FiNETIK – Asia and Latin America – Market News Network

Asia and Latin America News Network focusing on Financial Markets, Energy, Environment, Commodity and Risk, Trading and Data Management

Brazil:Inseed Investimentos selects eFront

EFront, a leading software provider of solutions for managing alternative investments, has signed a new Brazilian client, Inseed Investimentos, a prominent venture capital firm based in Belo Horizonte.

With over 40 companies in its portfolio, Inseed Investimentos has a strong track record of investing in innovative companies with high growth potential in the early stages of development. The company will be making use of eFront’s front-to-back integrated solutions to improve efficiency and investor relationships and structure its investment operations and fundraising activity.

The client win forms the latest chapter of eFront’s ongoing expansion into Brazil where it already provides solutions to the largest private equity firm in Latin America, GP Investments. In order to support these clients and the broader regional market eFront will be opening an office in Rio de Janeiro later this year. GP Investments has invested more than USD$5 billion across 15 different sectors, and as eFront’s cornerstone regional client is a big factor in the decision to expand.

Ayman Daif, Area Sales Manager of eFront, says “With Brazil’s fast-growing alternative investment market, this is an incredibly exciting time to make inroads into the region; over the past decade the Brazilian private equity sector has deployed over USD$22 billion in capital, and this is only accelerating. Private equity funds have played a key role in Brazil’s economic rise, helping to professionalize family-owned businesses, improve corporate governance and provide much needed growth capital.

eFront’s software solutions are designed to help general partners, limited partners and fund administrators automate and optimize all aspects of managing both investment and investors. For example, with eFront GPs can automate difficult and often error-prone tasks such as issuing capital call notices, managing investor allocations and fees, and closing financial periods.

Source: Finextra 30.07.2013

Filed under: Brazil, Latin America, Wealth Management, , , , , , , , ,

Latin America: Investors News Letter 14 March 2013

Top Ranking Banks in Latin America
After a decade of unusual success, the LatAm banking sector has slowed its growth
The year 2011 closed with disturbing news. Banco Santander decided to sell its subsidiary in Colombia, which finally Chile’s Corp Group bought for US$1.225 million. At the time, the chairman of Santander, Emilio Botin, said the measure was taken to “strengthen the balance sheet” of the crestfallen Spanish giants. As he explained, “Our market share in commercial banking in Colombia is far from the 10% which we aspired to get in the markets where we operate.” …

LatAm Hedge Fund Experts Weigh In
On the Current Political and Economic Context
Though 2011 and 2012 have been strong years for LatAm hedge funds, particularly relative to other regions, the political and Workings macroeconomic context in which local managers are investing has been fraught with complicated developments.  For instance, the slowdown in China has affected commodities markets, the lifeblood of many of the region …

Investors Ditch Brazil For Mexico, Colombia

Gramercy Adds to Latin America Private Equity Investment Team

IFC Invests $100M in Energy for Caribbean, Latin America

Brazil

2013 Oil & Gas Industry Perspectives  Brazil
Brazil is heralded as the largest and most significant new oil and gas prospect of the last few decades. However, there is still a long way to go to realize the promise of a new non-OPEC stable source of supply in the top 5 world oil producers by 2020. Progress toward this ambitious target has been slow in the last year, as project development, execution and political risks have taken their toll …

Brazil Real Drops on Speculation Credit Rating May Be Lowered

First meetings on Guyana-Brazil infrastructure project begins

Paraná green lights process to start Paranaguá port infrastructure works in Brazil

ETF investors avoid Brazil

Brazil Seeks Recipe to Attract Investors at Lower Cost

Brazil May Be Next Health-Care Frontier for Global Investors

Troubled Brazil fund Laep to sell 40 mln new shares-filing

BTG Pactual shuts macro hedge fund to new money

Argentina

Argentina Is Replaying Another Inflationary Collapse

Mining investment in Argentina grows 72% despite risky business climate

Fernandez Angers Investors While Ducking Argentine Austerity

Colombia

Foreign direct investment in Colombia seen down in 2013

Chile

Top LatAm selector on working Chile’s red tape

Banchile builds with Fidessa’s sell-side trading platform and connectivity network

Costa Rica

Costa Rica Constructing $96M Oil Terminal

Peru
Peru announces major upgrade to Lima’s water infrastructure

Peru’s Private Pension Funds Want Higher External Investment Limit

Qatar “looks favorably upon” investment-friendly Peru

Peru’s Private Pension Funds Want Higher External Investment Limit

Velarde Says Peru May Allow Pension Funds to Invest More Abroa

Venezuela

Venezuela to Create New Parallel Exchange Rate, Ramirez Says

Venezuela will establish a new parallel exchange rate as it seeks to crack down on a black market in which the dollar is worth about four times more than the official rate, Oil Minister Rafael Ramirez said.

