Shifting Towards Fiscal Union in Europe 

Dr. Friedrich Heinemann, a speaker at the marcus evans European Pensions & Investments Summit 2012, on the shift towards fiscal union in the eurozone. Interview with: Dr. Friedrich Heinemann, Head of the Department for Corporate Taxation & Public Finance, Centre for European Economic Research (ZEW)

FOR IMMEDIATE RELEASE

“The eurozone crisis has led to a revolution of European fiscal federalism and the dismantling of fundamental pillars in the fiscal constitution,” says Dr. Friedrich Heinemann, Head of the Department for Corporate Taxation & Public Finance, Centre for European Economic Research (ZEW). We must figure out how to gain back investor confidence.

A speaker at the upcoming marcus evans European Pensions & Investments Summit 2012, Heinemann discusses Germany’s role in the debt crisis and risk management strategies for eurozone members.  

What is Germany’s role in the current eurozone crisis?

We are in the middle of a comprehensive crisis of trust. There is increasing doubt and industrial countries will have to bear the burden of public debt. This lack of confidence is feeding and intensifying itself, becoming hazardous to the eurozone. 

Germany has a very important function in the eurozone debt crisis as it is a stability anchor. The economic situation in Germany is strong, compared to other eurozone countries. Germany has the dynamics to prevent another deep recession.

What does the future of fiscal federalism in Europe hold?

The eurozone crisis has led to a revolution of European fiscal federalism and the dismantling of fundamental pillars in the fiscal constitution.

Prior to the crisis, eurozone member countries were independent and responsible for their own public debt. These rules have been forgotten and we are shifting towards fiscal union and solidarism where we guarantee for each other. This was unavoidable to some extent, but we must be careful, as this guarantee mechanism could create huge disincentives as countries now know that when they enter public debt, others will cover for them.

We have made some big steps towards a fiscal union in Europe, but it has not been perfected. For political reasons, Germany is reluctant as voters do not want to take over the guarantee for Italian debt. 

How can sustainability be achieved in today’s environment?

In order to achieve economic sustainability, we must look towards elements which will stabilise the vicious circle of deterioration and loss of confidence.

By remaining united, Europeans will find a way to stop this negative destructive crisis from escalating. Whenever it became critical in the past, we were ready to make unpleasant decisions, such as the euro umbrella. If necessary, I also expect the European Central bank to activate all of its unlimited instruments. At the end of the day, I believe Europeans will be successful in preventing the crisis from escalating.

Contact:
Stacey Melvin
Journalist
marcus evans, Summits Division
Tel: + 357 22 849 400
Email: press@marcusevanscy.com

About the European Pensions & Investments Summit 2012

Offering much more than any conference, exhibition or trade show, this exclusive meeting will bring together esteemed industry thought leaders and solution providers to a highly focused and interactive networking event. The Summit includes visionary presentations and interactive forums on looking beyond volatility to pinpoint innovative investment approaches, modernising risk models and delivering returns in the new era of pension investing.

For more information please send an email to info@marcusevanscy.com or visit the event website at www.epi-summit.com 

marcus evans group – investment sector portal

Complementing our Summit format, the Investment Network – marcus evans Summits group delivers peer-to-peer information on strategic matters, professional trends and breakthrough innovations.

Please note that the Summit is a closed business event and the number of participants strictly limited.

About marcus evans Summits

marcus evans Summits are high level business forums for the world’s leading decision-makers to meet, learn and discuss strategies and solutions. Held at exclusive locations around the world, these events provide attendees with a unique opportunity to individually tailor their schedules of keynote presentations, think tanks, seminars and one-to-one business meetings. For more information, please visit www.marcusevans.com

All rights reserved. The above content may be republished or reproduced. Kindly inform us by sending an email to press@marcusevanscy.com

North Sea Capital: International Asset Protection

Lauge Sletting of North Sea Capital, an independent private equity adviser at the marcus evans Alternative Investments Europe Summit 2012 and Middle East Alternative Investments Summit 2012, shares his views on asset protection in today’s uncertain economic environment. Interview with: Lauge Sletting, Managing Partner, North Sea Capital

FOR IMMEDIATE RELEASE

It is crucial for investors to ensure asset protection and be aware of future inflation risk and recessions scenarios, says Lauge Sletting, Managing Partner, North Sea Capital. Portfolio diversification will allow investors in the alternatives space to reduce risk and successfully plan for the future, he adds.  

From an independent private equity adviser at the upcoming marcus evans Alternative Investments Europe Summit 2012 and Middle East Alternative Investments Summit 2012, Sletting talks about how investors could benefit from the negative cycle that has arisen from the economic crisis.

How can investors ensure assets are protected in today’s uncertain environment?

Several private equity funds are coming back into the market, but due to the economic climate and debt crises, many investors are reluctant to make any commitments.

For the most part, investors can guarantee asset security by investing in companies with strong market positions and the ability to mark-up prices. Companies that are leveraged appropriately will be able to reduce debt overtime and safeguard assets from inflation.

This is one of the advantages of investing into private equity, as managers are able to control the level of leverage and manage true and inflationary scenarios. Looking at inflation is critical, as we see increasing risk due to the immense money supply that has arisen from debt structuring and the capital issues at national banks. The other advantage of control investing is that private equity managers transform companies to be more profitable and even in a down cycle, add alpha to the returns.

From your perspective, why is portfolio diversification essential?

Growth can come and go in all industries. We have seen this through emerging markets and non-cyclical trends, such as the telecom and Silicon Valley boom. Having a diversified portfolio allows investors to capture a range of developments around the world. Nevertheless, diversification is not only geographic, but also specified to corporate governance and management experience.

