Photo: Esparta Palma. Old Mutual Global Investors Introduces Team Based Approach to Fixed Income Range
Old Mutual Global Investors announces the introduction of a team based approach to managing its fixed income range of funds. This change mirrors the approach utilised by Russ Oxley and his team, who joined the company earlier this year. This development has also resulted in promotion for some members of the team, which aligns to Old Mutual Global Investors’ desire to offer career growth opportunities.
With the arrival of Russ Oxley and the Rates and LDI Team (initially titled Fixed Income Absolute Return Team) Old Mutual Global Investors now has a powerful 20-strong fixed income capability in two distinct teams. The two teams (Absolute Return/Rates and LDI – headed by Russ Oxley and Total/Relative Return – headed by Christine Johnson) will harness the skill set of each other’s experience continually, there will be synergies but the end result will be independent. These two teams will work collaboratively, sharing tools and discussing views. However, as there is no fixed income house view, each team will manage funds in line with their own investment process.
Stewart Cowley will leave Old Mutual Global Investors at the end of June 2015. Until that time, Stewart will support the business in the transitioning of the funds he has actively managed to the newly named teams stated above.
Julian Ide, CEO at Old Mutual Global Investors comments: “I am grateful to Stewart for the guidance and stewardship he has given to Old Mutual over the last six years and for the commitment he invested in building our powerful fixed income capability. He has made a vital contribution to our management teams over many years, and particularly since I joined the company. Stewart leaves with our gratitude and best wishes.
“I believe that we now have one of the industry’s most powerful fixed income capabilities led by two highly experienced fixed income leaders, Christine and Russ. The changes we have made to our funds will benefit our clients in the future. I am also pleased that we have been able to offer further career growth opportunities to Bastian, Hinesh and Lloyd,” point out.
Stewart Cowley adds: “I am immensely proud of what we have achieved at OMAM and Old Mutual Global Investors over the past six years. Bringing this group of people together has been one of the most important things I have done in my career. Achieving this whilst guiding clients through some of the most difficult market conditions I have seen in my time as a fund manager gives me a real sense of achievement. I wish Julian Ide and all the Old MutuaI Global Investors’ family well in the future.”
. Matthews Asia’s Sunil Asnani to participate in Miami Fund Selector Summit
Sunil Asnani, portfolio manager at Matthews Asia, is set to present views on the future of India when he presents at the Fund Selector Summit Miami 2015, at the Ritz-Carlton Key Biscayne on 7-8 May.
Continued reforms in the country, as well as monetary policy, will play their part in determining developments in the country’s equity markets through 2015. Asnani is set to focus on small and mid cap companies, and explain how he builds a portfolio for investors seeking exposure to the country.
Asnani joined Matthews Asia in 2008 as a research analyst. Previously, he was senior associate in the Corporate Finance and Strategy practice for McKinsey & Company in New York. In 2006, he obtained an MBA from The Wharton School of the University of Pennsylvania.
From 1999 to 2004, he served in various capacities, including as Superintendent of Police, for the Indian Police Service in Trivandrum, India.
The Funds Society Fund Selector Summit Miami 2015 will bring key fund selectors, primarily from the Miami area but also from other locations where decisions are made regarding the US Offshore market, together with top-performing Asset Managers to explore the latest portfolio management strategies and investment ideas. The Summit is designed specifically for key fund selectors who want to benefit from the knowledge of leading fund managers.
CC-BY-SA-2.0, FlickrPhoto: Kevin. Natixis Global AM: Emerging Markets are No Longer a Homogenized Asset Class
Commodity and currency pressures, economic slowdowns and structural reforms have been creating a divergence in emerging markets in recent months. All of this punctuates the fact that not all emerging market investments are created equal.
The nature of investing in emerging markets has changed significantly since the Great Financial Crisis, explains David Lafferty, Chief Market Strategist Natixis Global Asset Management. Through much of the 2000s, EM performance across countries was driven by several common factors including double-digit or near- double-digit growth rates, strengthening local currencies and growing exports – often coinciding with commodity demand.
