth’s Chairman.  Bruce will continue to be a director of the Old Mutual Wealth Board.  Glyn will be working closely with Bruce as Old Mutual plc seeks to execute the managed separation of the wealth business.

Glyn is presently the Chairman of Aspen Insurance Holdings, a New York Stock Exchange listed business, and the Chairman of Aldermore Group, the challenger bank that went public in 2015 on the London Stock Exchange. Previous non-executive roles included being the Senior Independent Director on the Direct Line Insurance Group, a board he joined ahead of its listing on the London Stock Exchange as a FTSE 100 company. Other past chairmanships include: Hermes Fund Managers, BT Pension Scheme Management and Towry, a financial planning and wealth advice business.

Glyn started his career with Deloitte, Haskins & Sells, a predecessor firm to PWC, where he was a senior partner in the consulting practice specialising in financial services. In 1991, he joined Standard Chartered Bank where he ran their international private banking business which was headquartered in Hong Kong. On his return to the UK in 1997, he joined NatWest Bank and was appointed CEO of the Coutts Group, the domestic and international private banking business, as well as having responsibility for NatWest Investments and NatWest Stockbrokers. In 2001, Glyn joined Gartmore Investment Management as CEO until 2004.

Paul Feeney, CEO of Old Mutual Wealth, said: “I am very pleased that Glyn has agreed to join the Old Mutual Wealth Board as Chairman.  His depth and breadth of understanding of the financial services industry, which has been gained from leading top industry companies over the last 20 years, will be of great benefit to our business.  He also brings extensive experience of chairing both public and private boards.  I look forward to working with Glyn as we build on the momentum that exists to transform Old Mutual Wealth into a truly outstanding business.  I believe we have an exciting future ahead of us.”

Jones added: “I am delighted to be invited to be the new Chairman of Old Mutual Wealth.   This is a unique and leading wealth management business which is well placed to succeed in the fast developing and exciting industry in which it operates.  I look forward to helping Old Mutual Wealth in its development and playing my part, alongside my fellow board directors, in supporting and guiding Paul and his executive management team, as well as working closely with Old Mutual plc to help them achieve their strategic objective of managed separation.”

Old Mutual Wealth is a subsidiary of Old Mutual plc. Old Mutual plc is in the process of executing a managed separation strategy that will separate the Group into its four constituent businesses: Old Mutual Wealth, Old Mutual Emerging Markets, Old Mutual Asset Management and Nedbank.

 

 

London Remains the Top Leading Global Financial Centre

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Londres mantiene su liderazgo como centro financiero a pesar del Brexit
CC-BY-SA-2.0, FlickrPhoto: Nimalan Tharmalingam. London Remains the Top Leading Global Financial Centre

London, New York, Hong Kong, Singapore and Tokyo remain the five leading global financial centres according to the twentieth Global Financial Centres Index (GFCI 20). Published by Z/Yen in collaboration with the China Development Institute (CDI), the GFCI rates 87 financial centres. London is one point ahead of New York (on a scale of 1,000 points this is insignificant). Singapore is 42 points behind New York in third place. Tokyo, in fifth place, is 60 points behind New York.

The UK ‘Brexit’ referendum result is not reflected in the GFCI 20 results so far. GFCI 20 was calculated based on data collected up to the end of June 2016 – a few days after the referendum result on 24 June. Looking ahead to GFCI 21, assessments given to London in July and August are significantly down from previous levels. GFCI 21 may show some significant changes. London, New York, Singapore and Hong Kong remain the four leading global financial centres.

All North American centres except Calgary are up in the ratings. Calgary focuses on energy finance and the recent volatility in oil prices is likely to have caused a decline in Calgary’s rating. San Francisco and Boston are second and third in North America – reflecting the growing importance of FinTech. Chicago re-enters the GFCI top ten and Toronto, the leading Canadian centre, is now 13th having been eighth a year ago.

Western Europe remains a region in flux. Luxembourg and Dublin show strong rises in the ratings whilst Geneva and Amsterdam fall. Early indications following the Brexit referendum result are that decision-makers are looking around and considering Luxembourg and Dublin as potential locations if they need to leave the UK. Wealth management in Geneva may be suffering from increased transparency requirements of international regulators. Seven of the top ten Asia/Pacific centres see a fall in their ratings.

Some Eastern European and Central Asian centres prosper whilst others struggle. Warsaw, Tallinn and Riga are now the leaders in this region. Istanbul, Moscow, St Petersburg and Athens continue to languish. Turkey and Russia are both involved in armed conflict. Although geographically removed from the fighting, the financial centres in these countries are clearly affected by the uncertainty this creates.

