Photo: Juan Antonio Canales. Raymond James Completes Cougar Global Acquisition
Raymond James Financial has completed its acquisition of Cougar Global Investments, an ETF-focused asset manager headquartered in Toronto.
As a result of the deal, which was recently approved by Canadian regulators, Cougar Global will become of an affiliate of Raymond James subsidiary Eagle Asset Management, which will offer Cougar Global’s asset-allocation strategies to its worldwide client base, the company announced.
Founded in 1993, Cougar Global is a global asset-allocation ETF strategist with $1.5 billion under management that markets its investment services to high-net-worth individuals, families, foundations, trusts and institutions in Canada and the United States.
Eagle Asset Management has more than $32.8 billion in assets under advisement from institutional, mutual fund and high-net-worth clients.
“This acquisition continues to enhance our presence within the asset-management industry by providing us with an important suite of investment options that our clients are seeking,” said Richard Rossi, president and co-chief operating officer of Eagle.
CC-BY-SA-2.0, FlickrPhoto: Jimmy Baikovicius. BMS Group Names Jose Astorqui CEO, Latin America
BMS Group Limited announced the launch of its Miami Hub with the appointment of Jose Astorqui to the newly created role of Chief Executive Officer, BMS Latin America.
The new Miami office is part of BMS’s stated strategy to expand its proposition in selective international markets. The independent specialist insurance and reinsurance broker sees an attractive opportunity for growth in the region and will use Miami as its base to service business from Latin America, Central America and the Caribbean.
Reporting to Nick Cook, BMS CEO, Jose Astorqui joins BMS from Howden Insurance Brokers. Jose has a strong track record of managing a portfolio across the region and has been based in Miami as Howden’s Director of Latin America since 2008.
Jose Astorqui said: “BMS have a compelling vision for growth and I am honored to have been asked to lead their new venture in the region.” Mr. Astorqui has attracted eight members of his former team at Howden to new posts at BMS at Miami, Uruguay and New York.
Nick Cook: “BMS are delighted to have secured a candidate of Jose’s calibre to lead our new Miami office. His experience will help accelerate our presence in the region as we seek to capitalise on Latin America’s rapid economic growth. The opportunities in this region are complementary to our growth strategy and Jose’s appointment is another exciting development for BMS.”
Jose Astorqui, holds a 20 years experience in the insurance brokerage industry. He first worked for the Spanish leading company Gil y Carvajal, based in London. He then joined Howden and Marsh in Spain, following the acquisition of Gil y Carvajal by Aon in 1999. He finally rejoined Howden in London in 2004 as Head for Iberia and Latin America and moved to Miami in 2008.
Artivest, a cutting-edge technology platform that connects leading private equity and hedge funds with a wider audience of suitable investors, announced today a $15 million round of funding led by prominent global investment firm KKR, with existing investors RRE Ventures, Peter Thiel, Nyca Partners, Anthemis Group and FinTech Collective participating as well. Artivest will use the funding to accelerate the growth of its technology, infrastructure and sales teams and the execution of its product roadmap.
“Artivest combines leading technology with operational tools for feeder funds that will further open the door for financial advisors and high net worth investors looking to commit capital to a wide variety of top private equity funds. Most private equity firms are very interested in accessing this capital but do not have the technical or operational capability to do so today. We look forward to partnering with Artivest as they expand their business,” said Ed Brandman, KKR’s Chief Information Officer, who will join Artivest’s Board of Directors.
Founded in 2012 and headquartered in New York City, Artivest provides access at lower investment minimums to a select assortment of privately offered alternative investment funds. To date, Artivest has offered premier private equity and venture capital funds and will soon be offering hedge funds.
“The process of investing in private placements—previously inefficient for all involved–has not changed in any meaningful way for decades. A number of trends have come together, including alternative funds’ increasing focus on individual investors and investors’ growing appetite for all types of alternatives. At this crucial moment, we are bringing private investing a much-needed digital upgrade,” said Artivest CEO and Founder, James Waldinger. “It’s a great honor and a meaningful endorsement to be backed by KKR, one of our first partners.”
High net worth investors, a crucial and complicated customer base
Qualified investors, including those served by the rapidly growing independent advisor community, are fueling a new wave of demand for alternative strategies and are, in fact, the fastest growing segment of assets allocated to alternative funds. With equity markets periodically testing new highs and publicly available fixed income investments providing unsatisfactory yields, clients and their advisors are actively seeking alternative solutions for compounding wealth over long time periods. Top private equity and hedge funds, which have historically raised capital exclusively from institutions and those capable of writing institutional-sized checks, are compelled by this investor base but challenged by the implications of sourcing, onboarding and serving a much more fragmented clientele.
