Amicorp Capital Markets Latin America announced via LinkedIn through its Managing Director, Martín Improta, the hiring of Luis Gustavo Vernet as Commercial Director for Latin America.
“I have the pleasure and joy of sharing with you that the Capital Markets LATAM team of Grupo Amicorp is growing!! Welcome Luis Gustavo Vernet as Commercial Director of Capital Markets for LATAM,” wrote Improta on the social network.
As a subsidiary of Grupo Amicorp, Capital Markets offers a wide range of corporate management, fund, and capital market services to clients around the world.
The company highlights that its clients include intermediaries, corporations, small and medium-sized enterprises, and startups, to whom it offers local knowledge of the constantly changing rules and regulations, enabling them to carry out their activities without legal setbacks.
The group offers services in capital markets, funds, as well as global management and financial services in the markets where it operates.
Before taking on the challenge of leading the commercial direction for Latin America at Capital Markets, Luis Gustavo Vernet served as Coordinator for Latin America of capital market services at TMF Group, where he worked for nearly 13 years.
His experience extends to other companies related to financial services, and he is a graduate of the Pontificia Universidad Católica Argentina.
Citi has appointed Ignacio Gutiérrez-Orrantia as Chief Executive Officer of Citibank Europe Plc. (CEP). Based in Dublin, Ireland, Citibank Europe Plc. is one of Citi’s largest legal entities and its primary banking subsidiary in Europe. As explained by the entity, Gutiérrez-Orrantia assumes this role in addition to his current position as Head of Cluster and Banking in Europe, a role he has held since November 2023.
As Head of Cluster and Banking in Europe, Gutiérrez-Orrantia is responsible for managing Citi’s client relationships across Europe, overseeing all businesses, and maintaining a strong risk and control environment. As CEO of CEP, a vital part of his role will be to lead Citi’s European banking subsidiary and foster strong relationships with European regulators.
Gutiérrez-Orrantia has also been appointed Vice Chairman and member of the Supervisory Board of Bank Handlowy w Warszawie S.A. (Citi Handlowy) (MC: 3.43 billion USD). Additionally, Natalia Bozek, CFO of CEP and Europe, and Fabio Lisanti, Head of Markets in Europe, have been appointed to the Supervisory Board of Citi Handlowy. Citi Handlowy, a subsidiary of CEP, is one of Poland’s largest financial institutions.
Gutiérrez-Orrantia has over 30 years of experience in financial services. He has been with Citi for 20 years and was recently co-head of Citi’s Banking, Capital Markets, and Advisory business in Europe, the Middle East, and Africa (EMEA), where he led a team of more than 2,000 bankers across 54 markets. During this time, he has led some of Citi’s largest investment banking transactions in the UK and EMEA.
Following this announcement, Ernesto Torres Cantú, Head of International at Citi, stated: “The appointment of Nacho as CEO of Citibank Europe plc, in addition to his responsibility as Head of Cluster and Banking in Europe, combines the growth of our client business in Europe with the responsibility of having industry-leading risk and control, and managing our European legal entities. Nacho’s leadership in these critical areas of our business will support our simplification plans and ensure his accountability for all our activities in Europe. He is an exceptional banker, highly respected for the advice and insights he provides to clients. His experience, combined with the strength of Citi’s global network and services, ensures that we are well-positioned to build on the positive momentum we are achieving in Europe.”
For his part, Nacho Gutiérrez-Orrantia added: “I am delighted to be appointed CEO of Citibank Europe plc. We have exceptional talent here and employ nearly 18,000 people. Citi has a great opportunity to deliver our unparalleled global network to our European and global clients. I am confident that we will be the leading international bank in Europe.” Citi has had a presence in Europe for over 100 years and operates in 24 countries in Europe, serving clients in 18 more.
After months of rate cuts and positive inflows, the Peruvian mutual fund industry anticipates a strong 2024, and BBVA Asset Management is no exception. Leading the increase in AUM, according to the firm’s CEO in the country, Antonio Cevallos, the company is focusing on expanding the affluent segment through a comprehensive advisory model they call “prime banking.”
