Consulting company, EisnerAmper received all the shareholders, principals and professional staff of certified public accounting firm Mallah Furman & Company in their firm last November 15, 2015.
Members of the Mallah Furman shareholder group, Gary Dix, Barry Gould, Joe Berkovits, Curt Rosner, Arthur Unger and David Sloan, together with a team of more than 60 outstanding professionals and staff, will become part of EisnerAmper and maintain their present offices in Miami and Fort Lauderdale.
Christopher Loiacono, EisnerAmper Partner and Executive Committee member said, “Mallah Furman’s reputation for client service is well known throughout Florida where they are recognized as one of the premier accounting firms. We look forward to adding their strengths in audit and assurance, tax, private business, and family office services to EisnerAmper.”
Mallah Furman, with its decades-long reputation for excellence, has deep industry expertise, serving clients in insurance, hospitality, professional services, construction and real estate, retail and telecom, among other industries. Gary Dix, Managing Director of Mallah Furman, said, “When our clients make business decisions, they count on us to be their trusted advisor. We listen to and understand their needs. Now, as part of EisnerAmper, we will be able to bring an amazing array of new resources to them to help them meet their goals.”
Barry Gould, the Mallah Furman Chief Operating Officer, has been named Partner-in-Charge of EisnerAmper’s Florida locations.
In speaking about the addition of Mallah Furman, Charles Weinstein, CEO of EisnerAmper, said, “This next step affirms our growth strategy of striving to add the best people and finest resources to the firm in exciting and vibrant marketplaces. In Mallah Furman we see limitless potential, and we are extraordinarily pleased to welcome their team into the EisnerAmper family.”
From left to right: Bruce Zagaris, a partner at Berliner Corcoran & Rowe; Jon Grouf, partner at Duane Morris; David Schwartz, president of FIBA, and Ernesto Mairhofer, Regional Manager for Latin America at Citco Corporate Services - Photo Funds Society. Where Is Increasingly Complex Regulation Leading Us?
The pressure on Wealth Management is increasing at such a rate- due to the dynamism of national and international authorities, and the various agreements between countries which are incessantly enforced- that David Schwartz, President of FIBA (Florida International Bankers Association) states that “the industry is at a crossroads.”
The regulatory scenario is by no means easy for Wealth Management companies, be they large or small. The rising costs of expanding compliance teams are challenging business profitability, and customer privacy seems to have disappeared from the playing field.”Has privacy been lost forever? It could have. We are in a new world,” says Jon Grouf, partner at the New York based company, Duane Morris, which boasts over 700 legal professionals.
Schwartz and Grouf, together with Bruce Zagaris, a partner at law boutique Berliner Corcoran & Rowe of Washington, took part at a round table on the regulation of the industry, which was organized by Citco Corporate Services and in which their Regional Manager for Latin America, Ernesto Mairhofer, acted as moderator.
The situation has become extremely complicated in recent years. On the one hand, the United States introduced FATCA and its “IGA” (intergovernmental agreements), which depending on the model signed, means either a unilateral or a bilateral exchange. Subsequently, GATCA– its equivalent, albeit with some differences- was introduced in the UK. And now, the CRS (Common Reporting Standard) of the OECD will in practice begin to operate in some countries from January 1 st, 2016, although the initial exchange will not take place until 2017.
Since the aforementioned OECD agreement for the automatic exchange of information must be transferred by the different jurisdictions into their local regulations, we’ll no doubt still see the birth of new legislation in many of the participating countries, between which, there are remarkable differences in the level of its enforcement.
But what, in addition to the costs and proper compliance of these rules, is worrying the institutions, according to the Berliner Corcoran & Rowe partner, are reductions in the privacy rights of the asset holders, which in regions such as Latin America, are key -for reasons of the clients’ security and even physical safety-. In addition to the new regulations, these reductions are also the result of the increased activity of whistleblowers (accusers who are not always within the framework of the law), the growing importance of investigation journalism, which has given rise to a consortium of over 190 journalists from 65 countries, or leaks (as the famous case of Wikileaks, which made some people leave their country for security reasons). “We should lobby more for taxpayers´ rights. We should not be afraid to demand more rights,” he says.
