Foto cedidaIvo Frielink, director de Desarrollo Estratégico de Producto y Negocio y miembro del Comité Ejecutivo de Robeco.. Robeco nombra a Ivo Frielink director de Desarrollo Estratégico de Producto y Negocio y miembro del Comité Ejecutivo
Robeco has announced the appointment of Ivo Frielink as Head of Strategic Product & Business Development and member of the Executive Committee (ExCo), effective 1 March.
Karin van Baardwijk, CEO Robeco, said: “We are very pleased to have Ivo joining the ExCo and taking on this strategic position for our clients and Robeco. It also makes me proud that we are able to fill this position from our own ranks, which underlines the strength of our organization. Having worked closely with Ivo in the past, I have full confidence that the experience and insights he has gained over his extensive career will be a great asset that we can all profit from.”
Mr. Frielink, currently Regional Business Manager APAC at Robeco Hong Kong, will in his new role be responsible for further aligning Robeco’s product offering with its key commercial priorities and focus, as well as adding capabilities that complement the company’s current offering and drive Robeco’s strategic agenda.
He started his career at Price Waterhouse Coopers in 2000 and moved to Robeco in 2005, where he held different roles including Corporate Development. At the end of 2017, he moved to NN Investment Partners, where he served as Head of Product Development & Market Intelligence. After just over two years, he returned to Robeco, where he was appointed Regional Business Manager for APAC at Robeco Hong Kong.
Ivo Frielink, Head of Strategic Product & Business Development: “Having spent the majority of my career at Robeco, I am honored to be taking on this important position and working together with the ExCo members and all the different teams within Robeco. I look forward to connecting with and supporting our clients to achieve their financial and sustainability goals by providing superior investment returns and solutions. With Sustainable Investing, Quant, Credits, Thematic and Emerging Market Equities we have a strong suite of capabilities, and I look forward to aligning this even further with what our clients are looking for and where we can add value to them.”
GVA Management, in partnership with Leste Real Estate, announced the completion of a $380 million portfolio of Class B multifamily residential properties that includes five communities across Texas, Tennessee and South Carolina.
The acquisition, which includes 1,670 individual units in total, is one of the largest single transactions completed by Leste Real Estate to date and its first acquisition completed in 2022.
“Like many of Leste Real Estate’s community-friendly acquisitions, the buy will include significant value-add for the communities, including approximately $17 million allocated for renovations”, the statement said.
GVA, which manages more than 24,000 residential units throughout Texas and the southeastern U.S., will manage the portfolio and oversee value-add improvements.
Alan Stalcup, Chief Executive Officer at GVA, said, “We are thrilled to be adding these communities to our portfolio and look forward to a successful partnership with all our key stakeholders, most of all our new residents. All of these communities are in good markets and high-value neighborhoods. We are confident we can add value to and feel well positioned to execute our value-add plans on behalf of our partners and our residents”.
On the other hand, Josh Patinkin, Managing Director at Leste Real Estate added, “All of us at Leste have developed a view that acquiring strong communities like the ones in this portfolio represents a great way to position capital, especially in an inflationary environment like the one we are in.” Patinkin added, “Our multifamily portfolio is performing well and is now more diversified across a great mix of growing markets. We’re fortunate to have a great operating partner in GVA and truly value the trust and confidence our investors have placed with us as we make this investment together.
Founded in 2014, Leste Group is a global independent alternative investment manager. Through its U.S. offices in Miami and New York, the firm offers investors a diverse range of strategies across real estate, credit, venture, liquid markets and other alternative asset classes.
GVA Real Estate Group is an Austin, Tx.-based vertically integrated real estate company committed to creating value in the multi-family real estate sector. GVA specializes in conventional as well as affordable opportunities, paying particular attention to expanding sub-markets.
Eduardo Pérez Balli, banker associate in JP Morgan
Copyright: LinkedIn. Foto cedida
JP Morgan has recruitedEduardo Perez Balli in New York as banker associate for the Global Families Group.
“We are pleased to welcome Eduardo Perez Balli to the Global Families Group as a banker“, the company posted on LinkedIn.
