On November 6th the AltsMIA Investment Forum will gather the industry’s leading experts across the alternative investment spectrum, at an event that takes place at the JW Marriott in Miami.
Developed by CFA Society of Miami, CAIA Miami, Miami Finance Forum, and MarketsGroup, participants will profit from the insights from experts in private equity, venture capital, real estate, hedge funds, cryptocurrency, artificial intelligence and…. learn all about the CASCAID Americas initiative.
The organization has kindly provided us a booth where we will answer all the questions about how to join forces through CASCAID Americas to benefit The Seed School of Miami, our charity of choice for this edition. Member from this amazing school will be with us to give first-hand information about the school and its needs.
This is just another example of how the asset and wealth management community get together to change the world for the better. We would like to give our very special thanks to CASCAID Americas Ambassador Karim Aryeh, who has made this possible.
To help CASCAID Americas reach its US$150k goal please donate here.
Nicolas Schreiber has joined Bolton Global Capital's New York City office. Schreiber, formerly with Morgan Stanley, manages $180 million in client assets. His international clientele includes high net worth individuals and institutions based in the US, Europe and Latin America.Schreiber began his career as a financial advisor with HSBC Private Bank in 2001 in Manhattan. Two years later, he moved to UBS International where he worked for 5 years until joining Smith Barney in 2008. Smith Barney was acquired by Morgan Stanley in 2009 where Schreiber has worked for the last 9 years before joining Bolton in October 2018. Custody of his client accounts will be through BNY Mellon Pershing.
Bolton recently opened an office on 5th Avenue in New York City to recruit Manhattan based advisors who wish to convert their practices to the independent business model. Since the financial crisis of 2008, several hundred teams have migrated their client accounts from the major banks and wirehouses to independent broker dealers and registered investment advisors like Bolton. Over this period, Bolton has recruited financial advisors with more than $5 billion in client assets from the major banks and wirehouses.
Bolton provides compliance, back office, and brand development support as well as the wealth management and trading technologies for its independent financial advisors. Under Bolton’s independent business model, advisors retain a much higher percentage of their fees and commissions and yet have access to all of the wealth management and trading capabilities offered by the largest firms.
Schreiber hold a bachelors degree in economics as well a CPA designation from the Catholic University in Argentina. He lives in Williamsburg in Brooklyn NY with his wife Florentine and two children Philippe and Melody.
"We are proud to have such a well respected professional affiliate with our company and look forward to supporting the continued growth of his wealth management business. Mr. Schreiber will operate under the trade name Nomad Advisors." Said Bolton in a statement.
Investors may be ready to abandon emerging markets, but the potential is there for a sizeable rebound. U.S. technology is once again ascendant. Since the fall of 2016, the S&P 500 Technology Sector Index is up nearly 70%; the tech sector now accounts for more than 25% of the S&P 500 market capitalization.
Despite the strength of the recent rally, tech enthusiasts will recall a long, long period of unpopularity. After peaking in early 2000, the tech sector lost more than 80% of its value. It then took 17 years until the sector reclaimed its 2000 peak. Investors in emerging market (EM) stocks should keep that history in mind as they go through a similar, albeit less prolonged drought. The MSCI Emerging Markets Index is trading at approximately the same level as it did in early 2010.
Value, or the lack thereof, played a part
Valuations in emerging markets never approached the Olympian heights that tech stocks traded at in the late 1990s. That said, valuations have played a part in emerging markets’ struggles.
Since coming out of their own financial crisis in late 1990s, emerging market stocks have tended to trade in a well-defined range versus developed markets: a 45% discount to a 10% premium (based on price-to-book). Periods when EM stocks traded at a premium, such as late 2007 and 2010, turned out to be market tops. Interestingly, EM’s recent 20% drop was not proceeded by egregious valuations. In January, EM stocks were trading at approximately 1.9 times x book, a 23% discount to the MSCI World Index.
Following the recent correction, EM stocks are trading at levels that preceded previous rebounds. EM equities are trading at roughly 1.55 times price-to-book (P/B), the lowest since late 2016 and a 35% discount to developed markets. Price-to-earnings (P/E) measures paint a similar picture. Current valuations represent a 33% discount to developed markets. Today, countries from Russia to South Korea are trading at less than 10x earnings (see Chart 1).Enlarge
Of course, valuations are never the complete story. In the short term, they might not even be that relevant. As I discussed back in August, an EM rebound probably requires two other components: a flat-to-cheaper dollar and signs of an economic rebound. On the former, emerging markets should be getting some relief as the dollar is now down nearly 3% from its August peak.