“We are the leaders in YTD growth, with over 25% growth in total AUM. For five months, that is a quite significant number,” the executive stated in an interview with Funds Society. One of the differentiating factors, he added, is that they reinforced their offering for the affluent segment, which they had previously only promoted “timidly.”
“We are putting a lot of focus on our affluent banking, prime banking,” he explained, adding that this involved a relaunch of the segment and a new internal structure. Rather than increasing their commercial or financial advisor workforce, the top executive described it as “creating not-so-large teams of advisors with more of an investment bias to support these prime bankers.”
Thus, with a mix of technology—anchored in the BBVA app—and advisors who incorporated more investment products into their portfolio, the firm redefined its offering for clients with a “more holistic focus.” The firm’s strategy is to offer financial and non-financial products, “with an advisory nuance,” through a team of specialized bankers and advisors.
The Conquest of the Affluent
For BBVA, this client segment includes those who fall below the traditional private banking range, which they designate at over $500,000. On average, Cevallos described, they handle between $100,000 and $150,000. The asset class bias, meanwhile, leans towards cash and fixed income.
And the results justify the effort. Of the net flows accumulated this year, around two-thirds come from prime banking. “It is a segment that has captured a significant portion of the AUM and is bearing fruit,” stated the CEO of the asset manager, adding that clients are valuing this “more holistic” proposal.
Moreover, it is a category with growth potential, according to BBVA AM. “In all mutual funds, our total number of clients is over 100,000,” he explained, while for the prime segment, they have “mapped” 35,000 clients.
This aligns with the historic strategy of the Spanish parent company, which has previously ventured into attracting retail investors. “We have been strong there and have gradually climbed up the pyramid,” the professional commented.
Other Focus Areas
Another segment they are looking at with interest is corporate clients, which involves managing companies’ cash.
“At other points in the cycle, they have been quite significant,” Cevallos described. During 2021 and 2022, the spread between funds and time deposits led companies to banks. Today, however, “we have started to see a return at the system level,” he said.
Currently, the segment values that mutual funds offer more diversified products with different terms. “That allows us to stay above what a traditional deposit offers,” at a time when mining companies, for example, which are significant in the Peruvian market, have “significant surpluses” due to a positive cycle.
At the product level, they are focused on defined-term products, mainly in dollars, taking advantage of the interest rate situation; and on complementing their product portfolio in currencies, terms, and global strategies, particularly in fixed income in dollars.
According to the latest data collected by Morningstar, in May, investors showed a positive sentiment, possibly driven by hopes of interest rate cuts and positive macroeconomic data on economic growth, investing 54 billion euros in funds domiciled in Europe. In terms of flows, this figure makes May the best month so far in 2024.
Among the trends observed in May, global equities strongly recovered from the previous month’s losses, with developed markets outperforming emerging markets overall. “Investors continued to anticipate interest rate cuts, despite the US Federal Reserve keeping interest rates unchanged once again in May, with Chairman Jerome Powell indicating that easing was postponed but not canceled. In fact, the decline in US inflation has stalled in recent months, highlighting that the final stretch towards 2% inflation will be difficult for the Fed. Conversely, in Europe, a more moderate narrative emerged, with the market anticipating the European Central Bank meeting in June where a rate cut was widely expected, though the path beyond this remains less clear,” Morningstar explains in its report.
Notably, long-term index funds recorded inflows of 33.1 billion euros in May, compared to the 20.8 billion euros gained by actively managed funds. According to Morningstar, last month, none of the broad global category groups experienced outflows from either passive or active strategies. “The market share of long-term index funds increased to 28.25% in May 2024 from 24.93% in May 2023. Including money market funds, which are dominated by active managers, the market share of index funds stood at 24.57%, compared to 21.78% 12 months earlier,” they indicate.
Regarding the major players, the data shows that global large-cap blend equity funds were by far the best-selling in May, with Mercer Passive Global Equity CCF raising 1.4 billion euros in new net funds during the month. “Global large-cap growth equity funds and US large-cap blend equity funds followed at some distance,” they add.
