Wealth & Finance International | November 2015
Soaring
to the Top How Aerospace Technologies Group’s dedicated CEO has piloted the firm to the top of its industry.
Finessing the Financial Industry How Ghassan Hakim has helped Riva Financial Systems bring innovation into investments.
Hedging their Bets How the hedge fund industry could be affected by the new senior management regime.
Investments Get Social
Tamsin Chislett of ClearlySo explains the impact of a particular project in Manchester.
With Family Enterprises All Solutions Are Relative We profile top family enterprise consulting firm, Relative Solutions, which assists families to manage the complexities of their wealth over generations.
W&f International
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Welcome to the November Issue of Wealth & Finance. Despite major concerns about the Swiss economy, many financial institutions operating in the region continue to thrive. We take a look at one such firm, Geneva headquartered INOKS Capital Ltd, and explore how they have managed to maintain their enviable success despite the struggling economy in the region. Following the FCA’s announcement of the final rules for the new Senior Manager’s regime, Jacqui Hatfield and Melanie Shone from Reed Smith discuss the potential issues the regime could pose for hedge funds. High net worth individuals are constantly searching for experienced and professional investment advisors to protect their wealth against issues such as family problems, legal complications and investment risk. We profile our investment advisory firm of the month, Clearbrook Global Advisors, who serve as dedicated advisor and advocate for their clients. A growing trend in the investment industry is working collaboratively, utilising a network of industry contacts to ensure that firms stay ahead of market developments. Vivaris, Ltd is one firm that has embraced this approach, and is dedicated to their unique collaborative and opportunistic approach. Bel Brands USA is a rapidly expanding cheese specialist which produces household favourites such as Boursin, Mini Babybel and the Laughing Cow. We profile their CFO Didier Aziza and highlight the vital role he has played in the firm’s success. We hope you enjoy this issue.
Contents 4. News
12. CEO of the Month: Aerospace Technologies Group 18. An Innovative Global Solution To The Asset Management Industry 20. CFO of the Month: Bel Brands USA, Inc 22. Asset Manager of the Month: Calamos Investments 26. Investment Advisor of the Month: Clearbrook Global Advisors 28. Investments Get Social 32. Hedge Fund Manager Of The Month: INOKS Capital Ltd 36. The Investment Law Landscape in Ireland 40. Growth in UK M&A Appetite – a Risky Business 42. Hedge Funds to Soon Feel the Bite of the New Senior Managers Regime 44. Relative Solutions LLC 48. Securing Family Finances: Sequoia Group 50. Securing Family Finances: Kaiser Partner 52. Private Equity Fund Manager of the Month: Vivaris, Ltd. 54. Our Company in 60 Seconds: Accounting Direct Plus limited
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Wealth & Finance International | November 2015 News
Bank of America Expands National Community Advisory Council New members increase focus on sustainability as the council celebrates a decade of engagement.
The National Community Advisory Council (NCAC), a diverse group of nonprofit and private-sector leaders convened by Bank of America, recognizes its 10th anniversary with the addition of five new members representing environment and sustainability expertise. Meeting this week in Washington, D.C., the group of senior consumer, community and academic leaders gathers twice a year to advise the bank on critical issues impacting society.
This week’s meeting will provide an opportunity for NCAC members and bank executives to sit down together and engage in meaningful dialogue on a broad range of topics, including neighborhood stabilization efforts around affordable housing, the state of civil rights, and environmental sustainability issues. These meetings are meant to address important topics and open the lines of communication between NCAC members and the bank on the state of the economy and how these collaborative efforts can lead to meaningful solutions.
Formed in 2005, NCAC initially provided guidance on the bank’s community development lending and investment activities. While continuing its focus on community development and consumer policy issues, the council’s concentration has evolved into a broader focus on environmental, social and governance (ESG) issues and performance.
“Bank of America has long set a high bar for social responsibility programs that enhance the communities they serve,” said Rick Fedrizzi, founding chairman and CEO, U.S. Green Building Council. “I’m honored to be part of its National Community Advisory Council, and look forward to serving with such an exceptional group.”
As part of the broad portfolio of climate change goals and transformative finance initiatives the bank has engaged with several leading environmental organizations. This led to an increased focus and expansion of environmental NCAC membership, which now includes: • Armond Cohen, executive director, Clean Air Task Force • Rick Fedrizzi, founding chairman and CEO, U.S. Green Building Council • Bob Perciasepe, president, Center for Climate and Energy Solutions (C2ES) • Andrew Steer, president and CEO, World Resources Institute • Mark Tercek, president and CEO, The Nature Conservancy
The six new members join a seasoned group comprised of nationally recognized consumer advocates, academic leaders, civil rights leaders, and community development and environmental experts Northfoto / Shutterstock.com
Another recent addition to the NCAC roster is Jane Nelson, a globally recognized leader in the CSR arena who currently serves as director of the Harvard Kennedy School’s Corporate Social Responsibility Initiative. “Our members challenge us and collaborate with us to strengthen the impact of our collective work in the communities we serve, and we welcome new voices around the table to further that goal,” said Andrew Plepler, Corporate Social Responsibility executive, Bank of America, and NCAC chair. “We are proud that what started out as a conversation about community development has evolved into a decade of engagement on some of the biggest issues facing society.”
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Continued Expansion of the Calvert Responsible Index Series Developed markets Ex-U.S. and U.S. mid cap latest introductions.
Calvert Investments, Inc., a global leader in responsible investing, announced today the introduction of two new indexes in the Calvert Responsible Index Series: the Calvert Developed Markets Ex-U.S. Responsible Index (CALDMI) and the Calvert U.S. Mid Cap Core Responsible Index (CALMID).
The indexes are driven by the Calvert Research System, a proprietary research platform that synthesizes multiple sources of non-financial data, including environmental, social, and governance (ESG) data. Calvert analysts identify and weight the ESG factors that are most material within each of 156 sub-industries, then rate and rank every company to build the list of index constituents. The firm continues to build upon its global responsible investment research expertise with the newest additions to its responsible index series and related low-cost index funds that will track them and institutional separate account products.
“Calvert is committed to meeting the evolving needs of our clients with both active and indexed responsible investing products,” said John Streur, CEO, Calvert Investments. “Calvert has 30 years of leadership in helping responsible investors define and assess the environmental, social and governance impacts of the corporations they own. Combine this with our shareholder engagement and we can help investors drive real positive change in the world.”
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Wealth & Finance International | November 2015 News
Swrve Completes $30m Financing Round and Acquisition Capital and acquisition to expand Swrve’s leadership in the mobile marketing engagement space
Swrve, a leader in the mobile marketing engagement space, today announced that it has closed a $30mn funding and acquisition round. Swrve has acquired adaptiv.io, a data automation platform for mobile. These two announcements come on the heels of a period of significant growth for the company, including reaching one billion installs of the product.
“We’re excited about the simplicity of Swrve Amplify in allowing us to make real-time decisions based on all of our data sets, no matter what silo they live in,” said Adam Warburton, Head of Mobile at Travelex. “We see tremendous value in transforming all of our user data to make an instant connection with our most loyal customers. The ease of reaching these users at the time when they are ready to engage with a brand through Swrve Amplify will be incredibly beneficial to any mobile marketing program.”
Swrve, whose platform enables brands to deliver contextually rich and relevant in-app mobile interactions, will use this funding to continue the company’s global expansion and market-leading product innovation. Leading the round is Evolution Media Partners (EMP), a partnership of CAA-backed Evolution Media Capital, TPG Growth and Participant Media, and the Ireland Strategic Investment Fund (ISIF).
According to the September 2015 Forrester report (subscription required for access), Upgrade Your Marketing Plans With Push Notifications And In-App Messaging, “App usage is now mainstream ... in the US, 62% of consumers opt to receive push notifications from a select few apps they download on their smartphone.” As a result, Swrve believes that digital marketers need to change the rules of mobile and digital engagement, adopting a personalized approach to marketing that goes beyond generic push notifications and blanket in-app messages that can damage a brand’s reputation.
Others participating in the oversubscribed round included existing investors Acero Capital, and Atlantic Bridge. “Swrve solves real problems for real mobile marketers,” said Marco DeMiroz, Managing Director of Evolution Media Partners, who also joins Swrve’s Board of Directors. “We’re thrilled to be investing in Swrve, which is helping to make marketing more powerful, more relevant, more targeted and more effective than ever before, revolutionizing how some of the biggest brands in the world interact with their customers.” With an existing roster of customers spanning some of best known brand names in the world, Swrve will use this capital primarily to accelerate product development and sales growth, to solidify their market position as a recognized global leader in the mobile marketing engagement space. Recent company milestones include: one billion installs of the Swrve SDK; a successful Q2 followed by a peak Q3 represented by 4x growth from Q3 2014; unprecedented expansion across verticals such as financial services, media and publishing, and entertainment and rapid hiring across its growing employee base in San Francisco, New York, Dublin, London, and continental Europe. Swrve is also unveiling its new Swrve Amplify product, fueled by the acquisition of marketing and data automation provider adaptiv.io. Swrve Amplify will enable mobile marketers to build omni-channel marketing campaigns informed by real-time data streams. The result is more relevant, impactful, mobile campaigns that move the needle.
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Opus Bank Announces Further Expansion of Its Merchant Bank Paul E. Kacik Joins as Managing Director, Healthcare Investment Banking
Opus Bank has announced that Paul E. Kacik has joined Opus as Managing Director, Head of Healthcare Investment Banking within Opus’ Merchant Banking division. Mr. Kacik, a 24-year investment banking veteran, is responsible for providing M&A advisory services, debt and equity capital solutions, and other strategic advisory services to healthcare providers and practitioners.
our merchant banking model of providing a comprehensive and integrated principal investing and advisory solution to middle-market companies.” Mr. Kacik joins Opus’ Merchant Banking division from Duff & Phelps Securities, LLC in Los Angeles, where he served as Managing Director – Healthcare Investment Banking and was responsible for the origination and execution of middle-market Healthcare M&A transactions. From 2009 and following its acquisition by DA Davidson & Co. in 2011, Mr. Kacik served as Managing Director – Head of Healthcare Investment Banking with McGladrey Capital Markets, LLC where he led the national healthcare investment banking practice and was responsible for the oversight of all origination and execution efforts in the healthcare sector. From 2004 and following its acquisition by Wells Fargo Securities in 2006, Mr. Kacik served as Senior Vice President – Head of Healthcare Investment Banking with Barrington Associates, where he was responsible for originating and executing corporate finance transactions, including buy and sell-side M&A, equity and debt fundraising, and private equity recapitalizations. Earlier in his career, Mr. Kacik served in banking and finance roles with Smith Barney, Solomon International, LP, and Technomark. LTD. Mr. Kacik holds a B.S. from the University of Southern California and an M.B.A. from the Sir John Cass Business School – City University, London, England.
Stephen H. Gordon, Founding Chairman, Chief Executive Officer and President of Opus Bank, stated, “Over the years, banks have become exceedingly product focused and have failed to effectively provide broader and more sophisticated client centric solutions, including access to alternative sources of capital, M&A and other strategic advisory solutions. The addition of Paul joining our Merchant Banking division enables Opus to integrate our niche Healthcare Banking focus with complimentary investment banking expertise, better positioning Opus to provide a comprehensive and customized financial and strategic solution for those within the healthcare industry.” Dale Cheney, Senior Managing Director, Head of the Merchant Banking division, stated, “We are pleased that Paul has joined Opus to lead our Healthcare Investment Banking efforts. He is a highly-talented and experienced investment banking professional whose background complements
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Wealth & Finance International | November 2015 News
UK Economy Trapping Working Capital Study suggests over £29b of working capital currently trapped in UK economy
Newresearch commissioned by American International Group, Inc. and PrimeRevenue indicates thatlimited access to working capital finance and inflexible payment terms are having an adverse impact on UK business.
