Archive for November, 2013

PAM Insight Hosted a Successful Dinner & Discussion for Private Client Wealth …

Published: November 30, 2013 6:26 AM

Private Client Wealth Management CIOs enjoyed a dinner and discussion on ‘Looking ahead at 2014 – what investment areas and asset classes are going to be in out’, run by PAM Insight, with the assistance of Wendy Marston Events.

London, London (PRWEB UK) 30 November 2013

On 12 November 2013, PAM Insight held a successful dinner for chief investment officers of leading private client wealth management firms, with the assistance of Wendy Marston Events.

The PAM Annual Dinner series was launched in 2012 with the view to:

  •     Provide networking opportunities to senior executives in the private client industry;
  •     Enable consultation with a number of senior executives to identify the key industry issues;
  •     Facilitate discussion on items at the top of private wealth manager’s agendas; and
  •     Provide content for thewealthnet, PAM Insight’s news service to the wealth management industry, covering the discussions.

The second annual dinner, held at the Goring, London, targeted at CIOs proved the growing success of the forum, with greater attendance and positive feedback.

Wendy Marston Events assisted PAM Insight in organising the dinner focusing on:

  •     Creating a targeted marketing strategy to increase ticket sales;
  •     Tracking sales and maintaining the guest list;
  •     Organising some elements of the supplier relationships and media production; and
  •     Corresponding regularly with attendees and speakers.

Wendy Marston Events is a specialist event planner, focusing on the organisation of awards programmes and their associated receptions, dinners and meetings, from small roundtable breakfast meetings to gala award dinners. Wendy Marston, founder and director, has been managing the PAM Insight’s suite of awards and specialist industry dinners for over 10 years.

Companies interested in improving the return on their events and awards programmes can contact Wendy Marston at Wendy Marston Events at


About Wendy Marston Events:
Wendy has been running events for business since 2001 and weddings and private events since 2008. Wendy Marston Events specialises in running award programmes, receptions, dinners and meetings, from small roundtable breakfast meetings to gala award dinners.

For further information contact Wendy Marston
Email: wendy(at)wendymarstonevents(dot)com
Phone: +44 (0)7971 203725

For the original version on PRWeb visit:


Saturday, November 30th, 2013 EN No Comments

You Can Have It All When You Relocate To Guernsey

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Saturday, November 30th, 2013 EN No Comments

For Fairfield wealth adviser, a major change in investment strategy

FAIRFIELD — He’d been a wealth adviser for nearly 30 years, guiding people toward their financial goals, and connecting them with the brokers and businesses needed to create financial security. But by March 2009, Christopher Neubert was re-evaluating everything he knew about the markets.

The tech bubble had burst in the early 2000s, which had really troubled him. Now, the SP 500 had dropped 50 percent in just seven months, leaving Neubert and many of his 300 clients at Moneco Advisors “unbelievably gun-shy” about getting back into the market, he says. When stocks finally began their long and steady rebound, Neubert, whose firm oversees $250 million, found himself struggling with a thorny question.

“We had just gone through the worst experience many people had probably had since the Great Depression,” he says.

So he wondered: Was he accessing all the tools he needed to do the best job?

Two schools

For decades, the world of investing has been split into two schools: Those who practice “fundamental analysis,” poring over companies’ balance sheets, visiting their factories and getting to know their CEOs; and then there are those who say all of that information is already imbedded in the price of the asset.

The latter are called “technical analysts,” and they believe their methods take the emotion and bias out of investing. Their software is designed to pick up on positive or negative trends in the market — offering up-to-the-minute guidance on whether to buy, sell or hold a stock faster than others can calculate a price-to-earnings ratio.

There’s no shortage of criticism leveled against the latter camp, sometimes known as “chartists.”

In the most recent edition of his best-selling book, “A Random Walk Down Wall Street,” Princeton economist Burton Malkiel shares a five-sentence explanation of an investment decision from an enthusiastic chartist that includes clunking phrases like “reaccumulation is a bullish sign,” “fulcrum characteristics” and “continuation of the intermediate term downtrend.”

