Archive for August, 2012

Chilton Capital’s Werner Talks “REIT Elite”

The idea that all REITs are not created equal might seem obvious, but Chilton Capital Management LLC has taken steps to identify those REITs that stand head and shoulders above their peers.


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The Houston-based wealth management firm has tagged these companies as “REIT Elite”—a catchy moniker for sure, but the numbers behind the REIT Elite prove they have as much substance as style.


NREI caught up with Matthew Werner, a portfolio manager and analyst with Chilton Capital Management, to talk about the genesis of REIT Elite, the companies that deserve such a title and what sets them apart from other REITs.


An edited transcript follows:


NREI: Can you explain the whole concept of REIT Elite?


Matthew Werner


Matthew Werner: The REIT Elite is our way of segregating REITs that have a distinguished record of producing above average total returns to shareholders over a long period, and we believe have the best chances of continuing to do so going forward. These are the blue chip, core quality holdings that an investor should buy for his or her grandparents, parents and children. They are the “sleep at night,” confidence-inspiring companies with management teams and operational expertise that REIT investors can rely on for above average earnings growth over long time periods, despite changing economic conditions.


The idea behind the REIT Elite was to respond to the flow of money we have seen go into high quality dividend paying stocks. We started thinking about a portfolio of REITs that would be able to be put on autopilot for the next 10 years without having to worry about what direction interest rates are moving in or if they were going to miss a consensus quarterly earnings estimate by a penny. Instead, the REIT Elite give investors the peace of mind that they will manage through each scenario as well as they possibly can, acting in the best interests of shareholders.


NREI: Investors are familiar with the idea of blue chip stocks. Does the idea of REIT Elite take the idea of blue chip to the next level?


Matthew Werner: The term blue chip has traditionally been reserved for industrial companies with distinguished records. We have not seen it used in the REIT space. In the REIT space, our version of blue chip is usually referred to as core. Like blue chip industrial companies, core REITs have a favorable track record, strong credit ratings, and a product that has been, and will continue to be, in demand.


Of the 123 equity REITs as of June 30, 2012, we have classified 28 as core. However, analysis of these 28 companies found that 11 of them created total returns for shareholders far above the average for their competitors, and they had many characteristics in common. Importantly, the average REIT Elite member produced a total return of 725 percent for shareholders over the 10 year period ending July 19, 2012, while the MSCI US REIT Index produced a total return of 214 percent.


NREI: What metrics did you use to identify the REIT Elite?


Matthew Werner: In addition to producing above average total returns for shareholders, the REIT Elite can be identified by looking at the income statement, balance sheet and the management team. Specifically, we looked at metrics surrounding the capital structure, predictability of the dividend, management team track record and operational excellence.


Each member of the REIT Elite stressed having the most flexible balance sheet. They maintain a manageable dividend that leaves room for growth. Management teams have established a track record of smart capital allocation and transparency with investors, tenants, their boards of directors and fellow employees. Last, they have a focused effort on finding the best properties in the best locations, and then growing cash flows at the property level at a rate above the average for the submarket.


NREI: Your firm highlighted 11 REITs that qualify as REIT Elite. What do they have in common?


Matthew Werner:The 11 companies we found that excelled in the metrics were: AvalonBay Communities, Federal Realty Trust, Simon Property Group, Ventas, Eastgroup Properties, Essex Realty Trust, HCP Inc., Public Storage, Boston Properties, Taubman Centers and newcomer American Tower Corp.


Each one of these companies consistently trades at above average multiples of Funds from Operations (FFO) and Adjusted Funds from Operations (AFFO), and commands a premium to net asset value (NAV) under most market conditions. They trade at these high valuations due to the metrics cited earlier: flexible balance sheets, low dividend payout ratios, consistent same store net occupancy income growth, and management teams whose reputations are second-to-none.


NREI: Many investors would consider these REITs to be pricey. And your own firm doesn’t own all of these stocks either. What can you tell us about valuation?