“Previously, hardly anyone wondered about ownership of assets under a corporate name, but currently we are seeking out the final owner” says Jon Grouf. The multi jurisdictional structures used so far could change their attributes depending on the countries involved and the agreements between them. “This new regulation will have a big impact in many countries, though perhaps not so in the United States.” Everything will depend on whether the country is considered as “a participant or not,” because regulators are reluctant to join CRS wielding the existence of FATCA as reason.
Large fortunes, and especially their advisors, will have to, like it or not, invest in lawyers and experts to help them comply with international law as well as with their clients’ wishes, and all players within the Wealth Management sector who wish to continue operating, will have to do so in order to avoid legal implications and reputational damage.
All these changes in international rules and regulations are prompting many countries to offer taxpayers who did not meet their tax obligations on time the opportunity to do so now, through regulations or amnesties. In this regard, Grouf reminds us that Chile has a voluntary disclosure program at 8%, United States at 27.5%, Brazil is currently discussing something similar in parliament but with a higher rate of around 30%, and this year Colombia announced 16 % until 2017. We also have Mexico with a voluntary disclosure program, and Argentina, whose program has had little success, is expecting a more attractive one.
Where is this leading us? “There may be entities which are increasingly unwilling to accept foreign funds,” said the Duane Morris partner. The president of the International Bankers Association of Florida does not hesitate to describe the current situation as “over-regulation“, does not harbor hopes of relaxation by the authorities, and encourages the industry to state their opinion, while he points out that “the risk has already influenced the industry. We are already seeing banks which reduce their risk by leaving whole jurisdictions,” and he recognizes that at any given moment, “we did expect the death of Miami as a financial center, but the overall escalation of regulation has eliminated the disadvantage of our place, and money is returning to Miami. Until when? We do not know, but we must seize the moment.”
To which Ernesto Mairhofer of Citco, adds “There is life after FATCA and CRS, it will undoubtedly be different, but high income families will continue to have the same needs which they do today: orderly estate planning, cross border issues (for e.g. children living in different countries), insecurity in their countries of residence, avoiding fictitious profits from the devaluation of their currencies, etc.”
. The Key to Pioneer Investments’ Income Strategies: Diversify Different
Demographic challenges, increased regulation, and the Public Debt Mountain, are fueling investor demand for assets that provide income; thus converting income strategies into the most affordable way to cope with mortgage payments or health insurance, and supplement public pensions.
This market trend is increasingly clear to the team at Pioneer Investments, which presented the panel, ‘A Need for Income in Today’s Economic Environment’ at the investment seminar “Embrace New Sources of Return”, which was held in Miami. Both Adam MacNulty, CFA, Senior Client Portfolio Manager of Pioneer Funds – Global Multi-Asset Target Income, and Piergaetano Iaccarino, Head of Thematic Equity and Portfolio Manager of Pioneer Funds – Global Equity Target Income shared their expert views in the series of panelist questions.
Despite the increased demand for income, Pioneer Investments believes that many investors’ conservative portfolio exposures may not be positioned to cope with the income need.
“We believe that investors face multiple concerns over time, but on top of the list is the need to generate income on a sustainable basis. In our opinion secular trends, such as an ageing demographic, public debt and increased regulation, which by definition are beyond the realm of the economic cycle, will shape the outlook and behavior of investors, by continuing to drive the demand for income,” company experts point out.
In the current environment of low interest rates and low returns of sovereign debt making it more difficult to draw income from traditional assets, Adam Mac Nulty, recommended looking beyond traditional sources, such as the U.S. stock market, the European stock market or U.S. Treasuries. In their search for sustainable income, the company intends to explore the U.S. high yield market, European high dividend equities, or REITs.
The key is to maintain a low volatility target, between 5 and 10%, and at the same time diversify among poorly correlated assets to keep the risk toward the downside. The Global Multi-Asset Income Target strategy seeks to deliver these goals.
Meanwhile, Piergaetano Iaccarino, also pointed out that one of the keys to attracting income to the portfolio is to be flexible in asset allocation. Thus, the Pioneer Investments team effectively attenuates falls in volatile markets.
In Global Equity Target Income fund’s case, Iaccarino explained that its portfolio has 80% of core positions and 20% of tactical positions which vary according to the strategy’s requirements and market conditions. Thus, the expert from Pioneer achieves flexibility and dynamism, which are crucial in finding assets that provide income. This portfolio construction enables potential for high income in a stable portfolio.
Photo: 55Laney69. Safra Sarasin Acquires Leumi Luxembourg Unit
Banque J. Safra Sarasin has announced the acquisition of Bank Leumi Luxembourg’s private banking business, in a bid to expand its private banking presence in the region.
