How to Overhaul the Tried-and-Tested Investment Portfolio When Inflation Soars

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The tried and tested 60/40 formula for buy-and-hold investment portfolios got off to its worst start since World War II.

The 60/40 portfolio — split between the S&P 500 Index of stocks (60%) and 10-year U.S. Treasury bonds (40%) — fell about 20% in the first half of 2022, the biggest decline on record for the start of a year, according to Goldman Sachs Research. Such ‘balanced’ portfolios, meant to blend the higher risk of stocks with the relative safety of government bonds, often have different formulations, such as a mix of corporate credit or international stocks. But virtually all of them had one of their worst starts to a year ever, according to Christian Mueller-Glissmann, head of asset allocation research within portfolio strategy at Goldman Sachs.

Almost all assets were in a precarious position at the start of the year, as valuations for stocks and bonds were hovering around their highest levels in a century, Mueller-Glissmann says. Decades of tame inflation allowed central banks to drive interest rates ever lower to try to smooth out the business cycle, which in turn pushed assets from stocks to house prices higher. In fact, in the decade before the COVID-19 crisis, a simple U.S. 60/40 portfolio delivered three-times its long-run average for risk-adjusted returns.

And then 2022 hit. As consumer prices and wages accelerated, central banks like the Federal Reserve scrambled to reverse their policies. That resulted in one of the biggest ever jumps in real yields (bonds yields minus the rate of inflation).

As policy makers try to contain skyrocketing inflation, stock investors are increasingly concerned that those efforts will slow growth, potentially tipping large economies like the U.S. into recession. Indeed, investor concerns have recently shifted from inflation to recession concerns as soaring inflation expectations have fallen, but it might be too early to fade inflation risks, at least in the medium-term, says Mueller-Glissmann.

“In contrast to the last cycle, you’ve had a mix of growth and inflation conditions that are quite unfriendly,” Mueller-Glissmann says. Rising inflation weighs on bonds, as does monetary policy tightening (when central banks increase interest rates). This also means weaker growth, meanwhile, which is a headwind for equities, and equity valuations suffer from rising rates as well. “That is a backdrop that’s very bad for 60/40 portfolios, irrespective of valuations,” he said.

That means there’s less diversification potential between equities and bonds, as they have been more positively correlated this year — in fact this has been more often the case than not historically.

The outlook for the 60/40, however, might not improve right away, as long as inflation is percolating up and central bank tightening weighs on growth. “I don’t think it’s dead, because the current environment won’t last forever, but it’s certainly ill-suited for that type of backdrop,” Mueller-Glissmann says. “In an environment where you have both growth risk and inflation risks, like stagflation, 60/40 portfolios are vulnerable and to some extent incomplete. You want to diversify more broadly to asset classes that can do better in that environment.”

Real assets could be more important in a cycle where inflation is higher than the world has been used to over the past two or three decades. Things like residential real estate can generate profits that exceed inflation. Precious metals and even fine art and classic cars can help protect purchasing power when consumer and commodity prices are climbing quickly.

A portfolio with a slice of real assets, like gold and real estate, performed even better than the 60/40 over the long run. In that case the optimal strategic asset allocation since World War II was closer to one-third equity, one-third bonds and one-third real assets, Mueller-Glissmann says.

Investors have picked up on this shift. Instead of a tech startup that might not produce a profit until many years from now, investors are favoring companies that can already produce earnings and dividends. Warehouses have been a popular investment as e-commerce accelerates. Demand for companies that make battery storage has grown amid an increasing focus on renewable energy infrastructure.

But as recession risks rise, some real assets have also become more volatile in recent months. Nobel prize winning economist Harry Markowitz is credited with saying that diversification is the only free lunch in finance. Mueller-Glissmann says that principle applies to investing in real assets as well. They tend to be heterogeneous, with different risks.

“You want to have a bit of diversification within real assets as well,” Mueller-Glissmann says. Goldman Sachs Research has run the numbers and found that a roughly equal weight (about 25% in each) between real estate, infrastructure, gold and a broad commodity index has led to the best risk-adjusted performance in periods of high inflation. Allocations to Treasury Inflation-Protected Securities (TIPS), which were created in the late 1990s and are a more defensive real asset, can help lower cyclical risk while providing inflation protection.

Going forward, active portfolio management, allocations to alternative assets — such as private equity but may also include hedge funds — and new strategies for mitigating risk, like option hedges, are going to be more important in multi-asset investing, Mueller-Glissmann said.