Matthew Werner: As a group, these 11 REITs trade at a price/2013 FFO multiple of 20.0x and a price/2013 AFFO multiple of 23.1x as of July 19, 2012, which are well above the REIT averages of 16.1x and 20.1x, respectively. Additionally, they trade at an average of 21percent above their consensus NAV.


The market has ascribed a premium valuation to them due to confidence that the management teams will continue to make value-enhancing decisions on multiple fronts. Also, the REITs included in the REIT elite own mostly core properties, which are the most sought after by institutional investors.


The flight to quality by institutions looking for yield and liquidity has driven up the valuations for the REIT Elite relative to the rest of the REIT universe even more than normal. Lastly, their size and presence in indices (both REIT and non-REIT) keeps them in high demand as “must-own” for many institutions that have mandates to maintain exposures.


NREI: An important differentiator for the REIT Elite is the predictability of the dividend. How do the REIT Elite compare to the REIT universe at large?


Matthew Werner: A high percentage of REITs cut their dividends in the 2008-2010 time period. Remarkably, eight of the 11 REIT Elite members did not cut their dividends (AMT did not pay a dividend and was not classified as a REIT until January 1, 2012).


Despite frequent dividend raises and lack of dividend cuts, the average payout ratio for the REIT Elite is 65 percent of AFFO today, far below the average for the REIT sector of 74 percent. This gives investors confidence that the dividends will be increasing over the near and long term.


NREI: The value of a REIT’s management team is difficult to determine, yet your evaluation includes this qualitative element, as well as other hard-to-measure components. Why are these components an important part of your equation?


Matthew Werner: An outsider looking into the REIT landscape could easily make the assumption of think¬ing a REIT is merely a collection of buildings, instead of a company with employees and future value creation potential.


We argue that a strong leadership team is as, if not more, important in the real estate business as in other sectors for several reasons. First, there is constant cash flow coming into the business, which requires prudent capital allocation deci¬sions. Second, real estate is characterized by high leverage so a CFO must be disciplined to maintain relatively conservative targets. Third, the risk and return associated with develop¬ment is alluring and should only be attempted if there is a favorable track record to assure shareholders there will be value added.


NREI: What about the balance sheet of the REIT Elite? Is there a measureable difference in the way the balance sheets are managed that propels them to REIT Elite status?


Matthew Werner: To measure balance sheet flexibility, we look at several metrics, which include the debt/ total market capitalization, debt/gross asset value (GAV), and net debt/EBITDA ratios. As of March 31, 2012, the REIT Elite average debt/total market capitalization ratio was 28 percent.


PSA leads the way with a 2 percent ratio. The average REIT has a debt/total market capitalization ratio of 38 percent. The debt/GAV ratio average for the REIT Elite stood at 31percent, which again is much more conservative than the average REIT at 40 percent. Lastly, the average net debt/EBITDA ratio for all of the REIT Elite members was 5.5x, versus a REIT average of 7.0x as of March 31, 2012.


NREI: From an investor standpoint, what would I miss out on if I invested only in the REIT Elite?


Matthew Werner: You would miss all of the REITs that could potentially become members of the REIT Elite of the future! Each member of the REIT Elite had to come from somewhere.


Though there is higher risk associated with these companies, the commensurate return that comes from spotting a REIT that is not yet recognized for some of its elite qualities can add significant value to a portfolio. Some companies may never become Elite, but there are still times when a REIT is mispriced by the market and there is the potential for outsized returns relative to the risk.


If you had to pick 11 REITs in a portfolio and were not planning on making any trades for the next 10 years, these would certainly be the first 11 we would recommend. However, we believe we can add value over a static portfolio of the REIT Elite bucket by taking calculated risk where appropriate. And we are more than happy to oblige when a member of the REIT Elite is priced to produce a total return that is acceptable for the low risk.


NREI: Is there anything else that differentiates the REIT Elite?


Matthew Werner: The management teams of the REIT elite have realized that high leverage does more harm than good, so their liability management skills have been superior. The capital allocation prowess of many REITs was very notable in the 2006/2007 period when REITs were huge sellers of property at record high valuations while private funds were buyers only to see a 30 percent to 40 percent drop in value in 2008/2009.