Perez Balli comes from BlackRock where he was responsible for driving sales of active mutual funds and separate managed accounts with Citibanamex financial advisors in Mexico. In addition, he advised and supported Citi’s investment advisors and private banking bankers on indexed solutions and mutual fund products and supported the sales team leader as an internal contact for existing clients, according to his LinkedIn profile.
“He has vast experience as a wealth relationship manager supporting individuals and families domiciled in Mexico,” the company release adds.
Perez Balli will work with clients domiciled in Spain, according to the firm.
The advisor returns to JP Morgan after working in Mexico City between 2015 and 2019.
“I am very happy to share that I moved to New York City to join JPMorgan Chase & Co. as a banker associate in the Global Families Group,” the banker posted on the social network.
Precious metals can serve as a hedge against stock market tumbles, although in the medium term, they can reverse gains and cause significant losses. We should try to sell them opportunely.
Some of the falls or rises of the S&P 500 index, gold and silver, during 22 years, from January 2000, to February 2022, are outlined below. In the graph, the ones with the highest proportion are marked and numbered.
The economic recession that began in 2000 caused the 49% drop in the index①. Gold (gold line) and silver (blue line) mantained levels. S&P (white line) began to stabilize in 2003. By 2004, precious metals accumulated gains of 68%.
By mid-2006, the S&P 500 was up 64% from its 2002 low. Gold and silver extended gains to 234%, before falling 35% and 20%, respectively.
From that lowest level in mid-2006, and prior to the great crisis of 2008, silver rebounded 117% and gold 70%②, while S&P rose 25%.
The financial crisis of 2008 – 2009 produced huge losses across the board: S&P, -57%③; Silver, -56%; Gold, -25%
Thereafter, as equity markets compensate some of the losses, silver soared 441% to hit its all-time high of US$48, and gold surged 173%④.
Over the years, as the economy and stock markets improved, metals lost their shine. As of December 2015, silver accumulated losses of 72% and gold, 45%, from the highs of 2011.
Also at the end of 2015, the S&P lost steam with a drop of 13.50%. Gold and silver served as hedges, rallying 47% and 29%.
And again, during 2016, while the index rose, metals turned lower. Towards September 2018 and from the highest prices, gold lost 13%; silver, 31%. On this occasion, the drop in metals was anticipated to the 21% drop that the index would have.
From then until before the outbreak of the pandemic, the S&P rose 44%. It was a good period also for metals: silver, +44%; gold, +32%.
The start of the pandemic diminshed the index 36% and silver 29%. Gold resisted ⑤.
During the hard days of the pandemic, silver skyrocketed 141%. Gold rose 40%, to a new all-time high.
Still within the period of the pandemic, gold fell as much as 20%; silver, 25%.
While metals lost strength and fell, the index continued to climb to accumulate 114% until the first days of January 2022 ⑥.
And during this last phase in which the stock markets were affected by the mix of taking profits and the nervousness about the Russia-Ukraine war, the index has lost 12.50%, while silver and gold have risen a maximum of 9.3% and 6.7%, respectively. The reaction of precious metals has not been as good as on previous occasions; have not yet fully compensated for the losses the index, although it is true that the fall of the S&P 500 cannot yet be considered a crash.
In sum, beginning in 2000, the extraordinary gains in precious metals reversed the declines in the S&P 500, but over time, the improving economy and bullish markets meant the opposite.
For illustrative purposes only, the different percentages are shown in different time periods.
Pixabay CC0 Public Domain. ¿Será 2022 un año más “débil” en términos de negocio para las gestoras?
After a positive 2021 for European asset management driven by the recovery and strong risk appetite, the analysts of Bank of America think 2022 will be more challenging given conflicting messages on markets, growth, inflation, rates and COVID. In their last report, they reveal that they are taking a defensive approach at this stage in the cycle.
Sector valuation of 14x 2022 PE is optimistic as it is above the long-term average and implies 2021 trends continuing. The research shows that although a yield of 5% is supportive, there is downside risk to ratings given the long-term correlation between markets, flows and valuation. “We prefer to be defensive at this stage in the cycle and favor stocks benefiting from structural growth (passives, private assets), absolute/total return exposure, stable asset bases (wealth) and proven cost control”, it says.