Australasian centres are doing well. Three of the top five global centres are Asian. Hong Kong and Singapore had some small declines. Sydney and Melbourne both saw solid increases in their ratings.

Offshore financial centres are recovering lost ground. Jersey, Guernsey, the Isle of Man, the Cayman Islands, Bermuda, the British Virgin Islands, and are all up in the GFCI 20 ratings.

Middle Eastern centres decline. With the exception of Bahrain which saw a modest rise, all Middle Eastern centres were somewhat down although Dubai only fell by a single point remaining well ahead of other centres in the region.

Latin America down, Caribbean Up. Sao Paulo, Rio de Janeiro and Mexico continue to struggle. Trinidad & Tobago have entered the index for the first time in 71st place.

Mark Yeandle, Associate Director at the Z/Yen Group and the author of the GFCI, said “Changes in perceptions following the Brexit referendum are not yet reflected in the GFCI. However, early signs are that London could see a decline next time round. Which centres may gain from this is hard to predict.”

Fan Gang, CEO of the CDI, said “We are delighted to be working with Z/Yen Group in producing this index. It is a very exciting time for financial centres in China as Shanghai, Shenzhen and Beijing all rose in the GFCI ratings in GFCI 20. Dalian and Qingdao were also seen as performing well in recent editions. We anticipate that Chinese financial centres will rise rapidly in importance around the world.”

Wall Street’s Oldest Woman has Died

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Muere la asesora financiera más longeva de Wall Street
Photo: Stralem & Co. Wall Street's Oldest Woman has Died

Irene Bergman, Senior Vice President and Financial Advisor at Stralem & Company, Inc., a New York asset management firm founded in 1966, has passed away.

Born in Berlin, Germany on August 2nd, 1915 to a prominent private banker, she started her career in 1942 after arriving as a refugee from Europe. At Stralem & Co, Bergman helped oversee about $1 billion and managed accounts for U.S. and international clients. She joined the company in 1973 from Loeb, Rhoades & Co., where she worked six years as an investment manager in the international department. She previously spent a decade as an assistant manager in Hallgarten & Co.’s foreign department, working on merger arbitrages and writing a weekly market letter.

Bergman stopped going to the office in December 2014 and worked from home until her death. To celebrate her 100th birthday, she was invited to ring the bell at the New York Stock Exchange.
 

 

Annual Hedge Fund Conference Around The International Boat Show

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Hedge Fund Symposium en el marco del International Boat Show
Poto: John Spade . Annual Hedge Fund Conference Around The International Boat Show

Every year around the world famous International Boat Show in Fort Lauderdale takes place the “Annual Hedge Fund Conference” where Hedge Fund Managers, Family Offices, UHNWI and other professionals in the industry meet at an event followed by the opportunity to network and experience the luxury lifestyle of mega yachts.

Year after year the Nexgen Summit has presented The Hedge Fund Conference, attracting more attention and participants. Among the speakers featured last year were John Tyers, Lombard International; Tom Neinman, Sali fund Services; Ian Scott, Csledonia Planning Group; or Michael Liebeskin, Winged Keel Group.

The event will take place on Thursday, November 3rd at the Ritz Carlton, Fort Lauderdale. For more information or registration please contact thalius@hecksherpartners.com. Funds Society readers can benefit from a 25% discount. Please advise when registering.

“You Cannot Invest in Asia Without Properly Knowing the Market.” Matthews Asia’s Message During its Annual Conference

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“You Cannot Invest in Asia Without Properly Knowing the Market.” Matthews Asia’s Message During its Annual Conference
CC-BY-SA-2.0, FlickrPhotos: Florence Low. “You Cannot Invest in Asia Without Properly Knowing the Market.” Matthews Asia’s Message During its Annual Conference

Last 13th to 15th of September, Matthews Asia held its annual conference at the Palace Hotel in San Francisco. The sessions were attended by up to 120 delegates from Canada, the United States, and Latin America.

Delegates heard firsthand about the management company’s experience in long term investing in one of the world’s most dynamic economic regions, which contributes to more than a third of global GDP. This year, the company celebrates its 25th anniversary as one of the most specialized companies in the Asian market.

“Speaking directly with the CEOs, visiting the company, walking through their facilities…” for Paul Matthews, the firm’s founder, and Mark Headley, Chairman of the Board of Directors, that isthe key to the company’s 25 years in the region. “It is still essential to visit the companies in which we invest to get to know them properly,” Headley said during his speech, reminiscing about his first visit at an Asian factory.