Many of these private funds used leverage which ended up destroying the equity. This period turned out to be a defining moment for the REITs in the modern REIT era.


In the past 20 years, the best REITs have improved the quality of their assets, lowered debt leverage, and brought dividend payout ratios down to record low levels. We look forward to seeing how the REIT Elite will perform over the next 20 years that will surely be filled with equally surprising economic shifts and market movements.

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Friday, August 31st, 2012 EN No Comments

Picking winners and avoiding losers early is key to investing

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Advent’s Asset and Wealth Management Solution Sweeps All Four Categories …


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M2 Communications

ENP Newswire – 31 August 2012

Release date- 30082012 – SAN FRANCISCO – Advent Software, Inc. (NASDAQ: ADVS), a leading provider of software and services for the global investment management industry, today announced that Advent Portfolio Exchange (APX) – Advent’s end-to-end portfolio management solution for asset and wealth management – was awarded top honors in the CEB TowerGroup Portfolio Management Systems Technology Analysis.

Advent Portfolio Exchange was named a best-in-class in all four technology categories assessed: Portfolio Tools, Advisory Experience, Workflow Management and Enterprise Support.

‘The financial services industry highly values portfolio management systems to drive efficiencies for wealth managers, asset managers and advisors while enhancing decision making and improving relationships with their clients,’ said CEB TowerGroup senior research director Peter Delano. ‘CEB TowerGroup identified 24 attributes that define a ‘Best-in-Class’ Portfolio Management System in wealth management, which are grouped into four categories to support firms in their purchase decisions.’ CEB TowerGroup research director Darrin Courtney, co-author, added, ‘Finding the proper technology vendor is important, as recent CEB TowerGroup research found that, of wealth management firms surveyed, Portfolio Management is considered the most valuable technology.’

In today’s complex and competitive investment landscape, asset managers rely on technology to keep them ahead of the curve. APX is the first integrated portfolio management and client relationship management solution to deliver the tools needed across the entire enterprise-from front, middle and back offices-on a single platform. The solution offers portfolio tools, reliable data and calculations to streamline workflows and support the objectives of end users, while improving investment managers’ ability to effectively communicate portfolio performance and deliver returns for the clients they serve.

‘It is an honor to see APX recognized as a best-in-class across multiple categories in the CEB TowerGroup report. APX is a key component of Advent’s platform for asset managers, which is used by asset and wealth managers globally,’ said Anthony Sperling, Senior Vice President and General Manager of Advent’s Asset Management Group. ‘Over the past 18 months we have been increasing the pace of innovation within our solutions to support our clients’ in streamlining workflows within their office, growing AUM and realizing ROI on their technology investment. We truly appreciate the acknowledgement from TowerGroup, and we are committed to partnering with our clients, solving complex problems, and eliminating boundaries to create forward-momentum in the investment management industry.’

Technology Assessment Disclaimer

CEB does not endorse any vendor, product or service depicted in our CEB TowerGroup publications and does not advise technology users to select only those vendors rated ‘best-in-class.’ CEB TowerGroup research publications consist of the opinions of CEB TowerGroup’s analysts and should not be construed as statements of fact. CEB disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.

About Advent Portfolio Exchange

Advent Portfolio Exchange (APX) is an end-to-end portfolio management solution that integrates the front-office functions of prospecting, marketing, and customer relationship management with the back-office operations of portfolio accounting and reporting. This enterprise solution leverages a single SQL database to deliver critical client information via an easy-to-use browser-based user interface. APX delivers improved client service with enhanced security for today’s amplified compliance environment. For more information on APX visit https://secure.advent.com/info/pr_apx.

About Advent

Advent Software, Inc., a global firm, has provided trusted solutions to the world’s financial professionals since 1983. Firms in more than 60 countries count on Advent technology to run their mission-critical operations. Advent’s quality software, data, services and tools enable financial professionals to improve service and communication to their clients, allowing them to grow their business while controlling operational risks and costs. For more information on Advent products visit http://www.advent.com/about/resources/demos/pr.