There is a high degree of developed corporate governance in Northern Europe, and as a result many organisations in the region are export orientated, benefiting from growth in emerging markets such as Asia and Latin America. Therefore, investing in these companies that have an awareness of diversity would allow investors to benefit from the growth that they are experiencing in emerging markets, instead of investing directly into markets which can prove to be risky.

The major hazards in the alternative investments space today are corporate governance risk, geographic risk and risk in the private equity arena where there are many undeveloped teams. We are seeing many new teams that are not as mature and cohesive as in Northern Europe and the US.

How can investors recognise successful fund managers?

Investors and investment firms alike must be ready to identify successful private equity managers as soon as they create their first fund. For example, our due diligence processes focus on alpha and the added value generated from experienced private equity managers. We are in the position to capture, test and prove that specific managers have generated returns that are better from the general market. Even in the downturn, the managers we have selected have been able to add value to companies by increasing their profit beyond their peers.

What advice would you give to alternative asset class investors today?

Focus on global investing instead of one specific area. Explore investment opportunities in Europe, Asia, Latin and North America in order to achieve a successfully balanced portfolio that focuses on emerging and developed markets. A mix of expansion growth funds and turn around investments as a supplement to a core mid-market buyout portfolio will add to that solidity.

Having the patience to wait for access to the right private equity managers in the market is also crucial. All of these factors together should generate a high, stable private equity return of at least 20 per cent per annum.

Contact:
Stacey Melvin
Journalist
marcus evans, Summits Division
Tel: + 357 22 849 400
Email: press@marcusevanscy.com

For more information please send an email to info@marcusevanscy.com or visit the event websites below:

Alternative Investments Europe Summit 2011: www.aie-summit.com 

Middle East Alternative Investments Summit 2012: www.meai-summit.com

marcus evans group – investment sector portal

Complementing our summit format, the Investment Network – marcus evans Summits group delivers peer-to-peer information on strategic matters, professional trends and breakthrough innovations.

Please note that the Summit is a closed business event and the number of participants strictly limited.

About North Sea Capital

NorthSea Capital, based in Copenhagen, is a leading independent private equity adviser that serves institutional, corporate and high net worth clients including some of the largest Nordic pension funds. Providing investors with access to top tier private equity managers as well as advisory services within the private equity asset class.

www.northseacapital.com

About marcus evans Summits

marcus evans Summits are high level business forums for the world’s leading decision-makers to meet, learn and discuss strategies and solutions. Held at exclusive locations around the world, these events provide attendees with a unique opportunity to individually tailor their schedules of keynote presentations, think tanks, seminars and one-to-one business meetings. For more information, please visit www.marcusevans.com

All rights reserved. The above content may be republished or reproduced – kindly inform us by sending an email to press@marcusevanscy.com

 

Partners Group:
Recognising Investment Opportunities within the Secondary Market

Erik Kaas from Partners Group, an investment management firm at the marcus evans European Pensions & Investments Summit 2012, on prospering from the secondary market.    Interview with: Erik Kaas, Partner, Partners Group

FOR IMMEDIATE RELEASE

Investors are exiting positions at a discount due to changes in the regulatory environment or their portfolio strategy, which is creating immense opportunities for other investors, says Erik Kaas, Partner, Partners Group. “Market players with an integrated approach, proprietary sourcing channels and timely in-house execution capabilities will be able to take advantage of such market cycles,” he adds.

From an investment management firm at the upcoming marcus evans European Pensions & Investments Summit 2012, Kaas discusses how to take advantage of the investment opportunities in the secondary market.

What is your long-term macroeconomic outlook? How can investors be positioned for growth, bearing in mind the continuing weak global economic recovery?

Already in 2009, we forecasted a stagflationary scenario with three to five years of a stagnant economic environment in the Western world, followed by increased inflation at the tail end, which would manifest in the form of asset inflation without classical wage inflation. This led us to adjust our investment strategy accordingly, with a focus on stable businesses in the defensive sectors and inflation-linked asset classes, such as infrastructure and real estate.

Although our forecast in 2009 was right, it was too optimistic. At the end of the day, the European debt crisis can only be solved by solidarity within the eurozone.

The European Central Bank will begin buying up volumes of European bonds from weaker member states, which will result in an unparalleled increase in the capital supply. Financially healthy nations such as Germany or the Netherlands will end up paying for the rescue mission through increased debt levels and higher financing costs, while the whole eurozone will have to cope with asset inflation followed by classical wage inflation in three to five years.

How can investors successfully identify the right assets? How have investing strategies evolved post crisis? 

A global vertical depth approach is essential. Investors must drill down into the sub-sector level and into individual portfolio companies, taking into account valuations, leverage and relative industry and marketing positions to identify defensive, cash-generating companies and assets with strong revenue visibility. This is the tactic for identifying the right assets.

However, investors should not overlook the fact that the current market environment offers attractive opportunities. Many new opportunities are arising from the secondary market when existing investors are exiting positions at a discount because of changes in the regulatory environment or in their portfolio strategy. Market players with an integrated approach, proprietary sourcing channels and timely in-house execution capabilities will be able to take advantage of such market cycles.

What long-term investment strategies could you share?

Investors can prosper by keeping a focus on direct investments, primaries and the purchase of portfolio companies on the secondary market. Investing in this manner provides maximum advantage of market opportunities at a specific stage of the economic cycle.

In addition, we offer the whole range of private markets strategies from private equity to private real estate, infrastructure and private debt which allows investors to choose the most attractive strategy at a given point in time and to benefit from synergies and information advantages.