“The inability to get access to low cost working capital can affect our clients and is holding back thousands of very well run businesses. Ultimately, it can have a significant impact on the economy as a whole,” commented Neil Ross, Regional Manager EMEA Trade Credit, AIG.
The YouGov poll of UK businesses that provide goods or services to large organisations found that 17% of their revenue is currently tied up in invoices with non-standard payment terms, suggesting that around £29bn is being withheld from UK plc. Over three quarters (77%) of companies have been asked to accept longer payment terms, with 28% saying the issue has increased in the past year.
Ross continued, “Leading publicly-rated companies can borrow quickly and with favourable terms to take advantage of emergent market opportunities. Now, by combining PrimeRevenue’s market-leading platform with AIG’s Trade Credit underwriting experience we’re able to extend this advantage to many more businesses.” The ongoing financing requirement will be organised by PrimeRevenue Capital Management, by providing investment access to banks as well as non-bank entities such as insurance companies, pension funds, hedge funds and capital market investors looking for stable returns. The offering will be rolled out to other European countries and the United States in coming months.
Businesses reported that on average 20% of their customers insist on terms longer than the norm. This can have a significant impact on business operations with respondents saying extended payments affect cash flow (55%), require additional administration (33%) and strain client relationships (29%). And the risk of not providing extended payment terms can be costly. One in five respondents (20%) report that they have lost business after denying customers longer payment terms.
Rob Barnes, Founder, PrimeRevenue, said: “PrimeRevenue has been serving the supply chain finance market for over a decade, with over $120bn flowing through our system in the last 12 months. We have seen first-hand the benefits that this approach can bring to businesses through unlocking cash flow and working capital to fund day-to-day operations and investment for the future. Our partnership with AIG means that these benefits are now available to a broader market of buyers and their suppliers.”
With these business risks in mind AIG and Prime Revenue today launched a new supply chain finance offering for mid-market, non-investment grade companies that could free up significant funding for UK businesses. Supply Chain Finance from PrimeRevenue and AIG is the product of a partnership between a leading global insurer and the largest working capital finance platform in the world. The solution provides funds that enable suppliers to take early payment less a small discount, while enabling buyers to standardise and potentially lengthen their payment terms. This provides low cost access to working capital on both sides of the transaction. Until now, supply chain finance platforms have been limited to supporting the largest, investment grade businesses. Supply Chain Finance from PrimeRevenue and AIG is able to cater to the thousands of mid-market, non-investment grade companies, by providing financing with the credit risk insured by AIG’s market-leading trade credit insurance.
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New Research Finds Investors Regaining Risk Appetite Investors have regained some appetite for risk with a strong consensus over a U.S. rate rise next month, according to the BofA Merrill Lynch Fund Manager Survey for November.
With growth and inflation expectations notably higher after new U.S. payroll data, investors have cut cash holdings and increased exposure to equities, real estate and alternative investments.
Eurozone and Japan strengthen as the most favored equity markets globally, reflecting deeper consensus on the U.S. dollar. A net 67% now expect the currency to appreciate in the next year.
The percentage of asset allocators overweight equities rose significantly by 17 points to a net 43%, while lowering cash overweights to their lowest level since July. Four-fifths of panelists now expect the U.S. Federal Reserve to raise rates during the current quarter.
Real estate and alternative investment overweights rise to their second-highest readings in the survey’s history. In contrast, aggressive underweights on commodities and Global Emerging Markets are maintained.
Confidence in the global economy rebounds, with net expectations of it strengthening in the next 12 months up 22 percentage points from October.
“With consensus very clustered in QE and strong dollar trades, asset price upside appears limited until an ‘event’ curtails the Fed hiking cycle, as in 1994,” said Michael Hartnett, chief investment strategist at BofA Merrill Lynch Global Research.
Concerns over a slowdown in China abate, as local fund managers turn neutral on the country’s growth outlook – their most positive reading in more than a year.
“While European equities are loved by global investors and the ECB has created some excitement about growth, sector positioning shows local asset managers are lacking conviction and hugging their benchmarks,” said Manish Kabra, head of European quantitative strategy.
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Wealth & Finance International | November 2015 News
Study Shows Pensions Savings Often Neglected Long-Term Retirement Goals Lose Out to Short-Term Financial Pressures, Finds Natixis Retirement Savings Study
Low contribution rates, low account balances On average, survey respondents say they will need $805,000 to fund their retirement and expect to live on that for another 23 years after they stop working. To date, they have accumulated $83,000 in their workplace savings plan and $95,000 overall, including all sources of retirement savings – or 11% of their stated goal.
American workers say the biggest risk to their retirement security is failing to save enough money. Yet 60% set aside less than 7.5% of their income for retirement and nearly four in 10 have tapped into their retirement accounts, largely to meet other financial goals, according to a survey released today by Natixis Global Asset Management. “We’re seeing a conflict between investors’ long-term goals and the pressure they feel to address their immediate financial needs,” said John Hailer, CEO of Natixis Global Asset Management in the Americas and Asia. “For many, the short-term pressure wins out and they make minimal contributions, or opt out of their retirement plan altogether. And many borrow against their accounts, eroding the assets they’ve worked hard to accumulate.”
Baby Boomers (age 51 to 69) have put away only 20 percent of the $946,000 they estimate is needed to fund retirement. Workers in Generation X (age 35 to 50) may be the most financially pressured group. They’ve saved only 10 percent of the $741,000 they estimate they’ll need, and are more likely than any other group to have opted out of their workplace savings plan because of debt.
The Natixis 2015 Retirement Plan Participant Study surveyed 1,000 employees with access to a workplace defined contribution plan, such as a 401(k), 403(b), SIMPLE or SEP IRA. It found that 60% of employees contribute less than 7.5% of their annual income to their retirement accounts, and 40 percent contribute less than 5 percent. The estimated average annual income of survey respondents is $100,118.
Younger workers (younger than age 34) may be a bright spot among plan participants. While having only saved about 3 percent of the $769,295 they estimate is needed to retire, Gen Y, or Millennials, began contributing to a workplace savings plan at a younger age (23 years old, on average) than other generations, giving them a head start in accumulating assets. Members of Generation X began saving at age 30 and Baby Boomers began at age 33.
Since retirement plans are often the biggest pool of liquid assets workers own, many turn to their long-term savings account for cash flow to cover immediate expenses or reach financial goals that are a higher priority now. The survey found: • 37% have borrowed from their retirement accounts, including 38% who needed emergency funds for a financial hardship and 19% who used the funds to buy a home. • Of those who have changed jobs, 43% have taken a lump-sum distribution rather than keeping assets in the company plan or rolling them into another qualified plan. • One in three (30%) have taken an early withdrawal from their retirement plan.
“It’s a positive sign to see Millennials are saving and thinking about retirement as early as right out of college,” said Edward Farrington, Executive Vice President, Business Development and Retirement at Natixis Global Asset Management. Financial pressures inhibiting participation Some 250 of those surveyed have access to a company-sponsored defined contribution plan but choose not to participate. Those who opt out are clear in the factors that keep them from participating: • 51% agree with the statement “I need my money today.” • 50% say their employer does not provide a match for workers’ contributions, or the company match is too small. • 34% overall, and 40% of Generation X non-participants, say they have too much personal debt to be able to save for retirement. • 23% say they need to pay off student loans.
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Participants motivated by dreams and fears When active plan participants were asked why they contribute to their retirement account, 68% said they are motivated to achieve financial security, 52% said they didn’t want to work for the rest of their lives and 50% want to be able to provide for themselves.
Despite the retirement savings challenge in the U.S., Natixis’ survey of retirement plan participants found that most are wary of the government interfering with their retirement planning and skeptical that Social Security will even be available to them, with 85 % stating that they do not believe a government-mandated savings requirement would help them be more successful in reaching their retirement savings goals.
In addition, 44% said they don’t want to end up being old and poor and 38% want to avoid being a burden to their family. The retirement horizon Robust social services and dependable pension plans are common in countries that consistently rank higher than the U.S. on retiree financial preparedness, according to the annual Natixis Global Retirement Index1, an in-depth analysis of retirement security in 150 nations. This might suggest that achieving widespread retirement security in the United States will rely on the combined initiative of individuals, plan sponsors and the government.
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Wealth & Finance International | November 2015
CEO of the Month
Aerospace Technologies Group
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Founded in 1998, Aerospace Technologies Group Inc. (ATG) is headquartered in Boca Raton, Florida (USA). ATG is the world’s premier supplier of window shade systems for Corporate, Head-of-State and Commercial aviation aircraft. ATG specializes in rapid development and production of quiet, lightweight, premium quality aircraft shade systems. ATG’s rigorous quality standards exceed most OEMs’ requirements and ATG is certified to AS9100:2009 Rev C and ISO9001:2008. Today, ATG is the largest tier one supplier of window shade systems to OEM’s worldwide. We now have more than 30,000 shade systems in service on more than 30 aircraft types in both commercial airline service and private aircraft.
My role as President and CEO revolves around developing and implementing high-level strategies and establishing the overall vision for development and expansion of the company. To that end I have an active role in new product development and assessment of new products as well as the identification of new markets for existing products. During the course of my career I’ve had exposure to virtually every tier - up and down the chain within the aerospace industry, from being a Chief Pilot to working for a major OEM, to various completion centers and sub-tier suppliers. As a result of this diverse background I have been able to shape ATG in a way to better serve its broad customer base. My experience helps me understand the unique expectations of each customer that ATG serves, and helps establish targeted communication strategies. First and foremost, I’ve established a culture where we communicate on a regular basis throughout the organization so the entire company is aware of important developments. Additionally, I’ve identified key influencers within the organization who create excitement and buy-in at all levels of ATG. I am also known to be very hands-on when necessary, helping move key initiatives through any snags that may occur. I’ve made it an objective to really get to know the team that works for me and have embraced an open-door policy where any employee can voice concerns or offer suggestions for improvements. If we end up implementing new ideas as a result of an employee suggestion, we reward that individual or team in an effort to foster the continuous improvement environment for which we strive for.