Structural growth drivers
After rising 45% in 2021, Bank of America expects sector earnings to fall 5% in 2022 as operating margins compress by 1-2pp on cost growth normalization post lockdown, lower performance fees from cyclically high levels, and “slower net new money growth”. In this sense, their strategists forecast 3% net flow growth in 2022from 4-5% in 2021. “Given the pro-cyclicality of the sector and expected market pressure, there is also downside risk to valuation. We expect a wide valuation range between those with inflows and those without”, they add.
As for the key themes of the year, the report highlights four, starting by the continued structural growth for private assets as rates remain near historically low levels and investors seek higher returns through an illiquidity premium. The second one is increasing demand for absolute/total return through hedge funds to preserve capital and diversify in light of market risks.
The last trends into 2022 would be a rotation back to passive funds (including ESG) after a strong year for active; and importance of cost management to maintain operating margins given top-line pressures.
The analysts of Bank of America don’t forecast a negative scenario, but expect structural growth drivers to outweigh cyclical in 2022 as macro uncertainty rises and market beta comes under pressure. In this sense, they favor high quality, defensive stocks; and highlight that their buy ratings have average 27% total return potential.
“Our top picks are alternative & private asset managers, Italian asset gatherers and diversified firms with leading passive exposure. Our underperform ratings are ABDN, JUP and ASHM which face outflow pressure. We think their multiples are capped until flows inflect. We have Neutral ratings on SDR, DWS, N91 and Baer”, they conclude.
Foto cedidaSophie Del Campo, responsable de distribución para el Sur de Europa y Latam de Natixis IM. . Natixis IM nombra a Sophie Del Campo responsable de distribución para el Sur de Europa y Latam
To increase proximity with local clients and partners and meet 2024 development ambitions, Natixis Investment Managers (Natixis IM) continues to execute on its strategy to strengthen key business regions. In this context, the asset manager has announced the appointment of Sophie Del Campo as Head of Distribution for Southern Europe & LATAM.
In her new role, she will be responsible for expanding Natixis IM’s footprint in the Southern Europe & LATAM region andwill oversee Iberia, Italy, LATAM and US Offshore. She is based in Madrid and reports to Joseph Pinto, Head of Distribution for Europe, Latin America, Middle East and Asia Pacific, at Natixis IM.
“Sophie’s appointment contributes to reinforce our regional capabilities and reflects our commitment to keep closer to our clients and better meet their specific needs. Since she joined Natixis IM in 2011, Sophie has achieved significant milestones. She successfully led our development in Spain, she drove our expansion in Andes, Southcone, US Offshore, and more recently in Brazil”, commentedPinto.
He also claimed to be confident that Del Campo’s “strong leadership and experience” in business development across countries and client segments will help her to succeed in her new role and to achieve their ambitions in the Southern Europe & LATAM region.
Meanwhile, Del Campo said she is pleased to take on more responsabilities: “I am looking forward to pursue our goals, together with my team. Our purpose in Southern Europe & LATAM is to deliver high quality services to our clients and offer them the investments that suit their long-term requirements. We’ll accomplish that, by following a selective and diversified development strategy, leveraging on the high-value solutions from our affiliated investment managers. We’re committed to further expand into the Retail & Wholesale market through strategic distribution partnerships, and to increase our portfolio of large accounts”.
Del Campo has 20 year experience in the asset management and financial industry. She started her carreer at Deloitte Consulting Group and then worked at ING Direct to develop a mutual funds broker-on-line in Spain. In 2001 she joined Amundi in Spain where she led the wholesale distribution until 2006, and she became Head of Distribution for the Iberian market. From 2008 to 2011, she was Head of Spain and Portugal at Pioneer Investments. Del Campo was most recently Head of Iberia, US Offshore and LATAM at Natixis Investment Managers. She holds an Master in Finance from IEP Paris, and a Master Degree in Economy from the University of Sorbonne Paris.