Artivest provides a multi-pronged solution to connect these two constituencies at scale. Key Artivest features for qualified investors include more accessible investment minimums, online access to intuitive displays of fund metrics and electronic completion of all legal documentation. Funds utilize Artivest technology to manage investor relations and client operations at scale. Both user types benefit from best-in-class-security and encryption protection.
Photo: Ian Sane. A Rate-Rise in the U.S. is Barely Priced In by the Markets for This Year
The broad-based stock market rally that characterised much of the first quarter of 2015 ran out of steam in March. During the month, investors focused on weaker US economic data, renewed geopolitical tensions in the Middle East and a corresponding bounce in the oil price. In bond markets, benchmark 10-year government yields remained extremely low, with German Bund yields finishing the month at just 0.18%. In the US and UK, 10-year yields also moved lower, reflecting the softer tone of US data and the ‘gravitational pull’ of the ECB’s QE programme. In credit markets, there were some signs of indigestion following heavy new issuance, but these concerns have eased somewhat following the seasonal lull in activity over Easter.
Looking to the second quarter, there are three important issues which investors will have to consider – the trajectories of interest rates, currencies and economic growth. On the interest rate front, much was made of the Fed’s decision to drop the word ‘patient’ from its March policy statement but the bottom line is that, seven years on from the financial crisis, we are still living in extraordinary times. Consumers and governments in the developed world remain overlevered and overindebted and companies across a number of sectors are struggling to maintain pricing power. In my opinion, it is not obvious that there is a need for any aggressive rise in interest rates, particularly given the deflationary impact of lower energy prices. At the time of writing, barely one US rate rise is priced in by markets for this year, and in the UK markets have pushed the timing of the first rise all the way out to August 2016. The eurozone and Japan, meanwhile, are expected to keep policy extremely accommodative.
Interest rates provide a neat segue to currencies. The combination of European and Japanese QE and the expectation that the US should raise rates this year has driven a very strong rally in the dollar index over the past six months. We do not expect the dollar to maintain its very robust rate of appreciation but the greenback remains the global reserve currency by default. Moreover, further short-term volatility in the euro/dollar exchange rate cannot be ruled out as Greece appears to be heading towards a ‘day of reckoning’. In the long run, a Greek exit from the euro could be a positive for the country but the period of adjustment in the short term would be extremely painful. But, by itself, a ‘Grexit’ would not be a disaster; the real issue is what happens elsewhere in the eurozone, particularly if Greece does succeed, over time, in going it alone.
The global economic growth outlook appears to be deteriorating at the margin. The recent weaker US data is almost certainly linked to weather-related disruptions and other one-offs such as the West Coast ports strike, but it was probably unreasonable to expect the US to keep outpacing the rest of the developed world by such a wide margin. At the corporate level, US companies are undoubtedly feeling the pinch of the reduction of capex in the energy sector and the stronger dollar. Our own view is that the US economy is in a soft patch, and this is likely to be reflected in Q1 US GDP and probably Q1 reported earnings. Nonetheless, for risk assets, and indeed the global economy in general, it is important that the recent ‘blip’ in US data is nothing more than that.
CC-BY-SA-2.0, FlickrVictor Rodriguez is Senior Portfolio Manager of emerging market debt for NN Investment Partners (formerly ING Investment Management) - Courtesy Photo. EMD: "There Is No Better Market to Invest in Corporates"
Victor Rodriguez is Senior Portfolio Manager of Emerging Market Debt for NN Investment Partners (formerly ING IM) and confesses that there are so many changes in emerging economies that some of his answers may vary over the short term. What remains unchanged is the attractiveness of these markets, which for the same rating and duration allow greater yield. “There is no better market” he declares, although he is aware of the problem that volatility and any small lack of liquidity may involve. As this market works almost entirely in USD, some companies who are not exporters are also at risk from fluctuations in exchange rates. “When the value of the dollar is rising, it is better to stick with exporters. You can only pick the best of the best.”
Korea’s stability can make it attractive at certain times, yet it currently doesn’t play in its favor. However, when it comes to China’s growth forecasts, the Atlanta based expert estimates GDP growth at 6.8% or more by the end of this year, and 6.5% for 2016, making that country his major option, as he believes that even if there are changes, the real estate sector can bring long-term value, and economic development in the country will improve in the second half of this year. His vision for Indonesia is also positive thanks to the improving economy and growth-forecasts, likewise for some banks in Hong Kong and Singapore; he sets India aside however, as he considers that, although it will continue to grow, the opportunities it offers are no longer as attractive.