Weatherman `can do better’

“If you ask me what this means, I cannot tell you,” Malkiel quips, “but I think the technician probably had the following in mind: `If the market does not go up or go down, it will remain unchanged.’ Even the weather forecaster can do better than that.”

Others note that the method looks backwards, that it can’t foresee events that have never before taken place — like when Russia defaulted on its debt in 1998, cratering Greenwich-based hedge fund firm Long-Term Capital Management.

Then there’s the opinion of legendary investor Warren Buffett, who once said his family loves hamburgers, and would rejoice if their price dropped. If you really know an asset’s value, Buffet argued, then you won’t sell your stake in it simply because the price is dropping.

You’ll stock up on inexpensive burgers.

Southwestern Connecticut is filled with wealth advisers, and nearly all of them will tell you their primary job is work through your specific needs and build a portfolio that gets you there. Are you looking for rapid growth? For protecting what you already have? For building a framework that will leave certain amounts to your kids?

An adviser who comes up with a different answer to those questions can gain a marketing edge.

Saturated market

“Is it competitive around here? I would use the word `saturated,’ ” says Eric Johnson, director of business development at Rocco Associates Wealth Management in Fairfield.

How wealth advisers approach the fundamental-versus-technical question is one way they can set themselves apart — especially in the age of 24-hour business TV and easily accessible financial advice and data on the Internet. Neubert guesses that less than half of Fairfield County’s wealth advisers have decided to employ the methods of technical analysis. And most of those who do haven’t subscribed to the system completely.

One such wealth manager is Ron Weiner, of RDM Financial Group in Westport, which oversees about $670 million in clients’ assets. Weiner’s biggest holding is a mutual fund steeped in technical analysis, he says, but even he blends the two schools — with a primary focus on studying fundamentals.

“Human beings have an amazing predilection to buy high and sell low,” he says, citing a common argument for technical analysis. “But (technical analysis) doesn’t deserve to be half of a portfolio, no matter how well it’s done.”

Embracing the practice

For Neubert, the decision to explore technical analysis came in 2009. He spent two years reading up on the field and talking to experts before deciding to fully embrace the practice.

In 2011, he hired a Newtown company that helped him build software that fit his needs. The convincing step, he says, was running the program back through the financial crisis. The program told him to get out of the market before the worst of the ’08 bloodbath,’ and to get back in relatively early in the rally that started in April `09.

Ultimately, he launched his system earlier this year, getting a trademark for the name “Growth Protection Strategy,” or GPS.

Neubert likes to call technical analysis “just another arrow in his quiver.” He works hard with clients to find out what exactly they’re looking for, and still conducts the fundamental analysis before deciding if an asset should be used to populate someone’s portfolio. But now, he always puts his clients’ assets through the technical analysis system to determine if something should be bought, held onto or sold.

It can sound like a perfectly balanced marriage between the schools of thought, but it isn’t entirely.

Asked which arrow he’d reach for in his quiver if the Buffet family dream takes place, he’s quick to the draw.

“If the price of burgers is really going down, we’re going to sell,” he says. “When you live as an adviser through ’02, through `08, what you learn, which is critically important for an adviser, is that the pain of losing money is far, far worse than the joy or euphoria of making it.”;


Saturday, November 30th, 2013 EN No Comments

Income theme seen staying hot

INCOME-yielding assets are expected to remain a hot theme in 2014, despite having posted strong returns over the past three to four years. The reason is that despite jitters over the prospect of a tapering of quantitative easing (QE) measures, interest rates are expected to remain low.

Says Anthony Ho, JP Morgan Asset Management (JPMAM) managing director: “We believe the income theme will still play out over the next couple of years. We believe that interest rates will continue to be maintained at a historically low level for a little longer. . . We think the first rate hike is still more than two years away. Investors will continue to focus on asset classes that continue to generate yields.”

Mr Ho is also client portfolio manager (asset management solutions), under the firm’s global multi-asset group.

Over the past 12 months, JPMAM has seen inflows of as much as US$10 billion into income strategies under the multi-asset group. Assets in such strategies grew from US$7 billion to US$18 billion. The firm manages a total of US$1.5 trillion globally. The multi-asset group manages about US$126 billion.