“In 1993, Paul and I saw, in a Barings brochure, photos of a textile company, which pictured all its workers busy at their jobs. When we went to visit it, we discovered that their warehouses were completely empty” After a few twists and turns, they finally got someone to explain to them what was happening. The factory was waiting for machinery from Germany, and meanwhile its 3,000 employees could not work. “The fundamental conclusion of that trip was that you could not invest in Asia without personally visiting the companies,” said the Chairman of the Board.

During the two conference days, the company’s portfolio managers emphasized the idea that investing in Asia is a long distance race, and that the best way to ensure returns is by investing strategically, rather than tactically. Matthews Asia does not invest in countries or in certain sectors, but in companies. Their process is entirely bottom-up and the portfolios are constructed company by company.

Investing in China

With regards to China, Matthews’ experts stressed that despite the ‘bad press’ haunting the Asian giant, the reality is that there has just been a slowdown, rather than a collapse of the economy. In fact, the fund managers believe there is an opportunity to invest in companies, especially those related to the strength of domestic consumption in China.

Matthews is convinced that the debt problem in China is not higher than in other world economies, and is mainly composed of public debt. The fact that household debt is not substantial is, in their opinion, an advantage.

The highlight of the first day came from Andy Rothman, a veteran investment strategist and author of the Matthews Asia blog, Sinology. His mission: to destroy the myth of an unrestrained China.

“The average citizen in developed economies imagines China as an economy which is still totally controlled by the state, with a very communist background, ghost towns, “zombie “companies, and with exports and investment accounting for the most part of GDP. The reality of China’s economy is more like this: 80% of employment in China is in private hands, all employment growth is generated by SMEs, it is a market of entrepreneurs and, finally, we are in the fifth consecutive year in which services and consumptionaccount for a larger part of the economy that investment.”

Strategic vs. Tactical

The Matthews Asia Investment Forum also featured a presentation by portfolio managers, Robert Horrocks and Teresa Kong, who reminded the audience that there are not many purely tactical or purely strategic decisions, but that decisions within their company are much more strategic than tactical. This is why, for them, macro data is important but just up to a certain extent.

Matthews Asia defines itself as ‘macro-agnostic’, a description which caught the audience’s attention, and which refers to the fact that it places much more importance on choosing the right companies, than on choosing the right countries.

“Choosing the right company is even more important than choosing the right sector. In fact, issues like interest rates, currencies, and GDP growth, are all more tactical than strategic. When you invest with a 10-year horizon, macro parameters lose relevance,” Kong said during her presentation.

The event closed, until next year, with a visit to the company’s San Francisco office, providing delegates with the opportunity to have one-to-one meetings with fund portfolio managers.

 

Baby Boomers Are the Largest Users of ETFs

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Los 'baby boomers' son los mayores usuarios de ETFs
CC-BY-SA-2.0, FlickrPhoto: greeblie . Baby Boomers Are the Largest Users of ETFs

 Despite the commonly held view that exchange traded funds (ETFs) are most popular with younger investors, a new whitepaper from Pershing, a BNY Mellon company, in conjunction with Beacon Strategies, finds that investors between the ages of 51-70 who work with advisors are, in fact, the largest users of ETFs, followed by those over the age of 71.

The report, The Evolving ETF: Using Exchange Traded Funds in Client Portfolios, surveyed more than 1,500 advisors in the U.S and around the globe. More than two-thirds of advisors who use ETFs intend to increase their usage over the next 12 months, while 55 percent said that more than half of their clients already have ETFs in their portfolios.

“The widespread assumption across the investment management industry is that the continued growth and popularity of ETFs is being driven by younger investors. However, advisors are telling us that this is not necessarily the case,” said Justin Fay, director of financial solutions for alternative investments and ETFs at Pershing.

“We found that ETF usage in portfolios is most prominent among the Baby Boomer and Greatest Generation populations, mainly because these investors have become increasingly aware of the cost efficiency and access to a variety of styles that ETFs may provide, which can help them achieve their financial goals,” he added.

Pershing and Beacon Strategies’ whitepaper revealed a number of other key findings, such as:

  • Advisors view ETFs as critical investments in client portfolios
  • Performance is the key criteria for choosing a specific ETF
  • Further education needed around ETFs

“ETFs can be a particularly attractive investment option for advisors, offering customizable solutions and potentially lower-cost access to markets, countries and sectors than many other comparable investment vehicles. While the RIA channel continues to dominate in terms of ETF use, we are seeing increased adoption across other channels, particularly independent broker-dealers who are implementing ETFs more frequently within portfolios, and this trend is expected to continue,” concluded Fay.