In Latin America, he stresses his preference for Peru, which he justifies by his opinion that there are good opportunities for finding value in specific companies within the banking and mining sectors, although the country’s growth is slowing down; as regards Chile and Colombia, the portfolio manager believes that there are only isolated opportunities in some companies, for example in the Utilities industry, while insisting that there are no attractive sectors, but specific companies which are. Another country that is growing and will continue to grow, albeit more slowly, is Mexico, where you can also find value in certain corporations, although, being a country which has been affected by falling crude oil prices, it previously offered some very good potential investments and now those opportunities have been reduced.
We must remain alert to new opportunities that will come from frontier markets, as the expert expects Mozambique, Vietnam, and Sri Lanka to follow the path of growth.
As regards the options in other regions of the world, Rodriguez believes that, although there is still value in Russia, it is no longer as attractive as it was a few months ago, even though it seems that the country begins to improve, with the Ukrainian crisis taking a turn for the better, and the rising oil prices; he is more optimistic about Kazakhstan, as he believes that it currently already has an interesting valuation, and shall present good opportunities towards the end of the year. He also confirms that it is possible to find some good options in South Africa, which does not happen with the Middle East region, as local investors themselves have placed their own assets there, pushing spreads down.
The flow of capital into fixed income is increasing and Victor Rodriguez expects the trend to continue. “Everyone is looking for spread products because you cannot concentrate the entire portfolio on equities. In addition, the wealth of emerging markets has grown, as has its investment in debt. Insurance companies continue to invest more, and more in fixed income, and are aware that they must continue to increase their commitment, and pension plans should definitely increase their placement in emerging fixed income. “
With regard to oil, the Lead Portfolio Manager of Corporate Debt for IP NN Emerging Markets Debt team believes that a deficit situation will be reached by the fourth quarter, since OPEC is stable in its production, and will remain roughly at current levels unless Libya starts to produce, and US production will peak in April-May, and then go down. According to the expert, the end of this quarter will still be good time to invest in companies involved in oil, with price estimated at US$65 a barrel for WTI by the end of 2015 and US$70 by the end of 2016. “There is no doubt that oil will rise, although not excessively. We will not see the barrel at US$100, because if prices started climbing very quickly, greater supplies would be released into the market. “
“The FED will not raise rates as early as people expect. If oil stays along the aforementioned lines and there is no inflation, the other central banks will increase liquidity and the dollar will rise, and exports and job creation in America will both fall,” says Rodriguez, who concludes by predicting that “the FED will not raise rates. If it does so, it will be by 25 basis points, and not before September.”
Victor Rodriguez is Head for NN IP’s Emerging Markets Corporate Debt strategy. The team has offices and analysts in The Hague, Atlanta, and Singapore. EMD Group’s Total assets (sovereign, local, and corporate included) stand at 7 billion dollars. Rodriguez has over 25 years’ experience in emerging markets, corporate bonds, and investment banking. Before joining ING in 2003, he worked in GMA Partners, Wachovia Securities, and Prudential Capital. He holds a Cornell University A.B. degree, and an Emory University MBA.
CC-BY-SA-2.0, FlickrMeeno de Vreeze, Andrea Ajila y Damian Zamudio. Aberdeen’s Andrea Ajila Appointed Business Development Manager for the International Wealth Management Group
Andrea Ajila, previously an Advisor Services Associate at Aberdeen Asset Management, has recently been appointed Business Development Manager for Aberdeen’s International Wealth Management team focusing on the Miami and Latin American (ex Brazil) businesses. Andrea has been a key member of the business development team alongside the Head of the team, Menno De Vreeze and Business Development Manager, Damian Zamudio.
Previously, Andrea came from Punch & Associates, an investment management firm based in Minnesota, where she was part of the Wealth Strategies Group supporting private clients and later institutional investors. Andrea has also previously worked at Ameriprise Financial Services with a wealth advisory group in New York.
Bev Hendry, Co-Head of Americas said, “ We are delighted with Andrea’s appointment. Aberdeen has made a strong commitment to the U.S. Offshore space over the last several years and is looking to grow its business in both the U.S. offshore market and in Latin America. With recent key event sponsorships in Miami, Panama, and Uruguay so far this year, and with further plans for fund manager road shows and marketing initiatives in both the U.S. and Latin America, the Aberdeen team continues to make headway.”
