Category: Finance

NAS Invest and BlueRock Fund Acquire Residential Properties Worth EUR 50 Million
Corporate Finance and M&A/DealsFinance

NAS Invest and BlueRock Fund Acquire Residential Properties Worth EUR 50 Million

Overall, NAS Invest and BlueRock Fund have acquired close to 200 residential units across the Berlin districts Charlottenburg, Wilmersdorf, Tiergarten and Mitte over the first six months of the year. The two partners expect to invest another EUR 100 million over the next years. NAS Invest is responsible for property asset management and the implementation of the individual project strategies, while BlueRock is in charge of AIFM compliant fund management and reporting.

“Our deep network enabled us to acquire these residential properties in Berlin off market. We will now modernise and reposition them in line with our fund strategy,” says Nikolai Dëus-von Homeyer, managing director at NAS Invest.

“The Berlin residential market still has huge growth potential. Our ability to leverage a local network enables us to identify unique investment opportunities that stand out in the European market including from a risk return perspective,” adds Ronny Pifko, director and founder of BlueRock Fund.

NAS Invest and BlueRock Fund target core plus and value add properties across German metropolitan regions and more particularly in Berlin for the “NAS Berlin Residential Growth” fund.

Please go to www.nas-invest.com and www.bluerockfund.com for additional information.

Brexit – What can Companies do to Mitigate the Impact?
FinanceInfrastructure and Project Finance

Brexit – What can Companies do to Mitigate the Impact?

The United Kingdom, Europe and the world woke up this morning to a new reality. With the majority of the population voting to leave the European Union, Britain has started today its road to separation.

With sterling plummeting to its lowest level in 31 years and the stock market falling sharply this morning, what lies ahead? What will be the impact on companies and markets? What can be done to mitigate potential repercussions that Brexit will inevitably bring? Even more importantly, how can companies adapt to the important changes coming our way and identify new opportunities?

Frost & Sullivan is already working with its clients to assess, review and plan strategically for the future to create a positive impact on the economy and society.

As we all know Brexit is likely to take a minimum of two years to materialize, with the process for withdrawal from the EU expected to start when Article 50 of the Treaty of Lisbon is triggered. Once the intention of separation is formalized, Britain will begin to negotiate withdrawal terms with EU member states on issues such as trade tariffs and the movement of UK and EU citizens, in effect laying the ground for its redefined relationship with the EU.

Senior Partner and Managing Director for Europe Sarwant Singh explains:

“It is important to note that during this interim period, Britain will still be subject to existing EU treaties and laws, but will be barred from decision making processes. Therefore, existing regulations are likely to continue until negotiations are completed.”

“However, there is uncertainty regarding the path ahead,” adds Mr Singh. “This could trigger a dip in business sentiment and delays in FDI (Foreign Direct Investments). On a positive note though, Brexit could pave the way for Britain to expand trade relations with the rest of the world beyond EU, and this would especially help mitigate risks arising from excessive reliance on one trading partner.”

Looking at the UK financial sector, Senior Partner Gary Jeffery admits that “there may be risks if financial institutions lose passporting rights which presently allow for the sales of services across EU states without the need to secure local regulator approval.”

Britain could also see the departure of automotive plants from its shores if manufacturers cease to enjoy the benefits of tariff free trade with the EU. Currency volatility could persist in the medium term given the uncertainty of the path ahead and if the devaluation sustains, we could see exports becoming more attractive, therefore benefitting UK based manufacturers.

Although the results are a cause for concern, one must remember that they also herald the mark of a new beginning for the UK which will be influenced by a strong government policy and the success of negotiations with the EU and the rest of the world. We will have to wait and watch to see how the nation’s growth story unfolds.

Wellian Investment Solutions Shares Reaction to Brexit vote
FinanceInfrastructure and Project Finance

Wellian Investment Solutions Shares Reaction to Brexit vote

At this stage, Wellian has said that it is difficult to predict a long term outlook, however, the only immediate certainty is the extreme volatility in the financial markets prompting huge price swings across equity, currency, bond and commodity markets. Such volatility will require continuing close management and careful analysis over the weeks ahead as Sterling falls to its lowest since 1985, the DFM has said.

As the pound reaches a 30 year low against the dollar, Richard Philbin, Chief Investment Officer of Wellian Investment Solutions (part of the Harwood Wealth Group plc) comments:

‘Whilst it is not our position to debate the rights and wrongs of this historic outcome, we are acutely aware of the fact that this verdict has raised many poignant and serious questions. Of these questions, the ones to have the most immediate impact on our industry include whether or not there will be an interest rate hike, will businesses turn away from the UK market and will the M&A market suffer even more than it already has done?’

Philbin continued:

‘The answers to all of these questions are at this stage, on this list of the many unknown outcomes of a Brexit. However, we would like to reassure our clients by reaffirming that we have recently been focussing all of our attention on diversifying our portfolios whilst simultaneously leaving plenty of room for wealth creation; regardless of the result.