No longer “one-size-fits-all”
Today however, these factors no longer dominate the EM landscape, points out Lafferty. Forecast gross domestic product (GDP) growth for EMs in aggregate is now closer to 4%–5%. The strong demand for commodities has collapsed and most EM currencies are under pressure due to the expectation of tighter U.S. monetary policy. In the absence of these macro themes, each country now trades based on its own fundamentals, not as part of a homogenized asset class. So we can expect the fortunes of each country to diverge due to differences in interest and inflation rates, domestic savings rates, current account position, and commodity dependency. As performance diverges, security, country and currency selection will all take on greater importance.
Because each country is now following its own path, the broad outlook for “emerging markets” is cloudy at best. U.S. dollar strength has brought back echoes of the currency crises of the 1980s–90s as dollar-denominated debt is harder to pay back. Local currency weakness creates inflation (i.e., imports become more expensive), and curbing that with higher rates hampers growth. Finally, falling commodity prices, particularly for oil, may severely weaken growth due to lower exports in major emerging markets like Russia, Brazil, Venezuela, the Middle East, and parts of Africa.
Long-term growth, short-term pain
Even so, on both the equity and debt sides, Natixis Global AM continues to view EM as an essential asset class for the long run. Cyclical growth rates have come down somewhat, but due to demographics and younger populations, most of the secular growth in the world today still resides in EM countries, explained the firm. Across equities, valuations may be deceiving. EM stocks have a lower relative Price-to-Earnings than other markets, but this is skewed by unique risk factors and state-owned enterprises. EM bonds still offer attractive yields, and credit quality has been steadily improving. While sovereign debt levels have grown, so has GDP, so debt remains manageable. Moreover, U.S. dollar strength isn’t the bogeyman many folks think, for several reasons:
Many EM countries now have local currency debt, not just U.S. dollar debt.
Weaker local currency boosts export growth.
As the EM consumer base grows, they contribute to their own economies and are less dependent on trade and external funding.
Mexico and India among favorites
In terms of specific markets, Natixis Global AM likes Mexico and India. Mexico is becoming more competitive thanks to structural reforms in energy and education, and its cost of production is becoming more favorable when compared with rising labor costs in Asia. Mexico also benefits from its proximity to the gradually improving U.S. economy. India has been slow to reform, but new government under Prime Minister Modi is rooting out corruption, reducing agricultural subsidies, and opening up industries to competition.
In contrast, Russia looks far more dicey as its economy collapses under the weight of global sanctions and falling oil prices. In this environment of currency and commodity volatility, the insights by experienced portfolio managers may be particularly valuable to investors.
Photo: Deurimpoyu. Allfunds Becomes Europe’s Largest Mutual Fund Platform
Allfunds has become Europe’s largest mutual fund platform, overtaking UBS, according to the latest annual edition of The Platforum “European Platforms and Open Architecture 2015 Guide”.
Platforum also revealed today that Allfunds has been recognised by asset managers for having the best potential for supporting their distribution strategies.
Platforum also suggested that the winners from upcoming MiFID II European fund regulations will be those platforms who not only provide excellent technical services for fund administration but also help asset managers with fund selection; a wide range of supportive management information and offer support in commercial negotiations – three elements in which Allfunds has strength in depth.
As the largest provider of mutual funds Allfunds believes it has become the irrefutable leader in ‘open architecture’ – the industry model which offers asset managers the opportunity distribute their funds more widely while offering financial advisers and their end clients a far greater level of choice than from proprietary platforms.
Allfunds focus on open architecture is complemented by the provision of independent research of the mutual funds it has on its platform – an area Platforum suggests will become ever more important with MiFID II. Unlike some research providers, Allfunds does not operate the ‘pay to play’ research model – which allows the largest and most financially strong fund groups to dominate its research agenda. Rather Allfunds seeks to fund its research activities from its adviser clients who aim to provide the widest range of fund choices for their clients.