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After being appointed to President and CEO in 2007, ATG entered into a major airline product development program that required us to utilize an OEM-specific quality management system (QMS) that is considered far more rigorous than regularly accepted industry standards. Rather than maintain multiple quality standards, I elected to implement these elevated quality system standards throughout ATG, and which have now become the gold standard in the industry. Additionally, we have built our organization with qualified experience, employing experts from luxury manufacturing segments such as yachting, high-end automotive, and aircraft completion centers, all of whom understand what our end-user customers expect in terms of quality. We have used these experts to train our manufacturing teams to ensure that everyone has the same mindset. Our quality culture is so strong that our team is ready for random quality audits 24/7/365 without any need for advance preparation. The PowerTech TM Shade System was designed in 1998 to address several significant flaws found in generation shade systems on the market at that time. Window shades at that time had very few features (generally were manual units only) and required a high degree of maintenance to keep them functional. In addition, when they required maintenance, the units had to be removed from the aircraft and shipped to the factory to be repaired, then shipped back and reinstalled – taking much time. ATG saw an opportunity to greatly improve on these minimalistic designs and created the PowerTech Shade System. Our PowerTech Shade System has several significant improvements over previous designs: * Modular design * Replaced old manual shades used since the 1940’s with a new sleek “electric” version, more befitting of the aircraft in which they are installed (who has manual wind-up type windows in cars these days?). * PowerTech is assembled without hardware, requiring no special tools. * Low parts count increases reliability * PowerTech is tested to a higher standard - the first shade product to achieve RTCA DO-160 certification, the same as avionics equipment - resulting in a much greater degree of reliability and ease of certification. * Field Serviceable: on the rare occasion a PowerTech Shade System requires maintenance (including cleaning) - it is fully serviceable. Our objective was simple: Design and market a sophisticated and reliable electrical product to completely replace the old, outdated technology of manual shades. We wanted to make a step change in the market similar to the replacement of manual rollup windows in automobiles to electric window controls that are pervasive now. ATG has largely achieved this objective. Within 12 years of first shipments we now possess more than a 70% share in our addressable market. In essence our “hot-swap” systems can be replaced on the line between flights without having to power down the aircraft. Our units are considered line replaceable units or LRUs. With the ATG “hot-swap” technology, we have been able to dramatically reduce our removal and reinstallation time from a target maximum of 15 minutes to as little as 15 seconds.
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To keep at the forefront of key developments in the industry, externally we are constantly canvassing the industry landscape. This includes reviewing the global economic and political landscape, changing industry regulations, adjacent markets and general consumer trends, anything that may lead to opportunities for new products or increased market penetration. Internally, we regularly engage in continuous improvement and innovation events, and brainstorm on processes and product enhancements, as well as investing in the longer- term development of advanced technology concepts and ultimately products, typically with prototypes developed in our Quantum Lab. Additionally, our continuous investment in R&D and new product development ensures that we have several new product designs in the pipeline nearing completion at any given time. Operating in the United States has its positives and negatives. One advantage is airplanes around the world and components like ours are sold in US dollars virtually eliminating currency risk. With most of the business jet manufacturers being based here it is perhaps no surprise that the US is the largest single market for aircraft interior products. In terms of what makes ATG unique we are a company of innovators, it is part of our culture and some might say part of our DNA. Everyone from our assemblers to quality, engineering and testing personnel are continuously looking for new more efficient ways of doing things. I was recently awarded the 2015 Distinguished Entrepreneur Award by the Research Park at Florida Atlantic University for innovations that have made a significant impact in the local economy. Our organization capitalizes on the various skills each employee has often utilizing them in ways that do not neatly fit traditional job descriptions. Our team steps up to the challenges of the organization and often takes on multiple activities in an effort to produce the best products in the most efficient manner. We also actively employ Lean-Six Sigma training throughout the organization. We are quick to conceptualize, develop and launch. Our time to market is often a fraction of others in the marketplace. With our advanced prototyping capabilities, we can identify potential issues prior to launch, saving time and cost and allowing product modifications early in the design phase, resulting in maturity at entry into service. They say a picture is worth 1,000 words but at ATG we believe a prototype is worth 1,000 pictures. As we look ahead to the future ATG is already recognized as the industry leader in the window shade system marketplace. ATG recently launched its Quantum Lab Advanced Research Center as a way to develop, evaluate and vet new product introductions prior to launching to the market place. This technology incubator has resulted in a variety of serious product considerations including acoustic systems, competitive decorative designs, custom upholstery, as well as other electromechanical devices. ATG is just taking off
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An Innovative Global Solution To The Asset Management Industry Riva Financial Systems Limited is a financial systems firm specialising in providing global transfer agency solutions for the asset management industry. We speak to Ghassan Hakim, Chief Executive Officer, about his role in the company and how the firm itself has grown to become an industry leader. regulator committed to the success of the industry and the protection of the investor with clearly a global positioning of the funds registered within its jurisdiction. Luxembourg is a highly regulated jurisdiction that rewards its participants with greater stability.
Riva was established in 2002 by a group of industry professionals, each with extensive experience in operations and technology at some of the largest asset managers and fund administrators in Europe. The founders recognised that there was a lack of modern investor record-keeping technical solutions available for an increasingly dynamic asset management market environment, where complex new investment products could no longer be adequately sustained by legacy platforms.
Working within such an established market does mean that we have a number of competitors, and therefore we work hard to ensure we stand out from them in order to maintain our reputation for excellence among our clients. The global deployment capability of Riva TA as a single platform is a key differentiator, as such an implementation of Riva TA results in retiring a number of legacy systems and realizing significant cost savings. In addition, Riva TA has a rich, fully integrated, list of functions that historically are acquired as separate solutions like case management, imaging, workflow, general ledger, foreign exchange, payment manager and extensive commissions processing.
It was during this period of consultation and research that they decided to design and build an innovative alternative solution. The flagship product that emerged from this blueprint was the Riva Transfer Agent solution (‘Riva TA’). Riva TA is deployed in Europe, United Kingdom and Asia as a single platform solution at several large asset managers and third party administrators with deployment plans in North America and the Middle East over the foreseeable future.
Ultimately, Riva is committed for the long term and to its global deployment culture, producing a solution that aims to improve efficiencies and lower total cost of ownership. The consistency and professionalism of our delivery today keep that vision in check. This is not about an overnight success but for a long term of reliable support, innovation, reach, integration and cost efficiencies.
Riva operates across a number of markets, with headquarters in the Isle of Man and branch in Luxembourg as well as additional staff in the UK, India and Canada. Current expansion plans are taking Riva to Asia and the Middle East.It is these emerging markets which prove the most challenging, as many regions in Asia and the Middle East have markets which are still developing. In addition these areas are often fragmented with protective local regulations, yet, they are eager to belong to the global community and benefit from globalization. Keeping up with those changes can be challenging but we work hard to ensure that we stay competitive, as these markets are growing rapidly and are therefore important to our corporate growth.
Therefore, as we look towards the future, we have some exciting plans for the years ahead. We are currently launching the development of core functionality in support of the Canadian funds market which will be followed by the US market for a complete North American deployment. In addition, Riva TA is being evaluated by key players in the Middle East which we hope would launch further deployments in that region. Finally, internal R&D funds are being used to enhance our existing support of the alternative hedge funds and subsequently private equity and real estate funds.
In order to achieve this and maintain our industry knowledge despite the changeable market, we adopt a number of strategies. For key positions like business, regulatory and compliance analysts, Riva seeks professionals with extensive industry experience. In addition, Riva is active in industry committees, relevant conferences and uses its vast professional network to stay in touch and current on all industry developments.
Company: Riva Financial Systems Name: Ghassan Hakim Email: Ghakim@rivafs.com Web Address: www.rivafs.com Address: St. George’s Tower, Hope Street, Douglas 1M1 1AR Isle of Man Telephone: +44 1624 850140
Luxembourg, which is one of our key markets, provides us with a mature and strong financial centre with a political system and financial
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Wealth & Finance International | November 2015
CFO of the Month
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Bel Brands USA, Inc is a manufacturing firm that creates popular cheese products, and which has grown considerably in recent years. We profile Didier Aziza, the firm’s Chief Financial Officer, whose expertise and dedication were key to the company’s expansion.
Bel Brands USA is the US subsidiary of Bel Group, the world’s third largest branded cheese company and the leader in single serving cheese portions. Bel is the only pure global player in branded cheese. Operating as a family company the firm has been bringing smiles to people around the world since its founding 150 years ago. Over the past five years the firm has experienced a vast amount of growth, almost doubling in size. Bel Brands USA has also been named Chicago’s “101 Best and Brightest Companies to Work For” for seven years in a row, from 2009 - 2015. The company is headquartered in Chicago and operates three manufacturing plants in Little Chute, WI, Leitchfield, KY, and Brookings, SD. The firm’s Little Chute, Wisconsin, facility was named the “2013 Dairy Foods Plant of the Year”, and the firm completed the construction of its third U.S. manufacturing facility in Brookings, SD, and began commercial production of Mini Babybel in July 2014. Throughout this transformation the company has relied upon the expertise of their CFO, Didier Aziza. Didier has extensive experience in profit and loss, working capital management, financial planning and analysis, internal controls, accounting, reporting, ROI analysis, and operations. A resourceful team-builder, Didier has been a key contributor in doubling Bel brands size while achieving vision and building cultural values. He has acted as a core member of Bel Brands leadership team and he helped define and implement the company vision, mission and values. As a Bel Brands board member, Didier has been instrumental in driving key updates to board members on critical topics including business and financial reviews, pension and risk management, legal review, tax related transactions. One of his top achievements has been developing and securing the biggest industrial investment for Bel Brands USA and Bel group for the new MiniBabybel plant in South Dakota, $150mn. In addition he worked on the site selection and agreement. Didier also helped the firm to implement an $18mn tax incentive program. Company: Bel Brands USA Address: 30 S. Wacker Drive, Ste. 3000, Chicago, IL 60606-7413 Phone: 312-462-1572 Email: kmulcahy@belbrandsusa.com Website: www.belbrandsusa.com
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Photo’s courtesy of Valdis Skudre / Shutterstock.com
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Asset Manager of the Month
Calamos Investments Calamos Investments® (NASDAQ: CLMS) is a diversified global investment firm offering innovative investment strategies including U.S. growth equity, global/international, convertible, multi-asset and alternative investments.
Known as a pioneer in utilizing convertible securities to manage risk, Calamos has retained its character as a boutique investment firm which offers strategies through separately managed portfolios, mutual funds, closed-end funds, private funds, UCITS funds and an exchange traded fund. Clients include major corporations, pension funds, endowments, foundations, family offices and individuals, as well as the financial advisors and consultants who serve them.
While the mandates of individual strategies differ, each portfolio benefits from the contributions of our various teams, the first of which I will mention is, the aforementioned, CIO Team who is responsible for oversight of investment team resources, investment processes, performance and risk. As heads of investment verticals, CIOs also manage investment team members and have portfolio management responsibilities for specific groups of strategies.
Headquartered in the Chicago metropolitan area, the firm also has offices in London, New York and San Francisco broadening its national and international presence.
In our Portfolio Management and Research Teams, the co-portfolio managers are responsible for day-to-day portfolio oversight and construction while the research analysts provide specialized fundamental and quantitative analysis to the portfolio management teams. In the Investment Committee, our Senior investment team leaders provide a topdown framework, maintain oversight of risk and performance metrics, and evaluate investment process. Our Quantitative/Risk Management Group is a dedicated team that furthers the risk management efforts shared across the investment organization. Finally in the Investment Infrastructure team, we have a robust investment infrastructure, including trading and investment operations.
The Firm’s VP and Director of Corporate Communications, Jennifer McGuffin was kind enough to spare some time to tell us about Calamos and how they are managing to flourish in the current unsteady financial climate. We believe our edge as an investment manager is our ability to evaluate businesses strategically, by marrying top-down insights with rigorous bottom-up fundamental research. When we find a compelling opportunity, we look across a company’s capital structure to determine how to best exploit that opportunity.