“I would disagree that diversification is the only free lunch in finance,” he added. “But certainly it remains a core investment principle for any investor.”

 

Florida’s Governor Announces Initiatives “to Protect Floridians from ESG Financial Fraud”

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By Funds Society, Miami

Florida’s Governor Ron DeSantis announced legislative proposals and administrative actions “to protect Floridians” from the ESG movement, according the Florida administration web site.

“The leveraging of corporate power to impose an ideological agenda on society represents an alarming trend,” said Governor Ron DeSantis. “From Wall Street banks to massive asset managers and big tech companies, we have seen the corporate elite use their economic power to impose policies on the country that they could not achieve at the ballot box. Through the actions I announced today, we are protecting Floridians from woke capital and asserting the authority of our constitutional system over ideological corporate power.”

Governor DeSantis’ proposed legislation for the 2023 Legislative Session will prohibit big banks, credit card companies and money transmitters from discriminating against customers for their religious, political, or social beliefs; prohibit State Board of Administration (SBA) fund managers from considering ESG factors when investing the state’s money and Require SBA fund managers to only consider maximizing the return on investment on behalf of Florida’s retirees.

“The proposed legislation will amend Florida’s Deceptive and Unfair Trade Practices statute to prohibit discriminatory practices by large financial institutions based on ESG social credit score metrics. This “ESG score” is a framework created to force companies to meet ESG standards and arbitrarily includes metrics based on political affiliation, religious beliefs, certain industry engagement, and ESG benchmarks. Violations will be considered deceptive, and unfair trade practices will be punished according to the law”, the press release said.

At the next State Board of Administration meeting, Governor DeSantis will propose an update to the fiduciary duties of the State Board of Administration investment fund managers and investment advisors to clearly define the factors fiduciaries are to consider in investment decisions. Environmental, social, or corporate governance factors will not be included in the state of Florida’s investment management practices, the text added.

“Governor DeSantis will work with likeminded states to leverage the investment power of state pension funds through shareholder advocacy to ensure corporations are focused on maximizing shareholder value, rather than the proliferation of woke ideology”, concluded the statement.

Citi and Insigneo Complete Sale of Citi’s International Personal Bank Business in Puerto Rico and Uruguay

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By Funds Society, Miami

Citi and Insigneo closed the transaction under which the Miami-based independent broker-dealer and Registered Investment Advisor (RIA) acquired Puerto Rico-based broker-dealer Citi International Financial Services, LLC (CIFS) and Citi Asesores de Inversion Uruguay S.A. (Citi Asesores), an investment advisory firm in the country’s free-trade zone.

The transaction has received regulatory approval.

 

With the acquisition of CIFS and Citi Asesores, Insigneo will now exceed $17B in client assets and serve over 400 investment professionals. The acquired entities will continue to operate independently under the Insigneo brand.

“We’re prepared for a seamless transition of the businesses we are acquiring, and we welcome all incoming employees, investment professionals and their clients, to Insigneo’s growing independent platform,” added Raul Henriquez, Insigneo’s Chairman and CEO

Citi maintains all existing bank deposit relationships with wealth clients moving to Insigneo, which offers a broad spectrum of investment products and wealth management capabilities, according the firm information.

“Citi will continue to serve institutional clients through its Puerto Rico and Uruguay branches, as it has done so for the past 104 and 107 years; respectively. The U.S. Consumer Wealth team and the bank remain deeply committed to Latin America, where Citi has operated for more than a century and built an unmatched network across 20 countries. Citi’s U.S. Consumer Wealth business will continue to serve clients using the Citigroup Global Markets Inc. broker dealer”, the press release says. 

“The closing of the deal allows Citi to simplify its U.S. Consumer Wealth Management business model, focused on providing leading wealth management solutions through Citi Global Markets Inc. broker-dealer and investment advisor, while strengthening our banking relationships with our existing clients in Uruguay, Puerto Rico, and throughout Latin America.  In addition, it provides us an opportunity to expand banking services over time with Insigneo’s growing client base,” said Scott Schroeder, head of U.S. International Personal Bank at Citi.

The transaction is the latest in a series of ongoing strategic moves and acquisitions as Insigneo continues to execute on its business model, which received a boost with the recent $100M financing commitment by global investment firms Bain Capital Credit and J.C. Flowers & Co.


 

 

Secular Outlook 2022: Asset Class Return Forecasts for the Next Five Years

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Dividing a portfolio’s investments more or less evenly between developed market stocks and bonds has proved a rewarding strategy over the past few decades. The annualised return investors have secured by pursuing this approach has been in the high single digits – gains that have come courtesy of steady economic growth, an almost continuous fall in interest rates and inflation, and relatively calm financial market conditions.