Friday, November 29th, 2013 EN No Comments

5 Financial Pros Share Their Smartest Business Moves

Adviser Stacy Francis: Founded nonprofit group to boost practice. none

Adviser Stacy Francis: Founded nonprofit group to boost practice. none View Enlarged Image

One smart decision can propel a financial adviser’s career. By taking bold steps to break away from the pack, from adopting a new marketing strategy to launching an ambitious nonprofit organization, wealth managers have shifted their business into overdrive.

Such moves are rarely easy or risk-free. But the benefits can outweigh the costs.

IBD recently asked financial professionals, “What’s the best thing you’ve done to develop your business?” Some instructive replies:

• Seminar savvy.

For Jim McCarthy, president and chief investment officer of Seascape Capital Management in Portsmouth, N.H., business started to take off after he began offering monthly seminars in the early 1990s. To attract affluent pre-retirees, he chose topics such as estate planning and managing Social Security benefits.

“You need a systematic process to bring in new clients on a regular basis,” McCarthy said. “In our seminars, 10 to 15 show up and we get two or three clients out of it.”

Relationships take time to blossom. Because most attendees do not become instant clients, McCarthy follows up diligently to seed his relationships with future clients.

Over time, he has reduced the number of seminars to five per year. He avoids scheduling them during the summer and year-end holidays.

He fills the seats by inviting existing clients to bring a friend or by purchasing lists of names once or twice a year and then contacting those leads. In the seminars, he focuses on delivering educational content, not selling financial products to clients.

• Referrals made easy.

Almost every financial adviser asks for referrals. But few take it as seriously as Bob Siefert.

About four years ago, Siefert began tweaking how he conducted his annual client reviews. A principal at Modera Wealth Management in Boston, Siefert started asking for referrals as a formal agenda item in client meetings.

“We put the idea of soliciting referrals as one of the last bullet points in the agenda we gave to the client in the annual review,” he said. “Now we ask, ‘How are we doing?’ And we get feedback and referrals as part of the review process.”

• Monthly outreach.

At Legend Financial Advisors in Pittsburgh, the firm’s three certified financial planners contact all 210 of their clients every month. Their outreach began about five years ago.

“During the financial crisis, we saw how some of our peers hid from clients,” recalled Diane Pearson, the firm’s co-owner. “We weren’t going to hide.”


Friday, November 29th, 2013 EN No Comments

Manulife Asset Management Services Berhad declares dividend distribution for …

Manulife Asset Management Services Berhad, a subsidiary of Manulife Holdings Berhad, has declared dividend distributions for two of its funds, the Manulife Bond Plus Fund and the Manulife Equity Plus Fund.

Total gross distributions declared for the financial year ending 31 October 2013 are as follows:


Gross distribution per unit

Indicative yield

Manulife Bond Plus Fund

2.3 sen per unit


Manulife Equity Plus Fund

5.7 sen per unit


·          Based on net asset valuation as at 31 October 2013.

Edward Ooi, Chief Executive Officer of Manulife Asset Management Services Berhad, commented: “We are pleased to declare the inaugural income distributions for the Manulife Bond Plus Fund and the Manulife Equity Plus Fund. The distributions reflect our expertise in investment management, which is based on in-depth research and stringent risk management by our on-the-ground equity and fixed income professionals. Both funds have outperformed their respective benchmarks since their launch1.”

The Manulife Bond Plus Fund aims to generate returns for investors based on a combination of recurring income and capital appreciation by investing primarily in fixed income securities. As at 31 October 2013, the Fund had generated a total cumulative return of 13.64%2 since its launch compared to the benchmark return of 11.98%3.

The Manulife Equity Plus Fund aims to deliver medium- to long-term capital growth by investing primarily in equities and equity related securities. As at 31 October 2013, the Fund had generated a total cumulative total return of 52.00%2 since its launch compared to the benchmark return of 39.20%4.