Pixabay CC0 Public DomainDólares estadounidenses . Taper Tantrum
The U.S. stock market started 2022 with the S&P 500 hitting an intraday record high on January 4 as the Omicron variant’s disease severity was downgraded. The next day, when the minutes of the December 15 FOMC meeting revealed a tightening bias that included the “run off” of the Fed’s $9 trillion balance sheet, the financial markets turned negative abruptly. Stocks declined sharply and the ten-year U.S. Note yield spiked higher. ‘Taper Tantrum’ 2022 was underway.
So far, how does the May 2013 Bernanke quantitative tightening surprise compare? To date 2022, the S&P 500 is down 5.6% vs 4.9% in 2013 and the ten-year U.S. Treasury yield is 27% higher vs 35% in 2013. In 1955, Fed Chairman Martin said the Fed’s job is ‘to take away the punch bowl just as the party gets going.’ How will Jerome Powell compare to Paul Volcker? On Saturday, Oct. 6, 1979, Fed Chairman Volcker held an impromptu evening news conference, dubbed the ‘Saturday Night Massacre.’ Mr. Volcker declared war on inflation and announced the Fed’s monetary policy would now control interest rates by targeting the money supply, with markets setting interest rates. The post-war Keynesian era of big government run economic policy was fading.
Job creation estimates for the January U.S. payrolls report released on February 4 were far below the actual data as the labor market recovery strengthened and the Omicron surge slowed. Bottom line: the U.S. job market is tight and wages are rising. The FOMC’s December 15 minutes also said the job market is ‘very tight.’ The next inflation data release is the CPI estimated to have annualized at 7.3%, the largest rise since 1982 when Mr. Volcker was ‘slaying the inflationary dragon.’
Market volatility remained throughout the month of January, with the S&P 500 declining as much as 11.5% for the month, while the technology-heavy Nasdaq slid as much as 16%. The volatility spilled over into merger arbitrage markets where spreads widened as investors’ risk appetites were tested, and downsides recalibrated. Despite volatility in markets, widened merger arbitrage spreads, and regulatory setbacks, we come out of a challenging month optimistic about the opportunities ahead. M&A activity remains robust in 2022 including the announced acquisition of Activision by Microsoft for $74 billion, and the acquisition of Citrix Systems by Vista Equity for $17 billion.
January was a difficult month across the markets and convertibles were no exception. With growth multiples moving lower, many equity sensitive convertibles moved lower with stocks. Additionally, with interest rates rising, the fixed income equivalents in the market trended lower as well. While this hurt performance for the month, we believe it presents an opportunity as there are now some convertibles trading at more attractive levels than they have in some time, and underlying equity valuations have become more reasonable.
We are of the mind that security selection will be key to performance this year. Typically convertibles do well in a rising interest rate environment, but there are two factors that could cause things to be somewhat different this time. First is the large amount of convertibles with 0 yield and high premium. Most of these are trading below par and are now considered a fixed income equivalent. These will be weak in a rising interest rate environment as investors demand greater yield to maturity. Additionally, given the majority of convert issuers are growth oriented, a continued re-rating of growth stock multiples could weigh on the equity sensitive side of the market. Given that backdrop our focus remains on total return convertibles with some high conviction equity sensitive names.
______________________________________
To access our proprietary value investment methodology, and dedicated merger arbitrage portfolio we offer the following UCITS Funds in each discipline:
GAMCO MERGER ARBITRAGE
GAMCO Merger Arbitrage UCITS Fund, launched in October 2011, is an open-end fund incorporated in Luxembourg and compliant with UCITS regulation. The team, dedicated strategy, and record dates back to 1985. The objective of the GAMCO Merger Arbitrage Fund is to achieve long-term capital growth by investing primarily in announced equity merger and acquisition transactions while maintaining a diversified portfolio. The Fund utilizes a highly specialized investment approach designed principally to profit from the successful completion of proposed mergers, takeovers, tender offers, leveraged buyouts and other types of corporate reorganizations. Analyzes and continuously monitors each pending transaction for potential risk, including: regulatory, terms, financing, and shareholder approval.