“Furthermore, what is also reassuring is that the fall in Sterling will actually act as a diversifier. We have substantial international holdings in most of our portfolios and a 10% fall in Sterling will immediately boost their values by the same amount (excluding any movement in the underlying asset). Many of the UK’s best known companies are very international and a fall in Sterling will make their goods and services immediately more competitive overseas.

“We also need to remember that our Sterling based assets such as gilts, property and UK fixed interest won’t change in value to our Sterling based clients; neither will the income they are receiving from it.’

Philbin concluded:

‘Today and in the weeks ahead we will be spending lots of time thinking through the implications from an investment point of view. We acknowledge that this is not an issue that will be purely restricted to Europe; but one which will have a significant ripple effect across the global markets, which is why it is so crucial for us to continue to apply a long term view to our investment strategy.

“We wish to reiterate that investing; by its very nature, is rarely all plain sailing, even at the best of times and there will always be moments of risk and uncertainty like these. One only has to refer to the history books to see that we have often navigated through turbulent market risks and that in hindsight, these risks rarely seem as bad as they appeared at the time.

“The secret of our success in riding these storms has always been to design our portfolios with a long term view in mind and our diversification focused strategy has delivered excellent long term returns to our investors. We have been very aware of the implications of Brexit as well as the other investment risks such as the slowdown in the Chinese economy and the upcoming election in the US for quite some time. As such, our portfolios remain well diversified and invested with some of the City’s brightest minds to take advantage of opportunities as they unfold. As always, we will continue to keep our clients informed of our decisions as and when they arise.’

How Asia and Australia will Determine the Value of Sterling on Friday
FinanceInfrastructure and Project Finance

How Asia and Australia will Determine the Value of Sterling on Friday

Polls close at 10pm GMT today. Sydney opens at the same time and closes at 6am GMT, while Tokyo opens at 11pm GMT and closes at 7am GMT. According to a number of media sources in the UK, the final decision will be announced around 7am GMT on Friday. A flurry of activity is likely between 4am GMT and 6am GMT. Since no exit polls have been commissioned, any early warning signs and emerging voter trends are going to have a real bearing on trade in Tokyo and Sydney.

As Sydney closes, Frankfurt will open at 6am GMT, followed by London at 7am GMT. In all likelihood, a Leave vote will see Sterling decrease in value by approximately 10% and a Remain vote will see it increase in value by approximately 5%. “A rightsizing is inevitable,” adds Secker. “And in a poetic twist of fate that no politician on either side of the debate could have orchestrated in a million years, time will have the upper hand. Together, Frankfurt and London will determine Sterling’s value the morning after the night before. Everything else will be history.”

New York will open at 12pm GMT and close at 8pm GMT. In all probability, based on many years’ experience, the European trend will continue stateside.

The weekend will create a “cooling-off” period, so there should be a degree of calm and purpose by the time Asia and Australia wake up on Monday morning. In the event of Leave winning the day, volatility will remain for some time to come. How long is anyone’s guess.

Secker believes now is not a good time to be trading the currency market. “It is like the Wild West out there. Leave/Remain is a gamble, and one can win big – or lose big. As a professional currency trader, I want reproducible strategies and systems that give me low risk and an edge over time. I am not in the business of betting on Lady Luck!”

However, he says currency traders who are brave enough to ride the wave should keep a close eye on their risk management strategies and trade within their limits. He also recommends putting strategies in place to mitigate any overnight risk, particularly from 10pm GMT on Thursday to 7am GMT on Friday, when clarity will be low and volatility will be high.

Secker is backing Remain.

Germany and Slovakia fans face 395% hike on Average Hotel Room Prices
FinanceInfrastructure and Project Finance

Germany and Slovakia fans face 395% hike on Average Hotel Room Prices

IG Group, a global leader in online trading, reveals that fans of Germany and Slovakia descending on Lille in France this weekend for their Round of 16 clash at Euro 2016 can expect to fork out the most for a hotel room.

Analysing the average hotel price per match during the group stage of the tournament*, prices are 395% higher in Lille during Euro 2016 than the average price during 2015 making it the most expensive host city to stay in.
According to IG’s analysts, AccorHotels, which is the largest provider of hotels across France, is anticipated to be one of the main beneficiaries from France hosting the tournament.

AccorHotels, which has a portfolio of 1,598 hotels throughout France and a wide range of hotels in close proximity to each of the host venues for Euro 2016, incorporates brands including Sofitel, Novotel, Mercure, Ibis and F1. 

The stocks of AccorHotels and others which might be affected by Euro 2016 that IG are following can be viewed here.

As illustrated by the table below, Lille is the most expensive city in which to stay overnight of all the host cities where Round of 16 matches are taking place.

Alexandre Baradez, IG France, said: “France accounts for more than a quarter of Accor’s portfolio throughout the world with 28% of their hotels located in the country hosting Euro 2016.

“Accor’s stock has been performing well since mid-February, but started to retract in June as it tracked the wider European stock indices lower. The global macro-economic and political concerns are driving the direction of stocks in the near term.

“Any positive impact on Accor’s bookings being thanks to the tournament will become evident once it reports its results for the quarter later in the year.”