Contact:
Stacey Melvin
Journalist
marcus evans, Summits Division
Tel: + 357 22 849 400
Email: press@marcusevanscy.com

About the European Pensions & Investments Summit 2012

Offering much more than any conference, exhibition or trade show, this exclusive meeting will bring together esteemed industry thought leaders and solution providers to a highly focused and interactive networking event. The Summit includes visionary presentations and interactive forums on looking beyond volatility to pinpoint innovative investment approaches, modernising risk models and delivering returns in the new era of pension investing.

For more information please send an email to info@marcusevanscy.com or visit the event website at www.epi-summit.com

marcus evans group – investment sector portal

Complementing our Summit format, the Investment Network – marcus evans Summits group delivers peer-to-peer information on strategic matters, professional trends and breakthrough innovations.

Please note that the Summit is a closed business event and the number of participants strictly limited.

About Partners Group

Partners Group is a global private markets asset manager with USD 28 billion under management in private equity, private real estate, private infrastructure and private debt. Over 500 professionals based in 15 offices around the world focus on private markets investments on behalf of an international clientele of institutional investors. Partners Group is listed on the SIX Swiss Exchange with a clear majority owned by its employees.

www.partnersgroup.com

About marcus evans Summits

marcus evans Summits are high level business forums for the world’s leading decision-makers to meet, learn and discuss strategies and solutions. Held at exclusive locations around the world, these events provide attendees with a unique opportunity to individually tailor their schedules of keynote presentations, think tanks, seminars and one-to-one business meetings. For more information, please visit www.marcusevans.com

All rights reserved. The above content may be republished or reproduced – kindly inform us by sending an email to press@marcusevanscy.com

Getting Pension Design Right:
The Guide to Achieving Sustainability 

Keith Ambachtsheer, a keynote speaker at the marcus evans European Pensions & Investments Summit 2012, comments on designing sustainable pension funds for the long-term.  Interview with: Keith Ambachtsheer, Director, Rotman International Center for Pension Management & Founder, KPA Advisory

FOR IMMEDIATE RELEASE

In today’s economic environment, sustainability is crucial. Unfortunately, the traditional Defined Benefit (DB) and Defined Contribution (DC) models cannot achieve this, says Keith Ambachtsheer, Director, Rotman International Center for Pension Management & Founder, KPA Advisory. By looking towards high quality equity investments that yield four, five, or even six per cent, investors will benefit from sustainable cash flows in the long-term.

A keynote speaker at the upcoming marcus evans European Pensions & Investments Summit 2012, 14 – 16 May, Ambachtsheer discusses the need for transparency and sustainability in the pensions marketplace. 

Why does the pension fund system need to evolve and how can this be done?

Keith Ambachtsheer: The market currently expects the two pension models, DB and DC, to do two things: provide affordability of pensions and certainty of pension payments. Realistically, neither one of the models can achieve that. Two separate instruments are required: a long horizon wealth creation instrument and a shorter horizon payment certainty instrument.

Long horizon wealth creation programmes acquire and nurture current and future cash flows. Buying these cash flows is getting cheaper, creating interesting investment opportunities. However, it will not be a prosperous time for those concerned with buying payment certainty, because the rate of interest on ‘risk free’ instruments is very low. We used to believe sovereign debt was risk free, but we are now even questioning that. Investment programmes that focus on short-term payment certainty will struggle, as they will need to redefine what a risk free asset is.

How can we achieve fairness and transparency within the pension system?

Keith Ambachtsheer: Once the pension fund design is right, Chief Investment Officers (CIOs) will have to be able to provide reports on a regular basis and assure participants that the payment certainty system is sound because there is enough money to make the payments, and that the long-horizon investment programme is strong as its investments are yielding four to six per cent with some prospects for growth.

How can pension sustainability be achieved? 

Keith Ambachtsheer: If we want a sustainable pension system, we must design investment instruments that are sustainable. That is obvious. The question is, why has this not been achieved?

To reiterate, traditional DB and DC arrangements are both problematic in design. We expect them to do two things when they can only do one. CIOs must separate long horizon investing from short-term payment certainty investing. Once this has been done, long-term horizon investors will be able to buy great companies yielding four to six per cent and benefit from the prospect that dividends will be inflation-indexed over the longer term. Thus, there will be growth on top of that. Examples are companies such as Procter and Gamble, Johnson & Johnson and Nestle, with their portfolios of recession proof products. These are products that will keep selling, creating a sustainable cash flow in the long-term.

The Dutch are currently leading the way in turning their old pension system into a more sustainable one. They are the ones to watch.

Contact:
Stacey Melvin
Journalist
marcus evans, Summits Division
Tel: + 357 22 849 400
Email: press@marcusevanscy.com

About the European Pensions & Investments Summit 2012

Offering much more than any conference, exhibition or trade show, this exclusive meeting will bring together esteemed industry thought leaders and solution providers to a highly focused and interactive networking event. The Summit includes visionary presentations and interactive forums on looking beyond volatility to pinpoint innovative investment approaches, modernising risk models and delivering returns in the new era of pension investing.

For more information please send an email to info@marcusevanscy.com or visit the event website at www.epi-summit.com

marcus evans group – investment sector portal

Complementing our Summit format, the Investment Network – marcus evans Summits group delivers peer-to-peer information on strategic matters, professional trends and breakthrough innovations.

Please note that the summit is a closed business event and the number of participants strictly limited.