Yet our forecasts covering the next five years indicate investors will need to plot a different course to achieve a similar result. This will involve allocating less capital to the developed world, increasing holdings of emerging market assets, and investing far more in alternatives, particularly commodities and gold.

Pictet AM

A key finding from our research is that returns from equity markets will fall victim to an unfavourable shift in the business cycle. The global economy is approaching the end of its post-Covid expansionary phase. Tighter financial conditions, a peak in US jobs growth and large output gaps all point to a recession this year or next. This has significant investment implications. There is a considerable difference between making an allocation to stocks in the lead-up to a slump and doing the same once recovery begins to take root. And that’s true even for those who invest over long time horizons.

Our analysis of the past 100 years shows that an initial investment in developed market stocks after the end of a recession delivers a price return of 10 per cent a year for the following five years; investing before a recession, as would be the case today, has by comparison typically delivered only a 4 per cent annualised return – a shortfall of some 6 per cent per year.

A key finding from our research is that returns from equity markets will fall victim to an unfavourable shift in the business cycle. The global economy is approaching the end of its post-Covid expansionary phase. Tighter financial conditions, a peak in US jobs growth and large output gaps all point to a recession this year or next. This has significant investment implications. There is a considerable difference between making an allocation to stocks in the lead-up to a slump and doing the same once recovery begins to take root. And that’s true even for those who invest over long time horizons.

Our analysis of the past 100 years shows that an initial investment in developed market stocks after the end of a recession delivers a price return of 10 per cent a year for the following five years; investing before a recession, as would be the case today, has by comparison typically delivered only a 4 per cent annualised return – a shortfall of some 6 per cent per year.

Another obstacle for developed equity markets is a looming squeeze on corporate profit margins. With wages and raw materials prices rising, more stringent regulations adding to the costs of doing business and the prospect of a rise in corporate taxation, margins can be expected to fall by a cumulative 10 per cent over the next five years.

But it is not only developed market stocks that will struggle to match their past performance. Developed government bonds will also labour to deliver what investors require of them over the next five years. Such securities have traditionally served as an anchor for a diversified portfolio – a crucial source of income and capital protection during periods of economic uncertainty.

Yet outside the US – where initial valuations for government and investment grade bonds are becoming more attractive thanks to this year’s spike in yields – returns from developed market fixed income will fall below inflation over the next five years.

To make up for the lacklustre returns and income on offer from the developed world, investors will have to strike a delicate balance. On the one hand, our analysis indicates that, on average, portfolios will require higher allocations to stocks and bonds from emerging markets, as well as commodities – riskier investments that offer higher prospective returns. On the other, it would be prudent to accompany this dialling up of risk with a higher allocation to assets that do not move in lockstep with mainstream stocks and bond markets, such as liquid alternatives, gold and private assets.

Within emerging markets, Chinese stocks look particularly attractive while emerging market bonds’ income-generating potential should grow, enhanced by what we believe will be a steady appreciation in developing world currencies.

Among alternatives, non-energy commodities look especially appealing; their returns should be in excess of inflation over the next half a decade.

Our analysis also shows real estate and private equity both outperforming developed market equities over our five-year forecast horizon. Allocations to gold and infrastructure, meanwhile, make sense at this juncture as a means to diversify risk and protect portfolios against the possibility of stubbornly high – or volatile – inflation.

Investors can remain faithful to the traditional balanced portfolio of mainstream bonds and stocks but, in doing so, accept a lower return and potentially higher volatility.

The next five years, then, present investors with a conundrum. They can remain faithful to the traditional balanced portfolio of mainstream bonds and stocks but, in doing so, accept a lower return and potentially higher volatility. Or they can take a less familiar path and allocate more of the capital to alternative assets. Our analysis suggests, the second option is the wiser course.

 

Opinion written by Luca Paolini, Pictet Asset Management’s Chief Strategist, and Arun Sai, Senior Multi Asset Strategist.

 

Download the full investment outlook to read more on this subject.

 

 

Information, opinions, and estimates contained in this document reflect a judgment at the original date of publication and are subject to risks and uncertainties that could cause actual results to differ materially from those presented herein.

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U.S. Energy Sector Poised to Regain Dominance

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Russia’s invasion of Ukraine has triggered plans by many oil and natural gas importing countries to curtail Russian imports and transition to what may be perceived as more reliable, less unsavory sources of supply, while accelerating their transitions to green energy – opening the door for the U.S. to re-emerge as the world’s dominant oil and gas provider, according to Preqin.