To obtain a copy of Pershing’s whitepaper, follow this link.

Cazenove Capital Management Acquires C. Hoare & Co’s Wealth Management Business

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Cazenove Capital Management crece con la adquisición del negocio de wealth management de C. Hoare & Co
CC-BY-SA-2.0, FlickrPhoto: Moyan Brenn. Cazenove Capital Management Acquires C. Hoare & Co's Wealth Management Business

Cazenove Capital Management, the UK wealth manager of Schroders, has reached an agreement with C. Hoare & Co. to acquire its wealth management business.

C. Hoare & Co. is a London-based private bank with a 300-year history of providing banking services to high net worth and ultra-high net worth clients. Over the last decade, it widened its service offering into wealth management and has developed a high-quality business with approximately 1,800 clients and £2.2 billion of discretionary assets under management at the end of June 2016.

Peter Harrison, Group Chief Executive at Schroders, said: “C. Hoare & Co.’s culture of client focus and exemplary client service are a strong fit with Schroders. This acquisition of its UK wealth management business grows our business in this area. I am confident that the relationship will create long-term value and benefits for clients, shareholders and employees.”

Andrew Ross, Chief Executive at Cazenove Capital Management, said: “We believe the combination of our two businesses will bring significant benefits and enhanced opportunities for our clients. The complementary fit between our two firms, the strong shared service culture, long-term thinking and established heritage of both businesses make this an ideal match.”

Alexander Hoare, Partner and Director at C. Hoare & Co., said: “We have chosen Cazenove Capital, the UK wealth manager of Schroders, because our firms share established heritages and similar cultures with the same dedication to customer service. We are very proud of the wealth management business that we have built over the last decade and we are keen for it to continue to flourish. We look forward to an ongoing relationship with Cazenove Capital.”

Financial terms of the transaction were not disclosed and it is expected to complete in the first quarter of 2017.

 

Claudia Ripley, Ingrid Tharasook and Fabrizio Palmucci Join Jupiter

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Jupiter ficha tres especialistas de producto para sus estrategias clave
CC-BY-SA-2.0, FlickrPhoto: RIccardo Cambiassi. Claudia Ripley, Ingrid Tharasook and Fabrizio Palmucci Join Jupiter

Jupiter has appointed three product specialists to support its UK equity, Asia and GEM equity and Fixed Income and Multi-Asset teams. Reporting to Katharine Dryer, who heads the product specialist team at Jupiter, these new hires will provide additional support to some of our growing investment strategies and bring the recently-established product specialist team to full capacity. All three will have taken up their positions at Jupiter by the beginning of the fourth quarter of 2016.

Claudia Ripley joins Jupiter to work across all our UK equity funds, with a particular focus on those managed by Steve Davies and Ben Whitmore. She has nine years’ UK equity product experience, seven of which were spent as the Lead Retail Product Strategist on the BlackRock UK Active Equity Team. 

Ingrid Tharasook joins from Coutts & Co.’s investment strategy team to cover Jupiter’s range of global emerging market equity funds. Her previous experience as a sector specialist in emerging market fixed income and Asian (and Japanese) equities will complement the management styles of Jason Pidcock and Ross Teverson as they build on recent momentum.  A fluent Brazilian Portuguese and Thai speaker who has lived across four continents and has nine years’ investment experience, Ingrid brings a truly global perspective to her new role.

Fabrizio Palmucci joins the Fixed Income and Multi-Asset team to support recent growth in this area. Fabrizio spent five years developing the Pimco Source partnership as the Head of Fixed Income Product Management team at Source. Fluent in Italian, Spanish and French, Fabrizio will have a particularly strategic role to play in supporting our distribution teams as we increase our European footprint. His 14 years’ experience encompasses product management credit analysis and bond trading.

Katharine Dryer commented: “We are delighted to have attracted three talented professionals to these new roles. They will help us develop our communications with clients and enable our fund managers to stay focused on generating performance. The work of Alastair Irvine with the Jupiter Independent Funds team and Tommy Kristoffersen on Cedric de Fonclare’s team has demonstrated the value the product specialist role can provide as a key link between the investment and distribution teams. My congratulations go to all of the new recruits.”
 

Carlos Martinez Joins Investment Placement Group’s Miami Office

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IPG anuncia la incorporación de Carlos Martinez, quien asesora 100 millones
Carlos Martinez . Carlos Martinez Joins Investment Placement Group’s Miami Office

Investment Placement Group (IPG), an Independent Broker Dealer and Registered Investment Advisor, recently announced that former Merrill Lynch advisor Carlos Martinez has joined the firm’s Miami, Florida office which is managed by Rocio Harb.