As a result of the transaction, Safra Sarasin will take over responsibility for Bank Leumi Luxembourg’s clients and relationship managers. Services of Bank Leumi had been tailored to Ultra High Net Worth and High Net Worth clients.
The agreement comes as a number of Israeli banks have announced their withdrawal from European private bank operations, due to, among others, profitability and fiscal compliance concerns. This includes Israel Discount Bank, which sold its Swiss unit to Hyposwiss private bank Genvève earlier this week.
Just as their international counterparts, the move to sell Israeli private banking units was also reinforced by the global crackdown on tax evasion. Last year, Bank Leumi had already settled with US authorities to pay a $400m fine for helping US account holders to evade taxes.
Jacob J. Safra, Vice Chairman of J. Safra Sarasin Group, commented: “This acquisition underlines our position as a consolidator in the European private banking market. Our capital strength and family ownership provides great flexibility to do such transactions. Bank Leumi’s Luxembourg business sits ideally within our strategic focus, providing tailor made solutions to clients.”
The acquisition is expected to be completed during the course of the first quarter of 2016, subject to regulatory clearance. The financial terms of the agreement were not disclosed.
Photo: DncnH
. The Exodus of Merrill Lynch Professionals Towards Other Companies Continues
In addition to the departureswhich we announced a few days ago, those of Graciela Perez and Jorge Perez, partners in Merrill Lynch’s, The Perez Group, Albert Philion and Andres Brik, have also left the company for the UBS’ Coral Gables office, as well as Flavio Sugiyama, who has joined UBS at Brickell, and Rosa Leace, who has joined Morgan Stanley.
Industry sources explained that Merrill Lynch could be about to hand out “garden leave” documents for its personnel to sign, which is accelerating the departure of certain professionals who perhaps were already contemplating their future, and have opted to take the lead in making the move, rather than being invited to do so.
Albert Philion, who was based in the company’s Coral Gables office and had been involved with Merrill Lynch for 23 years, has taken up the Senior VP Wealth
Management position; Andres Brik, who had been with the company for seven years, is also leaving the Coral Gables office, and will hold the VP post at UBS Wealth Management. Flavio Sugiyama had been at Merrill Lynch for two and a half years, joining the company after 12 years working for Santander, while Rosa Leace, who was Senior Financial Advisor for Wealth Management at Merrill Lynch’s Weston office, leaves the company after eight years of service, to join Morgan Stanley in Ft. Lauderdale.
Meanwhile, Citywire announced Lorenzo Esteva’s and Alejandro Malbran’s departure, also to join UBS.
Furthermore,Jeff Ransdell, until now responsible for Merrill Lynch Wealth Management’s southeast region, supervising advisors in Florida, Alabama, southeastern Georgia, Caribbean and Latin America, retired in October and was replaced by Don Plaus.
Since the firm announced in July this year that it would raise client’s minimum capital requirements, and would reconfigure its international wealth management business to manage clients in 29 countries, including Latin America, the changes and departures have been taking place incessantly.
Regulation allowing retiring defined contribution (DC) savers in the United Kingdom to invest their DC pots, not only to buy an annuity, will help underpin the growth of platforms in this evolving market, according to the latest Cerulli Associates’ European Defined Contribution 2015 report.
At least 60% of the fund platforms from the United Kingdom, Germany, and Sweden surveyed by Cerulli had more than half of their assets under administration (AUA) from DC pensions. This was nearly double the proportion (33%) of platforms surveyed that had more than half of their AUA from defined benefit (DB).
Cerulli found most asset managers surveyed are targeting platforms to some degree, to sell funds variously to UK and German DC savers this year. In the United Kingdom platforms are rivalled by consultants as asset managers’ most popular DC distribution channel, whereas in Germany insurers are comfortably the favorite channel.
Platform providers Cerulli spoke to for the report said that clients were attracted to the flexibility and clarity on charges. In the near term it will be the more financially literate investor and their financial advisors who use them. Over time platforms will need to develop products and services if they are to appeal to a wider clientele.
“According to one research manager at a UK platform provider, some 75% to 80% of fund managers’ new business flows are coming via platforms,” says David Walker, director of European institutional research at Cerulli and the author of the report. “Therefore managers need to seriously consider listing their funds on them,” he adds.