In the case of passive management, BlackRock’s ETF provider, iShares, topped the list of asset gatherers last month, with net inflows of 8.4 billion euros in May. The iShares Core S&P 500 ETF was the best-seller, attracting 1 billion euros. Capital Group and J.P. Morgan secured the second and third largest inflows in May, with 6 billion euros and 4.6 billion euros, respectively.
Analysis of Flows
In this context, it is noted that investors showed a very positive sentiment towards equities in May, with equity funds receiving 30 billion euros, the best monthly result in terms of flows since January 2022. “Passive strategies took the majority, with 20.3 billion euros in net inflows during the month. Nonetheless, active equity funds managed to capture 9.7 billion euros, ending a 14-month period of net monthly outflows. Global large-cap equity funds were by far the most sought-after products last month,” they highlight.
Regarding bond funds, they received 30.2 billion euros in May, the eighteenth month of positive flows in the last 19 months. It is noteworthy that both passive and active strategies shared the benefits, with net inflows of 12 billion euros and 18.3 billion euros, respectively. In this regard, the Morningstar report clarifies: the fixed-term bond category was the best-seller in May, followed by very short-term euro bond funds.
In contrast, May data shows that allocation and alternative strategies continued losing assets with net outflows of 4.1 billion euros and 1.2 billion euros, respectively, in May. “Allocation strategies have had only one positive month in terms of flows since December 2022. Meanwhile, alternative funds have experienced net outflows every month since June 2022,” they explain. On the other hand, commodity funds had net inflows of 515 million euros and, finally, money market funds lost 3.7 billion euros last month, “confirming a renewed appetite for risk,” they highlight.
Sustainable Investment
Lastly, the report notes that funds within the scope of Article 8 of the Sustainable Finance Disclosure Regulation had net inflows of 18.7 billion euros in May, the best monthly result since December 2022. “Global large-cap blend equity funds were the main driver, as well as global small- and mid-cap equity products,” it points out. At the same time, funds falling under Article 9 lost 617 million euros in the month.
As Morningstar explains, from an organic growth perspective, Article 8 funds showed an organic growth rate of 0.73% so far this year. On the other hand, products in the Article 9 group had a negative organic growth rate of 2.40% in the same period. Between January and May, funds not considered Article 8 or Article 9 under the SFDR had average organic growth rates ranging from 0.13% to 2.69%.
DWS has announced the appointment of Ulrich von Creytz as Head of Real Estate for Europe. Based in Frankfurt, von Creytz will report to Clemens Schaefer, Global Head of Real Estate, APAC, and Europe.
In his new role, Ulrich will leverage his extensive experience in client relations and deep knowledge of the European real estate sector, acquired over 20 years, to enhance the platform’s investment process, both in terms of client guidance and capital orientation. Supported by DWS’s thematic investment approach, he will drive the entity’s market positioning and strategy in the real estate segment, working closely with the European platform strategy, portfolio management, and transactions teams.
Ulrich joined the company in 2004 and has held several senior positions in the real estate sector. Most recently, he served as Head of Real Estate Specialists for EMEA, overseeing teams in Frankfurt and London. He has played a key role in growing client relationships, demonstrating his ability to align investment themes and product offerings with clients’ strategic investment goals. Additionally, as a board member for nearly a decade, Ulrich has been actively involved in investment decisions for two legal entities, in line with the strategy and within the parameters of DWS’s fiduciary duties to deliver the best results and performance for investors.
He will join DWS’s European Investment Committee and will retain his two board positions in Germany. Clemens Schaefer, Global Head of Real Estate, APAC, and Europe, stated, “I am confident that Ulrich’s extensive experience and strategic capability will have a positive impact on the investment process, aligning investment themes and sources of capital.” He added, “His strong relationships built through the platform, industry, and our investor base will play a crucial role in shaping the future growth of DWS’s European real estate platform.”