Reducing dependency on Russian energy will be onerous, particularly for Europe, which imports about 30% of its natural gas and 25% of its oil from Russia. So far, the U.S. and some EU countries have curtailed imports of Russian crude oil and if more countries follow suit, there will be strains in the global markets to adjust to accommodate a reconfiguration of the 5 million Bbl/d (barrels per day) of waterborne exports from Russia. Indeed, Russia’s oil tanker exports are being offered at a significant discount of roughly $30/Bbl to Brent, indicating that new buyers aren’t fully absorbing demand lost in the boycott.

Recent releases from the U.S. Strategic Petroleum Reserve (SPR) (30 million Bbl) and from international partners (30 million Bbl) provide minimal relief. Potential deals – if they could even be reached – with Iran (1 million to 1.5 million Bbl/d) and Venezuela (less than 1 million Bbl/d) would still not be enough to fill the void. If anything, the recently announced historic SPR release (1 million Bbl/d for six months) suggests that these deals are unlikely to be completed soon and emergency responses are needed to meet demand.

The war in Ukraine comes at a particularly vulnerable time of tight inventory and a low backlog of oil wells, with little room for disruption. According to the U.S. Energy Information Agency, prior to Russian sanctions, OPEC+ excess capacity stood at only 3%-3.5%, or roughly 3-3.5 Bbl/d, down from about 8% to 9% in 2002. However, from recent discussions with energy officials in the Middle East, true spare capacity could be even lower at just 2.5%.

We believe OPEC+ will likely stick to its current plan and not increase output further, despite higher oil prices. This is because if the cartel decided to bring more volumes online, the investment community might react to the prospect of little-to-no spare capacity by sending oil prices even higher. Moreover, Russia is joint chair of OPEC+, leaving it unclear whether it will be able to fulfill its share of the cartel’s production.

The U.S shale industry – which produces both crude oil and natural gas – is well-positioned to increase production in the lower 48 states, but it will take time. During the last few years, energy producers curbed spending on new wells, following two mini U.S. shale boom and bust cycles, the latest causing roughly $55 billion of defaults. Responding to shareholder demands for strong investment returns, producers pivoted from a focus on production growth (“drill baby drill”) to one of capital discipline – maintaining modest leverage metrics and consistent cash returns on volume growth of just 0% to 5%.

As a result, exploration and production (E&P) operators face shortages in oil rigs (utilization is approaching 90%), frac fleets (which are completely sold out), and labor. E&P executives have indicated they could deploy more capital and maintain high profitability levels – thanks to improvements in drilling and completion technology – but estimate it will take them up to 12 months to increase current production volumes. In our view, the U.S. Shale “3.0 model” (e.g., spending within cash flow) of reliable production volumes and consistent cash returns could make U.S. energy attractive to countries overseas over the medium- to long-term.

Along with growth in U.S. shale production, Preqin expect recent geopolitical events and consequent rise in oil and gas prices to accelerate investments in green energy. As green energy becomes a larger component of the overall global supply, traditional U.S. oil and gas will likely remain a dependable baseload power source in the overall market.

Sculptor Jo Endoro to Present His Art at AM House Art Gallery in Miami

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After his ateliers in Pietrasanta (Italy) and Casa de Campo (Dominican Republic), sculptor Jo Endoro is ready to land in the USA. The inauguration of AM House art gallery (257 Giralda Ave, Coral Gables) is scheduled for April 30th, 2022.

For the Italian artist, who has been active in Europe, South America, and the USA, this is an important recognition, since his works will now be exhibited together with those of the caliber of Pablo Picasso, Salvador Dalí and Fernando Botero.

Jo Endoro was born as a sculptor, inspired by Canova’s neoclassical forms, reinterpreted using innovative techniques.

His works in marble and bronze are the offspring of a timeless gaze, capable of going beyond the noise of an exhausted present due to the persistence of appearing. “Being is timeless and Jo Endoro chases it” was written about the artist by Italian writer Francesco Mazza.

“I have always had an attraction for forms, for architectural forms, for everything that has a particular shape, starting with Greece, continuing with ancient Rome, and following with the Classicism of the 1700s. My whole vision derives from sculpture, which in my opinion is the greatest form of art because marble does not forgive any mistakes, it requires constant work with the material and absolute rigor in the realization. This concept can then be transferred to other disciplines” said Jo Endoro.