IG has created a Euro 2016 landing page, which includes some of the shares that IG is tracking during the tournament with comment from some of their analysts across Europe, at http://www.ig.com/uk/euro-2016

Manchester Cancer Treatment Company First to Secure Funding from £100m SME Funding Drive
FinanceInfrastructure and Project Finance

Manchester Cancer Treatment Company First to Secure Funding from £100m SME Funding Drive

• As current figures stand, Manchester‐based oncology company, Incanthera, has received a £150,000 investment pledge, which has been raised by private equity house IW Capital via Race to Scale;
• Crowdfinders and IW Capital launched Race to Scale – a £100 million funding drive – for UK scale-ups in London on 21 April, in association with a network of partners including Seedrs, SyndicateRoom, the UKBAA, Money&Co., Crowdstacker, Crowdcube, Envestors, Smith & Williamson and Invesdor to form the largest UK funding initiative of its kind;
• The annual initiative is open to UK SMEs that are looking for development finance in the form of an investment/loan between £100,000 and £5 million;
• Race to Scale launched in response to over a third (34%) of UK investors with over £100,000 in investments who would consider investing in SMEs in the next five years but do not have the knowledge to do so – equating to £126 billion in untapped investor finance;
• Launched in partnership with the UKBAA and its first Angel Investing Accreditation programme.

With 79% of high-growth businesses based outside of London, the primary objective of Race to Scale is to encourage and support the nation’s scale‐up community in sustaining growth from start‐up into successful mid‐size enterprise. The annual initiative aims to power vital development finance into entrepreneurial hotbeds across the UK, with a focus on key cities including Birmingham, Bristol, Cardiff, Edinburgh, Leeds, London and Manchester. Race to Scale will enable established businesses across the country to submit business proposals for a share of the £100 million funding pot, comprised of debt and equity finance. The finance is available exclusively to established small to mid‐sized enterprises that are proven in concept and require capital to scale, as opposed to start-up funding. Each successful SME will qualify for an investment or loan ranging between £100,000 and £5 million in value.

To reflect the new national roll-out of Race to Scale, IW Capital and Crowdfinders have launched the SME Heatmap. The motion infographic champions the regional hubs of entrepreneurial activity across the UK, concentrating on seven cities that are nurturing a thriving scale-up community and the sectors fuelling UK innovation and growth.

Incanthera is committed to the development of pioneering technologies that target solid tumours. Originally a spin‐out from the University of Bradford’s Institute of Cancer Therapeutics, Incanthera now operates from Manchester and has research facilities in Bradford and Salford. Incanthera exists to bridge the funding gap that often inhibits groundbreaking research from translating into a commercially viable product and progressing into a cure for serious diseases. The company progresses drug programmes through to early human clinical trials, to obtain vital safety and efficiency data, to then commercialise the product through licensing deals with major pharmaceutical companies. In addition to the Race to Scale funding pledge, Incanthera is still actively fundraising to support a clinical trial for a ground‐breaking drug, dubbed a ‘smart bomb’.

Crowdfinders commissioned national research to support the launch of Race to Scale. Key findings from the research include:

• Over a third (34%) of UK investors with more than £100,000 in investments would invest in UK SMEs but do not have the knowledge to do so – this equates to £126 billion of potential private investment that remains untapped;
• Only 9% of UK investors who would invest in SMEs feel they have the knowledge to do so;
• 71% of investors with over £40,000 worth of investments say they are confident in SMEs’ abilities to drive economic growth;
• 63% of UK investors with an investment value between £70,000 and £100,000 would consider investing in SMEs in the next five years;
• 57% of investors in London would consider investing in SMEs in the next five years – representing the highest appetite for SME investment in a regional comparison.

Acknowledging the necessity of greater investor education, Race to Scale is supported by Jenny Tooth OBE, CEO of the UKBAA. In March this year, the UKBAA launched the first Angel Investing Accreditation – a new official qualification to promote effective investment into Britain’s SMEs. Recognised by the Chartered Institute of Securities and Investment (CISI) and the SFEDI – the standards body for enterprise and entrepreneurship – the accreditation is the first quality-controlled angel training that will validate investors and demonstrate their knowledge and expertise.

Luke Davis, Chairman & Co‐founder of Crowdfinders and CEO of IW Capital said:

“Race to Scale got off to a fantastic start at our latest Crowdfinders event, and I am thrilled with the reception that Incanthera’s pitch received. The company is doing incredible things for the world of oncology and our investor audience was very perceptive to the immense potential that Incanthera has. This response encouraged me to lead the funding raise for Incanthera, to further its business progression and ensure that it can continue to push vital cancer treatments through the development pipeline. Our health service needs revolutionaries in the oncology field, so I am delighted to be supporting Incanthera’s scale‐up journey.”

“The company is such a worthy recipient of further investment, and reflects the calibre of businesses that are based around the UK. Incredible companies like Incanthera already exist all over the country, however, I think investors tend to have a very London‐centric view towards SME investment. Therefore, there’s a danger of businesses based outside of the capital becoming overlooked. By rolling out Race to Scale to other UK regions, we want to make sure that businesses nationwide receive the financial support they need, and to ensure that investors have greater access to remarkable, regional opportunities like Incanthera” Davis added.