In the words of Ulrich von Creytz, the new Head of Real Estate for Europe, “This position is a great honor given DWS’s long-standing track record as a leading real estate investment manager in Europe. I am looking forward to defining an investment agenda focused on value creation and growth, aligned with our clients’ aspirations.” He added, “We are starting to see some attractive opportunities in European real estate markets. This is driven by a window of opportunity for investors willing to enter the market in the next 2 to 3 years, which we believe could benefit from the expected strong recovery.”
Ulrich holds a Law degree from the University of Freiburg, a Law degree from the Higher Regional Court of Berlin, a PhD in Constitutional Law from the University of Freiburg, and a Real Estate Specialist degree from the European Business School.
Amundi is committed to making its range of ETFs more competitive. The asset manager has announced that it has been adjusting management fees across a wide selection of its passive funds. According to Amundi, this move demonstrates its commitment to “offering investors industry-leading products that combine performance, diversification, and cost efficiency.”
Amundi’s position as a key player in the market allows cost efficiencies to be passed on to investors. They indicate that the fee reductions will apply to key exposures such as traditional and ESG U.S. equities, euro equities, U.S. government debt, and euro credit. This initiative aligns with Amundi’s goal of making diversified investment accessible to all types of investors.
Amundi ETF offers more than 300 ETFs covering various asset classes, geographies, sectors, and themes, enabling investors to find solutions tailored to their specific investment needs and objectives in a competitive manner.
“One of Amundi’s long-term commitments is to ensure that our clients benefit from our adaptability and innovation across our extensive range of ETFs, as well as from our economies of scale. We value the importance of cost efficiency in investment, and these reductions will help investors achieve their investment goals without compromising on quality. By reducing the fees on such a diverse range of ETFs, we are making it easier for investors to benefit from our extensive range of products,” explains Benoit Sorel, Global Head of Amundi ETF, Indexing & Smart Beta.
Independent investors consider themselves self-reliant; however, one in five finds value in human advice, according to The Cerulli Report—U.S. Retail Investor Products and Platforms 2024.
According to Cerulli Research, 22% state that it is important to be able to speak with a human specialist linked to their account, and another 33% say it is somewhat important to have this capability.
To convert these investors into formally advised clients, wealth management providers must successfully guide clients through their platform with targeted customer service offerings while removing key friction points between a client’s desire for greater financial advice and the platform’s ability to connect them with advisors who can provide it.
Apart from the importance of speaking with a human specialist, the majority are willing to pay for that privilege: 42% state that they would pay, at least to some extent, to speak with a human specialist.
Younger investors, who are the most inexperienced with self-directed investment accounts, are the most likely to offer to pay for periodic advice, with one in five stating it is very likely they would do so.
However, despite the high demand for human advice within self-directed platforms, only 39% of respondents have ever consulted an advisor.
Those with less than one million dollars in investable assets and those under 30 are the least likely to opt for this service. Low adoption is a significant hurdle for providers seeking to use human interactions as a foothold for more extensive financial advice delivery.
To facilitate this transition, platform providers must ensure that clients can easily contact specialists with questions as needs arise to foster relationship development.
“If a full-service provider’s goal in offering self-directed brokerage accounts is for those clients to eventually engage in advisory relationships, they must make those interpersonal services visible to these clients,” says John McKenna, analyst.
In this regard, McKenna emphasizes the importance of financial education.
“Early awareness, through targeted email campaigns and milestone notifications, can drive this awareness. With this increased awareness, clients are more likely to stay with the firm for future financial advice,” he added.
For large firms with multiple lines of business, the path to closer engagement can be very efficient if the walls between units are lowered.
“By identifying moments of greatest need, transitioning clients toward more advised relationships can lead to increased wallet share and a more harmonious one-stop-shop for all financial needs, creating loyal clients for decades,” concluded the analyst.