In terms of economic growth, the picture is more mixed. In late July it briefly looked like emerging market economies were growing faster than expectations. That rebound proved fleeting. Going forward, investors should focus on China, where efforts to accelerate the economy through monetary stimulus are accelerating. Typically, these efforts start to impact the real economy with a 1-2 quarter lag.
Continuing pressure on particular EM countries–notably Turkey and Argentina–are partially responsible for recent losses. Escalating trade frictions have not helped. Still, should the dollar remain stable and China begin to accelerate, valuations suggest the potential for a sizeable rebound.
For investors who have given up on emerging markets, it may be worth recalling that nine years after peaking, U.S. technology stocks were still down nearly 80%. From there the sector began a rally that has lasted more than nine years and resulted in a gain of more than 500%.
Build on Insight, by BlackRock written by Russ Koesterich, CFA, is Portfolio Manager for the BGF Global Allocation Fund.
In Latin America and Iberia, for institutional investors and financial intermediaries only (not for public distribution). This material is for educational purposes only and does not constitute investment advice or an offer or solicitation to sell or a solicitation of an offer to buy any shares of any fund or security and it is your responsibility to inform yourself of, and to observe, all applicable laws and regulations of your relevant jurisdiction. If any funds are mentioned or inferred in this material, such funds may not been registered with the securities regulators of Argentina, Brazil, Chile, Colombia, Mexico, Panama, Peru, Portugal, Spain Uruguay or any other securities regulator in any Latin American or Iberian country and thus, may not be publicly offered in any such countries. The provision of investment management and investment advisory services is a regulated activity in Mexico thus is subject to strict rules. For more information on the Investment Advisory Services offered by BlackRock Mexico please refer to the Investment Services Guide available at www.blackrock.com/mx. The securities regulators of any country within Latin America or Iberia have not confirmed the accuracy of any information contained herein. No information discussed herein can be provided to the general public in Latin America or Iberia. The contents of this material are strictly confidential and must not be passed to any third party.Investing involves risks, including possible loss of principal.International investing involves risks, including risks related to foreign currency, limited liquidity, less government regulation and the possibility of substantial volatility due to adverse political, economic or other developments. These risks often are heightened for investments in emerging/developing markets or in concentrations of single countries.This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are as of September 2018 and may change as subsequent conditions vary. The information and opinions contained in this post are derived from proprietary and nonproprietary sources deemed by BlackRock to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by BlackRock, its officers, employees or agents. This post may contain “forward-looking” information that is not purely historical in nature. Such information may include, among other things, projections and forecasts. There is no guarantee that any forecasts made will come to pass. Reliance upon information in this post is at the sole discretion of the reader. Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index.©2018 BlackRock, Inc. All rights reserved. BLACKROCK is a registered trademark of BlackRock, Inc., or its subsidiaries in the United States and elsewhere. All other marks are the property of their respective owners.USR0918U-610540-1900137
Various international independent trust companies with presence in the State of Florida gathered in 2013 to create Florida International Administrators Association (FIAA), with the common goal to support the enactment of modern legislation for foreign trust companies, throughout their affiliates, that engage in marketing activities in Florida. FIAA’s primary goal has been to obtain an approved new section in the Florida Statutes that defines and regulates a Qualified Limited Service Affiliate (QLSA).
FIAA’s founding members Citco Corporate Services Inc, CISA LatAm LLC, JTC Miami Corporation, Amicorp Services Ltd, Corpag Services USA Inc and Integritas Inc, have registered to become a QLSA and all have been granted such qualification by the Florida Office of Financial Regulation (FOFR). This qualification, which is imperative by law and provides adequate supervision, has been a fundamental step in the consolidation of the international fiduciary industry in Florida.
FIAA’s President Ernesto Mairhofer, Secretary Myriam Bril and the rest of the Directors, Emilio Miguel, Tony Valdes, Anthony Perea and Ewout Langemeijer, will carry out a series of events in the financial market of Miami with the objective of publicizing the new regulatory framework and ensuring that the trust services offered by international Trust companies are only through companies registered and approved by the FOFR, in order to preserve the good reputation of this sector and helping to maintain relations with the leaders of this industry.
Japan has overtaken Singapore to claim the top spot on the 2018 Henley Passport Index, having gained visa-free access to Myanmar earlier this month. Japan now enjoys visa-free/visa-on-arrival access to 190 destinations, compared to Singapore’s total of 189. Japan and Singapore have been neck and neck on the index since they both climbed to 1st place in February — following a visa-exemption from Uzbekistan — and pushed Germany down to 2nd place for the first time since 2014.