About marcus evans Summits

marcus evans Summits are high level business forums for the world’s leading decision-makers to meet, learn and discuss strategies and solutions. Held at exclusive locations around the world, these events provide attendees with a unique opportunity to individually tailor their schedules of keynote presentations, think tanks, seminars and one-to-one business meetings. For more information, please visit www.marcusevans.com

All rights reserved. The above content may be republished or reproduced – kindly inform us by sending an email to press@marcusevanscy.com

 

Vision Capital: Prospering in the Canadian Real Estate Market

Jeffrey Olin of Vision Capital, an investment management firm at the marcus evans Private Wealth Management Summit Fall 2011 and Private Wealth Management Summit Spring 2012, on investing in Canadian real estate securities. Interview with: Jeffrey Olin, President & Chief Executive Officer, Vision Capital

FOR IMMEDIATE RELEASE

Investors should not be seduced by yield, says Jeffrey Olin, President & Chief Executive Officer, Vision Capital. “Taking into account the underlying net asset value and regional trends is critical. We analyze from the top down in terms of asset sectors and regions, and from the bottom up in terms of the fundamentals of each company or REIT,” he adds.

Vision Capital, which won the 2011 Number One Best New Fund in Canada award for the Vision Opportunity Fund Limited Partnership II, the 3rd consecutive year a Vision managed fund has ranked amongst the top five funds in Canada will be attending the upcoming marcus evans Private Wealth Management Summit Fall 2011 and Private Wealth Management Summit Spring 2012. Ahead of these Summits, Olin shares his insights into real estate investments and why private wealth managers should consider what Canada can offer.

According to your website, Vision has outperformed in declining and volatile markets. How do you select real estate securities in such market conditions?

Jeffrey Olin: We focus on publicly-traded equity and debt securities in the real estate market. Our principal valuation approach is to consider the net asset value of the underlying real estate, the value of the “bricks and sticks” as compared to the trading price of the securities in capital markets. We pay attention to the net asset value of tomorrow, not today, and the supply and demand fundamentals by region and property type.

We look top down at asset sectors and regions, and bottom up at the fundamentals of each company. This includes the company’s strategies and the strength of its management team.

What has been key to the fund’s success?

Jeffrey Olin: We are not yield driven. The whole world has gone crazy chasing yield and there is a flaw in looking at yield as a valuation metric. I do not know of anyone who has valued any business in any industry based on how much cash flow is being paid out in a period of time, as opposed to how much cash flow is being earned.

The chasing of yields creates distortions in valuation of comparable companies/REITs and we take advantage of that. We look for total return, whether it is generated by yield or capital gains does not matter.

Why should private wealth managers pay more attention to Canada?

Jeffrey Olin: Our focus on Canada is not simply because we live here. The Canadian story itself is pretty powerful. We had 12 years of federal budget surpluses before the recession. One year ago, employment levels surpassed pre-recession highs, and are moving higher. The macroeconomic environment is sound, the banking system is stable, our dollar is quite strong and we are recognized for our commodity strengths. 

We have the best supply and demand conditions in real estate markets that I have seen in 25 years. Canada has single-digit vacancy rates in every property type and region, compared to double-digits in the US. Canadian demand for housing is strong and housing prices are setting record highs, quite a remarkable contrast with the US.

All these factors make Canada and its real estate markets very attractive.

Any final thoughts?

Jeffrey Olin: The asset management business is going to become more about risk management than money management.

All returns are not created equal. We do not necessarily seek to be the highest performing fund, but we aim to be the highest risk-adjusted performing funds.

Contact: Sarin Kouyoumdjian-Gurunlian, Press Manager, marcus evans, Summits Division

Tel: + 357 22 849 313
Email: press@marcusevanscy.com

About the Private Wealth Management Summit

Offering much more than any conference, exhibition or trade show, this exclusive meeting will bring together esteemed industry thought leaders and solution providers to a highly focused and interactive networking event. The Summit includes presentations on unconventional investment strategies, Federal Tax Policy challenges, risk management strategies and the family office governance structure.

For more information please send an email to info@marcusevanscy.com or visit the event website

marcus evans group – investment sector portal

Complementing our Summit format, the Investment Network – marcus evans Summits group delivers peer-to-peer information on strategic matters, professional trends and breakthrough innovations.

                            

Please note that the summit is a closed business event and the number of participants strictly limited.

About Vision Capital

The Vision Opportunity Funds focus primarily on the real estate sector, and invest predominantly in publicly-traded equity and debt securities, with a primary focus on Canada. The Funds: target investments that are expected to outperform on a medium term, risk adjusted basis, can make concentrated investments in the Manager’s best ideas, and utilize a long-short and active investing strategy. The Vision LP II recently received an award at the 2011 Canadian Hedge Fund of the Year Awards at KPMG as the best performing (new) fund. This is the third consecutive year that a Fund managed by Vision was recognized as amongst the top five in Canada. In addition, the Vision LP was the top performing fund in the Scotia Hedge Fund Index in 2010.

For more information: www.visioncapital.com

About marcus evans Summits

marcus evans Summits are high level business forums for the world’s leading decision-makers to meet, learn and discuss strategies and solutions. Held at exclusive locations around the world, these events provide attendees with a unique opportunity to individually tailor their schedules of keynote presentations, think tanks, seminars and one-on-one business meetings. For more information, please visit www.marcusevans.com 

All rights reserved. The above content may be republished or reproduced – kindly inform us by sending an email to press@marcusevanscy.com

 

Emirates NBD:
Accelerating Middle Eastern Growth amidst the Eurozone Crisis

Gary Dugan, a speaker at the marcus evans Middle East Investments Summit 2011, shares his views on how the eurozone crisis has impacted institutional investors in the Middle East. Interview with: Gary Dugan, Chief Investment Officer, Emirates NBD

FOR IMMEDIATE RELEASE
 
In today’s changing economic market, institutional investors are unaware of the context in which they are investing, says Gary Dugan, Chief Investment Officer, Emirates NBD. The eurozone crisis has been an immense setback to Middle East investors, principally because it has produced uncertainty.