Filed under: Argentina, Banking, Brazil, Central America, Chile, Colombia, Latin America, Mexico, Peru, Venezuela, , , , , , , , , , , , , , , , , , , , ,

Alternative Latin Investor: Hedge Fund Latin America Issue 19

We are proud to announce the launch of our 19th issue of Alternative Latin Investor, with a special focus on Hedge Funds within the region.

Special Issue: Hedge Funds Latin America

 LatAm’s Maturing Hedge Fund Industry  – The Need for More Managers in the Andean Region

Why LatAm Equity Funds are Looking Beyond Brazil

LatAm Hedge Fund Experts Weigh in on the Current Political and Economic Context

Hedge Fund Marketing Post-JOBS Act: Concepts to Begin the Advertising Conversation

Victor Hugo Rodriguez of LatAm Alternatives
LatAm’s Maturing Hedge Fund Industry

As they did in 2011, LatAm hedge funds are leading the world in returns in 2012. According to the November Eurekahedge Report, which tracks global returns through October, LatAm is up 8.17% in 2012, well head of Asia ex Japan, with 6.40%, and emerging markets in general, with 6.14% …

Latin American Art
2012 Auction Recap
Following inconsistent results during the 2-week stretch of mega-auctions of Impressionist/Modern and Art Post-War/Contemporary art at Sotheby’s, Christie’s and Phillips, anticipation for the Latin American art sales ran high. Evening sales featuring Latin American masterworks at both major auction houses preceded considerable day-sale offerings …

…and much more. Banking, Regulations, Political Risks,  Foreign Direct Investment, Renewable Energy, Agri Business, Wine Investment, Infrastructure, Art Investment

Please view and access Issue 19  in the following formats

Virtual Viewer    http://www.alternativelatininvestor.com/issue19-preview.htm

For more details and information please view http://www.alternativelatininvestor.com

Source: AlternativeLatinInvestor 14.12.2012

Filed under: Argentina, Brazil, Central America, Chile, Colombia, Energy & Environment, Latin America, Mexico, News, Peru, Risk Management, Wealth Management, , , , , , , , , , , , , , , , , , ,

Alternative Latin Investor: Investing in Mexcio Issue 14

The Alternative Latin Investor Issue #14 is focusing on Investing in Mexico.  Below some of the other content of issue #14. LAWEA pronounces 2012 ‘The Year of Wind,’ we explain how investors can publicly trade private equity in Mexico, as well as an in-depth update of foreign land regulation in Brazil and Argentina.

Special Issue: Investing in Mexico

    • Finding the Value in Mexican Real Estate
    • Understanding the Mexican Mortgage
    • The  Mexican Investment Environment
    • Investment Opportunities in Business Hotels and Affordable Tourism
    • Mexico City: Car Addiction
    • Improving Mexico’s Housing Finance Infrastructure
    • Private Equity in Mexico: Capitalizing on the Growing Middle Class
    • CKDs: The Marriage of Wealth and Growth
    • Mexico’s Outlook for 2012 and Beyond
    • What We Talk About When We Talk About  Infrastructure

Renewabale Energy:  2012: LatAm’s Year of Wind Energy
Agriculture Business:Red Roses, Blue Skies: A glimpse at the LatAm flower industry
HF:  What Hedge Funds Association (HFA) members have to say about LatAm
Emerging Markets: How Will European Banks’ problems affect  Latin America
Profiles:Investing in Argentina: A legal  Perspective
Forex:Trading LatAm currencies in 2012
Real Estate

  • 40  years of residential and commercial  Development in Colombia
  • Unconstitutional regulation in Brazil
  • Argentina’s Rural Land Law

Private Equity CKD: Public Private Equity
Latin American Art
Philanthropy
Regulation: Rural Land Laws – Brazil and Argentina

Please view and access Issue 14 in the following formats

Virtual Viewer   www.alternativelatininvestor.com/issue14-sample.htm

PDF   www.alternativelatininvestor.com/issue14-sample.pdf

For more details and information please view http://www.alternativelatininvestor.com

Source: AlternativeLatinInvestor 24.02.2012

Filed under: Argentina, Brazil, Chile, Colombia, Energy & Environment, Latin America, Mexico, Peru, Wealth Management, , , , , , , , , , , , , , , ,

Alternative Latin Investor: Latam Family Office January 2012 Issue Nr 13

The Alternative Latin Investor Issue #13 is focusing on family offices.  With some great content this issue, from maverick economist Doug Casey, estimates on the effect of climate change in the region, and of course with premium focus looking at the needs, attitudes and opinions of family offices in LatAm. Below some of the other content of issue #13.

 Renewable Energy 

  • Electric Energy Storage in Latin America: Smart Grid Technologies.

