Tuesday 26th July 2016
NEWS TICKER: JULY 26TH 2016: CACEIS is now depositary for the first two mutual ship funds under the German KAGB investment act. The two closed-end funds, “MS Marguerita” and “MS Tanja”, will both be managed by “MST AIFM Eins Fonds manager GmbH”, which is the investment management company of “MST Mineralien Schiffahrt Spedition und Transport GmbH.” Matthias M Ruttmann, managing director of MST explains: “We found CACEIS to be a flexible service provider, keen to seek out solutions for new asset types: Our ships will be the first of this asset type to be structured in a German AIF. We have put our trust in CACEIS`s experience in dealing with regulations and launching funds holding new asset types, so will have a solid framework for the launch of the funds.” Holger Sepp, Member of the Management Board at CACEIS in Germany added: “When entering the closed-end funds industry, we clearly committed ourselves to delivering depository service to all major asset types. We are very proud that MST has put its faith in CACEIS`s willingness and ability to service its ship AIFs. During the last couple of months, we have ensured we are fully prepared to handle all relevant requirements for the funds such as the depository function and relevant legal aspects.” -- Carillion, part of a 50:50 joint venture with Dutch Infrastructure Fund, have achieved financial closure on the Irish Schools Bundle 5 Public Private Partnership project that has been procured by the Department of Education & Skills alongside Ireland's National Treasury Management Agency. The joint venture will finance, build and operate five schools and an institute of further education located in counties Meath, Carlow, Wicklow and Wexford. The London-listed company said those construction activities alongside its equity interest will mean the project will generate around £190m of revenue for the business. Separately, EUS-Rokstad, a joint venture between Emera Utility Services and Rokstad Power, a business in which Carillion holds a 60% stake, has won a new contract in North America. The venture has been chosen by NSP Maritime Link Inc, a subsidiary of Emera Inc, as the transmission line contractor for its Maritime Link project that will transmit energy from Newfoundland to Nova Scotia and will connect Newfoundland to the North American grid for the first time in history. The joint venture will complete the high voltage direct current transmission line link under the contract, which is worth a total of £86m to the joint venture -

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A TABB Group survey suggests that as much as 30% of asset managers outside of North America continue to maintain legacy platforms despite the technology’s role in trade delays and errors. The choices that investment managers make about their IT architecture can impact their success or failure to compete for market share. TABB Group’s latest research, The Buy-side Legacy IT Hangover: Finding the Cure for Alpha, Compliance and Growth, details a survey of global non-North American investment managers revealing that participants recognize trade delays caused by inadequate technology account for opportunity costs of anywhere up to 50% of revenue. The risk of not meeting the needs of both clients and regulators means loss of assets, potentially incurring large fines and not sustaining profitability and growth.

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While globally in 2015 High Net Worth Individual (HNWI) wealth saw only a modest growth of 4%, wealth in Asia-Pacific grew at an aggressive 10% propelling Asia-Pacific into the lead position as the region with the most HNWI wealth globally according to the 20th edition of the World Wealth Report (WWR), released today by Capgemini. This is the first time that Asia-Pacific is ahead of North America for both HNWI wealth and population. In 2015, Asia-Pacific held $17.4trn in wealth with a 5.1m HNWI population in comparison to North America’s $16.6trn in HNWI wealth and 4.8m in population.

Global HNWI wealth reached $58.7trn and the HNWI population grew at 4.9% to be 15.4m in 2015. Since 1996, global HNWI wealth growth has expanded by four times equaling nearly $59trn, and if current modest growth rates hold, wealth is projected to reach $100trn in 2025. Despite these record wealth levels, the report also found that only one-third (32%) of global HNWI wealth is currently being managed by individual wealth managers, representing a challenge and an opportunity for firms to consolidate assets. “It is remarkable that only one-third of HNWI wealth is currently with wealth management firms which shows how great the growth potential is for firms that can combine digital technology and FinTech capabilities with human expertise and relationships, to reflect state-of-the-art services for clients,” says Anirban Bose, Head of Banking and Capital Markets, Capgemini’s Financial Services Business Unit.  “Those firms that can offer a digitally-integrated customer experience that builds on high levels of trust and confidence in firms and captures the characteristics of speed, flexibility and ease of use will be well positioned to become leading firms of the future.”

 

Asia-Pacific has been a driving force, doubling HNWI wealth and population over the decade. Asia-Pacific’s HNWI wealth grew by 10 percent in 2015 which is almost five times North America’s 2% wealth growth in 2015 decelerating substantially from 2014’s 9% growth rate. Using a more aggressive growth projection, if markets in Asia-Pacific continue to grow at its 2006 to 2015 rate, Asia-Pacific will represent two-fifths of the world’s HNWI wealth in ten years, more than that of Europe, Latin America, and Middle East and Africa combined. Japan and China stand out as regional dynamos, driving almost 60 percent of global HNWI population growth in 2015.