Because of Aberdeen’s continued commitment to Latin America, it is timely to announce that on June 30th and July 1st 2015, Aberdeen’s Don Amstad, Director of Business Development – Asia, will be traveling to Uruguay and Chile for further updates on the firm’s Asian fixed income and multi-asset capabilities.
For further information on Mr. Amstad’s trip to the region and for information on Aberdeen’s investment capabilities, please contact Andrea Ajila at andrea.ajila@aberdeen-asset.com
CC-BY-SA-2.0, FlickrPhoto: Chris Potter. Three Reasons the Dollar Should Stay Strong
After a decade of weakness, the U.S. dollar has appreciated strongly over the past couple of years, with a particularly strong surge in the first three months of 2015. Some market observers have begun to wonder if the rally has run its course. PIMCO doesn’t think so. “Although the currency markets will likely experience bouts of volatility, we believe the dollar should remain strong over the next several years. Here are three reasons why”, point out Scott A. Mather, Chief Investment Officer U.S. Core Strategies at PIMCO.
1) Diverging global growth and monetary policy trends
Recent economic data has raised some concerns that the U.S. economy may be cooling a bit. Nevertheless, we continue to believe the pace of growth in the U.S. will lead the developed world, while the eurozone and Japan will fall well short of self-sustaining growth.
On the policy front, the U.S. Federal Reserve has clearly signaled its intent to embark on a monetary tightening cycle in 2015. The first rate increase could come as early as June, though a disappointing jobs report for March and other soft economic data may make a September move somewhat more likely.
Other central banks, however, are on a very different path. Since December, a parade of some 27 central banks from around the world – including most major central banks, save the Fed – have eased monetary conditions by slashing policy rates toward zero or even below zero.
But importantly, global central banks aren’t just cutting policy rates; they are printing money through enormous quantitative easing (QE) programs. The European Central Bank (ECB) announced in January a €1.1 trillion QE program – much larger and more open-ended than the markets had expected. In December, the Bank of Japan redoubled its QE efforts by increasing its monthly purchases to ¥80 trillion. At this pace, the balance sheet of the BOJ will reach 70% of GDP by the end of 2015. So not only policy rate divergence, but also QE divergence, will drive the dollar higher compared with the euro and the yen.
2) The experience of past strengthening cycles
Moreover, it’s important to put the recent strength of the dollar in context. First, as Figure 2 shows, the dollar started from a multi-decade low relative to other major trade-weighted currencies. So while the recent appreciation has been impressive, the dollar has a long way to go given how low it started. Second, when the dollar appreciates, it is typically part of a multi-year trend. Again referencing Figure 2, previous strengthening cycles have occurred over many years with ups and downs along the overall path to greater strength. From 1980 to 1985, the dollar appreciated by more than 60%, and by more than 40% from 1995 to 2002.
Related to global monetary policy divergence, central bankers also recognize this imbalance and are choosing to hold more dollars than euros and yen. Remember, central banks rank among the biggest players in the foreign exchange markets and exert tremendous influence on perceptions in the currency market. To provide a frame of reference, central bank reserves totaled $12.6 trillion in 2013, according to the World Bank. Following the 2008 financial crisis, central banks made a concerted effort to diversify the foreign exchange reserves they hold away from the dollar. In 2009, the share of foreign exchange reserves held in euros had risen to 28%. However, with Europe’s debt crisis in 2010, the euro’s appeal as a reserve currency began to decline. Last summer, in an effort to fend off recessionary pressures, European monetary policymakers reduced the central bank’s deposit interest rate to less than zero for the first time in history. That, plus the ECB’s aggressive program of quantitative easing officially begun in March, has made the euro significantly less attractive as a reserve currency and heightened the dollar’s appeal.
Investment implications
So what does this mean for investors? “The dollar will likely continue to appreciate, though the extent and pace of further gains will depend in part on the timing of the Fed’s initial tightening move. Nevertheless, given current economic fundamentals, the divergence in global monetary policy, the length of prior dollar strengthening cycles and the dollar’s persistence and prominence in central bank reserves, we continue to favor the dollar relative to the euro and the yen in particular. For those investors who find global stocks and bonds attractive – and PIMCO does – then carefully consider the currency exposure, lest the rising dollar sink your global gains”, said Chief Investment Officer U.S. Core Strategies at PIMCO.
Photo: youtube. Pioneer Investments Launches Global GDP-Weighted Government Bond Strategy
Pioneer Investments has launched a Global GDP-weighted Government Bond strategy as an approach to sovereign debt management – shifting from a market-cap weighted approach to a Gross Domestic Product (GDP)-weighted approach, with the aim of delivering more yield without increasing credit risk.