Commenting on the Platforum’s findings, Allfunds Bank CEO Juan Alcaraz said, “It has taken 15 years from the foundation of Allfunds to get to the leading position in Europe. That has only been achieved because we have relentlessly pursued our belief in consumer choice through our open architecture model and by focusing solely on providing a robust business to business service to institutional clients in the financial advisory sector. Our approach to open architecture is complemented by our desire to offer information and independent research to our clients with a view of offering as wide a range of choice as possible.”
CC-BY-SA-2.0, FlickrFoto: José María Silveira Neto. Los fondos long/short de renta variable se perfilan como una alternativa para gestionar la volatilidad
Americans believe their investments will perform well this year, but are wary that a market correction could derail their financial security, according to survey findings released today by Natixis Global Asset Management.
“Most investors in our survey participate in retirement plans and say they’re on their way to a secure retirement”, said the survey.
“American investors have gotten used to excellent stock market returns in the last few years, so their view of financial markets is notably positive,” said John Hailer, chief executive officer of Natixis Global Asset Management for the Americas and Asia. “At the same time, many investors remember seeing significant losses in their portfolios after the global financial crisis. The missing piece is that many haven’t really planned, or prepared themselves emotionally, for another market setback.”
Fifty-four percent of 750 investors surveyed say their portfolios will perform better this year than in 2014, when the Standard & Poor’s 500 Index rose by 13 percent. At the same time, 67 percent say they feel powerless to protect their investments in the face of a severe market correction.
Rational exuberance?
Investors are pleased with their past returns and expect more of the same. Eighty-two percent of investors say they were satisfied with their gains last year.
Looking ahead, investors say their portfolios have to earn a return of an average of 10.1 percent a year, above inflation, to meet their financial needs. The S&P 500 gained an average of 9.5 percent annually, including reinvested returns, from 2005 to 2014. This 10-year stretch included deep losses from the global financial crisis.
Eighty-one percent of investors say their double-digit expectations are realistic.
Risk-taking rises, while planning lags
Most respondents (51%) say they’re willing to take more financial risk than they were a year before. Still, there are issues that could keep investors from making financial progress. They include:
Most don’t plan: Forty-nine percent of investors have financial plans. Fifty-five percent of those who work with advisors have plans, in contrast to 38 percent of non-advised investors.
Politics and the Economy: Investors say U.S. politics (50%) and a global economic slowdown (43%) could undermine their finances in the next year. In both cases, members of the baby boom generation (age 50 to 68) are the most skeptical; 64 percent cite politics as a worry and 61 percent say world economics.
Emotional decisions: Sixty-five percent of investors say they struggle to avoid making emotional decisions about their money during market shocks.
“Confidence has its limits,” Hailer said. “Investors are far better off when they have a plan – so they can prepare for the future and get through rough patches in the markets. Working with a professional financial advisor to build a more durable portfolio is the best way to get ready for those unforeseen events. Durable portfolio construction can help manage risk and reduce volatility to help investors stay in the market to meet their long-term goals.”
Most investors understand the value of advice. A majority (87%) of investors, including those who don’t consult with advisors, believe that getting professional financial advice is important in making investment decisions. Natixis encourages investors to work with an advisor to create a durable portfolio that can help manage risk and reduce volatility through a mix of alternative investment strategies working in tandem with long-only, traditional investments.
In fact, 76 percent of investors want strategies to better insulate their portfolio from market swings, and 83 percent desire strategies that offer a better balance between risk and return.
Alternatives to traditional strategies
Investors say they’re interested in strategies that don’t rely strictly on stocks and bonds. Sixty-eight percent say traditional investment approaches aren’t enough.