Asset securitization has had a significant impact on portfolio management and distribution, providing asset managers with an additional tool to diversify, optimize performance, and manage risk more effectively. This article by the fund manager FlexFunds explores how portfolio managers can use asset securitization to enhance the distribution of investment strategies, examining its benefits, challenges, and impact on capital markets:
Asset securitization
Asset securitization is nothing more than the process of transforming any type of financial asset into a listed security. Through this financial technique, exchange-traded products (ETPs) are created, acting as investment vehicles aimed at giving the underlying assets greater liquidity, flexibility, and reach.
FlexFunds, a leading company in the set up and issuance of investment vehicles (ETPs), defines asset securitization as a tool used by asset managers as a bridge to facilitate access to investors and foster capital raising for various investment strategies.
Among the main benefits that securitization offers to portfolio managers are:
1.- Increased liquidity: The securitization process of any asset results in a product listed on the stock exchange with an individual identifier (ISIN) that can be bought and sold through Euroclear and Clearstream, making it possible to hold it in an existing brokerage account.
2.- Risk diversification: By distributing the risks associated with the underlying assets among multiple investors, securitization helps reduce exposure to risk for any individual investor. This is especially important during times of market volatility.
3.- Access to international capital: Securitization facilitates access to international capital markets, allowing companies to attract investment from a global investor base.
4.- Centralized account management: Securitization can offer the advantages of centralized account management. It avoids the administrative redundancies of separately managed accounts and allows investors to access higher-ticket projects that they would not have been able to access otherwise.
5.- Protection of assets under the structure: Because the issuance is executed through a special purpose vehicle (SPV), the underlying asset is isolated from the credit risk that may affect the manager, and thus, the investor.
In general terms, asset securitization is a process that allows multiple classes of assets, liquid or illiquid, to be converted into listed securities. Additionally, it offers the inherent capacity of exchange-traded products (ETPs) to transform assets into “bankable assets,” understood as assets that acquire the capacity to be distributable on various private banking platforms, according to the specialized opinion of FlexFunds.
How can asset securitization help distribute your investment strategy?
Asset securitization plays a crucial role in the distribution of investment strategies internationally. Here are some ways this process can enhance these strategies:
Flexibility in strategy management: Securitization allows asset managers to access a broader range of assets that they might not otherwise have access to. This includes assets from emerging markets or specialized sectors that may offer higher returns but carry higher risks.
Facilitates complex investment structures: Through securitization, asset managers can structure more complex investment products, such as collateralized debt obligations (CDOs) or mortgage-backed securities (MBS), which attract different types of investors with different risk profiles.
Efficiency in distribution: Securitization facilitates the distribution of investment products in different jurisdictions, leveraging the infrastructure of international capital markets. This allows asset managers to reach a broader and more diverse investor audience.
Transparency and international standards: Securitization requires compliance with international regulatory and transparency standards, increasing investor confidence and facilitating the distribution of products in multiple markets.
Challenges of securitization
Despite its numerous benefits, asset securitization also presents several challenges that must be managed carefully:
Opacity risk: While securitization can disperse risk, it can also introduce complexities that make the products less transparent.
Regulation and compliance: The regulatory requirements for securitization can be complex and vary between different jurisdictions. Managers must ensure compliance with all applicable regulations, which can increase the costs and time needed to structure and issue securitized products.
Market risk: Although securitization disperses risk, the underlying assets are still subject to market risks. A deterioration in the quality of the underlying assets can negatively affect the performance of securitized securities.
The future of securitization in international capital markets
As capital markets continue to evolve, asset securitization will remain a vital tool for distributing investment strategies.
Regulations will keep changing: the securitization market has been subject to increased regulatory scrutiny in recent years, and this trend is expected to persist. As regulators gain a better understanding of the risks associated with securitization, they are likely to introduce new rules and guidelines to ensure the market remains stable and transparent.
Moreover, the growing demand for sustainable investments is driving the development of securitized products that incorporate environmental, social, and governance (ESG) criteria. Asset managers are exploring the securitization of green assets, such as renewable energy projects, to attract investors seeking to generate a positive impact along with financial returns.