A speaker at the marcus evans Middle East Investments Summit 2011 in Dubai, UAE, 23 – 24 November, Dugan discusses the importance of remaining flexible and patient in unsystematic environments.

How has the eurozone crisis impacted institutional investors in the Middle East?

Gary Dugan: The eurozone crisis is the main setback facing investors in the Middle East, principally because it has produced uncertainty. Institutional investors are unaware of the context in which they are investing, as anything could happen tomorrow.

The financial position of the Middle East, particularly that of Dubai, has dramatically improved, but has recently been put back because of the global credit crunch and European banks withdrawing their capital from the financial markets.

Being flexible and patient in today’s shifting market is crucial. Investors have become extremely short-term and have jumped back into equities in the hope that they will see a rise of five to ten per cent, but have found themselves down three per cent. Many investors have lost small amounts of money too often in this crisis; they must learn to be patient.

Chief Investment Officers should never dismiss specific asset classes due to times being tough. They must remain diversified if they wish to prosper.

Where do the investment opportunities lie in the Middle East?

Gary Dugan: On a five year view, opportunities primarily exist in the equity market. Equity valuations in many parts of the world are low both on an absolute and relative basis; regional equities are very low in comparison to international standards. Yet in the MENA region, economic growth is assured with a high oil price and strong population growth.

In the short-term, investors will face even more challenges set by the eurozone. The Middle East at this point still needs flows of international capital into the market in order to lift valuations and continue to see improvement.

Have investors turned towards more sustainable investment strategies?

Gary Dugan: Unfortunately, while there is a financial crisis occurring, themes such as green investing and sustainability have taken a back seat. To be fair, we are seeing investors become more aware of these approaches and recognising the importance of responsible investing.

What is your outlook for the private banking sector?

Gary Dugan: There is continued growth in the sector as wealth increases across the region. With the Arab Spring this growth will be even more widely spread.

The private banking sector has previously been dominated by international players and we believe that domestic banks will start to take a greater market share, creating immense opportunities in the region. 

Contact: Stacey Melvin, Journalist, marcus evans, Summits Division

Tel: + 357 22 849 400
Email: press@marcusevanscy.com

About the Middle East Investments Summit 2011

This unique forum will take place at the Park Hyatt Dubai, UAE, 23 – 24 November 2011. Internationally acclaimed as the leading event for Middle East institutional investors, the Summit offers much more than any conference, seminar or trade show. This exclusive meeting will bring together esteemed thought leaders in institutional investing and market leading solution providers for a highly focused and interactive networking event. The Summit includes presentations on seizing attractive investment opportunities, gearing up for new regulatory regimes, and securing portfolio performance.

For more information please send an email to info@marcusevanscy.com or visit the event website

marcus evans group – investment sector portal

Complementing our Summit format, the Investment Network – marcus evans Summits group delivers peer-to-peer information on strategic matters, professional trends and breakthrough innovations.

                          

About marcus evans Summits

marcus evans Summits are high level business forums for the world’s leading decision-makers to meet, learn and discuss strategies and solutions. Held at exclusive locations around the world, these events provide attendees with a unique opportunity to individually tailor their schedules of keynote presentations, think tanks, seminars and one-to-one business meetings. For more information, please visit www.marcusevans.com

All rights reserved. The above content may be republished or reproduced – kindly inform us by sending an email to press@marcusevanscy.com

 

Calamos Investments on Portfolio Management in the Private Wealth Management Industry

John Calamos of Calamos Investments, an investment firm at the marcus evans Elite Summit 2011, on portfolio management in the private wealth management industry. Interview with: John Calamos, Chief Executive Officer & Co-Chief Investment Officer, Calamos Investments

FOR IMMEDIATE RELEASE

“To take the utmost advantage of an upturn in the markets, investors need to have an allocation to equities before the upturn begins,” says John Calamos, Chief Executive Officer & Co-Chief Investment Officer, Calamos Investments. Asset allocation should also reflect significant longer term trends, including the rise of emerging economies.

From an investment firm at the marcus evans Elite Summit 2011, in Montreux, Switzerland, 21 – 23 November, Calamos shares his insights into portfolio management and asset allocation in the private wealth management space.

What information do private wealth managers need for portfolio management?

John Calamos: It is especially important to design an investor’s asset allocation for long term results at the core level. Tactical over- and under-weighting can allow an investor to take advantage of shorter term trends. For example, would you consider an emerging markets allocation to be tactical or core? Our view is that exposure to emerging markets can be core if the risk is managed, but also a tactical or more aggressive strategy, as the flow of funds increases volatility in this opportunistic asset class.

Asset allocation should reflect significant longer term trends. A manager’s view of inflation will have a considerable impact on the overall allocation to bonds versus equities, as well.

An illustration of the importance of allocation is the year 1982, one of the worst years for GDP growth and unemployment. The Dow Jones had not been above 1,000 since 1970. When it cracked 1,000 in August of 1982, we entered one of the best bull markets in history, but there were so many people sitting on the sidelines, saying, “When that market corrects back down, I’m going to get back in.” It never let them back in. To take the utmost advantage of an upturn in the markets, investors need to have an allocation to equities before the upturn begins.

What do managers overlook when making investment decisions?