More than half (55%) say they invest in alternative asset categories, a group that includes hedge funds, private equity, commodities and long-short funds, among other investments. The total includes 76 percent of Generation Y (those age 18 to 33); 62 percent of Generation X (age 34 to 49); and only 32 percent of boomers. Yet most investors (73%) still perceive alternatives as riskier than other assets compared to 65 percent a year ago.
Retirement: Participation and perils
The survey found Americans are optimistic about retirement, their top financial priority, even as they expect to pick up most of the tab themselves, and as they foresee risks after their working careers.
Eighty-eight percent believe they will meet their retirement savings goals. They are being helped by enrolling in retirement savings programs such as 401(k)s; 67 percent participate in those types of plans.
“Most investors in our survey participate in retirement plans and say they’re on their way to a secure retirement,” said Ed Farrington, executive vice president for retirement at Natixis. ”While that’s encouraging, we should remember that about half of Americans still don’t have access to a savings program at work. As a nation, we need to give those workers better ways to invest in their futures.”
Almost two-thirds of Americans (63%) say the costs of retirement are shifting to individuals, away from the government and employers. They say 55 percent of their retirement income will come from their own efforts – saving, investing, selling a home or working after retiring. Of the rest, 36 percent would come from a pension or programs like Social Security and 8 percent from other sources.
Baby boomers are most concerned about financial risks in retirement. Of the perceived threats to retirement security, three stand out:
Long-term care: Fifty-nine percent of investors say the costs of basic needs in old age could endanger their financial wellbeing. Among boomers, that concern rises to 74 percent.
Uninsured healthcare: Fifty-seven percent of investors say medical costs represent a financial risk; the figure includes 71 percent of boomers.
Inflation: Forty-two percent say rising living costs could affect retirement; boomers again lead the pack, at 50 percent.
Market expectations for the next year
Investors say stocks will be the strongest investments in the next year. Forty-five percent of investors name stocks as the best asset class, followed by cash (17%), real estate (12%) and bonds (9%). Another 16 percent predict other categories of investments will do better.
Photo: El coleccionista de instantes. Central Banks Have Distorted Reality in the Volatility Market
The major impact of Central Banks actions all over the world has been a massive decrease of interest rates. This rates move has led to very good performances for bond investors, but reduced their potential of future returns. As a consequence, investors started to look for alternative yields, for example by allocating more risk to Equities, but also by selling volatility to extract the volatility risk premium and generate yield.
This is where Central Banks have distorted reality in the volatility market: volatility has become abnormally low and abnormally stable compared to the uncertainty over global recovery.
The consequence for the volatility market is that is at some point there is uncertainty regarding Central Banks (Tapering talks in June 2013 or more recently Fed Rates hike talks, or ECB QE), volatility can spike quite sharply, like we experienced in October 2014.
As Central Banks in general around the world will stay very accommodative in 2015, we at Seeyond expect volatility to stay artificially low in average, ie lower than where it would be otherwise, but with some key periods ahead (Fed rates hike, ECB QE effects, etc) we expect to see volatility short lived spikes few times in the coming year.
Simon Aninat, portfolio manager at Seeyond, subsidiary of Natixis Global AM.
Photo: Matthew Keefe. FINRA Board Approves Changes to Communications With the Public Rules, Trading Activity Fee
The Financial Industry Regulatory Authority (FINRA) announced that its Board of Governors has approved proposed changes to FINRA’s Communications With the Public Rules, as well as amendments to the Trading Activity Fee for firms with no customers that are engaged solely in proprietary trading activity for their own accounts.
The changes to the Communications With the Public Rules follow a retrospective rule review that was launched in April 2014, which was designed to assess their effectiveness and efficiency. The proposed rule changes are the first to be made to FINRA rules under the retrospective rule review program. FINRA will issue a Regulatory Notice in the coming months seeking comment on proposed changes to Rules 2210, 2213 and 2214.