Advent, the Advent logo, Advent Software and Advent Portfolio Exchange are registered trademarks of Advent Software, Inc. All other company names or marks mentioned herein are those of their respective owners.

Contacts:

Amanda Diamondstein-Cieplinska

Advent Software, Inc.

+1 (415) 645-1668

adiamond@advent.com

[Editorial queries for this story should be sent to newswire@enpublishing.co.uk]

((Comments on this story may be sent to info@enpublishing.co.uk))

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The Carlyle Group to Buy DuPont Performance Coatings Business for $4.9 Billion

The Carlyle Group to Buy DuPont Performance Coatings Business for $4.9 Billion

Global alternative asset manager The Carlyle Group (NASDAQ: CG) and DuPont (NYSE: DD) today announced that they have signed a definitive agreement whereby Carlyle will purchase DuPont Performance Coatings (DPC) for $4.9 billion in cash. The transaction is expected to close in the first quarter 2013, subject to customary closing conditions and regulatory approvals.

DPC is a global supplier of vehicle and industrial coating systems with 2012 expected sales of more than $4 billion and more than 11,000 employees. The investment will be funded with equity from Carlyle Partners V and Carlyle Europe Partners III.

“DuPont Performance Coatings is a leader in the automotive and industrial coatings sectors with world-class products and customer service. The business continues to grow and deliver solid results. After a careful review, however, we have determined that DPC’s full growth potential would be best realized outside DuPont and through the sale to Carlyle,” said DuPont Chair and CEO Ellen Kullman. “This transaction is consistent with our vision to be the world’s most dynamic science company and long-term strategy of driving competitive advantages in agriculture and nutrition, advanced materials and biotechnology, which represent high-growth, high-margin opportunities.”

Greg Ledford, Carlyle Managing Director and Head of the Industrial and Transportation team, said, “DuPont Performance Coatings is a successful business with attractive market positions, next-generation technology and established brands. Through targeted investments we will support DPC’s product development and growth objectives as it transitions to a stand-alone company. We look forward to working with management to fully realize DPC’s great potential.”

Gregor Böhm, Managing Director and Co-head of Carlyle’s Europe Buyout team, said, “DuPont Performance Coatings is a technology innovator and we look forward to building on its strong market presence to accelerate growth in emerging markets, particularly in China and Brazil.”

Kullman stressed that DuPont remains committed to serving the automotive industry. Following the closing of this transaction, DuPont will generate more than $3 billion in sales of advanced materials to the auto industry. “We will continue to work closely with automotive customers to apply our science-powered innovations related to light weighting of vehicles, revolutionary and environmentally friendly refrigerants, biobased seat fabrics and headliners, and next-generation biofuels,” Kullman said.

Beginning with the third quarter 2012, DuPont will classify and report results of DPC as discontinued operations on a retroactive basis. DuPont expects 2012 full-year earnings from discontinued operations to be in the range of $.41 to $.47 per share. Full-year 2012 guidance was last updated on and as of July 24, 2012, and is not being updated today. The company will begin providing full-year 2012 guidance from continuing operations when it issues its third quarter earnings announcement on Oct. 23.

DuPont plans to eliminate general corporate overhead costs that were previously allocated to DPC but are not part of the transaction. Additional details will be provided during DuPont’s third quarter earnings announcement. As part of the transaction, Carlyle will assume $250 million of DuPont’s unfunded pension liabilities. DuPont will use the net after-tax proceeds of this sale in a manner consistent with its cash deployment principles and goal to maximize shareholder value creation.

Carlyle’s industrial and automotive investments include Allison Transmission, Hertz and PQ Corporation, as well as recent commitments to invest in Hamilton Sundstrand Industrial, Sunoco’s Philadelphia refinery and regional rail freight operator Genesee Wyoming.

DuPont will host a webcast and slide presentation for shareholders, investors and the media today at 9:00 a.m. EDT, accessible through the DuPont Investor Center at .

