Photo: Sailko. Miami Will Host The Family Office Super Summit 2014
More than 40 family offices will attend The Family Office Super Summit 2014, an event that will take place in Miami, during three days -from 11th to 13th November-, organized by Wilson Conferences & Miami Finance Forum.
The conference will take place at JW Marriott, in Miami, where dozens of single family offices, the largest multi-family offices and industry experts will discuss about direct invesments, co-investing and club deals.
Private equity executives and wealth managers will attend the conference also.
Among the speakers:
Michael Connor, Consolidated Investment Group
Elliot Dornbush, CV Advisors (En el Top 50 de Multi Family Offices MFO)
Following an explosive re-rating in 2013 that saw the Tokyo Stock Price Index (TOPIX) gain approximately 51% (in local currency terms), we have seen a reversal of Japan’s equity markets so far this year. This has led some investors to question the efficacy of “Abenomics.” With the recent announcement of Prime Minister Shinzo Abe’s revamped growth strategy, Kenichi Amaki, Portfolio Manager at Matthews Asia, believes it’s a good time to reassess the impact of his economic plan, and consider what the future may hold.
There are literally hundreds of components that comprise Abenomics but one successful area has been job creation. Since it took over at the end of 2012, the Abe administration has created more than 1 million new jobs, with more likely to come given the robust growth in job offers. Discouraged job seekers who had previously left the labor pool have begun to re-enter the workforce. Critics often note that many of these jobs are at the low end of the wage curve in primarily part-time jobs but for the incremental worker and the economy as a whole, a job at a low wage is better than no wage at all. Supported in part by these job gains, corporate earnings have remained robust. The bottom-up picture appears fine as better earnings and share price underperformance have made valuations in Japan that much cheaper.
Nevertheless, macroeconomic statistics point to some emerging challenges on the horizon, near term. Amaki notes that judgments should not be made based solely on the numbers from the first two quarters of 2014, as they are heavily distorted by the tax hike. However, it still would seem fair to say that the tax hike has dampened consumer sentiment while causing a stiff decline in real household incomes and spending. The major issue behind this is wage growth, which remains muted. Improved corporate earnings have led to wage increases at many larger listed businesses, but smaller and medium-sized enterprises, which employ the vast majority of Japan’s workers, have been more reluctant to raise wages. Wages remain the main hurdle on the path toward sustainable consumption-oriented growth and more concrete steps to address labor regulation must be undertaken.
Meanwhile, over the past year, inflation has turned higher. At the end of 2012, Japan’s consumer price index excluding fresh food—the Bank of Japan’s preferred inflation benchmark—was -0.2%. But by the end of 2013, that had advanced to +1.3%, quite a big change in just 12 months. According to Amaki, this transition to an inflationary environment is slowly starting to change corporate mindsets. In aggregate, Japanese companies have been sitting on piles of cash, which would lose value in real terms in an inflationary world. Share buybacks announced so far in 2014 have already surpassed 2013. We’ve seen companies raise dividends and more have started to set specific dividend payout ratios in lieu of “stable dividends” (i.e. investors get whatever companies feel like paying).
At the same time, measures to strengthen corporate governance are being put forth By the middle of next year, Prime Minister Abe intends to establish a corporate governance code that will require, amongst other things, stronger oversight by independent directors. Of course, better governance is no guarantee of success but it should, on average, improve the quality of decision-making that goes on inside Japanese board rooms.
The potential for productivity enhancement induced by better corporate governance is enormous. According to Kenichi Amaki, productivity improvements will be the most important driver of growth for Japan going forward. Currently, productivity of Japan’s manufacturing and non-manufacturing sectors, as measured by output per worker per hour, remains far lower than the U.S., as highlighted in the chart below. Why? Pretty simple: over a decade of deflation caused by oversupply. There are many sectors of Japan Inc. that remain simply too fragmented and companies have little or no pricing power. Such fragmentation causes duplication of capacity and development costs, while keeping competition unnecessarily high, lowering selling prices and profitability.
In addition to consolidation, the emergence of Internet-based services with disruptive business models can also make an impact on productivity. These new companies don’t carry the legacy costs that plague many incumbent players. Recently, there is evidence that risk-taking is creeping up as Japan’s entrepreneurs attract more capital. Through June, Japanese start-ups attracted 32% more investment from venture capital firms compared to last year. Despite this year’s stagnant markets, investor appetite for new IPOs has remained resilient and venture capital funds seek to seize this opportunity. A government initiative to allow state-owned universities to set up venture capital funds that will invest in the commercialization of innovative research is also being set forth.