Simon Ward, CEO of Incanthera commented:

“We are thrilled and very grateful to receive the support and investment given through the Race to Scale project. It is often very difficult for investors other than Institutions and traditional Venture Capital to support small, drug discovery and development companies and Race to Scale allows for this opportunity. The fight against cancer is a long and difficult war and will involve us all. We wish the IW Capital‐led initiative every success.”

Looming Brexit Vote Shows Why Investors Must Treat Currencies with Caution
FinanceInfrastructure and Project Finance

Looming Brexit Vote Shows Why Investors Must Treat Currencies with Caution

“The impending vote on the UK’s future in Europe has seen sterling volatility spike to levels not seen since the financial crisis, driven by sharp intraday swings as investors’ nervousness around the pound’s value, gravitating around $1.46 to the US dollar currently, increases. While there has been a marked improvement for sterling in recent sessions, sentiment can swing rapidly.

“Indeed if the UK was to vote leave, the volatility experienced would be severe and we would expect currency and UK risk assets to come under intense pressure initially. Longer term, the risk of barriers to trade and investment worsening the UK’s current and capital account balances would potentially put pressure on gilts. Rather than UK equities, which in large-caps are overwhelmingly multinationals with a global footprint that benefit from pound weakness, the government bond market would likely succumb the most to rising bearishness.

“By staying hedged until after the result of the referendum, investors can mitigate any further weakness for sterling in the event of a Brexit, whilst also retaining the flexibility to move back into unhedged investments if the vote for remain wins out.”

 

Investment Outlook: Looking Beyond Brexit
FinanceInfrastructure and Project Finance

Investment Outlook: Looking Beyond Brexit

With less than a week to go until the EU referendum, this seems an appropriate time to remind clients of our current investment outlook.

Whilst we don’t discount the short-term uncertainty around our membership of the European Union. We believe that markets are vulnerable to several major economic risks – the scale of the Chinese credit bubble, negative interest rates and anaemic growth to name but three.

Over the next eighteen months, the political landscape will also alter with a new US president and the Eurozone’s four largest countries heading to the polls for a number of key ballots.

These factors have led us to position our portfolios more defensively and will exert a greater influence over the UK economy than whether the country votes in or out on 23 June. We have raised cash levels, lightened our exposure to developed market equities while maintaining our absolute return strategies and a light allocation to fixed income.

1. Equities

We have taken a defensive stance to equities tactically, as we feel that markets are vulnerable. Developed market equities are fully valued on most measures and we have grown cautious on the potential for a strong pick up in corporate earnings.

Emerging markets are very cheap in absolute terms and relative to their historical valuations. For the time being, the earnings outlook remains uncertain and so sentiment towards Asian markets is particularly sensitive to news about Chinese economic activity and movements in the US dollar.

2. Cash

As a simple but effective method for risk control, we have increased portfolio cash holdings.

We are comfortable holding cash on a short term tactical basis to reduce exposure to the market in light of the various risks we identify. As greater clarity is found, we will redeploy this cash into asset classes that we deem to be attractive.

3. Fixed income

Yields on sovereign debt remain too low to invest rationally and are being suppressed by central banks across the globe. In the UK the Bank of England is unlikely to change interest rates until Q4 2016 at the earliest. The European Central Bank is firmly in monetary easing mode, as is The Bank of Japan. The Peoples’ Bank of China is dealing with a slowing economy and so biased towards easing as well. The exception of course has been the US Federal Reserve which has started raising rates.

Although we recognise the defensive benefits of government bonds, we see little value in owning them. We do see riskier ‘high yield’ bonds in Europe as attractive on a relative basis.

4. Alternatives

Our overweight position in alternatives partly reflects our lack of enthusiasm for fixed interest. We have increased our allocation as it provides an opportunity to protect portfolios in the event of a significant downturn.

We have reduced our overweight position to property. While property has enjoyed a significant positive return over the past six years. Looking forward we see limited potential upside in prime properties except in the form of rental growth.
For more information about EQ Investors, visit www.eqinvestors.co.uk

Protest Debt on the Rise Amongst UK Consumers
FinanceInfrastructure and Project Finance

Protest Debt on the Rise Amongst UK Consumers

The survey of 1,500 households, by Echo Managed Services, revealed a number of reasons for debt outside of consumers simply not having the financial means to pay. Almost 1 in 3 people hadn’t paid because the bill was incorrect or higher than expected; 14% because the bill was difficult to understand or there was a mix-up with it; and 6% because they’d received poor service. Just 28% of people said that late or non-payment was as a result of not having the means to pay.

The research also revealed that higher income households are less tolerant of poor service, with 1 in 10 of those earning more than £40,000 per annum having withheld payment for this reason in the past, compared to just 1% of those earning less than £10,000.

Echo understands the importance of collecting outstanding payments and is now urging service providers to improve their billing processes and customer service standards, in order to mitigate some of the reasons behind avoidable debt and to avoid losing valuable customers in a market full of competition and choice.