Founded in 1922 and headquartered in Wilmington, Del., DuPont Performance Coatings is the leading global manufacturer, marketer and distributor of advanced coating systems primarily for the transportation industry. The company comprises four segments: refinish, OEM, industrial liquid and powder. With a consistently premium product, the firm is considered to be one of the highest quality paint providers in the auto refinish, OEM and liquid coatings market. The company operates manufacturing sites on six continents, serving customers in 120 countries directly and through 4,000 distributors.

The Carlyle Group (NASDAQ: CG) is a global alternative asset manager with $156 billion of assets under management across 99 funds and 63 fund of fund vehicles as of June 30, 2012. Carlyle’s purpose is to invest wisely and create value. Carlyle invests across four segments – Corporate Private Equity, Real Assets, Global Market Strategies and Fund of Funds Solutions – in Africa, Asia, Australia, Europe, the Middle East, North America and South America. Carlyle has expertise in various industries, including: aerospace, defense government services, consumer retail, energy, financial services, healthcare, industrial, technology business services, telecommunications media and transportation. The Carlyle Group employs 1,300 people in 32 offices across six continents. ;

DuPont (NYSE: DD) has been bringing world-class science and engineering to the global marketplace in the form of innovative products, materials, and services since 1802. The company believes that by collaborating with customers, governments, NGOs, and thought leaders we can help find solutions to such global challenges as providing enough healthy food for people everywhere, decreasing dependence on fossil fuels, and protecting life and the environment. For additional information about DuPont and its commitment to inclusive innovation, please visit .

This news release contains forward-looking statements which may be identified by their use of words like “plans,” “expects,” “will,” “anticipates,” “believes,” “intends,” “estimates” or other words of similar meaning. All statements that address expectations or projections about the future, including statements about the company’s growth strategy, product development, regulatory approval, market position, anticipated benefits of acquisitions, outcome of contingencies, such as litigation and environmental matters, expenditures and financial results, are forward-looking statements. Forward-looking statements are not guarantees of future performance and are based on certain assumptions and expectations of future events which may not be realized. Forward-looking statements also involve risks and uncertainties, many of which are beyond the company’s control. Some of the important factors that could cause the company’s actual results to differ materially from those projected in any such forward-looking statements are: fluctuations in energy and raw material prices; failure to develop and market new products and optimally manage product life cycles; significant litigation and environmental matters; failure to appropriately manage process safety and product stewardship issues; changes in laws and regulations or political conditions; global economic and capital markets conditions, such as inflation, interest and currency exchange rates; business or supply disruptions; security threats, such as acts of sabotage, terrorism or war, weather events and natural disasters; inability to protect and enforce the company’s intellectual property rights; and integration of acquired businesses and completion of divestitures of underperforming or non-strategic assets or businesses. The company undertakes no duty to update any forward-looking statements as a result of future developments or new information.

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Thursday, August 30th, 2012 EN No Comments

The Carlyle Group to Buy DuPont Performance Coatings Business for $4.9 Billion

The Carlyle Group to Buy DuPont Performance Coatings Business for $4.9 Billion

Global alternative asset manager The Carlyle Group (NASDAQ: CG) and DuPont (NYSE: DD) today announced that they have signed a definitive agreement whereby Carlyle will purchase DuPont Performance Coatings (DPC) for $4.9 billion in cash. The transaction is expected to close in the first quarter 2013, subject to customary closing conditions and regulatory approvals.

DPC is a global supplier of vehicle and industrial coating systems with 2012 expected sales of more than $4 billion and more than 11,000 employees. The investment will be funded with equity from Carlyle Partners V and Carlyle Europe Partners III.

“DuPont Performance Coatings is a leader in the automotive and industrial coatings sectors with world-class products and customer service. The business continues to grow and deliver solid results. After a careful review, however, we have determined that DPC’s full growth potential would be best realized outside DuPont and through the sale to Carlyle,” said DuPont Chair and CEO Ellen Kullman. “This transaction is consistent with our vision to be the world’s most dynamic science company and long-term strategy of driving competitive advantages in agriculture and nutrition, advanced materials and biotechnology, which represent high-growth, high-margin opportunities.”