Improving productivity in Japan will involve making many difficult choices. For many years, managers have opted to kick the can down the road. But there isn’t much road left anymore. “These developments have me feeling more optimistic over the prospects for Japanese companies over the medium term”, concludes Amaki.
You may access the full article by Kenichi Amaki, Portfolio Manager at Matthews Asia, through this link.
Photo: Mike Strande . Henderson Global Investors Completes Purchase of Geneva Capital Management
Further to the announcement on June 30, 2014, Henderson Global Investors has completed the acquisition of Geneva Capital Management. Founded in 1987, Geneva has assets under management (AUM) of $5.4 billion in US growth equities.
This is an important strategic milestone in the development of Henderson’s North American business, adding US equity investment capabilities and extending its US institutional client base. Clients representing over 90% of Geneva’s AUM have agreed to the transaction.
Geneva’s long track record managing US growth equities, underpinned by a disciplined and consistent investment process, fills an important capability gap for Henderson.
The transaction doubles Henderson’s number of US-based investment professionals and quadruples Henderson’s US institutional AUM to around $8 billion. It also brings proven institutional distribution capabilities to complement Henderson’s successful retail franchise, creating a well-balanced client base, split broadly equally between retail and institutional.
Geneva will continue to employ the same rigorous investment philosophy and process that has been in place since 1987. Its commitment to high quality investment strategy and attention to client service will remain unchanged, and it will continue to operate from Milwaukee, Wisconsin.
Nicholas Bauer, responsible for Geneva’s distribution, will now head US Institutional Distribution as part of an integrated team reporting to Chuck Thompson, Head of North American Distribution. Nicholas’s extensive institutional experience will be an excellent complement to Henderson’s growing North American distribution network.
Andrew Formica, Chief Executive of Henderson, said: “The acquisition of Geneva supports our growth ambitions as a global asset manager. It increases our assets under management in the US by approximately 50%, adds investment management expertise in US equities and extends our US institutional client base.
“Clients of both Henderson and Geneva will benefit by gaining access to a wider investment universe while being supported by the resources of a global pure play asset manager.”
Henderson’s North American business continues to grow rapidly, doubling its AUM since 2011. Its Henderson Global Funds mutual funds family reached $10 billion in AUM for the first time in May 2014.
TIAA-CREF announced that it has successfully completed its acquisition of Nuveen Investments, a diversified investment management company.
“The closing of this transaction marks an exciting moment in TIAA-CREF’s 96-year history as a financial services firm committed to making a difference for those who make a difference in the world,” said Roger W. Ferguson Jr., president and chief executive officer of TIAA-CREF. “The addition of Nuveen Investments to the TIAA-CREF family further strengthens our position as a leading provider of financial services by enhancing our ability to deliver strong financial performance and serve our clients for the next 100 years.”
“Our investment in Nuveen further strengthens and diversifies TIAA’s General Account, which serves as a foundation for the savings and lifetime income payments for millions of our participants,” said Robert G. Leary, executive vice president, TIAA-CREF and president of the company’s Asset Management business, which includes both TIAA-CREF Asset Management and Nuveen Investments.
“The complementary investment offerings and strong distribution network that Nuveen Investments brings to TIAA-CREF will allow us to offer our clients a broader range of expertise and investment options than ever before.”
The closing, in aggregate, creates one of the world’s largest and most diversified financial services organizations that:
Manages approximately $844 billion in client assets, including approximately $111 billion in alternative investments; serves more than 5 million individuals and more than 16,000 institutions; and, features a product line-up that spans the asset class spectrum and includes retail mutual funds, closed-end funds and commodity exchange traded funds totaling $194 billion of assets.
Nuveen Investments will operate as a separate subsidiary within TIAA-CREF, retaining its brand and multi-boutique operating model. Nuveen Investments’ leadership and investment teams will remain intact, with John Amboian maintaining his role as chief executive officer. Carol Deckbar will continue to lead TIAA-CREF’s core asset management business as chief executive officer. Amboian and Deckbar will report to Rob Leary.