Funds 

  • Top Ten LatAm Hedge Funds
  • Mutual Funds in Argentina
  • Latin America fund assets to exceed $3 trillion by 2020

Emerging Markets

  • 2012 Should Be Better: A wasted year for LatAm Stock Markets
  • Investors Beware of Brazilian FIDCs (ABS) Backed by Consumer Credit

Agribusiness

  • Gauging the Effects of Climate Change on Brazilian Agri Output
  • 2011 Agribusiness Round Up

Forex

  • SPOT-trade’s Facundo Molina on Forex and CDFs
  • Mitigating Currency Risk when investing in LatAm

Private Equity 

  • A Primer on Colombian Taxes for the PE Investor

Art

  • Meso-American Remix
  • LatAm auction recap: Sotheby’s and Christie’s

Issue Focus: LatAm Family Business

 Please view and access Issue 13 in the following formats

Virtual Viewer
http://www.alternativelatininvestor.com/issue13.html
PDF
http://www.alternativelatininvestor.com/issue13.pdf 

For more details and information please view http://www.alternativelatininvestor.com

Source: AlternativeLatinInvestor 23.12.2012

Filed under: Argentina, Brazil, Central America, Chile, Colombia, Energy & Environment, Events, Latin America, Mexico, News, Peru, Services, Wealth Management, , , , , , , , , , , , , , , , , , , , , , , , , ,

Alternative Latin Investor: Latam Fund & Investment Trends- December 2011 Issue Nr 12

Latin America fund assets to exceed $3 trillion by 2020
-Driven by appetite for Asia – U.S. and European asset managers benefit most

While still smaller than other global regions in terms of aggregate assets – around US$1.4 trillion in mutual fund assets and about $710 billion in pension assets – fast growth in Latin America as a region is capturing the imagination of investors, distributors and asset managers alike, with tactical and strategic opportunities prompting resource allocations and investments.

Subscribe to the free issue of  at http://www.alternativelatininvestor.com/index.html.

Source: Alternative Latin Investor, 06.12.2011

Filed under: Argentina, Brazil, Chile, Colombia, Latin America, Mexico, News, Peru, , , , , , , , , , , , , , , , , , , , , , , , , ,

Latin America Fund and Investment News Aug-Oct 2011 – Alternative Latin Investor

American Business Practices in Brazil: A Contrarian’s View

Premium Article OCT, 2011 U.S. companies have been investing heavily in Brazilian private equity in recent years, capitalizing on the across-the-board growth in the country’s small, mid and large cap companies. But according to Malcolm McLelland, an American-born, Brazil-based consultant and…Read Full Article

Latin American Hedge Funds

Premium Article OCT, 2011 Hedge funds have become one of the most vital asset classes in LatAm in recent years, and LatAm hedge funds some of the most successful in the global industry, as local investors aim to diversify their strategies and exposure in the region while foreign investors vie for b…Read Full Article

Brazil

Premium Article OCT, 2011 Given its robust growth in recent years and massive wealth compared to its neighbors, Brazil has attracted the lion’s share of global investment in LatAm, with foreign investors allocating especially aggressively to equity and government bonds. Brazilian investors, …Read Full Article

MILA Integrated Latin American Market

OCT, 2011 On May 30 of this year, the Integrated Latin American Market (Mercado Integrado Latinoamericano, or MILA) was launched, combining the stock markets of Colombia, Chile and Peru into a single cross-trading platform. A key component of a regional trend toward integration, MILA has been wide…Read Full Article

Brazilian Pension Funds

Premium Article OCT, 2011 Alternative asset managers around the globe are vying for the attention of Brazil’s swelling pension funds. As of early 2011, these funds had a total of $342 billion under management and had grown an average of 14% per year for the last five years, one of the highest…Read Full Article

Meta-Trends in LatAm Investment

Premium Article OCT, 2011 The progress of alternative asset investment in LatAm is following two basic meta-trends, that is, large-scale and long-term patterns that transcend specific products, firms or opportunities. These meta-trends are, first, the increasing interpenetration of managers from th…Read Full Article

High Net Worth Individuals in LatAm

Premium Article AUGUST, 2011 The wealth and quantity of high net worth individuals (HNWI) in LatAm has grown in recent years. According to the Capgemini/Merrill Lynch World Wealth Report 2011, the number of LatAm HNWI grew by 6.2% in 2010, and its total HNWI wealth by 9.2%. There are about a half…Read Full Article

Quant Funds

Premium Article AUGUST, 2011 After taking a battering during the 2008 credit crunch and struggling in the early stages of recovery, quantitative (or ‘quant’) funds are trying to reassert themselves in the industry. And a small, but growing, number are looking to start afresh in the …Read Full Article