Greg Ledford, Carlyle Managing Director and Head of the Industrial and Transportation team, said, “DuPont Performance Coatings is a successful business with attractive market positions, next-generation technology and established brands. Through targeted investments we will support DPC’s product development and growth objectives as it transitions to a stand-alone company. We look forward to working with management to fully realize DPC’s great potential.”

Gregor Böhm, Managing Director and Co-head of Carlyle’s Europe Buyout team, said, “DuPont Performance Coatings is a technology innovator and we look forward to building on its strong market presence to accelerate growth in emerging markets, particularly in China and Brazil.”

Kullman stressed that DuPont remains committed to serving the automotive industry. Following the closing of this transaction, DuPont will generate more than $3 billion in sales of advanced materials to the auto industry. “We will continue to work closely with automotive customers to apply our science-powered innovations related to light weighting of vehicles, revolutionary and environmentally friendly refrigerants, biobased seat fabrics and headliners, and next-generation biofuels,” Kullman said.

Beginning with the third quarter 2012, DuPont will classify and report results of DPC as discontinued operations on a retroactive basis. DuPont expects 2012 full-year earnings from discontinued operations to be in the range of $.41 to $.47 per share. Full-year 2012 guidance was last updated on and as of July 24, 2012, and is not being updated today. The company will begin providing full-year 2012 guidance from continuing operations when it issues its third quarter earnings announcement on Oct. 23.

DuPont plans to eliminate general corporate overhead costs that were previously allocated to DPC but are not part of the transaction. Additional details will be provided during DuPont’s third quarter earnings announcement. As part of the transaction, Carlyle will assume $250 million of DuPont’s unfunded pension liabilities. DuPont will use the net after-tax proceeds of this sale in a manner consistent with its cash deployment principles and goal to maximize shareholder value creation.

Carlyle’s industrial and automotive investments include Allison Transmission, Hertz and PQ Corporation, as well as recent commitments to invest in Hamilton Sundstrand Industrial, Sunoco’s Philadelphia refinery and regional rail freight operator Genesee Wyoming.

DuPont will host a webcast and slide presentation for shareholders, investors and the media today at 9:00 a.m. EDT, accessible through the DuPont Investor Center at .

Founded in 1922 and headquartered in Wilmington, Del., DuPont Performance Coatings is the leading global manufacturer, marketer and distributor of advanced coating systems primarily for the transportation industry. The company comprises four segments: refinish, OEM, industrial liquid and powder. With a consistently premium product, the firm is considered to be one of the highest quality paint providers in the auto refinish, OEM and liquid coatings market. The company operates manufacturing sites on six continents, serving customers in 120 countries directly and through 4,000 distributors.

The Carlyle Group (NASDAQ: CG) is a global alternative asset manager with $156 billion of assets under management across 99 funds and 63 fund of fund vehicles as of June 30, 2012. Carlyle’s purpose is to invest wisely and create value. Carlyle invests across four segments – Corporate Private Equity, Real Assets, Global Market Strategies and Fund of Funds Solutions – in Africa, Asia, Australia, Europe, the Middle East, North America and South America. Carlyle has expertise in various industries, including: aerospace, defense government services, consumer retail, energy, financial services, healthcare, industrial, technology business services, telecommunications media and transportation. The Carlyle Group employs 1,300 people in 32 offices across six continents. ;

DuPont (NYSE: DD) has been bringing world-class science and engineering to the global marketplace in the form of innovative products, materials, and services since 1802. The company believes that by collaborating with customers, governments, NGOs, and thought leaders we can help find solutions to such global challenges as providing enough healthy food for people everywhere, decreasing dependence on fossil fuels, and protecting life and the environment. For additional information about DuPont and its commitment to inclusive innovation, please visit .