John Calamos: The most important thing for managers to understand is that active management works. New studies indicate that it is essential, along with the proper asset allocation reflecting the investor’s risk tolerance. Because of the current emphasis on passive strategies, some wealth managers may overlook the value of experience when reviewing investment management firms. We believe that the avoidance of major investment mistakes, while not missing opportunities, requires blending many inputs, primarily the perspective that comes from long term experience.  

As the economy rebounds, investors are trying to immunise portfolios against future crises and market fluctuations. How can they achieve this to some degree?

John Calamos: The “insurance” to immunise a portfolio against tail risk can, at times, be very expensive. Typically, when this insurance is the most inexpensive there seems little need for it, therefore, tail risk hedging needs to be accomplished very tactically.

Another way to reduce the total portfolio risk is by incorporating asset classes that are uncorrelated. Unfortunately, many of those asset classes, like commodities, have become correlated to the equity market and often no longer provide a cushion for the total portfolio. We have found that low-volatility equity strategies, including the use of convertible securities, can dampen some of the volatility.

There is a natural tension between the desire for safety and the pursuit of investment returns. It is a challenge to be fully prepared for both a 2008-reprisal and an economic expansion at the same time. Unfortunately, acting to mitigate every downturn can be costly in the form of lost opportunity and/or in the form of hedging costs. In practice, this means investors are better off, in our view, seeking an appropriate middle ground of reasonable risk/return that is managed by an experienced team.

We find that middle ground by looking at global opportunities for businesses with strong balance sheets that can finance growth without needing access to capital markets, and we then select the appropriate securities within their capital structure. If economic weakness becomes pronounced, we feel the stronger companies with diversified client bases should hold their value better. If overall growth continues, these firms should benefit from the natural expansion in their opportunity set.

We also try to make sure we are comfortable with the underlying fundamentals of the investments we manage. We have not and will not let short-term events scare us out of good positions. One mistake investors are making is waiting on the sidelines until market conditions improve to increase their allocation to equities. The problem with that thinking is that if the volatility on the upside is anything like the volatility on the downside, investors are not going to have a chance to get back in.

What asset allocation strategies could you recommend to private wealth managers?

John Calamos: For the longer-term, we feel the risk is inflation, therefore, we are underweight on traditional fixed income and overweight equities. We favour enhanced fixed income such as high quality, high yield bonds, and a risk-managed emerging market strategy as a core holding. We believe equity valuations favour growth equities over value and that the valuations for growth equities at this stage in the market cycle are very compelling.

Asset allocation is an ongoing, iterative process that leans heavily on judgment and understanding about how the global economy is evolving. At the moment, we tend to favour global growth equities as an attractive general category. Our view on fixed income is that cash and US Treasuries are less attractive, given the very low yields, and the fact that agencies and mortgages are subject to too much duration with too little standstill return.

We would agree that the bull market in bonds is over. However, with so much volatility in stocks it is very important to consider the client’s risk tolerance when constructing and adjusting the asset allocation. So within the traditional bond market we are keeping our duration very, very low. Bonds are more of a safe-haven play, especially in this volatile market. One exception is high-yield bonds, which we think are looking attractive again as spreads have widened.

What is unique about your investment philosophy?

John Calamos: We utilise a very different approach to an investor’s core holding. Typically, the balance of bonds/equities in a portfolio would be adjusted to the risk level of a specific client. Our history, however, has been to utilise low-volatility equity strategies which include convertible securities, and which we feel offer similar downside protection to a bond/equity mix but with better upside potential.

Additionally, we try to have a risk-managed approach to all asset classes we utilise. Over the years we feel this has added considerable value for our clients.

We believe we are unique in our approach to evaluating global businesses first. That research, combined with our understanding of markets allows us to construct portfolios with attractive risk/return characteristics so clients can gain the exposure to attractive investments that are suitable for them, while managing downside risk.

What are your thoughts and predictions for the future?

John Calamos: Headlines we read are often sensational and exaggerated descriptions of why the economic glass is half-empty. Unpleasant memories of 2008 remain in the forefront of investors’ minds. There are also political challenges ahead in terms of how we will rationalise current and future budgets. What is important for investors to keep in mind is that the government has never been the genesis of wealth or prosperity. The glass remains half-full as long as individuals have a profit motive and there is a reasonably business-friendly environment in which to compete. Though our challenges are significant, we are making progress in working through them and economic activity continues to grow, albeit more slowly than we would like. In our view, investors will be done a disservice by holding an overly defensive portfolio at this time. We believe clients are best served viewing portfolios in a global context, by favouring growth among the liquid and stable firms, and through a process of careful security selection as opposed to passive ownership of either equities or bonds.

As investors, we can all get focused on the short term, but we know that having a long term view is very, very important. We believe one significant longer term theme is the growth of middle class consumption globally. I believe that will be the engine of growth for many companies. Investors need to remember that middle class consumption is really where global companies are going to get their revenues. The middle class is made of people who are going to buy the washers, dryers, new cars and TVs. It is a very strong global theme. It is not bad news for the US that its middle class consumption is being reduced in proportion to the rest of the world. The growth of the middle class over the next few decades is going to be concentrated in the Far East, including, we hope, in the Middle East. We hope what comes out of all the turmoil in the Middle East is a thriving middle class.

We are always worried about what we cannot control. We do not have control over exogenous events, like another earthquake in Japan, nor do we have control over what the political scene is going to look like around the world.