“There are many reasons why people might not pay a bill and although a lack of income would be the obvious reason, our research clearly indicates that these days debt cannot be attributed solely to financial circumstances. Consumers are now much more aware of their rights and have the freedom to exercise them. They might be less tolerant of poor customer service or inaccurate billing, or think that failing to pay won’t necessarily lead to debt collection procedures, for example,” said Monica Mackintosh, customer services director at Echo Managed Services.

“That’s why it’s so important to understand customers and their reasons for missing payments so that the debt can be mitigated before it becomes an issue, or be resolved as quickly as possible. Making sure bills are clear and accurate, regular pre-bill customer engagement, and early intervention such as payment reminders are essential. In addition, a range of internal and external data sources can provide a strong indicator of customer behaviour and propensity to pay. But data alone does not provide the answer and should be used to support personable and empathetic customer service to ensure customers receive a positive experience” she added.

The report also revealed that although most customers do feel guilty about missed payments (59%), a surprising 3% think that regular debt is acceptable and 4% think it’s acceptable if they have more pressing needs, such as paying for an annual holiday. Over 1 in 4 think it’s acceptable to get into debt in extreme circumstances, while 6% think it isn’t an issue to be late with payments and that it causes no harm.

The full list of rankings and report can be found here.

2016 UK IT Outsourcing Study Results Published
FinanceInfrastructure and Project Finance

2016 UK IT Outsourcing Study Results Published

The key findings of this year’s UK Study include:

• There is still an appetite for outsourcing among UK companies. 72% of all respondents in the study confirm that they will continue to outsource at the same rate or more (an increase of 3% from 2015). This is a good indication that the UK market still has some growth potential.
• It is clear that the pace of outsourcing is slowing down. 40% said last year that they would outsource more. This has declined to 31% this year. Last year we noted a trend towards selective insourcing, which appears to be accelerating. It is notable that 21% of UK organisations are planning to outsource less and insource more, up 6% on last year. The driver for insourcing is that some organisations are looking to in house capabilities to support business initiatives such as Digital Technology adoption and Agile Transformation. Significantly, cost reduction is the biggest motive, in spite of the transformational aspirations of many firms. We may be out of the depths of recession, but cost pressures have not let up for the CIO.
• After two years where business transformation and a focus on core business were the primary reasons quoted for outsourcing, cost reduction has returned as the pre-eminent driver for companies who are planning to outsource more (cited by 60%). This ‘return to normal’ where outsourcing is seen a cost containment approach is subtle but clear.
• The service provider community continued to show a strong overall performance, with clients remaining satisfied with 86% of contracts (unchanged from last year’s impressive figure). However, inevitably, there were significant differences between the suppliers assessed.
• TCS retained its position as the supplier with the highest level of satisfaction, joined by Cognizant (up from fifth last year), after three years of identical satisfaction levels, and new entrant Hexaware. Those providers delivering predominantly network and telecommunication services continue to remain at the bottom of client satisfaction scores. In 2015 we noted “expectations on the customer side need to be adjusted” and this remains true; but large telco providers continue to struggle with matching their service provision to customer need and this threatens the non-telco components of their businesses.
• The continued rise of public cloud usage is marked, with 67% of all UK organisations planning to increase their usage of these services. Satisfaction with cloud vendors such as Microsoft, Google, Amazon and Salesforce.com is generally high.
• Comparing customers’ perceptions of suppliers with suppliers’ perceptions of customers is always revealing. The service providers suggest that around 35-50 percent of their outsourcing clients can still significantly improve their transition skills and governance and supplier management capabilities, while the client perspective on their own capabilities is much more positive.

“Our survey with Whitelane highlights the changing nature of IT outsourcing in the UK for both customers and suppliers, with some interesting themes emerging around the key drivers, insourcing and service integration. As a leading advisor on sourcing, we continue to help our clients understand how these trends can be harnessed to gain the maximum value from the constantly developing market.” Alan Young, Global Head of IT Transformation, PA Consulting Group.

The UK study is part of Whitelane’s annual extensive IT outsourcing studies. We interview sourcing executives about their outsourcing plans and their opinions on service providers. The study is conducted in 13 different European countries and provides a comprehensive overview of the IT outsourcing landscape in each country. The survey also shows the main sourcing trends and positions of the main IT service providers based on different key performance indicators (KPIs), in addition to cloud computing and governance trends.

Beacon Rail Acquires Ascendos Rail Leasing
Corporate Finance and M&A/DealsFinance

Beacon Rail Acquires Ascendos Rail Leasing

The combined Beacon and Ascendos portfolio includes 225 locomotives and over 1,000 freight wagons on lease in the UK, Scandinavia, Belgium, the Netherlands, Poland and Germany, 55 passenger train units on lease in the UK and Germany, 67 double decker coaches on lease in Denmark, and 13 sets of Mark 5 coaches which will be operated by TransPennine Express in the UK.