“We are excited to officially become part of the storied TIAA-CREF family and to add our leadership and diversified investment strategies and solutions to the firm’s multi-boutique platform,” said Amboian. “Together, we have formed a strong relationship that positions us well for the future.”
As of June 30, 2014, Nuveen Investments’ assets under management rose to $231 billion, an all-time high for the company. In the June quarter, Nuveen Investments’ mutual funds garnered $1.7 billion of net new inflows, driven by flows into a broad range of municipal and taxable fixed income strategies, representing a mutual fund organic growth rate of 12.3 percent from the prior quarter. Nuveen Investments is the market leader in closed-end funds and remains a leader in the retail managed account arena. The firm has significantly expanded its offering of high-caliber mutual funds over the past six years, more than doubling the number of non-municipal bond funds that it offers.
TIAA-CREF acquired Nuveen Investments from an investor group led by Madison Dearborn Partners for an enterprise value of $6.25 billion, inclusive of Nuveen Investments’ outstanding debt. In connection with the transaction, Nuveen Investments’ outstanding term loans, totaling approximately $3.1 billion, were repaid in full. The transaction was financed using a combination of debt and equity. On September 18, 2014, TIAA issued an aggregate of $2 billion in surplus notes, the proceeds of which were used to fund a portion of the acquisition price and for general corporate purposes.
The completion of the Nuveen Investments acquisition follows the successful close of the TIAA Henderson Real Estate joint venture in April 2014, as well as several other TIAA-CREF acquisitions in recent years including Westchester Group Investment Management (2010) and GreenWood Resources (2012).
CC-BY-SA-2.0, FlickrBenjamin Hein. Benjamin Hein Will Join the BigSur Team as Chief Operating Officer
BigSur Partners has announced that Benjamin Hein will be joining the BigSur Team as Chief Operating Officer. He has over 20 years of experience in investment management and private banking.
Mr. Hein was previously President and Chief Investment Officer at EFG Capital Advisors where he lead the investment division, was responsible for restructuring the platform into an open architecture offering and creating US & offshore fund vehicles for private clients. Mr. Hein holds the CFA and CIPM designations and the CFP (R) certification.
Building the “best in breed” platform for global high net worth families has been BigSur’s focus for the last 7 years. As Chief Operating Officer at BigSur, Mr. Hein will focus on continuing to strengthen the platform by enhancing risk control and streamlining processes.
This is extremely important as BigSur continues to increase the number of private investment deals for our clients: in real estate, private equity, private debt, infrastructure and opportunistic lending. Given the diminishing value we see in traditional assets, these types of private investment will be an increasingly important part of our client portfolios.
Mr. Hein will also help management execute key initiatives to further expand our platform and global reach. Utilizing the expertise of Mr. Hein, BigSur plans to building upon the BigSur mission “to help our client-partners build, preserve, enjoy and transfer their wealth.”
Alfonso del Moral. Foto: InvestmentEurope. T. Rowe Price abre oficina en España con Alfonso del Moral al frente
T. Rowe Price has appointed Alfonso del Moral as head of Relationship Management for Spain and Portugal as part of its continued focus on the intermediary markets in Europe. He will also join the T. Rowe Price EMEA Executive Committee.
Del Moral joins from Dicania, a third party representative of international asset managers in the Spanish market, where he was the co-owner and director. Prior to this, Mr. del Moral held leading positions with Aviva Investors and Schroders in Madrid. Mr. del Moral has 15 years’ of investment experience, primarily working with international asset managers in the Spanish and Portuguese markets.
Peter Preisler, head of Global Investment Services, EMEA at T. Rowe Price commented: “Alfonso’s appointment further underlines our commitment to building a strong intermediary business across Europe. We have existing clients in Spain but the market has developed so strongly that we believe it warrants us having a dedicated team. Alfonso has extensive knowledge of the market and is well positioned to develop our relationships further. Spain and Portugal are important markets for us as we continue to build our intermediary business.”
Almost two-thirds of investors in Latin Americaprivate equity are forecasting annual net returns of over 16% in the next 3-5 years, according to the annual Coller Capital/LAVCA Latin American Private Equity Survey. This compares with just 23% of investors that expect this level of return from their global private equity portfolios (according to Coller Capital’s Global Private Equity Barometer).