This quarter, Germany has fallen further to 3rd place, which it now shares with South Korea and France. France moved up from 4th to 3rd place last Friday when it gained visa-free access to Uzbekistan, while South Korea moved from 4th to 3rd place on 1 October when it gained visa-free access to Myanmar. Germany, France, and South Korea all have a visa-free/visa-on-arrival score of 188. Iraq and Afghanistan continue to hold the bottom (106th) spot of the Henley Passport Index, with only 30 destinations accessible to their citizens.
The US and the UK, both with 186 destinations, have also slid down one spot — from 4th to 5th place — with neither having gained access to any new jurisdictions since the start of 2018. With stagnant outbound visa activity compared to Asian high-performers such as Japan, Singapore, and South Korea, it seems increasingly unlikely that the US and the UK will regain the number 1 spot they jointly held in 2015.
Russia received a boost in September when Taiwan announced a visa-waiver for Russian nationals (valid until July 2019), but the country has nonetheless fallen from 46th to 47th place compared to Q3, because of movements higher up in the ranking. The same is true of China: Chinese nationals obtained access to two new jurisdictions (St. Lucia and Myanmar), but the Chinese passport fell two places this quarter, to 71st overall. This is still an impressive 14-place improvement over the position that China held at the start of 2017.
What has been most remarkable in recent years is the UAE’s stunning ascent on the Henley Passport Index, from 62nd place in 2006 to 21st place worldwide currently. The UAE now holds the number 1 passport in the Middle East region.
Christian H. Kälin, Group Chairman of Henley & Partners, commented on these developments: “The Henley Passport Index, which is based on exclusive data from the International Air Transport Association (IATA), is an important tool for measuring not only the relative strength of the world’s passports but also the extraordinary results that states can achieve when they work hand in hand with their global peers to build a more interconnected and collaborative world. China and the UAE exemplify this kind of progress, with both states among the highest overall climbers compared to 2017, purely as a result of the strong relationships they have built with partner countries around the world.”
It had seemed that the beginning of 2018 would mark a big milestone in the way the Mexican Pension Plans, or Afores, invest. At the end of 2017, the ‘Comisión Nacional del Sistema de Ahorro para el Retiro’ (CONSAR), or National Commission for the Retirement Savings System decided, among other things, such as making CERPI more flexible or including SPACs, to include Mutual Funds with active strategies as an additional investment vehicle. This decision was published in the official bulletin in January 2018.
As Carlos Ramírez, President of the CONSAR, commented, "When looking to invest with an international asset manager, we look for better yields and this is what we have seen with the mandates that have paid a good return... Mutual funds are a reflection of the mandates and what we are really doing is opening another option for investing abroad, especially with the small and medium Afores in mind."
However, in a recent interview with Funds Society, which will be available in the printed magazine this October, Ramírez commented that, unfortunately, this resolution has as yet not been implemented waiting for its authorization in a pending CAR, or Risk Committee meeting, "which would formally give life to mutual funds, and which to date was unable to be held for various reasons. I hope it can be achieved before the end of the administration so that we can see closure on an issue that we have been working on for a long time, which is a very deep analysis of the benefits of Afores being able to invest in mutual funds, and which we hope to be able to complete before this administration ends. It‘s practically ready, all that’s missing is that CAR meeting."
Meanwhile, Carlos Noriega Curtis, President of AMAFORE, told us prior to the Third Afores Convention that this meeting will most likely not go ahead until the next administration is in power: "If during the transition stage, within the next two months, there is communication between the incoming and outgoing governments, the CAR will meet, if not, it will meet as soon as it is able to do so following the transition." The executive added that they are watching very closely how the situation develops. "All the information has been prepared. We, as an association, have been supporting the importance, the necessity, and the convenience of being able to invest in mutual funds... we are convinced of this, and we are doing everything possible to achieve it," concluded Noriega.
CASCAID Americas is another example of the industry turning its attention to supporting others. It’s an initiative set up in 2017 in UK that brings the asset and wealth management community together to raise money for charities.
What is CASCAID Americas all about?
It’s really about bringing people together to support great causes whilst enjoying networking. It’s led by 30-40 Ambassadors – people from around the industry. Ambassadors range from CEOs of asset and wealth management firms to new graduates and Investment 2020 trainees.
On a practical level, Funds Society, with the help of MiP in the UK, sits at the heart of it, helping to organize events and with all the logistics (on a pro bono basis of course).
How do you raise money?
In any way we can think of! We will have one gala at the end of the fund raising period (June 2019), which is supported by investment firms. This can raise significant sums. Then we have other group events such as a darts evening, fun runs, wine tastings and sporting tournaments. And Ambassadors (and others) also do their own challenges – these are wide-ranging, from running marathons, to swimming lakes, to walking thousands of miles. Anything goes!