Merger investments are a highly liquid, non-market correlated, proven and consistent alternative to traditional fixed income and equity securities. Merger returns are dependent on deal spreads. Deal spreads are a function of time, deal risk premium, and interest rates. Returns are thus correlated to interest rate changes over the medium term and not the broader equity market. The prospect of rising rates would imply higher returns on mergers as spreads widen to compensate arbitrageurs. As bond markets decline (interest rates rise), merger returns should improve as capital allocation decisions adjust to the changes in the costs of capital.
Broad Market volatility can lead to widening of spreads in merger positions, coupled with our well-researched merger portfolios, offer the potential for enhanced IRRs through dynamic position sizing. Daily price volatility fluctuations coupled with less proprietary capital (the Volcker rule) in the U.S. have contributed to improving merger spreads and thus, overall returns. Thus our fund is well positioned as a cash substitute or fixed income alternative.
Our objectives are to compound and preserve wealth over time, while remaining non-correlated to the broad global markets. We created our first dedicated merger fund 32 years ago. Since then, our merger performance has grown client assets at an annualized rate of approximately 10.7% gross and 7.6% net since 1985. Today, we manage assets on behalf of institutional and high net worth clients globally in a variety of fund structures and mandates.
Class I USD – LU0687944552 Class I EUR – LU0687944396 Class A USD – LU0687943745 Class A EUR – LU0687943661 Class R USD – LU1453360825 Class R EUR – LU1453361476
GAMCO ALL CAP VALUE
The GAMCO All Cap Value UCITS Fund launched in May, 2015 utilizes Gabelli’s its proprietary PMV with a Catalyst™ investment methodology, which has been in place since 1977. The Fund seeks absolute returns through event driven value investing. Our methodology centers around fundamental, research-driven, value based investing with a focus on asset values, cash flows and identifiable catalysts to maximize returns independent of market direction. The fund draws on the experience of its global portfolio team and 35+ value research analysts.
GAMCO is an active, bottom-up, value investor, and seeks to achieve real capital appreciation (relative to inflation) over the long term regardless of market cycles. Our value-oriented stock selection process is based on the fundamental investment principles first articulated in 1934 by Graham and Dodd, the founders of modern security analysis, and further augmented by Mario Gabelli in 1977 with his introduction of the concepts of Private Market Value (PMV) with a Catalyst™ into equity analysis. PMV with a Catalyst™ is our unique research methodology that focuses on individual stock selection by identifying firms selling below intrinsic value with a reasonable probability of realizing their PMV’s which we define as the price a strategic or financial acquirer would be willing to pay for the entire enterprise. The fundamental valuation factors utilized to evaluate securities prior to inclusion/exclusion into the portfolio, our research driven approach views fundamental analysis as a three pronged approach: free cash flow (earnings before, interest, taxes, depreciation and amortization, or EBITDA, minus the capital expenditures necessary to grow/maintain the business); earnings per share trends; and private market value (PMV), which encompasses on and off balance sheet assets and liabilities. Our team arrives at a PMV valuation by a rigorous assessment of fundamentals from publicly available information and judgement gained from meeting management, covering all size companies globally and our comprehensive, accumulated knowledge of a variety of sectors. We then identify businesses for the portfolio possessing the proper margin of safety and research variables from our deep research universe.
Class I USD – LU1216601648 Class I EUR – LU1216601564 Class A USD – LU1216600913 Class A EUR – LU1216600673 Class R USD – LU1453359900 Class R EUR – LU1453360155
GAMCO CONVERTIBLE SECURITIES
GAMCO Convertible Securities’ objective is to seek to provide current income as well as long term capital appreciation through a total return strategy by investing in a diversified portfolio of global convertible securities.
The Fund leverages the firm’s history of investing in dedicated convertible security portfolios since 1979.
The fund invests in convertible securities, as well as other instruments that have economic characteristics similar to such securities, across global markets (but the fund will not invest in contingent convertible notes). The fund may invest in securities of any market capitalization or credit quality, including up to 100% in below investment grade or unrated securities, and may from time to time invest a significant amount of its assets in securities of smaller companies. Convertible securities may include any suitable convertible instruments such as convertible bonds, convertible notes or convertible preference shares.