As part of our evolution to a deeper and more specialized team and product platform, four senior members of the investment team became Co-Chief Investment Officers earlier this year. Alongside John Calamos, Sr., they oversee the investment department and their respective strategies, including investment personnel. The four new Co-Chief Investment Officers are: John Hillenbrand, CPA: Co-CIO, Head of Multi-Asset Strategies and Co-Head of Convertible Strategies; Hillenbrand joined Calamos in 2002 and has 23 years of industry experience. David Kalis, CFA: Co-CIO, Head of U.S. Growth Equity Strategies joined Calamos in 2013 and has 24 years of industry experience. Nick Niziolek, CFA: Co-CIO, Head of International and Global Strategies who joined Calamos in 2005 and has 13 years of industry experience. Lastly but not least is Eli Pars, CFA: Co-CIO, Head of Alternative Strategies and Co-Head of Convertible Strategies who has nine total years at Calamos and 28 years of industry experience.
We believe that we are better positioned to generate alpha opportunities through our willingness to construct portfolios which differ from benchmarks. By choosing a broader opportunity set and being benchmark-aware but not benchmark-driven; we believe we can add value over time relative to indexes. At Calamos, we believe we can deliver superior risk-adjusted performance by: fostering specialization (by sector, geography and asset class) and collaborating closely, at all levels of our investment organization. By evaluating, pricing and managing risk as well as employing an active, high-conviction investment approach we ensure that our services are second to none. Led by our CIO team, our investment professionals are organized as “teams within a team,” allowing us to capitalize on the diverse opportunities of the global economy in an environment of close collaboration. We believe our collegial environment enhances our ability to serve our clients and strengthens our investment organization as a whole.
All the above are longstanding members of the firm’s investment committee and have played an instrumental role in the company’s success, along with a list too long to mention on these pages alone.
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In recent years, the four investment team members emerged as strong leaders and have demonstrated exceptional capabilities as they have taken on more and more responsibilities. The enhanced leadership structure is in recognition of their many contributions and the Calamos Investment Team continues to pursue outperformance custom they have established across the firm’s multitude of investment strategies. The expansion of the leadership structure reflects the development and evolution of the Investment Team in recent years, which began with the goal of building deeper research capabilities within more specialized teams. Since these days, the firm has committed significant resources to the investment department throughout that time period.
We are known, throughout the asset management industry, as a pioneer in convertible and liquid alternative strategies, having launched one of the first open-end convertible mutual funds in 1985 and one of the first liquid alternative mutual funds in 1990. We developed these strategies because we are dedicated to meeting the needs of investors who seek risk-managed ways to enhance their asset allocations. Since the 1970s, innovation and adaptability have driven the growth of Calamos Investments. We introduced pioneering strategies that utilized convertible securities to help our clients navigate the difficult financial markets. In the decades that followed, we adapted our comprehensive capital structure research to a range of asset classes, providing investors with a breadth of strategies to help them achieve their financial objectives, including liquid alternatives and multi-asset class closed-end funds. We have expanded our global presence and affirmed our brand identity as an innovative provider of investment solutions. As our firm has grown and the investment environment has become more complex, we have cultivated an ever-increasing level of specialization within our investment team and distribution organization. This adaptation has allowed us to enhance the level of service we provide to our growing base of clients.
Calamos’ investment philosophy remains the same. We embracing a collaborative culture of “teams within the team,” the firm evaluates businesses strategically by blending top-down insights with rigorous bottom-up fundamental research as I have already mentioned. During the trailing 18 months, the firm’s overall investment results have shown marked improvement with many of its investment strategies outpacing benchmarks and/or peer groups. At Calamos Investments we’ve built a global investment platform with focused, experienced teams, specialized by investment discipline. Our team-managed, research-driven approach marries the top-down insights with bottom-up research which allows us to look across a companies’ capital structures.
In the spring of 2015, Calamos Investments announced the expansion of its London office capabilities, adding trading, research and portfolio management functions along with enhanced business development and relationship management. To support such growth, the company has relocated to office space on Threadneedle Street in the heart of the City. The expansion of our London office is yet another indication of our commitment to the global markets and investors worldwide as we believe our unique approach to risk management fully serves the needs of institutional, retail, and high-net-worth investors.
Calamos Investments is a global firm committed to excellence in investment management and client service. Grounded in family values, Calamos provides its associates a challenging environment with the opportunity for personal and professional growth. Since our earliest days, Calamos has structured its investment organization to reflect the view that a highly collaborative and collegial culture produces the best insights and investment ideas. The teams in which we operate are carefully structured to promote the exchange of research amongst the many individuals who make-up the group. We believe that this ongoing collaboration enhances the portfolio construction decisions that each group makes, as well as our overall research culture. We emphasize long-term professional development. Due to this type of process, we have frequently been able to promote from within. However we also enhance our capabilities by hiring talented individuals at all levels of our investment organization.
Calamos Investments has been investing globally since 1988, offering a diverse set of strategies via separately managed accounts and UCITS funds. In September of 2015, Calamos Investments completed the acquisition of Phineus Partners LP, a global long/short manager based in San Francisco. The acquisition enhances Calamos’ product offerings and role as an innovator in the liquid alternatives space. Founded in 2002 by Michael Grant, Phineus is a fundamentally-driven investment firm that, like Calamos, employs a blend of bottom-up and top-down considerations and has built customized portfolios for private investors, families, endowments and institutions.
Our “teams within a team” approach addresses the complexities of managing a range of strategies with different risk/return profiles. Our structure ensures that each portfolio management team maintains a dedicated focus on their area of expertise, without diluting their resources and contributions.
Calamos Investments was impressed with the investment capabilities at Phineus and believes the acquisition will be a great addition to the Calamos investment team culture and their strategies will be an important addition to the firm’s existing liquid alternatives platform, an arena in which Calamos has been involved in for more than 20 years.
Calamos Investments is a global investment manager committed to excellence in investment management and client service. For more than 35 years, the firm has partnered with clients around the world to help them achieve their investment objectives by providing active, global investment solutions through a number of strategies and funds. The needs of investors continue to evolve with the changing market and regulatory environment, and Calamos Investments continues to evolve to meet the needs of this dynamic marketplace.
Calamos Investments Web Address: www.calamos.com/Global/ Calamos Investments LLP 62 Threadneedle Street London EC2R 8HP Phone: +44 (0)20 3744 7010 Email: globalinfo@calamos.co.uk
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Investment Advisor of the Month
Elliott Wislar, CEO, Clearbrook
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Clearbrook creates customized investment solutions for institutions, family offices and high-networth individuals.
Independent and privately held, Clearbrook serves as advisor and advocate for their clients, with capabilities including discretionary management and outsourced CIO, ongoing advisory services, institutional research, and customized portfolios for alternative investments.
also leverages superior manager selection to implement shorter-term tactical allocation strategies and alters their portfolios to reflect changes in the markets, highlighting their flexible and market responsive attitude to investment.
As the firm understands that each client’s investment strategies and missions are unique, they do not operate from a series of pre-established portfolio models or a limited list of approved managers. Instead they offer a personalised service, beginning by understanding their client’s missions and goals, approach to risk, and any investment restrictions. Once this information has been determined, the firm works to establish realistic investment objectives and develop a customized solution.
This investment approach comes from decades of experience managing large, complex pools of capital for a wide array of institutional and private investors. This approach has served them well and the firm has a proven track record in alternative asset classes and investments, including hedge funds, real estate and private equity. As more and more investors look to the potential of alternative investments to enhance portfolio performance and reduce portfolio volatility, expertise outside the traditional asset class boxes has become a critical element in successful investment management.
“When we meet with potential clients, our priority is to understand their individual investment objectives, portfolio structure, potential risks, and costs – and we’re prepared to offer tailored advice.” said Elliott Wislar, Clearbrook’s CEO.
Additionally, Clearbrook creates customized portfolio solutions in response to client needs. In 2011, the firm implemented a strategy as a fixed income “surrogate”, intended for qualified clients seeking an investment with long-term investment results similar to the bond market, but without potential duration risk. The strategy, known as Hedged Income, invests in a concentrated portfolio of 15-17 hedge funds, and has a targeted investment objective in excess of the Barclay’s Aggregate Index, but is uncorrelated with fixed income or equity indices.
The senior members of the Clearbrook Investment Team have had successful careers as portfolio managers and traders, and have also served as investment committee members, trustees and board members on the plan sponsor side. As such, they understand the art of managing money successfully, and draw on this experience in every client relationship. This investment team fosters a collaborative culture, one that shares information and ideas, and works together to ensure that each client benefits fully from the full breadth and depth of cumulative experience, shared expertise and commitment to client service. Clearbrook’s Investment Committee meets weekly to review top-down asset allocation as well as investment recommendations for client accounts. In this way, the team assures that forward-looking research and best ideas are implemented across every client portfolio. Advisors proactively communicate with clients to pare back from waning trends, and reallocate to new strategies that are gaining momentum.
Alongside their work in investments, Clearbrook also endeavours to build meaningful partnerships with clients that extends beyond traditional investment advice. For mission-driven and non-profit organizations, the firm seeks to facilitate a strong connection between their organization and their clients’ work in the community. Clearbrook assists their non-profit clients with guidance on capital campaigns, staff and trustee education, and volunteerism. For educational institutions, Clearbrook offers opportunities for student internships, as well as guest lecturers for a school’s finance or MBA programs.
Ultimately, Clearbrook focuses on capital preservation and long-term wealth creation. The firm’s multi-faceted experience, analytic insight, and comprehensive understanding of risk help them to evaluate the full dimensions of the real risks their clients face, and enable them to devise sound strategies to counter them.
The C.A.R.E. Program (Community Action and Reachout with Employees) is one of the ways Clearbrook connects with their clients on-theground. One day each quarter, Clearbrook employees volunteer their time serving one of the firm’s non-profit clients. This allows the team to take part in very self-fulfilling work for a good cause, while providing service to their non-profit clients in a way that directly benefits their mission.
Evaluating the key risk factors behind each client’s investment program is critical to the investment process, and the firm’s philosophy is to look at risk from an absolute standpoint, rather than a relative one. A number of tools are employed to monitor and optimize risk allocations, balancing asset weight limits and risk limits to achieve client objectives.
Overall this combination of investment acumen and dedicated client service is what sets Clearbrook apart from their competitors and places them at the top of the investment advice industry. Company: Clearbrook Global Advisors Phone: 212-359-0290 Website: http://clearbrookglobal.com
These tools include utilising a risk-averse approach with a focus on creating portfolios with asymmetric return profiles and a long-term strategic perspective with attention to managing downside risk. The company
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Investments Get Social Social investment has become increasingly popular in recent years as investors become increasingly aware of the impact their money is having. Tamsin Chislett of ClearlySo explains the impact of a particular project in Manchester.
Something unusual took place in Manchester on the evening of October 21st. If you had headed over to Barclays Rise, the co-working space for startup businesses on Deansgate at around 7pm, you would have found a group of investors listening intently to a series of startups pitch for investment. Startup pitch events are already quite rare in Manchester, but two things made this event completely unique compared to others that have taken place before.
Tech North, the government-funded body with a mission to drive the growth of the technology industry across the North of the UK, has set up its initial headquarters in Manchester. Since its launch, it has got off the ground quickly to accelerate the technology community and support startups. Tech North’s “Northern Stars” pitch competition has already shone a spotlight on some exciting businesses – and ‘tech for good’ startups have been well represented in the regional warm-up events. Foodbank App, a startup that helps food banks let donors know exactly what they need, won in Sheffield. Whilst in Manchester, two ‘tech for good’ businesses came first and second in the public vote: Polen, an app that enables millennials to give to charity by turning their every day actions into corporate donations; and Cathartic, a website for users to leave anonymous personal stories and as a result get connected to the charities that can offer help (a service that he’s hoping corporates might pay for).