This news release contains forward-looking statements which may be identified by their use of words like “plans,” “expects,” “will,” “anticipates,” “believes,” “intends,” “estimates” or other words of similar meaning. All statements that address expectations or projections about the future, including statements about the company’s growth strategy, product development, regulatory approval, market position, anticipated benefits of acquisitions, outcome of contingencies, such as litigation and environmental matters, expenditures and financial results, are forward-looking statements. Forward-looking statements are not guarantees of future performance and are based on certain assumptions and expectations of future events which may not be realized. Forward-looking statements also involve risks and uncertainties, many of which are beyond the company’s control. Some of the important factors that could cause the company’s actual results to differ materially from those projected in any such forward-looking statements are: fluctuations in energy and raw material prices; failure to develop and market new products and optimally manage product life cycles; significant litigation and environmental matters; failure to appropriately manage process safety and product stewardship issues; changes in laws and regulations or political conditions; global economic and capital markets conditions, such as inflation, interest and currency exchange rates; business or supply disruptions; security threats, such as acts of sabotage, terrorism or war, weather events and natural disasters; inability to protect and enforce the company’s intellectual property rights; and integration of acquired businesses and completion of divestitures of underperforming or non-strategic assets or businesses. The company undertakes no duty to update any forward-looking statements as a result of future developments or new information.

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Thursday, August 30th, 2012 EN No Comments

Johnson Daughter Becomes President At Fidelity Investments

Eliane Chavagnon
Reporter

30 August 2012

News Analysis

Abigail Johnson has been named president of Fidelity Investments, succeeding her father, Edward Johnson, who will now serve as chairman and chief executive.

According to a statement, the move consolidates all of the firm’s
core businesses under Abigail Johnson’s leadership. Reporting to her
father, Edward Johnson, she will oversee the firm’s financial services
businesses. This includes asset management, retail and institutional
brokerage, as well as retirement and benefits services, corporate
operations and function support groups. 

“As our business continues to evolve, we want to bring all of our
resources together to position our firm strategically to optimize our
competitive capabilities to meet the growing and evolving needs of our
mutual fund shareholders, clients and customers,” Edward Johnson said.

In her most recent position at Fidelity, Abigail Johnson was
president of the personal, workplace and institutional services
organization, which includes the retail and institutional brokerage
divisions, as well as retirement and benefits services. In that role,
she partnered with Ronald O’Hanley, president of asset management and
corporate services.

O’Hanley will continue to oversee all asset management and corporate
services, while reporting to Abigail Johnson. The firm said the leaders
of its brokerage and mutual fund distribution businesses will also
continue to report back to her.

In additional to her role as president, she serves as vice chairman
and director of FMR, the holding company for the businesses of Fidelity
Investments, as well as chairman of the board of trustees for the fixed
income and asset allocation funds.

Fidelity Investments has $3.7 trillion in assets under
administration, including $1.6 trillion in managed assets, as of July
31.

 

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Thursday, August 30th, 2012 EN No Comments

Johnson Daughter Becomes President At Fidelity Investments

Eliane Chavagnon
Reporter

30 August 2012

News Analysis

Abigail Johnson has been named president of Fidelity Investments, succeeding her father, Edward Johnson, who will now serve as chairman and chief executive.

According to a statement, the move consolidates all of the firm’s
core businesses under Abigail Johnson’s leadership. Reporting to her
father, Edward Johnson, she will oversee the firm’s financial services
businesses. This includes asset management, retail and institutional
brokerage, as well as retirement and benefits services, corporate
operations and function support groups. 

“As our business continues to evolve, we want to bring all of our
resources together to position our firm strategically to optimize our
competitive capabilities to meet the growing and evolving needs of our
mutual fund shareholders, clients and customers,” Edward Johnson said.

In her most recent position at Fidelity, Abigail Johnson was
president of the personal, workplace and institutional services
organization, which includes the retail and institutional brokerage
divisions, as well as retirement and benefits services. In that role,
she partnered with Ronald O’Hanley, president of asset management and
corporate services.

O’Hanley will continue to oversee all asset management and corporate
services, while reporting to Abigail Johnson. The firm said the leaders
of its brokerage and mutual fund distribution businesses will also
continue to report back to her.

In additional to her role as president, she serves as vice chairman
and director of FMR, the holding company for the businesses of Fidelity
Investments, as well as chairman of the board of trustees for the fixed
income and asset allocation funds.