In summary, asset securitization is a powerful tool that can enhance the distribution of investment strategies in international capital markets. By transforming any type of asset into listed securities, securitization improves liquidity, diversifies risk, and facilitates access to global capital. However, it is crucial to carefully manage the associated challenges, including transparency, regulation, and costs.
If you want to know how asset securitization can enhance your investment strategy and facilitate capital raising in international markets, contact the specialists at FlexFunds at contact@flexfunds.com
The outlook for lithium has become a topic of interest, given the mineral’s role in batteries, positioning it well to capitalize on trends in energy transformation and electric vehicles. However, inventories are weighing down the market, according to a recent analysis by Macquarie.
The commentary, signed by analyst Alice Fox, warns that the anticipated recovery in mineral prices this year has lost momentum sooner than expected. This is due to “insufficient supply being released at lower prices and the accumulation of raw material reserves dragging down the market.”
In March and April, there was a “strong seasonal recovery”in Chinese productin of carbonate and hydroxide, although it is estimated to have moderated in May, according to the analyst. This has led to an increase in lithium carbonate inventories, which now stand at 92,000 tons, their highest level since these data were first collected.
Additionally, Macquarie highlights that battery inventories in China slightly increased in March, despite original equipment manufacturers in the country seasonally increasing electric vehicle sales since the Lunar New Year.
Global sales of battery electric vehicles, meanwhile, increased by 10.6% between January and April, representing a “considerable year-on-year increase,” but also a “notable slowdown” compared to the 26.9% growth rate in 2023. Conversely, sales of plug-in hybrid vehicles increased by 49.7% between January and April, compared to 44.5% in 2023.
Looking ahead, Fox notes that “the pace of expansion in electric vehicle sales in China is expected to slow to 24.6% this year, from 30.2% last year. The Chinese market is maturing, with a penetration rate in cities of 67.9% in 2023, compared to the national average of 35.7%.” While total Chinese exports of such vehicles increased by 19.6% in the first quarter, exports to the European Union fell by 19.6% year-on-year in January and February.
“At this point, it is difficult to determine whether the reduction in exports to date is due to lower demand or a premature response to potential tariffs, which might need to be 40% or 50% for the market to become unattractive to Chinese exporters,” writes the analyst.
Regarding spodumene prices—a lithium aluminum silicate—they reached a high of $1,240 per ton in early May, 46% above their January lows, but have since lost momentum.
“Mainland China’s hydroxide and carbonate prices recovered marginally from their lows following the Lunar New Year holiday, driven by unconfirmed reports of an environmental crackdown on domestic producers, inventory replenishment, and concern over the cancellation of warrants in the GFE market for inspection. However, prices did not make significant gains and have recently weakened slightly due to increased inventories,” comments Fox.
RIA Scala Capital seeks to advise and educate its clients so they understand and are encouraged to invest in private credit, thus providing the peace of mind of achieving good returns, said the firm’s founding partner, Alberto Siblesz, to Funds Society.
“Although our portfolios can include fixed income, equities, ETFs, mutual funds, among others, we are strong believers in private credit. I feel more secure with private credit,” responded the executive who resides in Miami.
Siblesz also explained the “arduous” work done at Scala Capital to include alternative products in their portfolios. They conduct studies of private fund management firms in sectors such as real estate, private credit, private equity, and venture capital.
The firm emphasizes that there is a significant opportunity to invest in alternatives, but they also argue that financial education for clients is necessary due to the nature of these investments and the limited liquidity of the underlying assets in which these funds invest.
The RIA has a diverse client base, with 35% domestic market, 30% Venezuelans, 15% Peruvians, 10% Colombians, and 10% from other Central and South American countries.
“Latin Americans want more liquidity and less correlation with the markets,” and this way they can increase their exposure to alternatives, he assured.
Scala has $270 million under management, according to information provided to Funds Society at the end of April, and is looking to expand in South Florida.
A few months ago, they hired Estefanía Gorman and Nicolas Martinez.
“The firm seeks to continue growing with advisors who want to be independent and need some industry support,” concluded Siblesz.