What charities do you support?
In 2017, CASCAID UK raised money for Cancer Research UK. The target was £1 million but it managed to exceed £2.35 million. For CASCAID Americas, based on the much smaller size of the offshore industry, we are setting an initial goal of US$150k, though we actually hope to beat our British counterparts, at least on a relative basis. For the 2018-2019 campaign CACSCAID Americas is raising funds for The SEED School of Miami. It’s important to remember that all monies go direct to SEED Miami – CASCAID Americas isn’t a charity itself, it’s just a brand name that acts as an “umbrella” to bring all our activities together.
Why The SEED School of Miami?
We want to help local charities with a strong social impact in our community. The SEED School of Miami definitely fits that bill – as South Florida's only public, college-preparatory boarding school, it impacts on the lives of the 210 young under-resourced students that are currently enrolled in the program, who spend 24 hours a day in a safe, structured and predictable environment from Monday to Friday —three healthy meals a day; consistent relationships with excellent role models; daily academic challenge and support; and extensive programs in athletics, visual and performing arts, and service. The national results for the SEED schools program speak for themselves. 90% of the students enrolled in 9th grade graduate high school; 93% of these student attend college with full scholarships, and 80% of these students are first generation college-bound students in their families
Can anyone get involved?
Absolutely! Everyone is welcome. If you’d like to get involved with CASCAID Americas, just email email@example.com and firstname.lastname@example.org We’re always looking for new Ambassadors and new ideas to raise money.
Geraci LLP is launching their Captivate East conference, a two-and-a-half-day event that melds high net worth individuals with top sponsors and event attendees. Captivate East will take place from October 16-18, 2018 at the Fontainebleau Miami Beach, a world-renowned resort where modern luxury is met with glamour. But what will you do at Captivate East? Prior to the event, all attendees will have the opportunity to network with each other via a mobile app – and during the event, keynote sessions will be met with lender presentations and insightful panel discussions. Investors who are hungry to close their next business deal will mingle with attendees during hosted meals and lavish events.
“We identified Miami for our East Coast launch because it is an enticing destination to travel, and we want to meet our audience where they are. South Florida is growing at a rapid pace. Whether it be startups, tech or real estate investors flock to this area because the demand is here,” stated Anthony Geraci, founder of Geraci LLP.
South Florida-based Carlo Barbieri, founder and CEO of Oxford Group, will be participating in a panel focused on Raising Money from Latin American Capital Markets. "I am looking forward to speaking about the changes that occurred in Latin American Countries such as Mexico, Chile, Argentina and Colombia, and how those changes have impacted South America and its economy. Since the conference will be taking place during the election period in Brazil, our panel will also address the economy and political issues that may occur depending on which candidate is elected," stated Barbieri.
The two-and-a-half-day event will begin on the 16th with a welcome reception, and continue the next day with a hosted breakfast accompanied by speed networking. Geraci’s goal for the conference is to help attendees feel comfortable while mingling with investors, lenders, and attending top-tier sessions and discussions. If one is looking to identify investors and mingle with high net worth individuals, decision makers, 100+ investors, and fund managers, this is an event they will not want to miss.
For more information, or to register, visit https://geracicon.com/conference/captivate-east/.
Borrowing Donald Trump’s electoral campaign slogan, Dan Siluk, co-manager of the Absolute Return Income strategy at Janus Henderson, explained at the Madrid Knowledge Exchange 2018 event that markets are at the beginning of a new cycle of quantitative tightening that will “make rates great again”.
In the past decade, the intervention of the three main central banks were able to save the global economy from the financial crisis, but at the same time there were some intended and unintended consequences. The balance sheets of the Federal Reserve, the European Central Bank and the Bank of Japan rose exponentially, substantially dampening the volatility in the markets.
The VIX index, who typically settled in the 20 – 30 points range over decades, in the last ten years traded in a very tight range, between 10 and 15 points. Any time there was a bout in volatility, the presidents of the central banks always came back to give an answer that reassured the markets. That’s what happened during the Greece and the Eurozone crisis in 2011-2012, when Mario Draghi pronounced his “Whatever it takes” speech, or in the “taper tantrum” episode, in the summer of 2013, when Ben Bernanke’ FOMC statement was interpreted by bond investors as a sell signal.
With a clear correlation between central banks’ balance sheet size and the value of global assets indices, there has been inflation in practically all the asset classes, something that has greatly favored passive investments, like ETFs and index funds.