LatAm Funds

Premium Article AUGUST, 2011 U.S. Institutional investors looking to increase their exposure to emerging markets have been turning increasingly to a handful of LATAM countries, where they see a swelling pool of experienced fund managers working within a context of political stability and economic g…Read Full Article

Institutional Investing in LatAm

Premium Article AUGUST, 2011 For most institutional investors, there is an uncertainty about LatAm´s quality and future – and a certainty about its checkered past – that gives them pause as they investigate young managers in the region. Most of these investors want to see a stron…Read Full Article

Source:Alternative Latin Investor, October 2011

 

Filed under: Brazil, Chile, Colombia, Exchanges, Latin America, Library, Mexico, News, Peru, Risk Management, Services, Wealth Management, , , , , , , , , , , , , , , , ,

Alternative Latin Investor: Premium Launch Issue Nr 11.

Alternative Latin Investor August 2011 – Issue 11 Premium Launch Issue

 News

Political Moves: brought to you by Latinnews.com

Emerging Markets

Growing M&A Activity between Asia and Latin America?

Latin American Venture Capital: Lessons Learned from China

Be careful What You Wish For- A Brazilian Cautionary Tale

Philanthropy

Cuipo: Saving the Rainforest One Meter at a Time

Nuts: Crops that Grow Well in LatAm

Entering The Brazilian Agribusiness Sector (Premium)

Infrastructure

Mezzanine Financing for LatAm’s Infrastructure

Energy

Investing in Brazilian Oil (Premium)

Art

Fine Art Funds: Taking the Soul Out of Art Investing?

Hedge Funds

MILA Integration

LatAm Fund Due Diligence: What Managers Need to Know (Premium)

Institutional Investing in LatAm: A Contrarian’s View (Premium)

Attracting US Institutional Investors to LatAm Funds (Premium)

Quant Funds in LatAm (Premium)

How HNWI in LatAm View Alternative Assets (Premium)

Forex

Spotting Opportunities in LatAm Forex Trading

Regulation

Tax Incentives: Software Development in Argentina

Ventures

Mercatrade: Inter-emerging Market Trade

QuickStart Global: Have an Office Anywhere

Real Estate

Airlift Encourages Latin America to reach for the skies

Read the content  at www.alternativelatininvestor.com/issue11.html 

To subscribe please click on the corner tabs within the above magazines or click directly to www.alternativelatininvestor.com/signup.php If your firm is interested in multiple licenses we can provide corporate discounts.

Please feel free email me directly with comments or questions regarding our current content or with suggestions for future stories. I can be reached at editor@alternativelatininvestor.com or 202-905-0378.

 http://www.alternativelatininvestor.com/registration.html

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Filed under: Argentina, Banking, Brazil, Chile, China, Colombia, Mexico, News, Peru, Risk Management, Wealth Management, , , , , , , , , , , , , , , , , , , , , , ,

Alternative Latin Investor, April 2011 – Issue 9

Alternative Latin Investor April 2011 – Issue 9

- Latin American Art
 Cuban Visions Event

-Hedge Funds             
 The business of running a hedge fund

-Agribuiness
Three strategies for investing in Latam Agriculture Sector
Bamboo for construction

-Infrastructure 
A look at infrastructure development in Argentina
 
-Real Estate             
Brazil’s real estate boom and the environment
 
-Venture                       
 Private Island Inc – International island brokerage
 
-Renewable Energy   
 Bio Fuel – Brazil vs. USA
 
-Regulation 
 Argentina’s legal update
 
-Profiles 
 Amaury Junior: CIO and Founder of Vision Brazil Investments 39
 
-Wine                           
  The newest designer labels…. in a glass
 
-Philanthropy    
 Accion: Microfinance in Latin America    
 

http://www.alternativelatininvestor.com/registration.html
Register for free to gain access to new feature article

Filed under: Argentina, Brazil, Chile, Colombia, Energy & Environment, Events, Latin America, Mexico, Peru, Risk Management, Wealth Management, , , , , , , , , , , , , , , ,

LatAm Hedgefunds: Comprehensive Report and Webinar November 10th

Alternative Latin Investor is proud to present our combined LatAm Hedge Fund Report and Webinar to be hosted by Hedgehogs.net CEO, Ken Yeadon, on November 10th at 1pm EST.  Early-bird price till Nov. 2nd is 175.00USD after which price is 199.00USD.  This price includes digital edition of report with directory as well as attendance to webinar.