We are free market advocates. We think upward mobility and growing the middle class works. The US has exported that idea to countries all over the world. What worries me is that now, there are those who do not think those principles are of value anymore. That, to me, is very worrisome. It is a whole change of culture and mentality. What makes a country grow is really the private sector of the market, not the public sector. When we have politicians making promises they cannot keep, that worries us because that is a whole change in culture. We have been through these tough economic periods before, and we have come out of each one very, very strong. I am confident that we will do that again.

Contact:
Sarin Kouyoumdjian-Gurunlian
Press Manager
marcus evans, Summits Division
Tel: + 357 22 849 313
Email: press@marcusevanscy.com

About the Elite Summit 2011

This unique forum will take place at the Fairmont Le Montreux Palace, Montreux, Switzerland, 21 – 23 November 2011. Offering much more than any conference, seminar or trade show, this exclusive meeting will bring together esteemed thought leaders in institutional investing and market leading solution providers for a highly focused and interactive networking event. The Summit addresses the ongoing evolution of private wealth management trends and provides attendees with fresh perspectives on both asset allocation and family governance strategies for a profitable investment portfolio of both financial and human assets despite market uncertainty.

For more information please send an email to info@marcusevanscy.com or visit the event website at www.elitesummit.com 

marcus evans group – investment sector portal

Complementing our Summit format, the Investment Network – marcus evans Summits group delivers peer-to-peer information on strategic matters, professional trends and breakthrough innovations.

About Calamos Investments

Calamos Investments is a globally diversified investment firm offering equity, fixed-income, convertible and alternative investment strategies, among others. The firm serves institutions and individuals around the world via separately managed accounts and a family of open-end and closed-end funds, providing a risk-managed approach to capital appreciation and income-producing strategies.

For more information visit www.calamos.com

About marcus evans Summits

marcus evans Summits are high level business forums for the world’s leading decision-makers to meet, learn and discuss strategies and solutions. Held at exclusive locations around the world, these events provide attendees with a unique opportunity to individually tailor their schedules of keynote presentations, think tanks, seminars and one-to-one business meetings. For more information, please visit www.marcusevans.com

All rights reserved. The above content may be republished or reproduced – kindly inform us by sending an email to press@marcusevanscy.com

 

Griffin Partners:  Maximizing the Value of Real Estate Assets

Edward Griffin of Griffin Partners, a service provider company at the upcoming marcus evans Private Wealth Management Summit Fall 2011, delivers his thoughts on real estate investing.   Interview with: Edward Griffin, President, Griffin Partners

FOR IMMEDIATE RELEASE

Private wealth managers looking at real estate investments should make sure they understand the exact leverage characteristics of the investment, fund and manager, advises Edward Griffin, President, Griffin Partners. They must avoid the pitfalls that were exposed in the recent economic downturn, Griffin adds.

A commercial real estate investment, management, development and leasing company, Griffin Partners is a solution provider at the marcus evans Private Wealth Management Summit Fall 2011, which will take place in Las Vegas, Nevada, December 5-7. Ahead of the event, Griffin shares his outlook on real estate markets and how to maximize the value of assets.

What are your projections for the US real estate market, and how would that impact the private wealth management space?

Edward Griffin: I expect the US real estate market to improve gradually, but that will be geography-specific. Real estate demand is a function of job growth, so the markets that have the most job growth will experience the largest increase in demand. This will bring about opportunities for successful investment in both opportunistic and value-added investment strategies. The improvement in the capital markets is allowing liquidity back into the commercial real estate market, facilitating a larger volume of investment opportunities.

How do you identify the real estate projects that can grow in value?

Edward Griffin: It is important for family office directors to consider the investment basis as a function of replacement cost. One should always look for opportunities to acquire assets at a basis that is below replacement cost. With a few exceptions, this can be done in most markets.

Tenant diversification in the portfolio or asset is another issue that investors should pay attention to; there should not be an asset where the failure or departure of a single tenant can create distress for the entire asset.

How could private wealth managers maximize the value of their clients’ real estate assets?

Edward Griffin: The most significant impact on private real estate investment is the use of leverage. Private wealth managers must understand the exact leverage characteristics of the investment, fund and manager. They must avoid the pitfalls that were exposed in the downturn. They need to understand the leverage profile whether it is a direct investment or through a manager. It is always best to be on the conservative side.

Investors should also consider working with managers who have a successful track record of proactively managing real estate assets, as these assets typically require the re-investment of capital and an active management strategy to ensure they continue to be as functionally efficient as possible and suitable for the needs and demands of their users.

Are there countries or types of real estate assets that you would particularly recommend to investors?

Edward Griffin: Demand for real estate is always a function of demographics. Investors might want to look at some of the opportunities in the Latin American countries, due to their rapidly growing populations or towards Asia for the massive rural to urban migration.

What are the trends related to the industry that you see playing out in the near future? 

Edward Griffin: One macro trend that is significantly impacting real estate is that of maximizing efficiencies; a function of being in a low growth environment, where businesses are keen to operate at maximum efficiency.

Real estate is a large component of operating costs, so corporate managers are very focused on maximizing the use of existing space. A theme in the office market today is having more people in less space. In the industrial market it means having assets as close as possible to the major distribution points.

Contact: Sarin Kouyoumdjian-Gurunlian, Press Manager, marcus evans, Summits Division

Tel: + 357 22 849 313
Email: press@marcusevanscy.com

About the Private Wealth Management Summit Fall 2011

This unique forum will take place at the Red Rock Casino, Resort & Spa, Las Vegas, Nevada, December 5-7, 2011. Offering much more than any conference, exhibition or trade show, this exclusive meeting will bring together esteemed industry thought leaders and solution providers to a highly focused and interactive networking event. The Summit includes presentations on unconventional investment strategies, Federal Tax Policy challenges, risk management strategies and the family office governance structure.