“In the past decade, investors could do pretty well by simply earning the beta of the market. They could obtain an attractive performance regardless whether they owned rates or credits, just because rates were driven lower, and credit spreads were driven tighter. Any bouts of volatility were short lived, because central bankers were coming to the rescue. So as long as investors could ride through those periods of volatility their fixed income portfolios tended to do pretty well”, said Siluk.
However, consumer price inflation has barely appeared. Except for United States and United Kingdom, were inflation expectations are lower in the near future, is expected that there will be a real inflation growth in the rest of developed economies, that would be the case of the Eurozone and Japan. In the latter country, after decades of low growth, consumption and growth in wages is returning. While in the Eurozone, unemployment levels are declining in many of the member states. Also, the Asian region excluding Japan is contributing significantly to global inflation. The emerging consumer is one of the fastest growing segments of the global economy and lately is leading inflation.
According to Janus Henderson Investors’ portfolio manager, we are facing the beginning of a new cycle, in which the Federal Reserve is reducing its balance, the European Central Bank has reduced the volume of monthly of its program purchases, aiming to finalize it at the end of year. And, even the Bank of Japan, in the last two years has slowed its program of quantitative easing, sporadically decreasing its balance.
Upside risks to rates
In the US, the necessity of financing a swelling deficit has significantly increased the supply in Treasuries. This increase together with a decrease in foreign investors demand on Treasuries, mainly due to the higher cost of hedging the exposure to US dollars, has partially diminished the total demand for Treasuries.
“Fiscal expansions tend to generate high levels of inflation. Even when there is a strong dollar due to the diversion in monetary policies among developed economies. Trump’s administration has certainly a bias towards a weaker dollar, which is inflationary. All these factors support our vision that rates are going to climb, and curves are going to steepen, that does not necessarily mean that we are going to wake up one morning and see rates 25 or 50 basic points higher. Typically, what happens is that they try to trade in a range and when they break that range, the highest point of the range becomes the new support level. For quite few months of this year, we have seen these 2,70% -3,0% yield range in the US Treasury 10-year bond. We just broke the 3,0%, and at some point, this 3% becomes now the point that backs up a resistance level”, he said.
All these factors are pointing out that you need to be very nimble in fixed income management, specially in terms of asset allocation. Therefore, in this strategy, they favor a benchmark agnostic strategy.
“Benchmark indices normally have certain limitations. We need to be active and flexible, to invest anywhere around the globe. For example, today, rather than bear interest risk in US, which is rising rates, we are looking at commodity-producing countries, like Australia and New Zealand. Because China is slowing down, these economies have very high household debt to income ratios. Their banking costs are increasing. Local banks are rising mortgage rates, whereas central banks are on hold. So, the domestic banks are partially doing the job of the central banks, who are maintaining a dovish position. We rather have interest rate risk in countries that are dovish or on hold monetary policy”, he explained.
“We will probably look back to US Treasuries when the Fed announces they have reached their neutral point. The US is today the highest yield across the developed world. It is also a very steep curve in the front part of the curve. The 10-year Treasury bond yields are offering a spread of 20 basis points over the 2-year notes, so investors are not actually getting paid for the additional interest rate risk or duration risk. On the other hand, the front-end of the curve will be an even more attractive investment once the Fed will finish their hiking cycle”, he concluded.
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Janus Capital Management LLC actúa en calidad de asesor de inversiones. Janus, INTECH y Perkins son marcas registradas de Janus International Holding LLC. © 2018, Janus Henderson Investors. La denominación “Janus Henderson Investors” incluye a HGI Group Limited, Henderson Global Investors (Brand Management) Sarl y Janus International Holding LLC. Para obtener más información o localizar la información de contacto del representante de Janus Henderson Investors en su país, visite www.janushenderson.com.
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© 2018, Janus Henderson Investors. The name Janus Henderson Investors includes HGI Group Limited, Henderson Global Investors (Brand Management) Sarl and Janus International Holding LLC
Abanca has obtained the license from the Federal Reserve of the United States (Fed) to open an office in Miami and operate in the United States.
The license that comes into the project after a year of work enables the Spanish bank to develop total activity with companies and non-residents and, in certain circumstances, to develop activities with residents of average and high incomes. Miami is a city with a large presence of Latin American, Spanish and Portuguese non-residents, groups that will focus on Abanca's growth strategy.
With this new opening, the firm's objective is to continue to grow in markets with high potential and, as in the case of Portugal, in the company segment and medium and high income.
The Miami office, located in the Brickell financial zone, will open before the end of 2018 and will have 12 employees, four Spanish and the rest of the United States.
Abanca is present through representations in Brazil, Mexico, Panama, Venezuela, France, Germany and the United Kingdom. In addition, the entity has centers in Portugal, with its own bank card and Switzerland, where we have offices with both modalities.