Jason Chong, Chief Investment Officer with Manulife Asset Management Services Berhad, explained: “Investors should be aware that it is not only bonds that have the potential to pay regular income. Listed companies are increasingly returning a portion of their earnings to investors in the form of dividend payments, which can contribute significantly to total returns. For example, the attractive performance of the Manulife Equity Plus Fund and its ability to pay a distribution reflects a combination of capital appreciation and dividend income.”

Manulife Asset Management Services Berhad operates under Manulife Asset Management, which is part of Canada-based Manulife Financial. Manulife Asset Management, which has over 330 investment professionals working across 17 countries and territories, combines the global resources of a financial services leader with the responsiveness and focus of a boutique asset management firm.

On the local front, Manulife Asset Management Services Berhad offers unit trusts and is also one of only eight investment service providers under the Private Retirement Scheme (PRS) in Malaysia, a voluntary investment scheme initiated by the Government to help Malaysians accumulate savings to bolster retirement income security.   

The Manulife Bond Plus Fund and the Manulife Equity Plus Fund were incepted on 18 January 2010.

Since inception, 29 December 2009. Manulife Asset Management.

Benchmark = Malaysia Malayan Banking Deposit Rate 12-Month; Bloomberg, 31 October 2013.

About Manulife Asset Management Services Berhad

Manulife Asset Management Services Berhad (MAMSB) is a substantially owned subsidiary of Manulife Holdings Berhad, which is majority owned by Canada-based Manulife Financial Corporation. MAMSB operates under the brand name of Manulife Asset Management and holds Capital Markets Services License for fund management, dealing in securities restricted to unit trusts and dealing in private retirement schemes, under the Capital Markets Services Act 2007.  

About Manulife Asset Management

Manulife Asset Management is the global asset management arm of Manulife Financial, providing comprehensive asset management solutions for institutional investors and investment funds in key markets around the world. This investment expertise extends across a broad range of public, private, and alternative asset classes, as well as asset allocation solutions. As at September 30, 2013, assets under management for Manulife Asset Management were C$265 billion (US $258 billion).

Manulife Asset Management’s public markets units have investment expertise across a broad range of asset classes including public equity and fixed income, and asset allocation strategies. Offices with full investment capabilities are located in the United States, Canada, the United Kingdom, Japan, Hong Kong, Singapore, Taiwan, Indonesia, Thailand, Vietnam, Malaysia, and the Philippines. In addition, Manulife Asset Management has a joint venture asset management business in China, Manulife TEDA. The public markets units of Manulife Asset Management also provide investment management services to affiliates’ retail clients through product offerings of Manulife and John Hancock. John Hancock Asset Management and Declaration Management and Research are units of Manulife Asset Management.

Additional information about Manulife Asset Management may be found at

About Manulife Financial

Manulife Financial is a leading Canada-based financial services group with principal operations in Asia, Canada and the United States. Clients look to Manulife for strong, reliable, trustworthy and forward-thinking solutions for their most significant financial decisions.

Our international network of employees, agents and distribution partners offers financial protection and wealth management products and services to millions of clients. We also provide asset management services to institutional customers. Funds under management by Manulife Financial and its subsidiaries were C$574.6 billion (US$558.7 billion) as at September 30, 2013. The Company operates as Manulife Financial in Canada and Asia and primarily as John Hancock in the United States.

Manulife Financial Corporation trades as ‘MFC’ on the TSX, NYSE and PSE, and under ‘945’ on the SEHK. Manulife Financial can be found on the Internet at

Media contact:


Yip Yi Ling
Manulife Insurance Berhad
Tel: (03) 2719 9228 (ext 541)
Fax: (03) 2094 8139


Ginie Lam
Manulife Asset Management (Asia)
Tel: +852 2202 1965


Friday, November 29th, 2013 EN No Comments

Wealth Management Industry Is Poised To Recover

The Wealth management industry is poised to benefit from operating leverage and cyclical exposure, leading to the industry’s recovery.

Brad Hintz and team at Bernstein Research point out that with improving revenues since the trough in 2010, the wealth management industry’s profits would improve.