For Latin American private equity investments outside Brazil, investors’ outlook is even more positive, with three quarters of them expecting net returns of over 16%. In terms of individual countries, Limited Partners (LPs) are most optimistic of all about returns from Colombia and Mexico, closely followed by Peru.
The pace of new commitments to Latin American private equity will remain strong in the coming year, with 78% of LPs maintaining or accelerating their commitments to the region.
More Latin America-based investors plan to increase than to reduce their target allocations to alternative assets (private equity, real estate and hedge funds) – and private equity receives the strongest vote of confidence, with 61% of Latin America-based LPs planning to increase their allocations to the asset class in the coming year. These plans are reflected in LPs’ hiring intentions; nearly half of investors will recruit new staff for their Latin America-focused private equity teams in the next 12-18 months. (Almost no investors expect to reduce the size of their teams).
The risk-reward equation for Latin American private equity as a whole is also improving, according to a majority of LPs. On the other hand, the risk-reward equation for Brazil specifically is seen as worsening, with almost twice as many LPs (42%) seeing a deterioration, compared with the 23% who believe the country’s risk-reward equation is getting better. (Interestingly, international investors are somewhat more optimistic about Brazil than their Latin American counterparts).
Coller Capital’s CIO Jeremy Coller commented:“Investors are signalling continued growth for private equity in Latin America. Their positive outlook is reflected in the attractive returns they expect, both from the region as a whole and especially from the less developed private equity markets of Colombia, Mexico and Peru.”
LAVCA President Cate Ambrose said: “The private equity and venture capital community in Latin America has become increasingly sophisticated in recent years. Not only are international investors growing their Latin America teams, but local investors are increasing their allocations to alternatives creating a dynamic environment for fundraising and investing.”
Both Latin American and international investors expect trade sales to become even more dominant as an exit route in the next couple of years. They think the second most common exit route will be secondary buyouts – followed in third place by IPOs. All these exit routes are expected to become somewhat more common.
You can find the whole report in the attached document.
London skyline. Guggenheim Securities Agrees to Acquire Lazard Capital Markets' London Operations
Guggenheim Securities, the investment banking and capital markets division of Guggenheim Partners, has announced the execution of a definitive purchase agreement to acquire the London operations of Lazard Capital Markets (LCM), expanding the firm’s international presence. Consummation of the transaction is subject to approval by the Financial Conduct Authority.
The acquisition, upon approval, would allow Guggenheim to conduct a range of sales and trading operations, with an initial focus on European corporate and sovereign debt and U.S. and foreign equities.
Guggenheim plans to operate the business under the new name of Guggenheim Securities International Ltd.
“We are excited to have the opportunity to extend Guggenheim’s products and services to clients in Europe,” said Alan Schwartz, Executive Chairman of Guggenheim Partners and CEO of Guggenheim Securities. “At a time when many European clients are looking to restructure and find funding in the capital markets, we believe that the client-focus partnership model that has served us so well in building our business in the United States will allow us to extend our growth throughout Europe, and this is an important step toward that.”
As part of the acquisition, Guggenheim is welcoming LCM’s team of 10 professionals, led by Duncan Riefler, who ran the LCM London office. He will report to Ronald Iervolino, Senior Managing Director and Head of Fixed Income, based in New York.
“My colleagues and I are looking forward to joining the Guggenheim team and providing the same world-class client service in Europe that has long been the firm’s hallmark in the rest of the world,” Mr. Riefler said.
Joining Mr. Riefler from LCM are David Corney, Phillip Bloch, Jay Larkin, Nannette Bax-Stevens, Piero Greco, Samir Patel and Alison Kilsby. In addition, Dennis McKenna and Tomas Mannion will also be joining the platform in high-yield trading and research roles, respectively, marking the start of the growth commitment from Guggenheim.
Before joining LCM, Mr. Riefler was a co-founder and partner of Sonas Partners in London, an independent brokerage focused on trading fixed-income securities. Prior to that, he had a 19-year career at Merrill Lynch with a number of roles within fixed income in New York and London. He holds a BA from Denison University.
CC-BY-SA-2.0, FlickrLanzamiento de drones BQM-74E desde USS Lassen. Página oficial de la U.S. Navy. Para reducir el coste de viajar en avión… ¿Eliminamos al piloto?
There has been much talk of the future of flight, with drones one day delivering packages to your house the latest example to generate headlines.