Today’s complex macro environment presents a number of challenges for Global Government bond investors. The current investment landscape of record low yields is demanding a new approach from investment managers to Government Bond investing which provides more yield, more diversification and greater alignment to long-term economic growth.
“The biggest issuers of government debt have also compressed bond yields through their monetary policy and quantitative easing,” said Tanguy Le Saout, Head of European Fixed Income. “’Investors are not being sufficiently compensated for increased sovereign indebtedness by the current level of sovereign bond yields”, he added.
“We believe the solution is to move from a market cap based approach to sovereign bond investing to a new innovative approach based on the GDP weights of the G20 nations, raising yield and creditworthiness”, point out Le Saout.
The typical global government bond index uses a market capitalisation approach to index construction, meaning that a country’s weight in the index is dependent on the amount of debt that country has outstanding. However, that means that countries with very high amounts of debt outstanding receive a higher weighting in the index. With a GDP-weighted approach those countries exhibiting the largest GDP and fastest growth make up a proportionally bigger part of the index. We believe this new approach will prove appealing to institutional investors who are concerned about the indebtedness of sovereign entities worldwide.
‘’We believe that a Global Government Bond strategy investing in future growth instead of past debt is a viable solution for fixed income investors seeking higher yields and more diversification,’’ said Le Saout.
For those countries where investing in cash bonds is not an option (such as China, South Korea and India), Pioneer Investments’ unique innovative approach will aim to synthetically replicate the index exposures of these key countries, using derivatives. Our long-established derivative expertise and experience in investing in these markets will help us in this optimization process. The strategy will focus only on high quality investment-grade government bonds.
Today, the People’s Bank of China has announced the granting of a 50 bn RMB RQFII quota to Luxembourg.
The RQFII (RMB Qualified Foreign Institutional Investor) scheme was launched in Hong Kong in 2011 and has been expanded to other jurisdictions since 2013 enabling offshore RMB to be reinvested into the Mainland securities market.
Luxembourg Minister of Finance, Pierre Gramegna, said: “The granting of the RQFII quota again demonstrates China¹s recognition of the Luxembourg financial centre as one of Europe¹s main hubs for international renminbi business. We are proud to play such a significant role in the process of the internationalisation of the renminbi.
Luxembourg has made the UCITS a globally recognized brand and more than 67% of UCITS funds distributed internationally are based in Luxembourg. Luxembourg is the largest investment fund centre in the world after the US.
The RQFII scheme is particularly useful for fund managers who use Luxembourg as a platform for cross-border distribution. Major international and Chinese fund promoters had already set up RQFII funds through Luxembourg domiciled vehicles, using other jurisdictions’ quotas. Luxembourg’s European and global investor base will now be able to use the RQFII scheme directly to invest up to 50 bn RMB on the Chinese capital market.
Together with the designation of ICBC as RMB clearing bank in Luxembourg, the RQFII quota consolidates Luxembourg¹s prominent position as a leading
Lori Monaco, CFA, SVP Financial Advisor at Morgan Stanley. Following the Closure of RBC WM, Lori Monaco Continues with her Renowned Track Record at Morgan Stanley
Lori Monaco, a reputed wealth management industry professional in Miami, has been developing her professional career at Morgan Stanley since January this year, following over 10 years at RBC Wealth Management. According to industry sources, who have confirmed the appointment, Morgan Stanley has acquired about 80% of the assets of RBC Wealth Management’s Miami office, which has been closed, along with the international private banking offices of the Canadian bank in USA.
Lori Monaco, Senior VP Financial Advisor at Morgan Stanley, attends to both domestic and offshore clients, and holds a CFA degree, as well as being fluent in English and three other languages: Spanish, Portuguese, and French.
Monaco has worked at RBC Wealth Management from 2004 to January 2015. In fact, she was hired to establish the Broker Dealer business in Miami and was branch manager in this city from 2004 to 2006. She has always worked as Financial Advisor, advising on investment solutions for wealth management clients.
According to her LinkedIn profile, she previously held the post of CIO at Coutts USA International for a period of four years, and was responsible for the Advisory and Execution team in Miami, focusing mainly on non-resident HNW and UHNW clients.
Previously, from 1995 to 2000, she worked as Head of Research at Vestrust in Miami, covering Latin American Corporate Debt, specializing in the Media and Telecommunications sector. She had previously spent four years in New York as an analyst in the technology sector. Therefore, Lori Monaco has over 25 years experience in the investment and wealth management industry.