Wealth management industry: Improved profitability

According to the Bernstein report, the wirehouses such as Morgan Stanley (NYSE:MS), Merrill Lynch, Wells Fargo Co (NYSE:WFC) and UBS AG (NYSE:UBS) and regional brokers witnessed expanding pre-tax margins over the past three years. The rationalization of FA headcount and segmenting markets to target the most profitable client relationships have allowed reduction in compensation ratios and controlling of expenses. These have in turn driven up the profitability of wealth management firms.

Brad Hintz and team at Bernstein Research points out that since the 2008 crisis, revenue has been growing across the industry both at the firm level and on a per broker basis. This can be evidenced from the following graph:

Wealth Management - Revenue

Bernstein anticipates that with further re-engagement of retail investors with the market, revenues will continue to grow.

Improved client assets

The analysts observed that Wall Street’s wealth management revenues are closely correlated with U.S. employment. With an improved employment picture, retail investors tend to become more risk tolerant and re-embrace the equity markets.

According to the Bernstein report, in recent years client assets have grown for the wealth management industry, both at the firm level and on a per broker basis. The analysts point out that historically greater client assets per financial advisor are statistically associated with improved pre-tax margin.

The following graph highlights the growth in client assets both at the firm level and on a per broker basis:


The analysts note the cyclical retail situation appears to be improving, five years after the crisis. Retail brokerage revenue has historically been linked closely with US non-farm payroll. Based on recent forecasts for U.S. unemployment, the analysts believe a full wealth management industry rebound can be expected in 2014 and 2015.

Morgan Stanley receives Outperform rating

According to the Bernstein analysts, the wirehouses form an oligopoly of retail financial channel distributors. These firms dominate the segment of the wealth management market servicing $1 to $3 million retail accounts in the U.S. However, among these firms, Bernstein notes Morgan Stanley (NYSE:MS) and Merrill Lynch have the largest pool of client assets and the most productive sales forces.

The analysts point out that Morgan Stanley (NYSE:MS)’s wealth management business has been a focus and produced stable revenue in recent years. Morgan Stanley’s fee-based assets too have been steadily increasing as a share of client assets, as evidenced in the following graph:

Morgan Stanley-Client Assets

With its massive operating leverage and interest sensitivity, Bernstein rates Morgan Stanley (NYSE:MS) as Outperform.


Friday, November 29th, 2013 EN No Comments

LCK Wealth Management Joins HighTower

BRONXVILLE, N.Y. — LCK Wealth Management has joined the HighTower partnership, making it the third adviser team HighTower has acquired in as many weeks.

LCK Wealth Management’s Laurie Kamhi will join HighTower as partner and managing director. The practice specializes in combining personalized wealth management strategies with forward-thinking investment services for families, trusts, foundations, charitable organizations and other nonprofit entities. In addition to Kamhi, the team includes senior financial analyst Christine Torrey and senior private wealth associate Karman Tong.

“This past month has given us an unprecedented opportunity to expand our partnership with some of the country’s most talented advisers,” said Michael LaMena, president of HighTower, in a prepared statement. “Laurie’s team combines the dedication to client service and adherence to accountability that define the HighTower brand, and we welcome them to our partnership.”

Kamhi has more than 30 years of experience in investing, private wealth management and institutional trading and sales. Her team manages $320 million in client assets, and takes a selective approach to its client base, ensuring they can devote sufficient time and resources to every client.

“HighTower allows us to build on the white-glove service and commitment to bottom-line results that define our team, while integrating the support of an entire partnership,” Kamhi said in a prepared statement. “They uphold a higher standard, committed to innovation and accountability—for clients, for advisers and for the entire firm.”


Thursday, November 28th, 2013 EN No Comments

Bad loan manager Cinda sits on its own debt mountain

As it homes in on Hong Kong’s biggest initial public offering this year, the distressed debt manager’s borrowing has risen twenty-fold in the last three years to more than its maximum market value at listing.

The surge to 104.1bn yuan ($17bn) in debt at the end of June came as Cinda went on a spree, scooping up distressed assets from the likes of real estate projects, cement makers, miners and coal companies unable to pay back loans.