Platforms should not ignore the “institutional” end of the UK DC industry, where platforms can be used to help design DC default funds, for example. Platform providers should take note that, according to Cerulli research for this report, managers expect default funds to use non-mainstream investments more in future. If this happens, platforms may have to relax current strictures they have regarding fund dealing terms.
“It will challenge default fund designers, out to 2017, to fit more non-mainstream assets into defaults, but managers expect it,” says Walker. “But Europe’s DC fund platform industry will either need to give ground on frequent dealing stipulations, or risk thwarting asset managers’ default design expectations with regard to alternative assets,” he adds.
Foto: Historias Visuales, Flickr, Creative Commons. El crecimiento mundial será anémico en 2016 y 2017 pese al petróleo barato, los tipos bajos y el menor lastre emergente
Mark E. DeVaul, portfolio manager of North America Value Fund and a member of the Nordea’s investment team (through the firm The London Company), explains in this interview with Funds Society how to be a good value investor in these high volatile markets. Recent additions to the portfolio have come from multiple sectors including Consumer Discretionary, Industrials, and Consumer Staples.
US equities have experienced a strong rally in recent years. Investing with a value perspective requires discounts to be found. Is this possible in a more expensive stock market scenario?
US stocks have been strong since the bottom of the market back in March of 2009. Valuations have improved and the US economy is in much better condition compared to the depths of the great recession. It is more difficult to find great investing ideas today vs. 5-6 years ago, but we are still finding them. We attempt to purchase strong companies when they are trading at a roughly 30-40% discount to our estimate of intrinsic value. We calculate intrinsic value using a process we call Balance Sheet Optimization. Our goal is to build the investment thesis for each holding around the strength of the company’s balance sheet and not rely on future growth.
What return potential are you currently detecting for your portfolios, taking into account market prices? Has the safety margin tightened compared with before?
We don’t have a specific return goal each year. Our goal is to outperform the broader market over full market cycles (5-6 years) while maintaining more attractive risk characteristics (better downside capture, lower beta, lower standard deviation). Yes, the discount to intrinsic value is lower today vs. a few years ago.
Value management is characterised by patience and long-term convictions… Do you believe it is possible to maintain a buy&hold management approach in view of the current high volatility?
We believe it is an advantage to follow a buy and hold approach. Many investors have a very short time horizon. We think time is one of the few remaining market inefficiencies. We look at each company as if we were going to buy the whole firm. Our average holding period is five years. We build diversified portfolios of 30-35 holdings. Each holding is meaningful and can drive value to shareholders over a multi-year holding period.
In this regard, have you made any changes to your management approach as a consequence of the market volatility in recent years?
No, we have not made any changes to our investment approach because of recent volatility.
As regards sectors or companies in which you are currently detecting value, which sectors are you concentrating on?
We build our portfolios following a bottom up approach and pay little attention to sector weights. Our goal is to have a strong margin of safety in each holding. Recent additions to the portfolio have come from multiple sectors including Consumer Discretionary, Industrials, and Consumer Staples.
What impact could the Fed’s decision to raise interest rates have on your portfolios? Could the volatility that has been created be useful in any way?
The Fed’s timing of interest rate increases will not have much of an impact on our portfolio. We are aware of the risk and on the margin have stayed away from some of the sectors that investors may view more like bonds because of the high dividend yields (REITs, Telecom, Utilities). If rates begin to move higher, we take that into consideration as part of our balance sheet optimization approach in determining intrinsic value.
To what extent do you take into account macro considerations when it comes to making your investment decisions?
Our process is 100% bottom up so there is limited impact from macro considerations. That said, we are aware of what is going on at the macro level and try to avoid major headwinds when possible.
I imagine that you invest bearing in mind the fundamentals of the company. Do you think the exposure of US companies to China and other EMs will impact their fundamentals?
Exposure to China and other EMs may have some impact. In our large cap portfolio, roughly 30% of sales from the companies in the portfolio are generated outside the US. So we recognize there is some impact. However, the impact is fairly limited as we attempt to buy companies with very little growth expectations priced into the shares.
Wikimedia Commons. A Global Macro Perspective 2016 For Family Offices & Funds
Florida Alternative Investmet Association will hold, on Tuesday December 1st, a pannel, under the title “A Global Macro Perspective 2016 For Family Offices & Funds”.