Asia-Pacific’s HNWI population growth of 9% in 2015 also far outpaced that of North America (2%), and was nearly double that of Europe (5%). Latin America was impaired by the poor performance of Brazil, which lost momentum in both HNWI population (-8%) and wealth (-6%). Dampened by Latin America, ultra-HNWI wealth, long a driver of overall HNWI wealth did not provide its usual boost in 2015. Excluding Latin America, however, ultra-HNWI wealth grew more than the other wealth segments, both in 2015 and for annualized growth over 2010 to 2014.

Wealth management firms are well positioned to capture a greater share of the rising tide of HNWI wealth, the report found. HNWIs exhibited substantially more confidence in wealth management firms (+17 percentage points) and the financial markets (+30 points) in 2015 compared to 12 months prior. And while trust in individual wealth managers remained flat, 68 percent of HNWIs expressed satisfaction with the relationship, indicating a willingness to consolidate more of their assets with wealth managers.

Wealth management firms and wealth managers, however, have yet to gain a majority share of HNWI investable assets. In 2015, more HNWI wealth (35%) was essentially liquid, held in bank accounts or as physical cash, compared to the 32% that was overseen by individual wealth managers. Under-40 HNWIs were even less likely to turn to wealth managers (28%), while those in North America were more likely (39%).

Leveraging trust is key

To help wealth management firms build upon growing levels of trust and attract more HNWI assets, the WWR identified the characteristics that HNWIs are most likely to seek in a firm. The top three services HNWIs look for when choosing a wealth management firm are investment advice (47%), financial planning expertise (40 percent) and investment access (40%). In addition, the report found almost half of HNWIs (48%) are focused on investing for growth. Because a growth approach involves a tendency to hold more assets in alternative investments, wealth management firms may need to broaden their investment expertise beyond equities. Finally, HNWIs are also starting to favor pay-for-performance fee models, requiring firms to examine their more traditional fee approaches.

The last 20 years of HNWI wealth, which was marked by resiliency, even in the face of global financial disaster, as well as the rise of various trends, including social impact investing and technology disruption. Looking ahead, the report predicts that the pace of change will accelerate with disruption in four key areas: clients, operations, regulations, and digital technology. It is anticipated that change will span many issues, including but not limited to: market volatility, wealth transfer impact, pressure on traditional fee models, acceleration of value chain commoditization, regulatory focus on fiduciary duty and FinTech disruption. Budgetary allocations will need to adjust from business as usual towards transformation, to reflect the changing dynamics and new realities of the industry.



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Mercer, a consulting firm in health, wealth and careers and a subsidiary of Marsh & McLennan Companies (NYSE: MMC), has announced the appointment of Simon O’Regan as president in North America.  Previously president of the Mercer EuroPac, region which includes Europe as well as Australia and New Zealand, he is succeeded by Martine Ferland, previously senior partner and leader of the retirement business for EuroPac. Pat Milligan will assume a newly created role focused on growth of the firm’s multinational clients.

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In a speech to the DerivOps North America 2015, CFTC chairman Timothy Massad highlighted market uncleared swaps – SEF confirmations and confirmation data reporting and error trades are now in CFTC sights. 

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State Street Global Exchange today released the results of the State Street Investor Confidence Index (ICI) for February 2015. The Global ICI decreased to 105.2, down 1.4 points from January’s revised reading of 106.6. Confidence among European investors declined the most, with the European ICI falling 8.2 points to 105.9, down from January’s revised reading of 114.1, while in Asia the ICI fell by 5.3 points to 93.8. However, the North American ICI rose by 3.1 points to 104.3.

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Fidessa group plc (LSE: FDSA) today announced a key appointment for its sell-side business, Jay Biancamano is now head of equities product marketing for the Americas. Based in New York and reporting to James Blackburn, global head of equities product marketing, Biancamano will focus on driving the strategic direction of Fidessa's sell-side equities products to provide new and innovative services to its clients which deliver them real business value.

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Apex Fund Services, the independent fund administrator, has appointed Dennis Westley as managing director, North America with immediate effect. Westley will have responsibility for growing Apex’s North American operations and integrating potential acquisitions. Reporting directly to Apex’s Global CEO, Bill Salus, Westley will also manage Apex’s offices in New York, New Jersey, Florida and Toronto.

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Fitch Ratings-New York-09 February 2015: North American Exploration and Production (E&P) companies continued to announce reductions to 2015 capital spending in Q4 earnings calls as a function of lower oil prices, according to Fitch Ratings. Capex cuts are ongoing as the price of West Texas Intermediate has dropped over 50% since July of last year, and now stands at just over $50/barrel.

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