The debt pile, revealed for the first time in Cinda’s IPO prospectus, doesn’t just expose the company to risk factors including short- and long-term interest rate hikes. It means Cinda’s reliance on backing from the government and Chinese financial institutions to fuel its growth is set to intensify, even as the sale of up to $2.5bn in shares attracts some of the world’s biggest global investors.

“In the end the question is what are the returns they’re going to get on the assets that they’re buying,” said Charlene Chu, China bank analyst at Fitch Ratings in Beijing. “Will the returns be sufficient to pay back the obligations that they owe?”  

The IPO has lured sovereign wealth funds and hedge funds betting that soured loans will be big business in China’s slowing economy. Hong Kong market sources say demand for the shares, due to list on December 12, has been brisk since the prospectus was launched on

There’s no suggestion that Cinda’s major shareholder, China’s Ministry of Finance, or other lenders won’t continue to support the company or roll over borrowings if Cinda needs more time to pay back its own debt.

But Cinda said in its IPO prospectus that, “If sufficient financing is not available to meet our needs, or cannot be obtained on a commercially acceptable terms, or at all, we may not be able to fund our operations, investments and business expansion, introduce new business or compete effectively.”

Company officials said at an IPO presentation in Hong Kong on Wednesday that they’re comfortable with Cinda’s debt strategy and are looking to further diversify funding sources in the future.

Cinda was created in 1999 to take on the bad debts of China Construction Bank (CCB). It initially borrowed money from the government to take on and process CCB’s bad loans.

The company has since shifted its funding to other entities beyond China’s Ministry of Finance and the central bank, according to the IPO prospectus. Cinda increasingly taps other Chinese financial institutions, referring to these lenders in the prospectus as “market-oriented sources”.

The 104.1bn yuan in borrowing at the end of June compares with just 7.83bn yuan at the end of 2010.

Nearly half of the loans mature in one year or less. Their short-term nature underscores the risks Cinda could face in the event of a cash crunch similar to the one that affected Chinese markets in June.

“The potential is certainly there for any entity that has that type of profile,” Fitch’s Chu added.  The vast majority of the borrowings, 95.3bn yuan, are unsecured loans, which also exposes lenders in case Cinda faces any liquidity shortage.

Still, the company has relationships with over 100 banks in China without any single one having a major exposure, according to a person familiar with the IPO plans, limiting potential losses should any crunch occur.

Ultimately, analysts say, the company remains backed by the Chinese government, and concerns about its future liquidity would be overblown. After the IPO, the Ministry of Finance will own 69.6% of the company, compared with 83.5% before.







Thursday, November 28th, 2013 EN No Comments

Fitch Affirms J. Safra Asset Management Ltda’ Rating at ‘Highest Standards’

— Fitch Ratings has affirmed the International Scale Asset Manager Rating at ‘Highest Standards’ for J. Safra Asset Management Ltda. (J. Safra Asset). The Rating Outlook remains Stable.

Key Rating Drivers
The ‘Highest Standards’ rating for J. Safra Asset reflects Fitch’s view that the company’s investment platform and operating framework are superior relative to the standards applied by international institutional investors.

The rating affirmation of J. Safra Asset reflects its well-formalized and consistent practices for investment process, risk controls and compliance, in addition to its robust and segregated structures for fiduciary administration and custody, in line with the best practices in the market. The rating also benefits from the solid franchise of the parent, Banco Safra S.A. (Banco Safra, Issuer Default Rating [IDR] ‘BBB’/Outlook Stable), the fifth largest private financial conglomerate in Brazil, from the company’s continuous investments in technology, satisfactory distribution channels and corporate structure of the group.

J. Safra Asset’s rating applies to its Brazilian domiciled investment activities and does not include offshore, private banking, wealth management, fund of funds, real estate funds, fiduciary administration and custody operations. Those areas have their own processes and policies, which are segregated from the traditional fund management.

Fitch believes that J. Safra Asset’s main challenges are: to increase its participation in higher value added funds, in the face of stronger competition from other managers and funding products; to keep a competitive edge using a lean personnel investment structure; to diminish AUM volatility and to sustain a consistent performance mainly in the multimarket funds class.