For more information please send an email to info@marcusevanscy.com or visit the event website

marcus evans group – investment sector portal

Complementing our summit format, the Investment Network – marcus evans Summits group delivers peer-to-peer information on strategic matters, professional trends and breakthrough innovations.

                            

Please note that the summit is a closed business event and the number of participants strictly limited.

About Griffin Partners

Griffin Partners is a commercial real estate investment, management, development and leasing company. With more than three decades of experience, the firm’s principals have the skills and knowledge to evaluate a property or project and create the right strategy to maximize its value or result. Griffin Partners specializes in acquiring and managing key commercial properties that increase value and provide attractive returns for investors. Our team offers a full range of services to corporate and institutional real estate owners, including development, investment management, acquisition and disposition, asset and property management, marketing and leasing.

www.griffinpartners.com

About marcus evans Summits

marcus evans Summits are high level business forums for the world’s leading decision-makers to meet, learn and discuss strategies and solutions. Held at exclusive locations around the world, these events provide attendees with a unique opportunity to individually tailor their schedules of keynote presentations, think tanks, seminars and one-on-one business meetings. For more information, please visit www.marcusevans.com 

All rights reserved. The above content may be republished or reproduced – kindly inform us by sending an email to press@marcusevanscy.com

 

Unconventional Opportunities in Private Wealth Management

Helen Kearns, a keynote speaker at the marcus evans Private Wealth Management Summit Fall 2011, on unconventional investment strategies.   Interview with: Helen Kearns, President & Chief Executive Officer, Bell Kearns & Associates Ltd. & Board Member, Ontario Teachers’ Pension Plan

FOR IMMEDIATE RELEASE

Unconventional investing does not mean taking additional risks, according to Helen Kearns, President & Chief Executive Officer, Bell Kearns & Associates Ltd. & Board Member, Ontario Teachers’ Pension Plan. On the contrary, it can mean reducing risks.

A keynote speaker at the upcoming marcus evans Private Wealth Management Summit Fall 2011 in Las Vegas, Nevada, December 5-7, Kearns talks about unconventional investment strategies, risk management and exploring new opportunities.

What unconventional, yet successful, investment strategies have you observed at the Ontario Teachers’ Pension Plan?

Helen Kearns: I have made a number of observations that investors could benefit from. Although they deviate from conventional thinking, that does not necessarily mean taking on more risks.

For instance at our firm, we utilize re-balancing tools to move capital between asset classes and portfolios in order to manage risk and returns. Our system means that we often advise clients to buy when they do not feel like doing so, and sell when they are optimistic. Selling Canadian equities to buy bonds in early 2008 is an example.

We also assign a risk budget, a discipline that we imported from the pension world. We can do this at the total portfolio level, deciding with the client how much of their assets can be used to try and achieve value added returns, this sometimes includes alternative asset classes. 

In most portfolios, real estate falls in the alternatives category. We try to find income producing real estate with boring but sustainable returns, as it can compliment bonds in bringing stability to the portfolio with slightly higher returns.

How do you identify investment opportunities?

Helen Kearns: One of the major lessons that I have taken away from Ontario Teachers’ is to embrace the exploration of new opportunities. To be unafraid of looking at new markets and investment opportunities, but in a very measured way and in incremental steps. If it does not work out, the risk will be contained in a small amount. If it does work out, then you will have identified a source of return that may punch above its weight in the portfolio.

What strategies are available for mitigating risks?

Helen Kearns: The first and most important risk management strategy is changing the conversation. Most investors begin the investment process by focusing on the return they are seeking: “I am looking to achieve eight per cent per annum”. We think this is a backwards way of approaching a portfolio, as risks become secondary.

We begin by discussing risks at length. One of the lessons of 2008 was that risk is not one word. There is capital risk, liquidity risk and duplication of risk. This helps us focus on diversification across the total portfolio and cross-check our risk reference points along the way, to ensure that all stakeholders are comfortable with the investment risks that we will be assuming.

Any final thoughts?

Helen Kearns: The most important thing that we do for our clients is to build a framework for decision-making. Instituting a framework and proper governance allows a family to go back to the dinner table and enjoy being a family.

Contact: Sarin Kouyoumdjian-Gurunlian, Press Manager, marcus evans, Summits Division

Tel: + 357 22 849 313
Email: press@marcusevanscy.com

About the Private Wealth Management Summit Fall 2011

This unique forum will take place at the Red Rock Casino, Resort & Spa, Las Vegas, Nevada, December 5-7, 2011. Offering much more than any conference, exhibition or trade show, this exclusive meeting will bring together esteemed industry thought leaders and solution providers to a highly focused and interactive networking event. The Summit includes presentations on unconventional investment strategies, Federal Tax Policy challenges, risk management strategies and the family office governance structure.

For more information please send an email to info@marcusevanscy.com or visit the event website

marcus evans group – investment sector portal

Complementing our summit format, the Investment Network – marcus evans Summits group delivers peer-to-peer information on strategic matters, professional trends and breakthrough innovations.

                                      

Please note that the summit is a closed business event and the number of participants strictly limited.

About marcus evans Summits

marcus evans Summits are high level business forums for the world’s leading decision-makers to meet, learn and discuss strategies and solutions. Held at exclusive locations around the world, these events provide attendees with a unique opportunity to individually tailor their schedules of keynote presentations, think tanks, seminars and one-on-one business meetings. For more information, please visit www.marcusevans.com 

All rights reserved. The above content may be republished or reproduced – kindly inform us by sending an email to press@marcusevanscy.com