Fidelity Investments has $3.7 trillion in assets under
administration, including $1.6 trillion in managed assets, as of July
31.

 

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Thursday, August 30th, 2012 EN No Comments

UBS Wealth Management Americas Enters Fine Art Loan Facility Agreement

Eliane Chavagnon
Reporter

30 August 2012

News Analysis

UBS Wealth Management America
has established a referral agreement with Emigrant Bank Fine Art
Finance, allowing clients to apply for loans of up to $150 million,
backed by their artwork and antiques as collateral.

A spokesperson told Family Wealth Report that prior to this
agreement, the firm had “no way of solving for certain ultra high net
worth client requests” in cases where art was part of the collateral
equation.

“UHNW clients consider art as another asset class, so forming a
referral agreement was a thoughtful way of adding a solution,” the
spokesperson said.

UBS’s agreement with Emigrant involves a one-time referral fee. “But
it’s important to note that UBS is not using its balance sheet on this
business – it is 100 per cent a referral agreement,” the spokesperson
added.

According to a Reuters report, only 22 percent of private
banks surveyed by Deloitte Luxembourg in 2011 said they advised clients
to consider art-collateralized loans. Nevertheless, one-third of
respondents said they were “giving thought” to adding art lending within
two to three years.

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Thursday, August 30th, 2012 EN No Comments

UBS Wealth Management Americas Enters Fine Art Loan Facility Agreement

Eliane Chavagnon
Reporter

30 August 2012

News Analysis

UBS Wealth Management America
has established a referral agreement with Emigrant Bank Fine Art
Finance, allowing clients to apply for loans of up to $150 million,
backed by their artwork and antiques as collateral.

A spokesperson told Family Wealth Report that prior to this
agreement, the firm had “no way of solving for certain ultra high net
worth client requests” in cases where art was part of the collateral
equation.

“UHNW clients consider art as another asset class, so forming a
referral agreement was a thoughtful way of adding a solution,” the
spokesperson said.

UBS’s agreement with Emigrant involves a one-time referral fee. “But
it’s important to note that UBS is not using its balance sheet on this
business – it is 100 per cent a referral agreement,” the spokesperson
added.

According to a Reuters report, only 22 percent of private
banks surveyed by Deloitte Luxembourg in 2011 said they advised clients
to consider art-collateralized loans. Nevertheless, one-third of
respondents said they were “giving thought” to adding art lending within
two to three years.

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Thursday, August 30th, 2012 EN No Comments

FSA broadens review into wealth managers’ advice

The Financial Services Authority (FSA) has begun a new phase of its review into wealth management, focusing on client outcomes.

It follows a review of 16 firms last year, in which it found 14 posed a high or medium-high risk of detriment to their customers, based on the number of client files which had a high risk of unsuitability or where the suitability could not be determined.

The FSA sent ‘Dear CEO’ letters to wealth management firms in June 2011, highlighting its concerns and stating it believed the failings could be prevalent in firms outside its sample.

In today’s update, the FSA’s said its thematic work will now also look into firms’ systems and controls and whether they have heeded the regulator’s previous warnings and concerns.

Since last summer, the FSA says it has continued to interact with the 16 firms in its original sample to mitigate the risks identified, principally around record-keeping and/or suitability.

This, it added, has led to enforcement referrals, skilled person’s reports and significant remediation programmes.

It said: “The Dear CEO letter stated that the FSA expects firms to take reasonable steps to ensure that a personal recommendation or a decision to trade is suitable.

“The findings gave rise to concerns that there is an unacceptable risk of clients of wealth management firms experiencing unfavourable outcomes.

“The failings may point to deficiencies in the management and control architecture of firms, so wealth management businesses can expect to see continuing and increasing supervisory focus.”

In today’s update, the FSA said it will continue to interview key individuals from the firms assessed as part of its previous work, to see what action they have taken since then, warning it will consider taking further regulatory action if required.

It will provide further updates on its work next year.

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Wednesday, August 29th, 2012 EN No Comments