Now I don’t know about you, but I’m OK if the drone fails to deliver a package. However, I’m not so sure I want the drone failing to deliver me to my intended destination.
I prefer to have a pilot up front who has the same interest as me in having our plane arrive safely. As fabulous as technology is, I like the comfort of a professional being in control, just in case the technology does not work as planned. A malfunction or technical problem has never happened to any of us, right? So why worry? Wink-wink, nudge-nudge.
So, call me Mr. Belt and Suspenders. I like the security. And so do most investors who own passive funds. According to our survey, they buy for security, thinking passive funds are less risky.
Unfortunately, the pilotless passive portfolio is not less risky. Sure it costs a little less because it is entirely dependent on technology. But, contrary to popular opinion, a passive investment attempts to have the same risk as the index it is tracking. It can be just as vulnerable to risk as all technology can be.
For example, in the two most recent market crises, as with most bubbles, the index became overweight with the highest demanded securities, in this case, technology and financial services stocks. So passive funds tracking the S&P 500 Index also experienced the bubble. They were, on average, no safer than active funds. In fact, the average actively managed large-cap blend fund does a better job protecting clients than the passive large-cap blend fund when analyzing rolling 10-year periods.
Why? Because a pilot can make adjustments that a computer may not always be programmed to understand.
So when you get that chance to fly for a little less, make sure the flight is equally safe. Take the piloted portfolio.
Article by William Finnegan, Senior Managing Director, Global Retail Marketing, MFS
Diego Besga, partner at Team Real Estate Development. Courtesy photo. Cities North and West of Miami Are Attractive Real Estate Alternatives
The real estate industry in South Florida is experiencing a very sweet moment which is evident by the numerous projects approved and under development in the area, where cities like Hollywood and Fort Lauderdale are attracting prospective buyers looking for prices cheaper than what is currently available in Miami, said Diego Besga, COO and Business Development Director at Team Real Estate Development (TRED).
Markets emerging around Miami, such as in Hollywood, represent an opportunity for Team Real Estate, Besga pointed out. That is why they have leapt into investing in land in the heart of Hollywood, near the city’s main commercial area of shops and restaurants, and in close proximity to where the H3 Hollywood complex, a 15 storey building with 247 units, including studios and one, two, and three bedroom apartments, is being built.
“There is a group of buyers who don’t have access to the Miami market due to the prices that are being generated in the city.” Besga explained that these are buyers with budgets of less than $ 400,000 but who are looking for similar alternatives, and there are other cities in the south of the state where such properties are available.
Almost 50% of H3 Hollywood is already sold and buyers include mainly Argentines, Colombians, Russians, and Venezuelans, followed by locals and Canadians. To Besga, the price is very attractive at under $300 per square foot, while, according to data from Zillow Web which specializes in United States real estate, the average price in Miami currently stands at $379.
According to Zillow, the real estate prices in Miami rose by 10.6% last year, and are expected to rise this year by another 2.1%. Compare the $379 per square foot average price in Miami to the $159 per square foot average price in the metropolitan area of Miami-Fort Lauderdale. An average home in Miami is priced around $388,350, although the average selling price is $323,500, while the average rent is $2,200 per month in Miami and $ 1,800 in Fort Lauderdale.
For Besga, everything emerging north of Miami and west of downtown, as well as Miami’s Brickell area, is starting to become an attractive product, especially if the price is right.
As to whether Miami could be incubating a new real estate bubble, such as that suffered in the 2008 crisis, Besga emphasized that the situation is not the same. “I see a very strong market, for many years ahead. I do not think a new bubble is being created, amongst other things, because of the deposits required,” he pointed out.
Currently, most presale operations require deposits of 50% for closing, while a few years ago they were 10%.
Although Besga does believe that there will be a small price adjustment downward, he is convinced that nothing like 2008 will happen, because Miami is considered, especially by Latin Americans, as a safe place for protecting their wealth, and where it will continue generating value. “Prices are a little high, but not for a situation like that of 2008 to occur,” he said.
Team Real Estate Development (TRED) is a firm consisting of four Argentine partners, and which operates mainly in Argentina, and in the states of Florida and Georgia. Apart from the H3 Hollywood project, they have a wide portfolio of properties in both states, including rental properties, offices, hotels, and off-plan developments. In Fort Lauderdale they have a new residential development on the drawing board, which they hope to start building in early 2015.