Firstly, the event was focused primarily on educating investors, rather than helping the companies get the finance they need. Three founders of young companies took it in turns to do a five-minute pitch, telling the audience about their business, progress to date, and funding needs. After each pitch, an esteemed panel of three experienced angel investors gave their honest and blunt feedback. Even for seasoned Angel investors in the room, this was a rare chance to hear the true reaction of other angels as they thought through the quality of a pitch. “That market size is really over-estimated.” “Looks like a really strong team.” “Why didn’t they discuss competition?” …and so on.
James Bedford, Head of Investment Strategy for Tech North, believes the North’s capacity for building profit-with-purpose businesses is no accident: “The North built it’s first powerhouse by solving problems of efficiency in production but it’s problem solving didn’t end there, solutions to pressing social problems were also created and led to the birth of the cooperative movement. The rise of the tech sector in the North of England has been impressive but again has brought with it the Northern belief that things can be done differently. Social Enterprise combines the North’s strengths of tackling social issues and technical solutions. Where the world sees problems, the North sees opportunities.
Secondly, all of the entrepreneurs pitching were not just founders of technology companies. They were also founders of companies that have a purpose beyond profit. This new and quickly growing category is often known as ‘tech for good’. For Manchester, these ‘tech for good’ businesses that combine ambitious commercial opportunities with a mission to solve a social problem, are fast becoming a staple of the burgeoning startup scene. So how has this all come about?
The excitement about tech for good investments is quite understandable. Many are highly commercial, investable propositions (albeit with the equally high risks that all exist in all early stage investments). The fact that they focus on big significant pain points for customers means they inherently create a lot of value. And like many other angel investments, they are also often eligible for tax relief. Younger companies
The technology startup scene is taking off in Manchester. According to a report published by Tech City in February 2015, the average turnover of Manchester’s technology startups grew by 74% in the previous 12 months – the largest increase in the UK.
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can offer SEIS (Seed Enterprise Investment Scheme), which provides individual investors with 50% rebate on their income tax, whilst slightly older companies can offer EIS with a similar mechanism but set at 30%. Of particular interest to social impact ventures is SITR (social investment tax relief). Whilst standard companies limited by shares are not eligible, charities and community interest companies are, and the 30% income tax rebate it offers is valid on debt as well as equity. It is an innovation to encourage investors to put their money into social enterprises, whilst lowering the cost of capital for entrepreneurs. For investors who would like to get involved, there are more and more ways to tap into the community. Firstly, Tech North, ClearlySo, or other organisations working with angel investors can put you in touch with other angels so you can share deal-flow, learn and invest alongside others. To seek out investment opportunities yourself, there are now a myriad of co-working spaces in Manchester city centre, and they make a great place to find startups. Spaceport X, in the Northern Quarter, houses many startups and hosts events almost every evening. The Spaceport founding team are expanding to a huge space called Forward, backed by government and commercial funding, to be opened in 2016. Meanwhile other hubs including Barclays Rise, Hello Work, the Sharp Project, and The Landing at Media City all offer desk space for startups and a full schedule of events where entrepreneurs, advisors and investors can meet. A key lynchpin of this rapidly growing community is Dotforge Impact – a three-month accelerator program, specifically for ‘tech for good’ startups. They started with their first cohort in Sheffield at the beginning of this year, and moved to Manchester for their second cohort of 14 teams just last month. The Dotforge team works tirelessly to support the entrepreneurs on the intensive program. But perhaps even more importantly they have opened their doors to the wider community, allowing anyone to attend their training sessions, and making it a welcoming environment for investors to come and meet the entrepreneurs even whilst they’re at very early stage. Dotforge’s impact on the vibrancy of the community is only just beginning. As Colin Tan, Dotforge’s Entrepreneur in Residence, says: “The North of England has historically been an innovator of social good, as well as technology. Now with the establishment of TechNorth to stimulate tech entrepreneurship, and social investors like ClearlySo and Dotforge, other investors across the UK are becoming attracted to the North as a good source of dealflow.” During the investor event on October 21st, the air was buzzing with excitement about the potential for the Manchester community to incubate, invest in, mentor and grow businesses that are harnessing technology to make the world a better place. The three brilliant pitches each made Manchester proud as they described their socially impactful businesses. James from Parenthub showcased an app to increase parental engagement in children’s education by facilitating communication between parents and teachers. Matt from Reason Digital spoke about his new venture that aims to help companies measure and therefore improve their CSR activities – “Sage accounts for CSR”. And Neil from Carthatic spoke passionately about his desire to ensure everyone has an outlet for the stories they need to tell. As Stephen Critchlow, one of the Angel Investors on the panel told the audience: “All businesses, and therefore all investments, have an impact – it’s just that some impacts are better than others.” Manchester is well on the way to being a great place to build a business that changes the world.
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Hedge Fund Manager Of The Month INOKS Capital Ltd is an independent asset manager headquartered in Geneva and licensed by the Swiss Financial Market Supervisory Authority (FINMA). Since its inception in 2004, the company’s focus has been to promote sustainable growth by designing impact-efficient and innovative investment solutions in Emerging Markets and Commodity Value Chains. The investment vehicles managed and advised by INOKS actively provide both capital and handson support to real actors and their added value business activities. They invest in companies throughout former CIS countries, Africa, Latin America, Central and South-East Asia. Over the past 10 years INOKS has helped over 100 companies to grow through capital provided by the alternative vehicles it manages, deploying over US$ 2.8 billion across all major commodity types.
Central to the success of structured commodity finance investments is the manager’s ability to understand and isolate the performance risk of the invested entities whilst proficiently mitigating the remaining risk factors. Ultimately, success is achieved through the good conduct and self-liquidation of the underlying invested transaction, or in an adverse situation its proper liquidation without a loss. Through due risk mapping and assessment the skilled manager can hence benefit from a risk perception arbitrage.
INOKS gain a better understanding of the risks specific to underlying transactions through their pre-investment assessment and bespoke deal structuring. The company’s post-investment risk management process is just as effective and flexible, and includes surprise on-site visits, whilst also relying on local service providers which conduct daily inspections and appraisals of stock. The efficiency of its investment process is underlined by the absence of losses since it began trading for the Ancile Fund in 2006.
Traditional investors no longer have the resources or the incentives to support this highly specialised, granular process. In addition, the financial crisis has brought about stricter regulatory requirements (such as increased capital ratio requirements) and increasingly enforced Anti Money-Laundering / Know Your Client controls. These have increased the cost of investment, pushing providers of capital to either reduce their exposure to these arts or to seek higher capital remuneration, thus creating an ever increasing liquidity crunch.
INOKS Capital has innovation in its DNA. The company was amongst the first to offer the qualified investment community direct participation in Commodity Structure Trade Finance (or CSTF) through its collective investment schemes, with the launch of Ancile Fund (Cayman) Ltd in August 2006. Since then the company has paved the way for several other alternative capital solution providers to propose structured trade, value chain, and commodity finance collective investment strategies. Such is the popularity of these strategies that they are now talked of as part of a potential asset class in its own right.
INOKS Capital on the other hand is ideally positioned to service precisely the type of business models that are no longer attractive to traditional lenders. Their proprietary investment process enables them to source, invest, monitor and divest businesses entirely in-house. Their better understanding of the underlying commodity value chains, business segments and their performance drivers enables them to take on the performance risk whilst identifying and mitigating the remaining risks inherent to the good conduct or liquidation of the underlying transaction.
The company’s strength is its ability to lead by example by renewing its offering to adapt to the evolution of the tangible commodity universe. It is committed to financing all stages of the value chain, not just the trade segment. Far from being a passive trade finance lender, INOKS is an active partner which supports tangible commodity businesses throughout the value creation process. The company contributes its knowhow, experience, and vast network of partners, to enhance its investees’ operational effectiveness. At the heart of this commitment lies an understanding that businesses which are performing generate performance for the investment manager’s funds and their investors. This alignment of interest ensures a mutually beneficial relationship, and profitability for all stakeholders involved.
Contrarily to traditional investors, the company’s structure is flexible enough to customize the capital solutions it proposes to fit the specific needs of different businesses. Its approach is not based on the rigid balance sheet frameworks favoured by financial institutions. Rather,
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The company has also identified the need for infrastructure as paramount to achieving sustained growth in emerging markets. Its latest strategy, Debt to Equity Conversion (or DECO), launched some two years back in December 2013 to provide longer term operational and capital expenditure of up to three years to companies which are committed to growth, in order to assist them in the vertical integration of the tangible commodity value chain, by constructing infrastructure such as warehouses and mills. This ensures that value is generated locally and benefits local populations. This novelty approach testifies to INOKS’ long-term commitment to accompanying Emerging Market business throughout their J-curve growth in order to help establish lasting local governance.
Amongst the return characteristics of INOKS’ portfolios, a significant benefit is their absence of correlation to traditional asset classes and their directionality. This is appreciated by investors looking for return diversifiers offering downside protection in economic downturns, and improving their portfolios’ efficiency frontiers. Their alternative vehicles have posted consistently positive performances no matter what the economic outlook: in fact the strategy tends to perform better in times of economic stress, as returns are marginally higher during liquidity crunches. It is also worth underlining the reliability of the strategy, which boasts a historical volatility of only 1.3%. This consistency is preserved by the low default rate of the asset class (0.02% according to the ICC); by the due-diligence and risk management processes that the manager has put in place as described earlier; by the absence of any use of leverage; by the predictability of returns due to the self-liquidating nature of the financing structures. This measured, sustainable approach has brought success to INOKS Capital’s investors regardless of the global economic outlook.
The funds which the company manages and advises enable businesses in developing countries to access much needed capital and networks which are severely lacking in these markets. Increased regulatory requirements following the financial crisis are impeding the development of commodity value chains in developing markets to the tune of US$ 2 trillion, with over 200 million SMEs in developing countries in need of a loan. Whilst analysing capital access gaps, various organisations such as the ICC, the International Trade Centre, and the Asian Development Bank, are calling for more alternative actors such as INOKS Capital to help bridge a financing gap which is detrimental to economic growth and poverty alleviation in these regions.
The partnerships that INOKS fosters with the companies it invests in are the best indicators of what is happening at different levels of the physical commodity value chain. Their collaborative relationships add to the unique network of local value chain stakeholders working together to achieve mutual growth. Their alignment of interest ensures completely transparent communication which enables the company to always remain at the forefront of emerging developments.
The company is proud of this social utility and believes that the quality of its investments lies not only in the financial performance it delivers to its investors, but equally in the social impact it can achieve for its investees and their environment. This double-bottom line is upheld by carefully screening the direct and indirect social and environmental impacts of any potential investment during the assessment process, through both discriminating and qualifying criteria.
INOKS’ unique investment philosophy, creating value by investing in values, underlines that by aligning their objectives, INOKS generates performance for each of their stakeholders. Its impact-driven investment objective is engineered for durable economic growth, tangible wealth creation and sustainable development in emerging markets. Simultaneously, their unique investment process combined with decades of commodity finance experience ensure next-to no defaults and returns that are unrivalled amongst peers. The company is committed to institutionalising its asset class, and strives to remain at the forefront of regulation to provide the most transparent and reliable service on the market to its clients.