“The proposed changes to FINRA’s Communications With the Public Rules will help ensure that these rules are meeting their intended investor-protection objectives by reasonably efficient means. FINRA also announced that it is proposing to tailor its Trading Activity Fee (TAF) to the business activities of proprietary trading firms with no customers,” said FINRA Chairman and CEO Richard Ketchum.
FINRA will issue Regulatory Notices soliciting public comment on a series of proposals, including:
Communications With the Public
The Board authorized FINRA to publish a Regulatory Notice requesting comment on proposed amendments that would eliminate certain filing requirements that present a low level of risk to investors, such as the filing requirements for generic investment company material and investment company shareholder reports, and make other changes to better align the requirements to the relative risks presented by specific types of sales material.
Trading Activity Fee
The Board authorized FINRA to publish a Regulatory Notice requesting comment on proposed amendments to the TAF for firms with no customers and are engaged solely in proprietary trading activity for their own accounts. The proposed amendments would exclude from the TAF those transactions executed on an exchange of which the firm is a member (including non-market-maker trades) provided the firm does not have customers and trades only for its own account. These proposed changes follow the SEC’s recent proposal to eliminate the registration exemption for proprietary trading firms that are members of exchanges but not FINRA.
CC-BY-SA-2.0, FlickrPhoto: Mark Moz. China for Sale?
Over the past few years, there have been questions about whether the “smart money” is leaving China. For example, high-profile, Hong Kong businessman Li Kashing has been reorganizing his empire to lighten the amount of Chinese property assets he owns, and refocusing on other parts of the world, principally Europe. So, is the smart money leaving? Well, in this case, it is hard to know, as it can be very difficult to separate personal issues from hard-nosed investment decisions or tactical shifts in allocations between regions.
In any case, mainland property assets are still a very significant part of Li’s wealth and in some cases, even though he has been shedding some property, associated companies still retain an interest in the management of those properties. More recently, too, other businesses with at least as strong a pedigree in China have been making significant acquisitions in their core businesses there, particularly in consumer-facing sectors. So, not all the “smart money” is necessarily moving in the same direction. There have definitely been some recent retrenchments from China by multinational companies. As American businessman Jeffrey Immelt has said, “China is big, but it is hard. Other places are equally big, but not quite as hard.” Sometimes it is easier for home-grown companies, focused primarily on their domestic market, to succeed.
Perhaps more significant are the recent sales by some Hong Kong banks of banking assets held on the mainland. Is this a way of taking some of the risk out of the balance sheets of Hong Kong banks? There has been some concern in recent years over the growth in loans to the corporate sector, and potentially in exposure to rising nonperforming loans on the mainland. Since last year, the Hong Kong Monetary Authority (HKMA) has been far more public about lending details of Hong Kong bank loans to Chinese corporates. Mainland assets at the end of 2013 had grown to 17% of Hong Kong bank assets. Hong Kong remains eager to grow its role as a financial center for China over the long term. But it seems apparent that the HKMA is at least somewhat concerned over the pace of growth of the mainland market and its ability to regulate such activity. In addition, some regional banks with mainland loans have been reassessing the risk of these assets, particularly among state-owned enterprises. But even here, though the near-term concern is over rising non-performing loans, this reassessment may be in part a symptom of the belief that these companies will become gradually slightly more commercial and lose some of the implicit backing of the state. Apart from the implications for banks’ risk, would that be such a bad thing?
Then there is the long term—who are the buyers of China’s assets. Well, I would argue—we are. U.S. investment in Chinese securities is at very low levels. According to Treasury data, less than 3% of U.S. residents’ holdings of foreign equities are in China and Hong Kong combined. Although the absolute level has grown throughout the 2000s, it is now little changed since 2010. And it makes sense from the point of view of diversification for the U.S. to be buying more Chinese assets and the Chinese to be buying more U.S. assets.