Shannon Morton, BlackRock’s Investment Institute; Peter Halloran, Titanium Exploration Partners; Luis Laboy, RWC Partners; Ted Izatt, SDKA International and Daryl Jones, Hedgeye Risk Management will be the pannelists who share with the audience their insights.
The event will take place at Akerman´s -1 SE 3rd Ave, Suite 28- from 5 to 8 pm.
For additional information and registration you may use this link.
Photo: Google . Who are the 15 most Relevant Latin American and US Offshore Private Banking Industry Professionals?
Terrapinn, in collaboration with Wealth Management Americas, has published a list of the 15 most influential industry professionals from private banking and wealth management in Latin America and US Offshore. Voters have valued excellence in customer service, in addition to wealth planning and preservation, and portfolio management. The ranking this year includes professionals from 14 private banks and four different countries; eight are located in Brazil; five based in the United States, with one professional in Mexico and another one in Switzerland.
Beatriz Sanchez, of Goldman Sachs, United States, was the highest ranked with 252 votes, closely followed by Emerson Pieri, of Barings Investments, Brazil, with 247, and Diego Pivoz, of HSBC USA, with 235. The Spaniard, Conchita Calderon of JP Morgan, Mexico, and Ernesto de La Fe, of Jeffries, United States, rounded out the top 5 with 211 and 198 votes respectively.
Between the fifth and tenth positions, are two industry professionals based in the United States, and three in Brazil: Gabriel Porzecanski, of HSBC, USA; Adriana Pineiro, of Morgan Stanley, USA; Renato Cohn, of BTG Pactual Brazil; Joao Albino Winkelmann, of Bradesco, Brazil; and Francisco J. Levy of UBS, Wealth Management Brazil.
Four other professionals based in Brazil, and the only one located in Switzerland to obtain a position in the ranking of the 15 most influential professionals, appear between the tenth and fifteenth positions: Charles Ferraz, of Itau Unibanco, Brazil; Guilhermo Morales, of Audi Bank, Switzerland; Raphael Guinle, of BTG Pactual, Brazil; Felipe Godard, of Deutsche Bank, Brazil; and Renato Roizenblit, of SLW Brazil.
The Wealth Management Americas 2015 forum, organized by Terrapinn, took place this week, with the participation of two of the professionals ranked in the top 5: Diego Pivoz, of HSBC, who shared his view on deregulation and transparency, and Ernesto de la Fe, of Jeffries, who talked about client relationship management, and how the private banking industry needs to adapt to the increasingly global presence of its clients.
Photo by Christopher Bowns
. The A's that Acccording to Henderson, Move the Tech World
According to Alison Porter, portfolio manager with Henderson’s Global Technology Team, Apple, Alphabet (previously Google) and Amazon are three three key holdings “in a ‘winner takes most’ world.”
Following the release of the companies’ latest quarterly earnings results, Porter states that after the first quarter for Google as Alphabet, the company offers exposure to a number of powerful internet themes, including online video, programmatic advertising, paperless payments, mobile internet and several ‘other bets’ that could drive significant value in the future, including Nest (smart home appliances), its leading position in self-driving cars, Calico (life sciences) and Google Ventures (venture capital arm, which includes stakes in companies such as Uber). “In our view, the strength of Google’s position in mobile is underappreciated… We think investors will place a value on the company’s other ventures despite them currently being loss makers, and also award the core Google business a higher valuation.”
In regards to Apple, one of their main holdings, Henderson considers that the company “is currently valued as a ‘one product cyclical company’, which we believe undervalues the Apple eco-system.” Henderson expects sales growth of the iPhone 6 to slow from 28% in 2015 to around 6% in 2016. Nevertheless, they trust Apple will be able to take advantage of new markets.
When it comes to Amazon, better tan expected revenue and operating profit guidance consolidate Amazon’s dominance in its core businesses of ecommerce and cloud services − which are both large and rapidly growing markets where Amazon still has low market share. Henderson highlights Amazon Prime as an área of opportunity along with Amazon Web Services (AWS) is taking market share from traditional hardware companies such as IBM and EMC but now also increasingly from software companies such as Oracle.
“Technology tends to be a sector where the winner takes most market share and companies with the strongest barriers to entry such as Apple, Alphabet and Amazon are the most likely to benefit. The team is confident these three companies are well positioned in a low growth environment to grow profitably and reward investors.” concludes Porter.
You can read the full report in the following link.