To avoid negative externalities, the company does not invest in countries or entities which are sanctioned by OFAC, the UN, the EU, or the DFAE. The company also discriminates against companies which manufacture non-industrial alcohol, weapons, tobacco or genetically modified food; companies which are engaged in gaming or animal testing; companies guilty of human right validation; or that do not treat their workers, people and animals with respect.
The future is bright for INOKS Capital. To accommodate the firm’s sustained growth, its team in Geneva is moving to new offices twice the size of their current space. New team members are shall be joining in the first quarter of 2016, as INOKS prepares to deploy two new funds within its Luxembourg umbrella which are seeded and await CSSF approval. These important milestones set the company in good stead towards its goal of institutionalising commodity finance for the alternative investment community, whilst strengthening its position as the leading innovator of this exciting asset class.
To generate positive externalities, the company looks for qualifying criteria to invest in companies which contribute to one or more of the following: sustainable development; poverty alleviation; food security; environmental protection; corporate governance. INOKS is recognized by its peers as an industry leader in the field of sustainable and responsible investing, and is the proud recipient of several awards commending the positive social impacts generated through its investment vehicles. The company’s focus on emerging markets enables its portfolios to achieve higher returns than similar strategies which are being deployed in established economies. It benefits from higher growth rates, both economic and demographic, which in turn stimulate local consumption, transformation and infrastructure growth. Meanwhile, regulatory changes have precipitated a liquidity crunch for commodity value chains in Emerging Markets. INOKS Capital is able to capitalise on this arbitrage opportunity by leveraging its specialist knowledge and networks within these markets; whilst generating positive externalities in sustainable development and environmental respect.
Company:INOKS Capital SA Email: info@inokscapital.com Web Address: www.inokscapital.com Telephone: +41 22 718 74 10
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The Investment Funds Law Landscape in Ireland
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Matheson’s Asset Management Group is ranked by independent industry research as the top ranked funds practice in Ireland, acting for 28% of Irish domiciled investment funds by assets under management. Tara Doyle, Head of the Asset Management and Investment Funds team at Matheson, talks us through the investment funds industry in Ireland, and how her team at Matheson fits within this market.
Ireland is regarded as a key strategic location by the world’s leading asset managers. Over 800 fund managers from 55 countries have assets administered in Ireland. Ireland is known for its clear and practical regulatory framework, with certainty around timeframes for establishing investment funds and a pro-business government, presenting an attractive international fund domicile for fund promoters. In 2014, Matheson commissioned the Economist Intelligence Unit (EIU) to survey 200 global asset managers on the factors which influence their decision making when choosing a European fund domicile. The independent research carried out by the EIU found that three-quarters of the US and UK managers surveyed said that they would choose Ireland as a top-3 domicile for their European fund ranges if starting over. Promoters identified factors such as cost, the ease of doing business, speed to market, distribution opportunities and regulatory environment as key factors which influenced their decisions. Referring to the introduction of the ICAV, the new bespoke investment funds vehicle, Tara Doyle says, “The ICAV demonstrates Ireland’s pro-active approach in meeting the evolving needs of fund promoters, and its competitiveness as a leading international fund domicile. The ICAV provides an additional option for promoters, complementing the existing range of available Irish fund vehicles.” Perhaps the biggest challenge facing the asset management industry since the financial crisis has been the burden of new regulatory initiatives. However, as Tara notes, “There are indications that the fast pace may be slowing, and that the focus of regulators will now change to become one of harmonisation and enforcement in the coming years.” Matheson’s primary focus is on serving the Irish legal needs of international companies and financial institutions doing business in and through Ireland. Its clients include the majority of the Fortune 100 companies, 7 of the top 10 global technology brands and over half of the world’s 50 largest banks. Headquartered in Dublin, the firm also has offices in London, New York and Palo Alto. More than 600 people work across the four offices,
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including 75 partners and tax principals and over 350 legal and tax professionals. Matheson’s Asset Management and Investment Funds team is led by 10 partners and comprises over 60 fund professionals in total, with dedicated funds partners based in its Dublin, London and New York offices. The team advises on all matters relating to the establishment and ongoing operation of fund products including UCITS, AIFs, money market funds, exchange traded funds, manager platforms, private equity and property funds, loan funds, fund of funds and Sharia compliant funds. On the alternatives side, the team advised on the first AIFM authorisation in Europe and the first inward AIFMD management passport into Ireland. Tara divides her time between Matheson’s Dublin and London office, focussing on the team’s London-based clients, as well as supervising Matheson lawyers on secondment in London, where the firm’s asset management practice has a significant client base. Tara is a frequent speaker at international financial services conferences and seminars, and regularly contributes articles to financial services and investment fund industry journals. She is an articulate representative of the Irish investment funds industry, and her longstanding contribution and active participation at industry level has culminated in her election this year to the 12-member governing council of Irish Funds, the representative body of the Irish funds Industry. Tara notes, “Proactive and ongoing engagement by industry and its representatives is key to the ongoing development and direction of the Irish and European asset management and investment funds industry. Alongside my membership of the Irish Fund’s governing council, Matheson’s asset management partners currently hold over 20 active industry appointments at domestic and European level.” In terms of keeping on top of new legal and regulatory developments, Matheson’s Asset Management and Investment Funds team has a dedicated knowledge management unit, led by one of its partners, Liz Grace. Tara notes, “This specialist team’s remit is to track European and Irish legal, regulatory and market intelligence relevant to the firm’s asset management practice and clients. Liz and her team organise regular training for lawyers at all levels in the group as well as daily current awareness bulletins to ensure that lawyers are fully informed in a rapidly changing regulatory environment.” According to Tara, “Developing our team internally is also key to ensuring that we stay at the top of the industry. My role in the firm’s graduate recruitment and trainee development programme is to ensure that the firm continues to attract the best talent, and that those individuals go on to fulfil their potential as lawyers and business leaders in the firm. She adds that, “By ensuring that we have the best possible team, we are able to provide our clients with the best possible service. The funds team views our relationship with each of our clients as a partnership, working to develop advanced solutions to enable our clients to deliver innovative products.” Describing how the team actively works with each client’s legal and product development teams to become an integrated part of their business, Tara says, “I believe that professional advisers should give their clients a commercial advantage, not just make sure that they operate within the confines of new and existing regulation.”
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Wealth & Finance International | November 2015
Growth in UK M&A Appetite – a Risky Business?
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According to recent KPMG forecasts, appetite for M&A deals in the UK over the next 12 months is expected to outstrip both the US and the rest of Europe (with appetite in the UK, based on forward price/earnings ratios, expected to increase by 13%, compared to just 6% in the US and 8% in the rest of Europe).
Minimising the risks: practical considerations 1. Heads of terms to be reviewed by parties’ legal counsel at an early stage Parties will often involve their lawyers in a deal once the heads of terms have been negotiated and agreed. However, the advantages of involving legal counsel at an earlier stage, whilst these discussions are still taking place, should not be overlooked. Involving lawyers (or at least enabling them to have sight of the draft heads of terms) will help to ensure that the key contractual provisions are considered and dealt with at the outset, particularly those most likely to result in future dispute, for example the nature of the warranties given (and how these relate to any relevant warranty and indemnity insurance, to the extent taken out) and any termination rights to be granted between exchange and completion.
With deal teams often working to incredibly tight schedules to “get the deal done”, we look at the risks associated with accelerated negotiations from a UK contract law perspective, focusing particularly on recent case law which suggests that courts have little sympathy for parties trying to step back from a bad bargain post-completion, and the practical steps that parties should take in order to minimise these risks. The risks of a rushed deal: a UK contract law perspective When faced with recent disputes over the terms of commercial contracts, the courts have proved unwilling to sympathise with parties who have been unwise in their negotiations, instead making it clear that they will not apply commercial common sense simply to rewrite a bad bargain (Arnold v Britton [2015] UKSC 36; Wood v Sureterm [2015] EWCA Civ 839). This marks a subtle but significant shift by the courts, who traditionally stressed the importance of commercial common sense as an aid to contractual interpretation, leading some commentators to criticise what they perceived to be the erosion of the line between merely interpreting a contract and effectively altering it (Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896; Chartbrook Ltd v Persimmon Homes Ltd [2009] 1 AC 1101; Rainy Sky SA v Kookmin Bank [2011] UKSC 50).
2. Beware of “agreements to agree” Where parties enter into fast-paced negotiations with a view to completing a deal within a tight timeframe, key provisions can sometimes be left “to be agreed on later”. Particular care needs to be taken with this approach as “agreements to agree” are generally unenforceable under English law (Walford & Others v Miles & Another [1992] AC 128). However, where parties can identify certain specific aspects of a deal that are to be negotiated post-completion, it may be possible to draft the relevant contractual provisions so as to minimise the risk that they will be unenforceable. For example, the following provisions were found by the courts to be sufficiently certain to be enforceable: (i) an undertaking to negotiate in good faith the amount of certain “reasonable costs” payable (Petromec Inc Petro Deep Societa Armamento Navi Appoggio SpA v Petroleo Brasileiro SA [2005] EWCA Civ 891); (ii) a time limited obligation to seek to resolve a dispute by “friendly discussions” prior to referring the dispute to arbitration (Emirates Trading Agency LLC v Prime Mineral Exports Private Ltd [2014] EWHC 2104 (Comm)).
Specifically, in the case of Arnold v Britton, the Supreme Court held that when interpreting a contract, commercial common sense must not undercut the importance of the actual words used and cannot be invoked retrospectively. The court’s view was that “the mere fact that a contractual arrangement, if interpreted according to its natural language, has worked out badly, or even disastrously, for one of the parties is not a reason for departing from the natural language”. This is not to say that commercial common sense will not be applied by the courts, but that lesser weight may be given to it, with the courts favouring the natural meaning of the words used, regardless of whether or not this results in a bad bargain.
3. All contractual terms should be clear on the face of the document When it comes to drafting the relevant transaction documents, parties and their lawyers should opt for clear, simple drafting, rather than multi-layered, heavily-negotiated wording. Given (i) the recent shift away from commercial common sense as an aid to contractual interpretation, (ii) the difficulty in persuading a court to imply a contractual term, and (iii) the fact that previous negotiations between the parties are generally inadmissible when courts are asked to consider a contractual dispute, the parties should ensure that all of the relevant terms of the contract are clear on the face of it.
Similarly, the courts have re-enforced in recent cases their reluctance to imply terms into a contract simply to make it a fairer one, instead choosing to uphold the principle of freedom of contract, implying terms only where necessary, rather than reasonable (Attorney General of Belize v Belize Telecom Ltd [2009] UKPC 10; Rosserland Consultants Ltd v Credit Suisse International [2015] EWHC 384 (Ch)).
Joanne Maitland is an associate at international law firm Mayer Brown
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Wealth & Finance International | November 2015
Hedge Funds to Soon Feel the Bite of the New Senior Managers Regime By Jacqui Hatfield, Partner and Melanie Shone, Trainee, Reed Smith Summer 2015 signalled that substantial regulatory change impacting financial services firms is on the horizon.
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Mark Carney’s Mansion House speech and the final report of the Fair and Effective Markets Review (FEMR) confirmed the widely held expectation that certain key elements of the Senior Managers and Certification Regimes, or “SMR” (for insurers, the Senior Insurer Managers and Certification Regimes “SIMR”), are likely to be applied to all firms active in wholesale FICC markets, more specifically MiFID investment firms, hedge funds under the EU AIFMD and UCITS fund managers. It has since been confirmed in an announcement by HM Treasury in October 2015 that the government is pushing forward with extending the SMR to all financial services firms.