About the artist

Born as a sculptor, Jo Endoro has always been inspired by the neoclassical forms, that he reinterprets by using modern and cutting-edge techniques, using mainly in marble and bronze. Over the years spent in the Dominican Republic, he also devoted himself to painting, depicting the last famous classical and neoclassical sculptures of European art on recycled wood panels from the heart of the rainforest, through the use of mixed techniques.

Snowden Lane Partners Adds $350 Million Advisor Team

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Snowden Lane Partners announced that Andrew Randak has joined the firm as Senior Partner and Managing Director, alongside his colleagues, Nicole Boutmy de Katzmann and Kristian Sedeño, both of whom joined as Managing Director and Partner.

Together, they form The Mile Creek Global Group, based in Snowden Lane’s New York, Coral Gables and New Haven offices and overseeing $350 million in client assets.

Randak is a CFA and boasts nearly 30 years of industry experience. He provides sophisticated and unbiased advice to successful businesspeople, their families and their companies. Like Boutmy de Katzmann and Sedeño, he specializes in helping clients throughout Europe, North and South America manage wealth and tackle complex, cross-border issues.

Similarly, Boutmy de Katzmann advises families in Europe, Latin America and the United States, with expertise in multigenerational wealth planning, investments, philanthropy and gifting. Sedeño is a CPA and has also provided wealth management and private banking services to domestic and international families for over a decade.

“We were excited when Andrew, Nicole and Kristian expressed interest in joining the firm and are pleased to officially welcome them to the team,” said Greg Franks, Snowden Lane’s Managing Partner, President & COO.

“We have the utmost respect for Fieldpoint Private, as they have done outstanding work in our industry. We are fortunate to have The Mile Creek Global Group come on board and I’m looking forward to witnessing the big impact they will undoubtedly have at Snowden Lane,” he adds.

Prior to Snowden Lane, Randak and Boutmy de Katzmann each served as Managing Directors and Senior Advisors at Fieldpoint Private, while Sedeño worked as Vice President and Associate Advisor.

Randak began his career in private banking at The Chase Manhattan Bank. He spent two of his six years in Chase’s Santiago, Chile offices, where he managed the firm’s private client lending platform. In 2000, he joined Brown Brothers Harriman & Co. where he was responsible for wealth management and trust clients in South America. He moved to Fieldpoint Private in 2015 with a mandate to grow the firm’s wealth advisory and private banking business outside the United States.

Sedeño is a Certified Public Accountant and worked at PricewaterhouseCoopers (PwC) from 2009 to 2011. Following that, he joined Brown Brothers Harriman as an Associate, working with ultra-high net worth families in South America. Together with Randak, he joined Fieldpoint Private in 2015 to help build the firm’s global presence.

Boutmy de Katzmann’s career in global banking started at Republic National Bank of New York. With Republic, she served as an international private banker in Montevideo, Milan, London and New York. A few years after HSBC acquired Republic in 2000, Republic’s former senior executive team invited her to join them in forming a new firm, NuVerse Advisors, where she remained for over a decade. After NuVerse, she was a Senior Director in Oppenheimer & Company’s Private Client division for over three years.

Snowden Lane has 122 total employees, 69 of whom are financial advisors, across 12 offices around the country: Pasadena and San Diego, CA; New Haven, CT; Coral Gables, FL; Chicago, IL; Pittsburgh, PA; Baltimore, Salisbury and Bethesda, MD; San Antonio, TX; Buffalo, NY, as well as its New York City headquarters.

Thoma Bravo Makes Push Into Latin America

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Orlando Bravo, courtesy photo. , foto cedida

Thoma Bravo, a successful private equity firm focused on the software and technology-enabled services sectors with over $100B of AUM, is making its first foray into Latin America in the firm’s history. Orlando Bravo, founder and Managing Partner at Thoma Bravo, will be visiting Mexico City on April 28th and 29th to meet with local investors and share his vision on the software industry and its future.

Orlando Bravo told Funds Society: “Growing up in Puerto Rico, Latin America is near and dear to my heart. It’s a vibrant, dynamic market with an ever-expanding technology scene. We have been fortunate to have the confidence of several institutional and private investors in the region and are impressed by their investment programs. As the region grows, we are looking to create enduring partnerships with leading local investors which will allow us to further immerse ourselves into the region’s software and technology ecosystem. First on the list is Mexico City”.