Martinez has over 20 years experience and through his 16 years at Merrill Lynch, he managed a 100 million dollar portfolio. “Making a decision to join a new firm is not to be taken lightly, taking in consideration what is best for my clients being the most important factor.  After much consideration and due diligence, I determined that IPG is the best place for my clients and for me.   They have highly skilled support teams and are focused on the needs of global investors” said Martinez.

“Carlos is true professional with a long track record of working with Latin American investors.  He is a great addition to our team and we are happy to welcome Carlos to IPG” added Harb. 

“Our goal has been to add experienced and highly qualified advisors in key locations, Carlos certainly fits the bill.  We look of forward to his continued success at IPG”, said Gilbert Addeo, COO and Head of Business Development at IPG.

Joining Maurico Assael and Roberto Lizama, this is the third high profile hire of IPG in less than 10 days.

Building a Case for Increased Infrastructure Spending

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¿Por qué se debe invertir más en infraestructuras?
CC-BY-SA-2.0, FlickrPhoto: JosepMonter / Pixabay. Building a Case for Increased Infrastructure Spending

The U.S. presidential election is entering the homestretch and investors are gauging the potential investment implications of the candidates’ proposed plans. As I noted in my last blog, amid a bitterly fought campaign, one topic is drawing a fair amount of attention: increased infrastructure spending.

It has been a particular area of focus for both parties and even the Federal Reserve. It is a rare area of agreement between the two presidential candidates, suggesting that whoever wins the election will likely emphasize it in the next administration. Moreover, the phenomenon is not only in the United States, but in other developed countries. Are the stars aligning for significant increased infrastructure projects, and does this have implications for investors? Among the reasons that suggest they may be:

Monetary policy

Central bank actions have been one of the most influential forces in shaping global markets in recent years. Yet we remain in a low growth environment, which raises the question: “Has monetary policy run its course in the current cycle?” The lack of growth momentum and weakened fundamentals around the globe suggest so.

Economic need

Given low economic growth, as well as the weak state of the nation’s infrastructure, using federal aid to repair bridges and roads and other projects could be a means of increasing productivity and fostering economic growth. See the chart below. In addition, infrastructure spending could help lift labor participation rates thus narrowing the gap between labor mismatch and labor productivity.

Depending on the type of project, infrastructure has the potential to create a positive multiplier effect on markets from an economic perspective. In the short term, infrastructure projects could provide private sector growth and jobs, thus potentially leading to increased tax revenues and a boost in consumer confidence and consumption. As a recent report from the BlackRock Investment Institute suggests, an increase in government spending can add up to 2% to gross domestic product (GDP), depending on where in the economic cycle the spending occurs. (Not surprisingly, it is likely more effective when it comes in a recession.)

Low funding costs

Large scale central bank bond purchase programs have pushed yields to all-time low (Source: Bloomberg), and in many cases, negative. While this has created challenges for investors, particularly those who require income, the low interest rate environment means the cost to finance infrastructure projects through government debt is far less than in years past.

This renewed focus on longer-term fiscal policy measures like infrastructure is not unique to the United States. In July, Japan announced a new ¥28 trillion stimulus package, of which ¥13.5 trillion is earmarked for a variety of fiscal policy initiatives centering on public infrastructure projects such as upgrading port facilities and building new food-processing plants that help boost food exports.

Similarly, the UK, facing the possibility of an economic slowdown—or even its first recession since the financial crisis—appears ready to incorporate aggressive stimulus beyond monetary measures. Like the U.S., minimal public resources have been allocated to infrastructure over the past decade. Private sector infrastructure spending in the UK is also drying up as a result of uncertainty around Brexit. The number of contracts aimed toward infrastructure-like initiatives is down by 23% over the past year (Source: Office for National Statistics, UK, June 2016).

In short, a combination of factors have created a compelling case for infrastructure investment. Should these scenarios unfold, equity sectors and industries related to infrastructure activities like industrials or transportation in the U.S. specifically, may stand to benefit. However, the timing and level of impact remain to be seen. It is important to recognize that how infrastructure projects are funded can mitigate some of the multiplier effect. For the U.S. in particular, it is also important to recognize that whoever wins the election could still face a divided government, raising questions about how quickly a bill could get passed, and how large a bill it would be.

To gain exposure to global infrastructure companies, investors may want to consider the iShares Global Infrastructure ETF (IGF). For U.S. exposures, investors may consider the iShares Transportation Average ETF (IYT) or the iShares U.S. Industrials ETF (IYJ).

Build on insight, by BlackRock written by Heidi Richardson