REGISTER HERE

We have interviewed several industry professionals; mostly fund managers, to create a comprehensive overview of the LatAm fund market. We also look at the existing LatAm fund indexes and the legal aspects of funds. Included is a profile of 30+ funds with a directory of contacts, email or phone, for over 300+ funds

  • Industry Overview
  • Growth of Industry
  • Legal Aspects
  • LatAm Fund Indexes
  • Changes in Legal Aspects
  • 30+ Fund Profiles
  • 300+ Directory
  • The Economist on Hedge Funds

Webinar

Topics to be discussed
  • LatAm funds versus Global Macrofunds or Emerging Market funds with LatAm exposure
  • New investor demographics, or the same?  And who are they?
  • Institutional Participation?
  • Has there been a change in global opinion of LatAm funds due to crash of US/Euro markets?
  • Has this created a vacuum for LatAm to fill?
  • With the developed world seemingly on the path of competitive devaluation vs. emerging markets, how do the panel see Latin American investments being impacted?
  • Asian countries, in particular China, are increasingly looking to secure commercial rights over global supply chains for resources. (e.g. recent headlines over global supply of Rare Earths, a critical commodity input to green energy technologies and mobile devices). How is this impacting Latin America, and are any Latin American countries following similar strategies (via Sovereign Wealth Funds for example) to exploit their natural resource advantages? Does this represent an investable theme for Latin American funds?

Host

Ken Yeadon - CEO of Hedgehogs.net, a social application platform for the hedge fund and investment industry and those who serve it.

Ken is the former head of trading, sales and e-commerce for HSBC Asia-Pacific. He has a successful track record in angel and venture investing in financial technology, and in high frequency trading, stat-arb and quantitative/arbitrage trading. He has also managed several liquidity management infrastructure and financial CRM projects for banks, brokerages and technology vendors. Ken has an MBA from John Cass Business School and a BA in Economics from Nottingham University.

Expert Panel

Sonia Villalobos Co-portfolio manager of the LV Pacific Opportunities Fund
She was formerly Head of Latin American Equities at Larrain Vial AGF. A Brazilian citizen, she has more than 25 years of experience in the LatAm capital markets. She was Head of Research at Garantia in Sao Paulo from 1989 to 1996 and Vice President at Bassini, Playfair & Associates from 1996 to 2002. She holds a Bachelor and Master’s degree in finance from the Fundación Getulio Vargas in Sao Paulo. In 1994 she obtained her CFA, the first person in Latin America to achieve it.

Andres Azicri President and Founder of Convex Management
Prior to founding Convex, Andres Azicri was a Managing Partner of Cima Investments and the senior portfolio manager of the Cima Aconcagua Fund. Before joining Cima, Mr. Azicri was the head of Asset Management at MBA, prior to which he headed the Proprietary Desk for Latin America at Bankers Trust in New York (1997-1999) and the Emerging Markets Fixed Income Research Department at Oppenheimer & Co., in New York (1995-1997). Mr. Azicri is an economist from the University of Buenos Aires (1988), and is currently a professor of finance at CEMA University and the University of Buenos Aires.

Carlos Rojas Portfolio Manager Compass Perú
Portfolio Manager of the Peru Special Investment Fund. He joined Compass in 2006 after working for 12 years in the financial industry. In his previous role he managed over US$ 300 million for the Rimac Group and was also an investment advisor for the Brescia Group. Previously he performed roles in M&A operations, financial structures, derivatives, and trading. Mr. Rojas has a BA in Business Administration from Universidad del Pacífico in Peru.

Andrew Cummins Founder and Chief Investment Officer of Explorador Capital Management, LLC.
Previously, Andrew worked for Emerging Markets Investors Corporation, focused on investments in Argentina, Chile, Peru and Ecuador. Andrew holds an M.B.A. from Harvard University and a B.S. from the University of California at Berkeley. He has lived and traveled in Latin America over the last 20 years. Andrew serves on the Board of INPAR, a publicly traded Real Estate company in Brazil.

Webinar:

Date: November  10th
Time: 1pm EST
Price: USD 175.00 early bird till Nov. 2nd
USD 199.00

REGISTER HERE

Filed under: Argentina, Banking, Brazil, Central America, Chile, Colombia, FiNETIK Events, Latin America, Mexico, News, Peru, Risk Management, Services, Trading Technology, Wealth Management, , , , , , , , , , , , , ,

Alternative Latin Investor Issue 6 September/October

Alternative Latin Investor Issue 6 September/October 2010 click here for a free issue

Issue 6 Content Index

  • Infrastructure Municipal Bonds in Latin America
  • Emerging Markets Let the World See Your Wares in the Right Light
  • Investment Flows and Stock Market Returns p
  • Agribusiness Beekeeping in Latin America
  • Art Pinta: The Contemporary and Modern Latin American Art Show
  • Commodities The BP Oil Spill
  • Sowing Pools: Alternative Financing
  • Funds Latin America’s Favorite Sport: For Sale
  • Philanthropy Ashoka: Inspiring and Supporting Tomorrow’s Leaders
  • Regulation Due Diligence: You Bought the Company, Now What?
  • Renewable Energy Opportunities in Argentine Biodiesel
  • Ventures Real Estate Colombia: Founder Chad Smalley
  • Economist Emerging Market Forecaster
  • Wine Stocking up for World Cup 2014
  • Hedge Funds The Spectrum of Investors for Latin American Hedge Funds by Merlin Securities