By actively managing the fund and investing in convertible securities, the investment manager seeks the opportunity to participate in the capital appreciation of underlying stocks, while at the same time relying on the fixed income aspect of the convertible securities to provide current income and reduced price volatility, which can limit the risk of loss in a down equity market.
Class I USD LU2264533006
Class I EUR LU2264532966
Class A USD LU2264532701
Class A EUR LU2264532610
Class R USD LU2264533345
Class R EUR LU2264533261
Class F USD LU2264533691
Class F EUR LU2264533428
Disclaimer: The information and any opinions have been obtained from or are based on sources believed to be reliable but accuracy cannot be guaranteed. No responsibility can be accepted for any consequential loss arising from the use of this information. The information is expressed at its date and is issued only to and directed only at those individuals who are permitted to receive such information in accordance with the applicable statutes. In some countries the distribution of this publication may be restricted. It is your responsibility to find out what those restrictions are and observe them.
Some of the statements in this presentation may contain or be based on forward looking statements, forecasts, estimates, projections, targets, or prognosis (“forward looking statements”), which reflect the manager’s current view of future events, economic developments and financial performance. Such forward looking statements are typically indicated by the use of words which express an estimate, expectation, belief, target or forecast. Such forward looking statements are based on an assessment of historical economic data, on the experience and current plans of the investment manager and/or certain advisors of the manager, and on the indicated sources. These forward looking statements contain no representation or warranty of whatever kind that such future events will occur or that they will occur as described herein, or that such results will be achieved by the fund or the investments of the fund, as the occurrence of these events and the results of the fund are subject to various risks and uncertainties. The actual portfolio, and thus results, of the fund may differ substantially from those assumed in the forward looking statements. The manager and its affiliates will not undertake to update or review the forward looking statements contained in this presentation, whether as result of new information or any future event or otherwise.
Pixabay CC0 Public Domain. El darwinismo digital está en un punto de inflexión disruptivo para los inversores
Internet connectivity and digital tools have transformed everything from retailing to how we watch movies, learn, order food, and experience healthcare, forcing countless companies across industries and sectors to evolve to new digital realities or risk extinction in an ongoing process that has come to be known as Digital Darwinism.
Now, this trend is at a tipping point that will make the disruption of the past two decades seem like table stakes, with myriad implications for investors
Today, software and hardware advances coupled with artificial intelligence (AI) have accelerated to such an extent that technology is creating unprecedented opportunities for innovation, impact and disruption across countries and economic sectors. This global phenomenon will sweep some businesses aside, allow others to gain dominant market share and impact the world’s geopolitical order. It’s also an opportunity for investors to profit from disruption and to contribute to positive real-world change.
This survival of the “digitally fittest” exposes weaknesses in firms lacking technological prowess while enabling others—sometimes small firms—to dominate. While Digital Darwinism to date has been most prominent in the consumer sector, now it is permeating everything in a moment of exponential growth, bringing society ever closer to what Ray Kurzweil calls Singularity, the moment where the power of man and machine converge.
The evolution is evidenced by the shortening life cycle of companies: The longevity of an S&P500-listed company was 30-35 years in the 1970s but is expected to shrink to 15-20 years during this decade, according to Huron Consulting.
Amid this paradigm shift, three trends to which investors should pay particular mind stand out:
Data and connectivity
Three decades ago, few people had Internet access, now 60% of people are online, accelerating disruption by generating 2.5 quintillion bytes of data daily. That data is being used to improve goods and services. The Internet of Things (IoT) highlights the pace of change, growing 9% in 2021 alone to 12.3 billion connections. More and more of the global economy is now digital: Within the MSCI All Country World Index, digital firms generated about $7.4 trillion of revenue in 2020 versus $2.2 trillion in 2001. That number is forecast to reach as much as $30 trillion by 2040, creating opportunities in everything from the metaverse to networking, connectivity infrastructure, semiconductors, cloud storage and cybersecurity.