As the intention is that responsibility should rest with the most senior roles, the scope is more limited than that under the current APR. We could therefore see some individuals being allocated a significant number of prescribed responsibilities, requiring a restatement of roles and responsibilities, especially in smaller firms. Not only will these individuals be concerned to ensure that they have the information, systems and support required to meet any new regulatory demands made of them, but this could also result in renewed remuneration discussions to compensate the increase of assumed risk. We can also expect to see fund managers being required to compile “responsibilities maps”, which will require firms to formalise responsibilities and reporting structures. Whilst this is intended to bring accountability and responsibility to decision-making, an unintended consequence could be that individuals become reluctant to take decisions without receiving appropriate sign-off. This could stifle innovation and development in the sector.
At present, the SMR and SIMR regime will apply only to banks and insurers respectively, leaving the existing Approved Persons Regime (APR) in place for other firms. The political and regulatory will to abolish such a fragmented system was earlier seen in the Treasury Committee’s Project Verde inquiry and report into the Co-operative Bank’s failed bid for divested branches of the Lloyds Banking Group. Lack of personal accountability is widely viewed as a key driver of the financial crisis and misconduct that have dogged the industry in recent years. The existing APR has also been subject to sustained criticism from the Parliamentary Commission on Banking Standards as “a confused mess” and “woefully narrow”.
Individuals with the potential to pose “significant harm” Firms within the new scope, including hedge fund managers, will be required to assess and certify the suitability of individuals who have the potential to pose “significant harm” to the firm or its customers, effectively taking over the regulator’s current assessment role under the APR. However, this new “certification regime” is likely to capture more individuals within its scope than those currently performing significant influence functions.
Although responses to the FEMR consultation on the extension of the regime were mixed (with firms not currently within scope generally against the proposal) it’s not surprising, given the political context, that proposed regulatory change is on the horizon.
Fund managers will need to consider whether (and what) additional resourcing will be required to bring such assessments, which should be reviewed at least annually “in house”. The impact here is likely to be felt the greatest in smaller fund managers. Although the FCA will continue to maintain a register of individuals subject to prohibitions, firms will be required to notify the regulators of actual or suspected breaches of conduct rules and of any disciplinary action. We would expect to see firms reviewing their compliance toolkit (including management information and staff training) to ensure that these are fit for a more robust purpose.
Potential impact on hedge fund managers It is important to remember that we are still at a very early stage in the legislative process. The Government intends that implementation of the newly extended regime should come into operation during 2018. The Bank of England’s November Open Forum was due to debate these issues further and, together with the FCA and HM Treasury, will provide an update to the Chancellor and Bank of England Governor by June 2016. The precise details as to scope and content of the regime for the wider industry are likely to take further shape in the coming months. We are also likely to see the Government flesh out its plans for how the “principle of proportionality” may operate to take into account the divergent size and complexity of financial services firms, and in particular amongst hedge fund managers.
Regulatory references are intended to provide the information and tools with which a firm can investigate an individual’s past conduct effectively. Firms will need to ensure that they have the capability to effectively investigate the individuals concerned. With individual and firm accountability central to the new regime, the responsibility and liability will be on senior managers to ensure they make correct decisions.
The new banking criminal offence relating to failing financial institutions was considered by FEMR as not ripe for extension to other institutions, rightly recognising the systemic and prudential risk profile of bank failure differs substantially from other market participants. Given these strong contrary recommendations, we would be surprised if these are then included in any final rules applying to the wider financial services industry. However, fund managers should not underestimate the importance of ensuring sound compliance documentation is maintained, should the regulators come knocking at the office (or their home) front door.
Enforceable conduct rules The Government intends, as the FEMR recommended, the introduction of enforceable conduct rules, applicable to all non-ancillary staff in a firm. This will add the regulatory “bite” to voluntary codes of market conduct intended by the FEMR. The FEMR also recommends guidance on minimum training and qualifications requirements, although the FEMR’s intention is for firms to have flexibility in how this would be implemented. We don’t expect any future framework to be as prescriptive as that currently in place for retail activities, but fund managers will likely need to review and possibly adapt their training programmes in light of any new guidance.
Regulatory pre-approval and “statements of responsibility” for senior managers There are a number of “prescribed responsibilities” under the proposed regime which would, if extended to hedge fund managers, require distribution amongst individuals performing senior management functions. Pre-approval for those performing senior management functions will be required, but we would expect to see similar grandfathering provisions as there are under the SMR and SIMR to ease any transition.
As we note above, the precise scope and content will be revealed in the coming months as the legislative process begins and the consultations continue, but hedge fund managers should help to steer the consultation process by engaging with legislators, regulators and industry bodies over the potential impacts of the new regime, which the Government intends to come into operation during 2018.
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Relative Solutions Vijay Kumar is a professional consultant with Relative Solutions
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At Relative Solutions, we help multi-generational family enterprises manage the complex decisions related to the transition of their wealth across generations. Families that share assets must successfully manage the joining of their emotional and financial lives to have both the framework and the foundation necessary to foster successful family relationships in order to maintain sustainable family enterprises. We help them address the difficult questions that emerge from the shared risks and opportunities that define their lives together. We do this by offering a calm and neutral atmosphere so that a family’s best thinking can emerge to solve their own most pressing problems. We help family members think and act differently in relationship with each other.
When you’re dealing with shared assets, the plus side for a family is that they believe that they can potentially increase their economies by working together as a group. But sharing assets also means sharing liabilities, human as well as financial. Sharing objectives and goals along with responsibilities requires strong communication amid complex relationships surrounding issues such as power, control, conflict and gender. These challenges include defining roles within the family and participation in sharing of the assets, managing transitions in the family, a willingness to struggle with complexity, and having a public face while maintaining privacy and confidentiality. All of which takes a focused effort, a lot of hard work and a deep commitment over time to work together on these issues. Whether a family has to or chooses to share their assets, anticipating these challenges and dealing with potential risks are important as they evolve and continually redefine their family relationships. For example, when assessing whether it is a good time to sell a family business, many perspectives are needed. Many enterprising families invest together, commit to growing together and to taking the long-term view. Deliberately making the choice together to make the necessary sacrifices for the health and wellbeing of the family across generations is part of this process. In terms of helping families align their enterprises with their goals the sustainability of the family enterprise is dependent on being in sync as a family. Family relationships can be difficult without a sense of general alignment; being an enterprising family can add an increased layer of complexity. Families that define their values, mission and vision, and a plan for achieving them are much more likely to succeed.
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This kind of connection between a representative body and the rest of the family is built over time, as people trust the process. Part of our work with families at Relative Solutions is to help them design a governance structure that will help them navigate the difficult conversations that often go untouched.
At Relative Solutions, we work together with our clients to develop a mutual process that increases a sense of being on the same pathway and therefore makes it easier to make decisions that are deliberate and strategic to ultimately help them move forward in a sustainable way. For the high net worth family with shared assets, complex challenges must be successfully addressed with comprehensive solutions.
Familial connections also provide process, structure and ease in informing the family and shareholders and a necessary pathway for making rapid decisions. Creating separate shareholder and trustee groups even though sometimes the same people can help define distinct roles within the family. Family members are up-to date on the status of the company and other family holdings and can feel connected to the decisions facing them. In addition, we believe that it is important for those living with the decisions to participate and have a voice in making them. Then they can feel engaged and more confident that the path forward toward progress is clear, achievable and sustainable.
Our work is designed to help our clients take ownership of improved decision-making that is congruent with their stated values, vision and mission as a family enterprise including helping them to conclude the degree to which they want to join their assets as another pathway to sustainability. With the external world quickly evolving, technology rapidly changing, the consolidation of industries, and with markets and information moving at a faster pace, families need to have an entrepreneurial attitude toward their assets. In our experience, successful families are willing to diversify, seek out opportunities, question legacy assets and business processes that attend to the task of building family wealth.
Sometimes a family isn’t ready for these difficult conversations. It takes some level of trust, real commitment and a foundation of connectedness to each other and to the family to take that first step. If these pieces aren’t there it is more of a roadblock to help a family begin to move forward.
A family enterprise must ensure its strategic model is on track to keep up with these changes but is also positioned for growth. Family enterprises need to adjust their thinking and plan more broadly for their futures. In either case, the family needs to have some best practices in place including having a mission, vision and strategic plan for the family.
At Relative Solutions, we don’t tell families what they should do. Instead, our team works together in a collaborative consultative manner to lead a process for the direction they want to move toward as a family so that they own the process themselves. Families are able to talk about difficult issues and have the commitment to work to resolve them.
The adage “shirtsleeves to shirtsleeves in three generations” continues to generate concern however the rapid economic and demographic changes over the last ten years have brought about some very real practical concerns as well. Family members are living longer and relying on shared assets to provide for their needs while cohorts within generations have different needs (and very different ideas in many cases) on the meaning of family wealth.
Our strength lies in the context in which we work with families, allowing them to have those difficult conversations, addressing the challenges they are or may soon be facing and designing a pathway forward that is aligned with their values, vision and mission that meets their objectives and goals in a way that is sustainable across multiple generations.
Discerning the needs versus the wants of the current family versus future generations are important conversations to have to help build a meaningful roadmap for success in whatever shape or form that might take for the family.
After working with Relative Solutions, clients feel accomplished that what they have developed will be sustainable and adapt over time. In our experience, for high net worth families that share assets, all solutions really are relative.
Building a process for a family to talk about the challenges they may currently be facing or are likely to face is paramount in order to have the kind of personal connections and understanding of one another required for family cohesiveness and decision-making. Establishing a form of representative governance provides the family with specific structures and processes to exchange ideas and share concerns relevant to the entire enterprise.
Company: Relative Solutions, LLC Web Address: www.relative-solutions.com Email: info@relative-solutions.com Telephone: (800) 638-6442 toll-free Relative Solutions serves family enterprises around the world and is based in the United States.
For example, the family council, which represents the greater family, can focus on the business of the family throughout the year thereby connecting the family to the oversight of the family’s human, intellectual, social and financial capital.
Specialties Family Governance and Board Development, Human Capital and Leadership Development, Family Philanthropy, Transition Planning, Family Strategic Planning, Wealth and Family Dynamics, Family Sustainability Assessment
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Wealth & Finance International | November 2015
Securing Family Finances: Sequoia Group This Swiss based company has been assisting private families with wealth management for almost two decades. Pierre-NoĂŤl FormigĂŠ profiles the firm and explains how their dedication to wealth management has bought them to the top of their industry.
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Sequoia Group is a Swiss innovative financial group with headquarters in Geneva. Founded in 1998, the firm operates three main subsidiaries: SEQUOIA Wealth management, SEQUOIA Asset Management and Wealthings.
classes and strategies through very liquid and transparent vehicles. Our advisory services are also particularly valuable in that regard as we incorporate the fundamental concept of risk-adjusted returns all along the tactical asset allocation processes.
The main subsidiary, SEQUOIA Asset Management designs for its clients specific investment solutions in all asset classes with priority given to long term performance and risk control. Today our funds cover the full spectrum of the investment universe with uncorrelated and diversified strategies.
Ultimately, our overriding goal as a Group has always been to offer financial products and services complying with the most stringent investment and risk-control standards. To achieve this we always work according to our code of ethics which incorporates integrity, trust, innovation, excellence, long term perspectives and entrepreneurial spirit, but most importantly we have made investor-protection the key pillar of our organisation. It governs our entire processes as emphasized by our CISA certification. We have levelled up our different practices in order to develop client-centric solutions based upon the most stringent assessment of risks. This is firmly embedded in everything we do and develop and the team of specialists we have assembled is fully committed to this vision.