Source: Alternative Latin Investor 22.09.2010

Filed under: Argentina, Banking, Brazil, Chile, Colombia, Latin America, Mexico, News, Services, Wealth Management, , , , , , , , , , , , , , , , , , , , , , , ,

Alternative Latin Investor Issue 5 July/August

Alternative Latin Investor Issue 5 July/August 2010 click here for a free issue

Issue 5 Content Index

  • Argentine Wind Power A solid investment opportunity in Argentina’s market for wind energy
  • Vanilla Investment potential of the world’s second most expensive spice
  • The Latin American Trust Patricio Abal & Gonzalo Oliva-Beltrán explore a useful tool in project finance.
  • A New Era for Investment in Argentina Javier Canosa discusses post crisis investment issues in Argentina
  • Mexico: Superstar Player of the Emerging Economies Latin America’s newest investment beacon
  • Cuba: Return to capitalism?
  • Merlin Securities’ Best Practices for Latin American Fund Managers
  • Christie’s Latin Art Sale Breaks $20 Million Dollars
  • Chinese Brazilian Trade Ties Continue to Grow
  • Fine Wine Investors Thank Latin America for a Healthy Profit
  • Nordeste Invest : Coming to terms with a new reality        
  • Mark McHugh discusses the resilience of the Brazilian Real Estate Economy
  • Lending Opportunities In Mexican Affordable Housing
  • Mexico’s sovereign debt looks more attractive at present than that of any other G-8 country
  • LatAm Real Estate Index
  • Private Equity real estate investing  in Latin America
  • Forex:  The World Cup Effect
  • Investment Analysts Try Their Luck with World Cup

Source: Alternative Latin Investor 23.07.2010

Filed under: Argentina, Brazil, Chile, Colombia, Energy & Environment, Latin America, Mexico, News, Services, Wealth Management, , , , , , , , , , , , , , , , , , , , , , ,

CSRC outlines how funds can invest in CSI 300 futures

The regulator releases an early draft of the proposed rules for Chinese mutual funds that want to invest in CSI 300 index futures.

s fund analysts and managers continue to attend futures training courses organised by the China Securities Regulatory Commission, a draft of the CSRC’s proposed rules on how Chinese mutual funds can invest in the upcoming CSI 300 index futures hit the industry’s email inboxes earlier this week.

The regulator is encouraging discussion in the industry; it wants the public to provide feedback on the rules by this coming Monday, March 22.

A first glance through the five-page draft seen by AsianInvestor suggests the rules look straightforward, and its broad strokes read largely the same — both in language and spirit — to the rules for futures investing by fund managers in Taiwan. (This doesn’t come as a surprise; the regulations governing mutual-fund investments in securities, which went into effect in China in 2004, were also modelled after those in Taiwan.)

In the draft, the CSRC does not go into detail on how managers will qualify for futures-investing status. Fund houses, instead, are advised to review their fund prospectuses and contracts agreed with investors back at the fundraising stage and decide for themselves whether futures investing would meet their initial investment objective and risk exposure level as promised to investors.

For the fund industry, use of futures for the purpose of return enhancement is not permitted. The CSRC says the purpose of any fund activities in the futures market should be risk management.

The futures instruments for fund investment must be approved by and listed on China’s securities exchanges, and based on indices tracking only equity prices. (So notions of funds participating in bond futures or pretty much any other type of derivative would be futile at this stage.)

There are 559 mutual funds known to exist in China, according to the latest fund-registrar data tracking numbers published at the end of January. A quick search using the word ‘futures’ in Chinese in a fund database yields only 29 hits, in which ‘futures’ are specifically mentioned in the fund contracts or prospectuses as acceptable instruments for use by these funds.

Should these managers be willing to take up the challenge, they will theoretically be the initial 29 participants able to actually short A-shares domestically in China. (And there are 11 onshore brokerages authorised to serve them.)

Equity funds, balanced funds and principal-protected funds appear largely free to allocate to the CSRC’s approved list of futures instruments. The regulator thus far has made no mention on what it intends to do about segregated accounts and multi-client segregated-accounts, which went live in 2008 and 2009 respectively.

There will be limits on the holdings of futures by close-ended funds, open-ended index funds and exchange-traded funds. At the end of any given trading day, total value of securities held plus futures may not exceed 100% of a fund’s NAV — in short, leverage will not be permitted for these funds.