Commenting on the closing, Ted Gaffney, Chief Executive Officer of Beacon, said: “The closing on the acquisition of Ascendos marks the beginning of a new chapter for Beacon Rail. We are committed to providing quality, state of the art rolling stock to the UK and European freight and passenger markets and welcome the Ascendos employees to the Beacon family.”

Pamplona Capital Management (“Pamplona”) acquired Beacon in May 2014 through Pamplona Capital Partners III, LP, a 2011 vehicle with $2.7 billion of committed capital. Since closing, Beacon has been an active acquirer of assets through portfolio acquisitions, the placement of new build orders and the closing of sale / leaseback transactions with various freight and passenger operators, significantly increasing the scale of the portfolio and diversifying both the lessee and asset base.

Committed debt financing for the transaction has been provided by ING Bank and Deutsche Bank AG, London Branch. Berwin Leighton Paisner LLP and Lowenstein Sandler LLP acted as legal counsel for Beacon and Pamplona. Clifford Chance LLP acted as legal counsel for the lenders.

8/10 Businesses Fail to make Preparations for Brexit
FinanceInfrastructure and Project Finance

8/10 Businesses Fail to make Preparations for Brexit

• 80% of senior interim executives fear UK businesses are not prepared for Brexit

• Experts warn that a vote to leave the EU would affect operating costs, exchange rates and trade deals

• Businesses should reduce risks by hedging investments, broadening markets and collaborating with peers

Eight out of ten UK businesses have failed to make adequate preparations for a potential exit from Europe following the upcoming referendum, according to a survey.

Interim Partners, a market-leading provider of senior interim executives, conducted the survey as part of the research for its 2016 White Paper on the state of the interim market.

Over 400 top interim managers from across the public and private sectors were quizzed for their views on the EU debate, including whether UK businesses are prepared for the potential ramifications of Britain exiting the EU.

80% of those surveyed feared that the businesses they are currently working with are failing to prepare adequately. Predictions about the potential effects of Brexit included:

– Increased legal, travel and import costs
– Slump of the pound on the Foreign Exchange market
– Changes in how trade deals are made with EU countries

Those surveyed also warned that if UK businesses do not take swift measures to cope with these changes, they risk losing out in the event of a Leave vote.

Respondents recommended that businesses should protect themselves by:

– Developing new overseas markets to increase trade options
– Hedging their investments to protect against overspend
– Forming coalitions with sector peers to strengthen existing relationships

“Interim managers are specialists in change management, and are often brought into businesses to help them navigate periods of transformation and uncertainty,” says Steve Rutherford, Managing Partner of Interim Partners.

“As such, they are ideally-placed to help businesses negotiate the potential economic pitfalls of a UK exit from Europe.”

Six top tips to Help Businesses Prepare for Brexit

A recent survey by Interim Partners showed that eight out of ten UK businesses are under-prepared for the potential effects of Brexit. Leaving the EU would mean that UK businesses have to deal with a host of new challenges, from coping with an unpredictable exchange rate, to navigating fundamental changes in European trade law.

So what can you do ahead of the referendum to minimise the risk to you and your customers in the event of a Leave vote?

Interim Partners asked some of the UK’s most senior interim managers for their top tips to make the potential transition as smooth as possible for business leaders.

1. Develop new markets: By nurturing relationships outside the EU, your business will be more resilient to losing trade with your existing European partners.
2. Hedge your investments: To maintain financial stability and protect against overspend, make sure that any risky investments are countered with more reliable propositions.
3. Don’t act in isolation: Form coalitions with sector peers to build new bridges and strengthen existing relationships.
4. Consider a comms strategy: When you’re going through turbulent times, it’s a good idea to keep your stakeholders informed and reassured – plan ahead by getting a communications strategy in place now.
5. Have back-up plans: You can’t plan for every eventuality, but you can give yourself as many options as possible – consider all the possibilities in case things don’t work as expected.
6. Embrace the change: Brexit might not be your preferred option, but if it happens try to see the positive – look out for new opportunities and don’t be afraid to take them when they arise.

Draper Esprit IPO Brings Patient Capital to the London and Irish Stock Exchanges
FinanceInfrastructure and Project Finance

Draper Esprit IPO Brings Patient Capital to the London and Irish Stock Exchanges

The Draper Esprit team has considerable experience. The team has operated the Group for nine years and, prior to that, its members worked for leading firms within the venture capital industry. In aggregate, the team has been involved in investing over US$1 billion into more than 200 technology businesses and has been involved in creating businesses with a total aggregate value of over US$8 billion, with an exited value of over US$6 billion.

Simon Cook, CEO and Co-Founder of Draper Esprit, said:

“Our motivation for evolving our Venture Capital business model was twofold. Firstly, we wanted to be able to invest for longer in our emerging companies and to be able to build bigger stakes as companies remained private for longer periods, capturing more value for shareholders. Secondly, we wanted to further democratise funding for entrepreneurs.
Traditionally the Limited Partnership model in Europe has restricted who can invest in venture capital backed companies and many growing technology companies are not accessible to institutions or public investors until they go public. Now everyone can participate in the growth of VC backed companies from their earliest stages through series A and B to their success in the later stages up to and including their IPO.