Man-and-machine
This concept starts with the notion that the human body is hardware and DNA its software code. For example, the speed, innovation and collaboration that led to the rapid development of COVID-19 vaccines suggests scientists and technologists can meaningfully advance how we deal with all manner of diseases. Nanotechnology scientists are installing microelectrodes to help the blind see. Beyond health, the man-and-machine age holds vast potential too. As the metaverse blurs the lines between physical and digital experiences (spurred by Internet connectivity, virtual reality and the blockchain) shopping, entertainment, culture, and payments will be revolutionized. Imagine standing in your renovated kitchen before construction begins or test-driving a car at home. In education, students can be immersed in a culture or place. Imagine learning about the pyramids in Egypt by “visiting” one in the metaverse. Media, too, will change inexorably. Today in the US, consumers engage with 11 billion days of digital content annually and watch another 14 billion annual days of TV.
Climate tech
Addressing climate change is our biggest challenge today but it creates opportunities for investors to support positive change. In the year to June 2021, $87.5 billion was invested in firms combating the climate crisis, up from $24.8 billion the year before, according to PwC. As more capital is spent on the transition, significant investment will flow to technology innovators. US climate change envoy John Kerry forecasts that half of the cuts needed to achieve net-zero emissions will “come from technologies we don’t yet have.” Investors can support everything from AI-powered marketplaces for carbon offsets to improved power infrastructure.
All this could shake up the geopolitical world order as leading economies such as the US and China use technology to vie for dominance in the vital industries of the future, from making solar panels to semiconductors and robotics. As all this shakes out, there will be volatility as certain countries gain marginal power and advantages in particular sectors. On balance, however, I would expect to see the formation over time of stable global alliances that will facilitate disruption without onerous volatility.
These trends are challenging traditional equity investing approaches, as they too, after all, are not immune to Digital Darwinism. In this light, the evolutionary approach to buying stocks looks set to be thematic in nature, where investors can allocate capital via such themes as AI, the metaverse, clean-tech, healthy living, food security or water, instead of strictly based on industries, sectors or regions. This process could also help allocate capital more efficiently during the transition to a more sustainable world by allowing portfolios to invest for impact, both contributing to solutions while potentially benefitting from the volatility caused by the inevitable disruption.
A column by Virginie Maisonneuve, Global Chief Investment Officer Equity at Allianz Global Investors
As demand increases for ESG investing, several key trends are emerging—from climate change to human rights. The global pandemic, in particular, has turned the spotlight on the interconnectedness of sustainability issues and financial market performance. In this Q&A, we ask Thornburg’s Director of ESG Investing & Global Investment Stewardship, Jake Walko, for his insights on ESG trends that will emerge or continue in 2022.
As sustainable investing has become relatively entrenched in Europe and is becoming more mainstream in the U.S., many asset managers have been actively integrating ESG considerations into their investment processes. There are many ways to do this. What is Thornburg’s approach?
Our philosophy centers first and foremost around appreciating the complexity of the world and the ESG issues that exist. As investors with the goal of supporting the transition to a more sustainable world, the most important thing is the ability to determine the materiality of ESG factors—in other words, teasing out material ESG factors that stand to significantly impact a company’s long-term performance. In contrast to this, there are salient ESG issues that may be anecdotally and morally important, such as human rights issues, but do not currently impact the financial performance of a company in a consistent or well understood way. So, the question then becomes: How does one determine materiality?
At Thornburg, we think the best approach is to first leverage the expertise of the Sustainability Accounting Standards Board (SASB) as a starting point to guideustowardthemostmaterial and actionable ESG factors. From there, we overlay our own internal analysis and research to develop a holistic ESG viewpoint on individual companies we’re interested in.Due to our commitment to the ESG space, we have a team of ESG specialists that work collaboratively and organically with our investment team. As partners, our portfolio managers, analysts, and ESG specialists discuss how we can invest in a more responsible manner while simultaneously delivering excess returns for our clients.
How big of a role do you think ESG factors, such as climate risk, generally play in determining a company’s financial performance?