For open-ended funds, managers will be allowed to hold futures with a total outstanding value that exceeds 10% of the fund’s daily AUM at market closing. Net turnover of equity futures trading in a fund cannot exceed 20% of a fund’s NAV.

At the end of any given trading day, the total value of futures positions plus the value of the securities held in an open-ended fund may not exceed 95% of the fund’s NAV — with ‘securities’ defined as equities, bonds, options, asset-backed securities and repo instruments. Five percent of the fund’s assets must be allocated to liquidity instruments with maturities no longer than the equivalent of one-year government bonds.

Mindful that the funds industry at large is still poring over lecture notes and textbooks this month and that most firms have not yet hired the required techies for back-end support, the CSRC is advising caution and proper understanding; all participants should be adequately prepared before they enter the futures market. The CSRC wants fund houses to set up specific departments covering futures strategies and investments.

Other stakeholders, including guarantors to the ‘principal-protected’ funds (China’s version of CPPIs), are advised to get actively involved and aware of the potential value-at-risk for the funds they have given guarantee to; and that there should be sufficient assets to cover the principal-protected funds promised to investors should any potential losses occur.

Custodian banks are advised to review their own adequacy and strategies accordingly and develop risk-management and technological teams and platforms to support this development.

In earlier interviews with AsianInvestor, fund-rating agencies, including Morningstar and Lipper, have already taken a dim view of the opening moves that mutual fund houses will be able to make. Aside from the anticipated volatility to come, both predict a conservative and difficult early period, in which fund houses will be constrained by a lack of experienced staff and technical knowledge to draw on — for what is supposedly one of the most important chapters in the recent history of capital-market developments in China.

Nonetheless, for now, unregulated private funds, foreign investors with access to A-share markets and high-net-worth clients, and the 11 brokerages authorised to trade futures, are expected to be the largest beneficiaries.

For foreign players, though, CSI 300 futures will just be something to add to the toolbox. Overseas funds have long been able to express their views on A-shares using FTSE Xinhua A50 futures available in Hong Kong or Singapore.

Source:AsianInvestor.net, 18.03.2010 by By Liz Mak

Filed under: China, Exchanges, News, , , , , , , , , , , , , , ,

China braces for index futures; Fund experts sceptical about Chinese firms managing futures

China’s fund managers may get some nasty surprises once the newly approved stock index futures market finally kicks off. The main worries are a lack of expertise and limited investment in risk management.


China seems set on delivering market shocks at the turn of a new decade. Not only has it decided to rein in excess liquidity by raising bank reserve rates, it has finally announced its plan to develop stock index futures, after years of delay. (No doubt held back by some of the failed experiments with bond futures in the 1990s.)

On the upside, the general belief is that investors should benefit from enhanced transparency, deeper market development, product enhancement, and so on. This long-standing list was set out by market observers and foreign experts years ago. There’s no need to repeat it all here.

However, the is less consensus from consultants and fund-rating agencies on how stock index futures will affect the fund management sector. Analysts and research heads at Morningstar, Lipper and Z-Ben Advisors appear unconvinced about the ability of Chinese firms to manage these instruments.

Not that fund managers are authorised to join this new development yet. For now, only 11 authorised brokerages that have been approved to participate in the pilot schemes to trade the contracts have the qualifications to do so.

These 11 firms will only be able to express market views at an index level for the CSI 300 index. They aren’t likely to be able to do much at the individual stock level. Indeed, regulators have said little about the actual schedule of the futures market’s development.

The question then arises: If only vanilla instruments are available, will the futures market lead to product diversification for Chinese fund managers now trapped in the strait-jacket of a plain-vanilla world?

Maybe. Li Haiqing, fund analyst at fund-rating agency Morningstar in Shenzhen, says some primitive form of 130/30 strategies is likely to emerge in China. But that will happen first among the private funds that are not regulated by the securities regulator or are under the radar of the State Council’s strategic plans — not among the fund management houses. (Long/shorts, serious forms of arbitrage strategies, are something much further down the road.)

The best fund managers in China work for private houses these days, not mutual fund managers. Because they are not regulated, they are able to put together more flexible products. And they have the support of high-net-worth customers, who can take higher risks and have deeper pockets to support investments in trading platforms and risk management expertise.

The scene at mutual fund houses, meanwhile, is at best uneven. Xav Feng, head of research for China and Taiwan at fund-rating agency Lipper, reckons most fund houses have done “studies” on the new-fangled ideas of hedging tools. More are working their way up the learning curve, and most are simply not ready.

The lack of experienced people who can even understand the risks is a big worry. Talent supply simply to deliver good results from plain-vanilla securities is stretched, let alone expertise in innovative instruments.