This permanent capital model is ideally suited to a listed vehicle and we are grateful for the support this approach has received from shareholders including: Woodford Investment Management, the Ireland Strategic Investment Fund, China Huarong International Holdings Ltd, Baillie Gifford and several other city institutions, successful entrepreneurs and family offices, many of whom have active later stage and IPO investment activities.”

More information is attached (as is a photograph) and senior management are available for interviews. Please use the mobile number below, larger images are available on request.

The New Modern in New York City
FinanceInfrastructure and Project Finance

The New Modern in New York City

Lilian Weinreich. Photo: ©Steve Freihon

Formal simplicity requires intellectual rigor and aesthetic restraint – which is immediately apparent in each of the firm’s
projects – from the reinvention of a building in Gramercy Park with duplex apartments to the remodel of a Central Park
South bath and dressing room. The firm’s portfolio includes a range of high-end apartment building, duplex and townhouse renovations, as well as institutional work. Each project is opulent in the clarity of its spatial and functional resolution.

Weinreich’s pure sensibility evolves not from a predetermined architectural style, but rather from the intent to design clean, intelligent and functional space that operates as a background to what is contained within them. Working with space and light as sculptural materials, LHWA constructs architecture dramatic in its purity of means. “My aesthetic is entrenched in the modern, using prevailing technology to create leadingedge environments that are simple yet intelligent and sophisticated ‘the new modern’”, Weinreich says. “My goal is always to aim for the essence of timelessness and the paramount in design as well as in execution.”

Weinreich cites her Australian upbringing as a major aesthetic influence, instilling sensitivity to the natural environment as well as a proclivity to architectural modernism from her family home. Her parents, Holocaust survivors, commissioned famed architect Harry Seidler, an Austrian-born Australian architect, to design a house in the early 1960s. A leading proponent of modernism in Australia, Seidler was the first architect to fully express the principles of the International Modern Bauhaus in the country.

In 2013, the Weinreich house was given a Sydney Heritage Building Registry citation. Weinreich’s parents recognised her artistic talents at a young age and, when she was 14, they arranged private tuition with Professor Maximilian Feurerring in his Woollarah studio. Feuerring was considered to be one of Australia’s leading painters. Feurring did not teach children, but made an exception for Weinreich, whom he considered a prodigy. In rigorous weekly sessions, she reproduced works by modern painters such as Gauguin, Cezanne, Chagall, Modigliani and Clave and all of these paintings still hang in the family home in Australia. Through these lessons, Weinreich developed a regular following amongst his other pupils and friends, unbeknownst to her until years later. She chose Feurring as subject of her highly awarded Bachelor of Fine Arts Honours Thesis at Sydney University.

Growing up in a home and within a family that fully embraced the methodology of modernism shaped Weinreich’s uncompromising aesthetics. These influences can be seen in the firm’s signature vocabulary—defined by essential reductivism, fastidious attention to detail and execution and sensitivity to the intrinsic properties of building materials and the environment. “Australians, by nature, have an honesty in their intent,” Weinreich says. “I strive to find the most direct and honest resolution in my work.”

The day after Weinreich became a registered architect in Australia, she set off to New York City. She says, “This was an unexpectedly difficult transition. While I still consider myself an Australian, I could not imagine being based anywhere else in the world. The United States has awarded me amazing opportunities and career choices – for which I am very grateful.”

When beginning a new project, LHWA’s approach to design is defined by a specific set of criteria: the unique needs of the individual clients and their space; the development of an unequivocal, clean, simple, seamless and sophisticated background for the programmatic requirements; and the creation of an aesthetically unencumbered environment.
requests the real estate floor plan or a site plan, existing photos, and the clients’ wish list. She wants to take the time to think about the opportunities of the prospective job and to come to the first meeting prepared with an initial design idea.

“Interestingly enough, and to great personal satisfaction, my first sketch often reflects the built end product,” says Weinreich—a testament to her intuitive and visionary design ability, as well as her dedication to uncovering the right architectural solutions for her clients. For an interview for one particular apartment commission, she had learned from the real estate broker that the client had previously interviewed six other architects before meeting her. “The client selected me on the spot,” she recalls. “About halfway through the job, I asked him why he chose me. His reply: ‘You came with a vision’.”

Painting with Light
A key signature of the LHWA aesthetic is the precise application of light. The lighting schemes in all of the firm’s projects are designed to enhance spatial quality. In New York City apartment buildings, ceilings are traditionally lowered in bathrooms to accommodate plumbing pipes above, and Weinreich’s innovative solutions can often be found at this transition between ceiling heights. In the NoHo Duplex in downtown Manhattan, this condition becomes a design feature; lit cove edges soften the lowered ceiling at the entry to the powder room and master bathroom are ghosted behind full-height, eleven-foot tall sliding glazed panels doors.

Inside the master bathroom, backlit dropped ceilings at the rear wall visually heighten the space while giving the interiors a warm glow. In the West 72nd Street Duplex on New York City’s Upper West Side, an infinity lit ceiling edge visually opens up the ceiling plane of the Calcutta gold clad master bathroom.