Thoma Bravo has a more than 20-year track record of partnering with existing management teams of market leading, positive cash flowing and high margin software businesses. Leveraging the firm’s deep sector expertise and proven strategic and operational capabilities, Thoma Bravo helps to accelerate the company’s growth and innovation. The firm has acquired more than 375 software companies across a range of industries, including healthcare IT, security, financial technology, infrastructure and applications.

“The acceleration in digital transformation across all industries has underscored how essential software is for commerce and business continuity as well as its continued resilience,” said Jennifer James, Managing Director, Head of Investor Relations and Marketing at Thoma Bravo. “With our proven operational expertise, we see a tremendous opportunity to invest in profitable software companies with high revenue retention.”

Thoma Bravo is entering Latin America in partnership with Alpine Capital Advisors, a leading fundraising and advisory firm across the Americas with offices in New York, Santiago, Mexico City and Sao Paulo.

Venture Capital AUMs at Record High of $2 trillions

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Venture Capital assets under management (AUM) have experienced double digit annual growth in the 20-30% range over the past four years and now stand at a record high of $2trillions, according Q1 2022 Venture Capital Report by Preqin.

As the venture capital market matures, 14% of institutional investors are planning to commit $600 millions or more over the next 12 months, up from 10% during the same period last year and the only category that recorded more than 1% year-on-year growth, the report said.

Confidence remains highest in the North American and European markets. There has been a noticeable uptick in the proportion of investors targeting these regions, increasing from 53% to 59%, and 52% to 60%, respectively.

Investor interest shifts and dry powder grows

Experts highlight that amid market uncertainties and elevated asset valuations, investor interest has shifted to seed, startup and early-stage focused funds in search of opportunities, with nearly half (48%) of investors aiming to place capital in the early-stage strategy in the next 12 months, up from 40% in Q1 2021.

Venture capital dry powder has grown by $43.1 billions during the first quarter of 2022 to $478.5 billions. Early-stage funds’ dry powder increased by 24% during the first quarter of 2022. Now, early-stage funds make up around a third, or $168.6 billions, of total Venture Capital dry powder, making this the most significant specialized strategy in the risk world. Expansion/late-stage funds’ dry powder level, however, fell by 6% between Q1 2022 and FY 2021.

Kebelyn Lee, Associate Vice President, Research Insights at Preqin, says: “In spite of the sell-off in some of the more speculative technology stocks in the public equity market so far this year, there does not appear to be any immediate impact on venture capital activity. Fundraising came in slightly lower year on year but is still at a strong level given a strong base of comparison from 2021. Deal volume in APAC has been notably strong compared to North America and Europe in the last few quarters.” 

Larger funds pull ahead  

Venture Capital fundraising continued at a strong pace in Q1 2022. $54billions was raised by global Venture Capital funds in the quarter, an 11.1% rise on Q4 2021, but an 8.8% decline on the same period last year. The year-on-year decline is not a bad result given the strength of activity in late 2020 and going into 2021.

Despite a strong fundraising record, VC investors’ concerns over asset valuations, competition for assets, and the Russia-Ukraine conflict remain relevant.

In Q1 2022, just 202 funds were raised—the lowest number of funds raised since 2017—implying that investors are putting their trust and capital in larger and more experienced VC managers.   

Given the global average venture capital fund size in Q1 2022 jumped from $126.9 millions to $267.3 millions quarter-on-quarter, investors are clearly demonstrating a preference in larger funds. 

This trend is especially obvious in North America and Europe, which saw a 190% and 48% increase in average fund size during Q1 2022. Globally, there has also been a drop in planned commitment below $50 millions.

Morgan Stanley Investment Management Expands Latin America and US Offshore Sales Team in Mexico

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Denise Casellas and Jennifer Romero have joined Morgan Stanley Investment Management as part of the Latin America and US Offshore Sales team.

They will be reporting into Carlos Andrade, Head of MSIM’s Latin America and US Offshore Sales.

Denise and Jennifer will be responsible for relationship management in Mexico and other markets, they will focus on institutional and intermediary channels. 

Prior to joining the firm, Denise Casellas was a Business Development Executive for Vanguard in Latin America, servicing various clients including intermediary and institutional investors in Mexico and Brazil.

Previously, she was a Product Specialist at SURA Asset Management. Before SURA, she was at Santander Asset Management, serving as the link between Asset Management and the Private Bank. Denise has 14 years of industry experience.

Jennifer Romero was part of the Senior Equity Sales team at BBVA Mexico prior to joining MSIM. She was responsible for coverage of Pension Funds and other institutional clients.

Previously, she was an Equity Analyst for Qualitas Insurance Company. Jennifer has 6 years of industry experience.