Among the industry’s 10 oldest mutual fund houses, for example, only three can claim to employ the local asset management industry’s longest-serving fund managers. China Asset Management Company has Fang Jun, who served as a portfolio manager at China AMC for some five years and Han Huiyong for around six years. Shanghai’s Hua An boasts Shang Jimin, who can claim a little over six years of experience. Harvest has Shao Jian, with close to six years.

There’s an increasingly common polarised structure at these older firms, with a handful of senior managers at the top and a base of young managers with short track records. Hua An may have Shang Jimin, but other than Shang, there is a long list of individuals with experience ranging from around 20 days to little more than a year.

Similarly, at Shenzhen’s China Southern, at the top there is Chen Jian, with nearly four years under his belt, and below him a group of managers, each with one to two years of experience.

“There is a long way to go,” Lipper’s Feng says. Apart from the talent factor, more importantly “there needs to be enough liquidity for index futures. If not, it would be a disaster for fund managers”. Both Feng and Morningstar’s Li reckon the underlying support of margin provisions — the availability to secure leverage — is key to the success of index futures.

As per usual in China, big securities reforms make great promises for the long term. In the short term, the picture lacks clarity and can be worrying.

“Index futures will increase the volatility of the Chinese market in the short term, because investors are not familiar with it,” Feng says. But the market shock likely to come from the launch of futures might just be a stimulus for managers to strengthen their risk management techniques for the longer haul.

At present, Chinese mutual funds’ risk exposure is overwhelmingly centred towards equity risk premium. Over the long term, theoretically, they would do better to diversify to other sources of risks — for example, through credit, liquidity and manager skill.

Yet the reality is that managers have little business in asset classes beyond equities, which is their bread and butter, and managers are mostly unable to deliver returns purely through skill (the fabled search for alpha) that are uncorrelated from market exposure (beta).

Their only current means of managing risk is through asset allocation — managers could sell equities and park their proceeds in cash, bonds or cash-equivalent instruments. (For that reason, overseas investors — or reporters — questioning Chinese managers about their risk management practices often proves futile.)

Stock index futures should help change that.

Zhang Haochuan, analyst at industry research house Z-Ben Advisors, has seen little movement in the hiring of professionals or in the investment in trading platforms specifically in preparation for stock index futures or margin trading.

AsianInvestor sources suggest Beijing-based Harvest and China AMC, Guangzhou-based E-fund and even Shanghai-based Hua An might have been the early movers. These firms have been trying hard to recruit quantitative risk management talent in Hong Kong in recent months, albeit sporadically.

Zhang says larger firms that have been caught in CSI 300 index fund launches over the past year will have more incentive and resources to mobilise suitable expertise.

There are 16 CSI 300 (largely identical) index funds on the market now. Two of these are enhanced products with built-in leverage.

As an unintended result of their multi-billion-renminbi launches last year, these 16 houses have more skin in the game than the rest of the industry. China AMC’s CSI 300 product, for example, raised Rmb20 billion ($2.93 billion) in July. It is their business to start paying attention to these new concepts of securities innovation and risk management.

Source: AsianInvestor.net, 15.10.2010

Filed under: Asia, China, Exchanges, News, Risk Management, Trading Technology, , , , , , , , , , , , , ,

The Definitive Brazilian Private Equity Guide: Part I

With all of the media surrounding the opportunities found in Brazil, TriCap Partners have created the a condensed guide, “Everything You Need to Know About Brazilian Private Equity” Part I.

Register here to download the special report for free

 

Challenges for Successful Private Equity Investments in Brazil

Someone forgot to tell Brazil that we’re in the middle of the worst global recession in history.

Brazil is quickly becoming a political and economic leader in Latin America and the world. As with the rest of the global economy, Brazil entered into a recessionary period in 2009, but economic data that have been emerging from the Instituto Brasileiro de Geografia e Estatística (“IBGE”) increasingly point to a stabilization in the economy, further suggesting that the country has perhaps been less impacted than other markets in this global recession. After the 4.4% quarter-on-quarter decline in 4Q08 and a subsequent 3.5% decline in 1Q09, the country’s GDP reached US$417.8 billion at 2Q09, up 5.2% from the prior quarter, and projected GDP growth for the second half of 2009 is running at about 4.0% or even higher (see Figure 1).

Many economists point to Brazil’s changing trade patterns as an important shield from the global recession as this year, for the first time, China overtook the United States to become Brazil’s single biggest trading partner. In addition, as copper and oil prices have remained relatively strong, Brazil’s commodity-based economy continues to demonstrate strong expansionary growth, and consumer spending, up 2.1% in 2Q09, represented the 23rd consecutive quarter of growth. Any PhD in economics can tell you, in technical terms, that this is ginormous.

Filed under: BM&FBOVESPA, Brazil, Exchanges, Latin America, Library, News, Risk Management, , , , , , , , , , , ,

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