Building upon the CISA certification delivered in 2013 by the FINMA, the swiss financial market supervisory authority, SEQUOIA Asset management also provides fund managers with a full range of administrative, corporate and operational services. In contrast, SEQUOIA Wealth Management is dedicated to customised private wealth management. It caters private clientele, from the consolidation of assets to the creation of tailor-made portfolios. Wealthings is engaged in real-time corporate management and fiduciary services. It provides institutional and individual clients with services ranging from advice and assistance in administrative, financial, tax and legal fields to corporate administration, accounting and fiduciary operations.
Our industry is fast paced and the group has to work hard to stay at the top of its game. Fundamentally, SEQUOIA Group has always been innovative and will remain so in order to stay competitive and retain its position at the top. For instance, we have developed a solid expertise in innovative structures such as multi-strategy portfolios based on managed accounts platforms.
These services combine to mean that as a Group, we offer robust yet complex tailor-made investment solutions to families who often require sophisticated set-ups. As a matter of fact, we operate a fully integrated fund management platform which enables the creation and administration of dedicated bespoke investment vehicles.
But most importantly, we have always anticipated the tightening of the regulatory environment. Needless to say that the financial crisis and its losses have given customers and authorities a new appreciation for risk and transparency.
Moreover, risk management is and has always been an integral part of our Group’s operations and procedures. Following its CISA certification, SEQUOIA Asset Management has strengthened its risk management policy and reinforced its internal control systems.
Four years ago, we were among the few Swiss asset managers who took every step to apply for and get the CISA certification. As a result, SEQUOIA Asset management comes out today among the few FINMA registered financial specialists which operate in full legal and regulatory compliance.
Linking all of these subsidiaries is our firm’s main three priorities: ensuring a transparent managerial structure, the highest level of performance as a term of reference, and risk monitoring as a continuous point of focus.
The future is bright for the group. Currently we are seeking best-breed investment managers in the alternative and traditional space to plug on our platform. We are among the few Swiss asset managers approved by the FINMA with the CISA license offering to talented fund managers a one-stop-shop.
The addition to our range of multi-strategy portfolios based on managed accounts platforms has enabled us for instance to offer greater diversification and more potential outperformance while optimizing risk control and liquidity of the assets invested.
Looking further ahead, we would like to pursue our developments in the fields of wealth management and asset management with higher commercial ambitions. We are especially looking forward to expanding our teams with like-minded professionals who share the same work ethics. The CISA certification we have obtained in 2013 now enables us to attract such talented professionals, be they asset managers or wealth managers. Our full range of administrative, corporate and operational services is deep enough for them to concentrate on their core investment activities while the increasingly time-consuming support tasks are carried out by SEQUOIA’s specialist teams.
In obtaining the CISA licence for SEQUOIA Asset Management, SEQUOIA Group has also been able to assemble a strong team of experts in fundamental areas such as Investment advisory, risk management, research, legal & compliance. They make sure our investment solutions are structured for optimal control over investments made and strategies implemented. In addition to the firms’ priorities, SEQUOIA‘s wealth managers are guided by the basic principles of open investment architecture, optimum performance and risk monitoring. We embrace for instance the refined concept of multi-manager funds in order to provide to its clients investment solutions that will meet every level of risk sensitivity, time horizon and return expectation. This allows clients to diversify across asset
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Wealth & Finance International | November 2015
Securing Family Finances: Kaiser Partner
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Kaiser Partner is an internationally renowned wealth management firm with wide ranging experience in financial planning and organisation. Senior Partner Elmar Wiederin provides us with an insight on the firm’s current activities and what the future holds for the company.
For centuries legal structures such as trusts or foundations have been the reliable solution to manage and protect assets for families and individuals against claims from inside as well as the outside.
sent stable, secure and appealing locations for wealth in the heart of crisis-riven Europe. Despite these tough challenges, there are also a number of exciting opportunities for our company. As a family owned company we are able to take a long term perspective and we naturally view all client matters from the position as a wealth owner, giving our clients the best possible service, which is our motivation and the key to our success.
The experts at Kaiser Partner have the necessary skills to fully understand the tradition of our clients, their needs and goals. They take the time to get an overview of the entire wealth situation of our clients before taking on the responsibility to secure and grow our client’s wealth in an integral and responsible manner.
Within our firm we have a culture of innovation. We were amongst the first to acknowledge the importance of tax compliance for long term success and acted accordingly.
Kaiser Partner is a privately owned wealth advisory group, founded in 1931 in Vaduz, Liechtenstein. We specialise in helping wealthy families and entrepreneurs to safeguard, manage and grow their global wealth.
Kaiser Partner is a proactive and independent partner for private wealth owners. An all in one solution for our clients. Our multifaceted expertise lets us provide comprehensive, knowledgeable advice and support to private individuals and families on all issues relating to their wealth. We develop tailor-made strategies and solutions to help clients protect and grow their wealth in a rapidly changing world and to deal with asset protection and succession issues in a way that puts the interests of the family at the centre. We are supported in our endeavours by an ever-expanding international network of experts in a wide variety of disciplines.
Our expertise combines estate planning, fiduciary, banking, reporting and family office services as well as SEC registered investment advisory. Today Kaiser Partner employs over 200 employees in Vaduz and Zurich overseeing approximately CHF 25 billion in assets for clients around the globe. There are a number of challenges which we face working within this industry. Wealth is an attractive target for unjustified claims. These attacks can originate from external sources or within the circle of wealth ownership through issues such as divorce, statutory shares, or even simple greed. Legal structures and professional advice provide protection to ensure that the necessary knowledge and attention is guaranteed at any time, which we specialise in setting up for our clients.
What really sets us aside from other groups is the fact that we are family owned, have all the necessary expertise in-house or accessible in our global network and a unique track record in addressing potentially adverse movements with innovative solutions
Having a trusted partner that brings the right set of values, knows each client’s situation (ideally over generations) and has access to a global network of experts is the best way to safeguard a family‘s future, which is what our firm aims to provide.
We live our values and ask our partners and clients to do the same, every day and in every aspect of our business. Being privately owned with short decision processes and no places to hide is a decisive competitive advantage and source of permanent client satisfaction in a world where the industry is driven more and more by regulations and short term thinking.
Another challenge we regularly face is the issue of changing regulation and laws. At Kaiser Partner, we accept that the world is turning very fast and that this is altering the rules on how to preserve existing and create new wealth. We are more convinced than ever that geographical diversification of wealth is essential, and that tax compliance plays a major role in long-term asset protection.
Company: Kaiser Partner Name: Elmar Wiederin, Senior Partner Email: elmar.wiederin@kaiserpartner.com Web Address: www.kaiserpartner.com Address:Kaiser Partner, Pflugstrasse 10/12, Postfach 538, 9490 Vaduz, Liechtenstein, Kaiser Partner (Schweiz) AG, Zollikerstrasse 60, 8702 Zollikon (Zürich), Schweiz Telephone: +423 236 57 57
It is therefore important that families and companies respect a country’s tax laws. They must play by the rules of their countries, or settle their tax obligations and exit their countries, dependant on which will provide the best outcome. Consequently, we have spent the last few years building up the expertise and services we need to implement - together with our clients: Tax compliant, cross border solutions, sustainably attractive investment strategies and tailor made Family Office services involving Liechtenstein, Switzerland and other jurisdictions. We believe that our business locations in the Principality of Liechtenstein and Switzerland repre-
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Private Equity Fund Manager of the Month Vivaris, Ltd. Vivaris is dedicated to building a community of like-minded investors that are interested in a wide variety of high-quality, proprietary transactions. The firm is made up of a team of professionals with strong financial, operational, and entrepreneurial backgrounds.
Founded in June of 1998 by J. Christopher Mizer, Vivaris (formerly Lake Erie Capital) invests in and acquires middle-market businesses in a broad range of industries that are leaders in their market niches.
Experts in entrepreneurial finance, the company invests across all sectors and analyse projects on an individual basis. Starting with the fundamentals that drive growth and value creation: opportunities to revitalize management; implement a disciplined sales process; introduce new products and services, the firm are able to enter into strategic relationships.
Christopher serves as the chairman of each of the portfolio companies and guides key strategic decisions and their execution. He also serves as the operating president on an interim basis when companies are going through periods of ownership succession and new management team members are being assembled.
Overall, Vivaris invests on a yield convert basis. In structuring their offerings the company look to build instruments that offer their investors the security and current income of debt, with the back end up side associated with equity.
He began his career as a Research Assistant with The Center for Economic Issues, a think-tank focused on economic development. He earned the B.S. (biology, applied maths), B.A. (economics), M.S. degrees (biology - neurogenetics), and MBA (finance, accounting) degrees from Case Western Reserve University.
The firm outlines what they look for when seeking an investment. “Our ideal transaction size is $15 - $100mn, but there are no hard & fast lines. The risk / return profile of a given opportunity dictates how vigorously we pursue it, large or small. We invest in four basic areas, healthcare / medical / life sciences; technology; leveraged buy-outs and real estate.
His firm aims to create top returns for clients, and as such they have a number of investment criteria which include transaction size of $15mm - $150mm; history of revenues, earnings, and growth; core team of talented managers who would like access to capital to fund growth; position of market leadership within a niche; opportunity to expand globally; availability of complimentary acquisition candidates.
“We target niche businesses that are privately owned, revenue proven, and operate in a fragmented industry. They also have limited seasonality, strong management, diverse customers, and can benefit from additional capital.
What marks the firm out from their competitors is that whilst many private equity funds assume that their investors will be happy to rely on their expertise and invest in whatever they choose, Vivaris understands that many investors have their own preferences for industry or sector.
“Our mission is to be world-class at creating economic and social value. We are committed to a set of core principals and values, including meaningful relationships, absolute integrity, the disciplined application of creativity, and being “the best place for the best people to do their best work.”
As such, all of the firm’s investors have the autonomy to determine whether they interested in investing in any given deal before the firm parts with their money.
Company: Vivaris, Ltd. Address: 8143 Prestwick Drive, La Jolla CA 92037 Email: cmizer@vivarisltd.com Phone: 858-525-5141 Website: www.vivarisltd.com
The firm’s overall approach to investing is opportunistic, finding patterns in their financial analysis using their vast industry experience and investing accordingly.
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Our Company in 60 Seconds
Accounting Direct Plus limited What does your business do? We are an accounting practice, which also specialises in business advisory and forensic accounting
What’s the aim for your business? To continuously grow as a business but carry on providing the professional and bespoke service that we provide
Who are your clients? Businesses and individuals who need accounting services and business advice
What’s your company’s biggest challenge? To become one of the top 100 accountancy firms within 5 years Name: Mr Enver Kannur Company: Accounting Direct Plus limited Email: enver@accountingdirectplus.com Web Address: www.accountingdirectplus.com Address: 293 Green Lanes, London, N13 4XS Telephone: 0208 886 9222
What makes you unique? Accounting Direct Plus understands how important your money is to you. Our services are tailored for each client but our high standards of professionalism, efficiency and expertise never change. We know that everyone’s needs are different. What’s your biggest challenge facing you at present? Continuously dealing with the radical changes in the finance industry year on year and finding the right competitive edge.
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