Carbon emissions are likely one of the most universally material current ESG factors that can alter a company’s ESG profile. In an effort to rapidly cut emissions, many countries are turning toward policy tools, such as levying a carbon tax, in order to encourage companies to adapt and make meaningful changes to reduce their carbon footprint. While the U.S. may not be close to imposing a carbon tax, American companies from all sectors are facing pressures to reduce emissions. In this instance, the combination of tighter government regulations and increased penalties has transformed climate risk into a source of business risk for companies, which then translates into a level of investment risk for investors as well.
From a financial-performance perspective, we do not expect ESG factors to have an immediate influence on a company’s stock—any related drag on a company’s earnings or share price will be fairly incremental, occurring over an extended period of time. The exception may be such unpredictable idiosyncratic risks as petrochemical disasters, like a major oil spill, which can result in short-term abnormal losses for a company.
How useful are third-party ESG data and ratings, and do you use them as part of your process?
As interest grows in ESG criteria, investors increasingly need a way to access an objective assessment of a company’s ESG performance. While we believe ESG data can be useful in helping investors identify financially material ESG risks to a business, there’s no single data point that can inform us whether a company is a good or bad ESG citizen. Accordingly, a comprehensive ESG assessment needs to incorporate both quantitative and qualitative information about a company’s current and forward-looking ESG strategy and goals. Managers with strong commitment towards ESG investing excellence, like the one we have at Thornburg, will be better positioned to do this and can provide a richer picture of a company’s current and future ESG impact. While we leverage third-party ESG data as a starting point, we rely on our own internal research to determine our forward-looking ESG viewpoints on companies.
For example, some companies that we see as opportunities may not be obvious “good” ESG companies today, but they have the potential to be tremendously impactful in the future when it comes to moving along such ESG goals as mitigating climate risk. We believe that understanding how a company helps the transition to a more sustainable future is more important than its ESG score or label at a particular point in time.
Do you see any transformative technological innovations on the horizon? What are the key opportunities and risks to keep an eye on?
Financial markets have witnessed a general mindset shift from concern around managing ESG risks to a more opportunistic and return-driven approach: finding companies that will take on the role of creating value in this sustainability era. We think there are many potentially transformative innovations scattered across a variety of industries that have the potential to solve huge sustainability issues.
As an example, there is strong demand for a wide variety of clean-energy technologies, and these will be needed to decarbonize many parts of the economy. The electrification of cars is a popular technology that has gained a lot of traction over the years, although other promising developments include the use of hydrogen as a renewable energy source. Hydrogen, when produced sustainably, can be used as a high-efficiency fuel that has little to no environmental impact. And wind, solar, and even nuclear energy are all opportunities on the table that deserve close attention.
Thornburg is a global investment firm delivering on strategy for institutions, financial professionals and investors worldwide. The privately held firm, founded in 1982, is an active, high-conviction manager of fixed income, equities, multi-asset solutions and sustainable investments. With $49 billion in client assets ($47 billion AUM and $1.9 billion AUA as of December 31, 2021) the firm offers mutual funds, closed-end funds, institutional accounts, separate accounts for high-net-worth investors and UCITS funds for non-U.S. investors. Thornburg’s U.S. headquarters is in Santa Fe, New Mexico with offices in London, Hong Kong and Shanghai. For more information, please visit www.thornburg.com.
Xavier Pardo Y Lelo de Larrea, Executive Director de Morgan Stanley
Copyright: LinkedIn. Foto cedida
Xavier Pardo Lelo de Larrea joins Morgan Stanley this Friday as Executive Director, according to BrokerCheck.
Pardo manages more than $300 million in client assets with about 40 high-net-worth and ultra-high-net-worth relationships, industry sources told to Funds Society.
He has more than 16 years of experience at Citi and was most recently Director of Wealth Management at the firm, according to his LinkedIn profile.
Pardo arrives to Morgan Stanley with a team of five Citi former advisors who work with clients in Mexico, Argentina, Chile, Ecuador and Central America.
The new team will review nearly a billion dollars in assets.
In recent weeks, several senior Citi officials have left the company after the firm announced its exit from the offshore Wealth Management business in Uruguay and Asia.
Michael Averett, Fernando Campoo and Alex Lago, also left the firm few days ago.