Let’s not forget that every sell is a buy – greater foreign ownership of China is likely to go hand in hand with greater China ownership of foreign assets– witness China’s investment abroad climbing from 2% of the world’s total (as of 2006) to nearly 6% as estimated at the end of 2013. Indeed, we have seen some Chinese insurance companies starting to buy real estate and other assets since China’s regulators made this easier in 2012. (New York’s Waldorf Astoria is now Chinese-owned.) Programs such as the development of the corporate bond market in China, the development of an over-the-counter market, the mutual fund industry, better regulation of and capital allocation by the Chinese banking industry and capital markets all has a dual purpose: not only to raise the efficiency and attractiveness of investing for domestic investors, but also to reassure and attract foreign investors. For it is only by achieving long-term demand for Chinese assets (alongside the significant demand for Chinese goods) that China is likely able to achieve international status for its currency.
So, is China for sale? Most assuredly yes. This partly reflects the decisions of some high profile businessmen, which grab headlines but which are an imperfect guide to the real trends. It partly reflects, one suspects, an attempt by regulators and banks to get a handle on growing mainland risk exposure. But it also reflects a natural trend of greater cross-border holdings of assets between China and the rest of the world. Over the long term, China will likely continue to be “for sale,” in my opinion, as demand for Chinese assets from foreign investors and central banks continues to grow. As always, it only really matters what price you pay.
Robert Horrocks, PhD, is Chief Investment Officer at Matthews Asia.
The views and information discussed represent opinion and an assessment of market conditions at a specific point in time that are subject to change. It should not be relied upon as a recommendation to buy and sell particular securities or markets in general. The subject matter contained herein has been derived from several sources believed to be reliable and accurate at the time of compilation. Matthews International Capital Management, LLC does not accept any liability for losses either direct or consequential caused by the use of this information. Investing in international and emerging markets may involve additional risks, such as social and political instability, market illiquidity, exchange-rate fluctuations, a high level of volatility and limited regulation. In addition, single-country funds may be subject to a higher degree of market risk than diversified funds because of concentration in a specific geographic location. Investing in small- and mid-size companies is more risky than investing in large companies, as they may be more volatile and less liquid than large companies. This document has not been reviewed or approved by any regulatory body.
CC-BY-SA-2.0, FlickrPhoto: Antonio Zugaldia. Move To a Tactical Neutral on Equities
The European equity rally is both impressive and entirely warranted. Investors had been very sceptical on Europe at the beginning of 2015 but they are now seeing the ECB’s bigger-than- expected Quantitative Easing in action as well as encouraging signs of an economic recovery.
The pace of European growth is now much stronger, mainly due to household spending which had previously been rather soft. And countries like Italy are also seeing an incipient recovery after a long period of stagnation. Economic activity is gaining traction and the most obvious signs of deflation are on the wane:
Bank lending has been stabilizing over the last two months after a long period of contraction;
After a spectacular collapse, Spanish property prices rose by 1.8% YOY in the fourth quarter of 2014.
We are confident in the outlook for earnings growth especially as we believe European company margins have genuine upside if the economy continues to grow at a reasonable pace.
Consequently, we are still overweight Eurozone equities despite the impressiverise. But our overweight is still likely to be adjusted from time to time to reflect mounting political risk in Greece. We continue to believe talks between European institutions and the new Greek government will end up succeeding but, in the meantime, the process is proving chaotic with Athens resorting increasingly to political provocation and not much European enthusiasm over reform proposals from Alexis Tsipras. All this suggests we should be more cautious. Nobody really knows how long Greece can continue to honour its commitments but the risk of a payment accident is rising all the time and that would obviously trigger market volatility.
Based on this scenario, we have moved to a tactical neutral on equities due to:
1. Less buoyant conditions in the US.
The US economy has lost some steam. Statistics have been hard to read due to another exceptionally severe winter but the question now is how the US economy will perform with a strong dollar, an energy sector forced to adapt to much lower prices and the failure so far of household spending to stage a strong recovery. Against all the odds, retail sales have not yet benefited from low oil prices. Consumers have chosen instead to save more over the short term.