The ‘Highest Standards’ rating is based on the following assessments:

Company: Highest Standards
Controls: Highest Standards
Investments: Highest Standards
Operations: Highest Standards
Technology: High Standards

J. Safra Asset is the tenth largest asset manager in Brazil, with a focus on fixed income and multimarket funds, and significant experience in the local market. It is a part of a solid Brazilian financial conglomerate, is widely diversified and profitable, and is part of a retail and private bank structure in Brazil with a very good distribution network and client base. Its organizational structure has been fully segregated from Safra group’s other activities since 2012, with a strong corporate governance and compliance policy. The asset manager is well-segmented, with well-established processes and qualified and experienced professionals.

The AUM has declined since 2010 (-3.3% from Sept 2010 to Sept 2013), as a consequence of the loss of some mandates for corporate clients. This effect was related to very specific cases, which are competitive performance-based mandates managed by a group of institutions through dedicated funds, which are also susceptible to cash flow management of those companies. In September 2013, the investor profile comprised corporate clients (32%), private banking (22%), retail (18%), open pension funds (7%), closed pension funds (8%), and others (13%).

The AUM profile followed the higher investor demand for fixed income funds (34% of the AUM in Sept 2013) and the asset manager’s strategy to focus in multimarket funds (47% of AUM in Sept 2013). Equity funds represented 2%; real estate, 16%; and others, 1%.

J Safra relies on a strong and independent risk and compliance structure alongside an internal auditor’s area, all of which are a part of the Banco Safra’s corporate structure. The asset manager presents robust market and liquidity risk controls, adequate operating risk controls with no reported operating losses in 2013, and well-formalized and documented compliance policies. Limit breaches have been low and promptly addressed.

J. Safra maintains a robust investment process, based on committees supported by solid macroeconomic and fundamentalist research. The process is well-formalized and has provided a top-down scenario and an asset allocation input for all the investment mandates. Portfolio managers have some autonomy in their decisions but must follow the committee guidelines. The equities team has presented staff turnover in recent years. J. Safra recently hired a senior equities portfolio manager in order to strengthen its equity investment process and provide additional input for its idea generation.

J.Safra provides a very good overall communication with proper adherence to all asset management disclosure obligations made by CVM and Anbima and specialized relationship managers for each customer segment.

Similar to other large bank-affiliated asset managers in Brazil, the fiduciary administration and custody activities are developed by another business unit of the group. The processes observe regulations and best practices, supported by suitable technological platforms and a robust corporate structure, with good process automation. In addition, the middle office and market risk areas carry out the reconciliation of the whole operating process, including the trading activity.

J. Safra Asset Management relies on solid risk controls and automated and integrated systems, in addition to the robust structure and technological platform of Banco Safra. The asset manager has made adequate investments in systems and controls to improve the efficiency and agility of the processes. In 2013 it has implemented a front-office system for equity trading and it is assessing solutions for fixed income securities. The implementation of the aforementioned platform enables higher speed and better controls, as well as pre-trading blockings and alerts, among other benefits.

Company Profile
The Safra group has operated in asset management activities since 1980. J. Safra Asset Management is the tenth largest asset manager in Brazil, with AUM of BRL36.5 billion and 1.6% of market share in September 2013, according to the Brazilian Association of Financial and Capital Market Entities (Anbima). The company is responsible for the third party asset management of Banco Safra S.A., ranked as fifth private bank in the country in terms of assets.

Rating Sensitivities
J. Safra Asset’s rating could be sensitive to adverse changes to any of the key drivers mentioned above, notably a weakening in its financial profile, high turnover of professionals or deterioration in its processes and policies. An important deviation from Fitch’s guidelines for any key driver could result in a rating downgrades.

For additional information on Fitch asset managers’ guidelines, please refer to the criteria referenced below, which can be found on Fitch’s websites, at ‘‘ or ‘‘.

Additional information is available at

Applicable Criteria and Related Research:
–‘Asset Manager Rating Criteria’ (April 22, 2013).

Applicable Criteria and Related Research:
Asset Manager Rating Criteria

Additional Disclosure
Solicitation Status


Thursday, November 28th, 2013 EN No Comments