Tame inflation and lacklustre economic conditions may push back the launch date for a rate hike but it is still on the agenda judging from comments from Fed committee members.
We are still optimistic on the US economy but we are moving out of a period when US growth was underpinned by very laxist monetary policy and into more uncertain territory with the likelihood of more orthodox monetary policy.
2. Uncertainties over the UK elections.
May’s parliamentary elections and the risk that a Conservative minority government will end up organizing a referendum on membership of the European Union can only introduce a local risk premium. We have accordingly reduced exposure to UK equities.
Regarding the bond market, we continue to prefer high yield bonds and Eurozone convertibles due to the ECB’s move on QE. This is encouraginginvestors to take on more risk to avoid negative returns. We remain cautious on US bonds. As Janet Yellen recently said, investors remain very sceptical on the Fed’s intentions and/or scenario.
Given today’s very low bond yields, investors will probably wait for clearer indications that inflation is returning, before selling the US bond market. Wages will be in focus. At the moment, the US yield curve is the steepest and therefore the most profitable among industrialized countries. We believe that the risk of wage inflation will be high in coming months and drive volatility in the US. Hence our decision to remain underweight US bonds.
Benjamin Melman is Head of Asset Allocation and Sovereign Debt in Edmond de Rothschild Asset Management (France).
. EXAN Capital Receives the Mandate to Sell Espirito Santo Plaza in Bankruptcy Process
Miami’s landmark Espirito Santo Plaza has been mandated to be sold in the bankruptcy process tied to the collapse of Banco Espirito Santo (BES). The mandate shall be carried out by Miami-based EXAN Capital.
Rio Forte Investments, the controlling entity of Estoril, Inc, (the asset’s owning entity), sought protection from creditors in Luxembourg in July of 2014, hoping to avoid a fire sale of its assets.
Banco Espirito Santo had to be rescued due to the debt exposure of firms related to the Espirito Santo family.
On August 3, 2014, Banco de Portugal, Portugal’s central bank, announced a €4.4 billion bailout of BES which heralded the end of BES as a private bank. The bailout was funded by the Portuguese Resolution Fund. The bank was split in two: a healthy bank known as Novo Banco, and the existing bank, where the toxic assets remained. Most of these toxic assets are held in Luxembourg by two holding companies: Espirito Santo Financial Group (ESFG) and its subsidiary Espirito Santo Financiere SA, where RIOFORTE and the associated Espirito Santo Plaza are held.
Immediately prior to seeking such protection, the mixed-use tower (offices, retail, and parking garage) had been all but sold to an investor identified by Miami-based EXAN Capital, a boutique Real Estate Investment Firm. That process came to a halt when the bankruptcy process began.
This week the court-appointed trustees in Luxembourg announced that EXAN Capital will lead the sale process, as they did once before, because of their deep familiarity with the building and the transaction. EXAN believes that with a court-mandated marketing process open to new bidders, in a strictly transparent and public process, creditors of Rio Forte will find the outcome more favorable than in the prior process.
The Plaza (at 1395 Brickell Avenue) is an iconic 36-story mixed-use tower that in 2012 was awarded the American Institute of Architecture’s highest honor for a commercial building in the state of Florida, being recognized as Commercial Building of the Year. Located in Miami’s thriving financial district (Brickell), the building’s designers (Kohn Pederson Fox) built the glass- curtain wall to contain its trademark arch, symbolizing both the building and the neighborhood being “Miami’s Gateway to Latin America.” With nearly 660,000 square feet of offices,retail, hotel, and 121 luxury condos, the Plaza will command a market premium as the irreplaceable asset that it is.
“The sale of the Espirito Santo Plaza will no doubt draw attention from both local investors and those from around the globe, as both recognize the rarely seen opportunity for what it is,” notes Adam Wolfson, SVP at EXAN Capital, who will be managing the sale process. EXAN reiterates the open and transparent process and encourages qualified bidders to contact them in their Miami offices for more information.