This visual elongation of space appears throughout the firm’s portfolio, developed in response to working and building in Manhattan. Many In the West 67th Street Apartment, now under construction, perimeter dropped ceilings frame and define the main living spaces and innovative knife-edge cove lighting emphasises the full-height ceilings. The lowered ceilings house mechanical equipment, ducts, pipes, structural support for the tracks, audio-visual equipment, wiring and recessed light slots. By lowering a ceiling height to highlight function, the sculptural interplay of dropped ceiling planes creates an illusion of a vertical spatial openness.

Sliding Panels, Flexible Space
LHWA also employs full-height sliding panels as a signature design feature to enhance the feeling of soaring verticality—no matter if the floor to ceiling height is an eleven-foot loft space or an eight-foot post-war highrise.
The firm’s design vocabulary uses full-height sliding panels to shape and elongate space, provide functional flexibility and shield visibility.

In the NoHo Duplex, the powder room and master bedroom ensuite are separated by a series of eleven foot-tall, fully retractable, sliding, steelframed glass panels. These featured full-height elements create a perspectival vista to what appears to be an ostensibly larger space beyond.

The glazed panels soften the glowing cove edges above the entries post war high-rise apartments in New York were built with low ceilings throughout—a developer device to minimise cost and to maximise the number of apartments. In the West 72nd Street duplex, LHWA’s renovation opens up the ceiling on the main floor to full height, while using a hovering ceiling plane softened with lit coves as a visual highlight.

Large open spaces with flexible functions are highly desirable in cities like New York, where real estate space is at a premium. The combination of two apartments on Lexington Avenue, currently under construction, incorporates sets of sliding translucent panels to create options in how the clients can configure the spaces—all open for entertaining and maximum daylight, or closed in multiple configurations for varying levels of privacy. The renovation of the West 72nd Street Duplex opens the main level of the duplex into one large, open, utilitarian space for dining, living and entertainment with full width unobstructed window views. The den space can be partitioned off with three full-height Shoji screens, designed in collaboration with the Italian manufacturer, when it needs to serve as a temporary sleeping area.

Design and Material Innovation

Weinreich’s work highlights an innovative use of materials. The design and fabrication of the NoHo Duplex’s staircase presented the biggest single challenge of the project. The staircase’s co-planar, clear-tempered glass rails and childproof open slots elegantly comply with rigorous code and child safety standards. For a unique handcrafted industrial appearance, metalworkers forged all of the project’s metalwork, including the stair supports and door frames, on site.

Functionality
The work of LHWA combines a clean modern aesthetic with an understanding of how people will actually live and use the spaces on a daily basis. All of the firm’s projects integrate extensive storage. The NoHo Duplex has floor-to-ceiling storage in the master bedroom, lower level playroom and children’s bedrooms. In the Central Park South Apartment’s kitchen, the renovation integrated a commercial-quality kitchen into a residential setting, enabling the client’s in-house chef to cater for over a thousand guests per year. The kitchen facilitates both intimate family gatherings as well as formal sit-down banquets for heads of state, dignitaries and royalty, complete with silver service and tuxedoed waiters.
New full height upper cabinets, floor-to-ceiling pantry closets and the utiliSation of all under the counter island spaces, increased the storage capacity of this kitchen by 20%.

Recognition
LHWA enjoys a high-profile Internet presence, which continues to be a strong source of new work. The firm’s number of projects has tripled over the last two years with commissions of increasing size and scope. However, Weinreich never turns away a project because of its size. “If I see a potential design interest, I will take the job,” she says.

The firm’s greater visibility includes three publications featuring Weinreich’s work coming out at the end of 2016. Her work was prominently featured in the latest edition in the BBeyond Publication Series, entitled Fabulous Interiors and Architecture. The coffee table book’s international theme covers “interior and architectural icons of today/classic landmarks of tomorrow”, targeting a high net worth audience and covering the issues that matter to them and their lifestyles. LHWA in the only New York City architect featured in the publication.

Weinreich credits her success to her dedicated team of collaborators, skilled contractors and artisans as well as her husband, Dr. Michael Ezekowitz. Weinreich calls upon the support of the world-renowned cardiologist— cited by Thompson-Reuters in the top one percent of scientists in the world due to his research and publications—for his innate eye for detail and skill as a client and contractor liaison.

LHWA is currently working on several new projects, including two large apartment remodels, one on Park Avenue and the other on Central Park South, a building in Gramercy Park with duplex units and a house in Avon, Connecticut. The firm is also exploring new markets, including the design of private jet interiors and commercial projects, where Weinreich’s considered, innovative design aesthetic can be applied in new ways.

Name: Lilian H. Weinreich, AIA RAIA LEED-AP(BD C), NCARB
Firm: Lilian H. Weinreich Architects
Email: [email protected]
Web Address: http://weinreich-architects.com
Address: 150 Central Park South #502
New York, New York 10019-1566
United States of America
Telephone: 1 (917) 770 1000

First Meeting of the Cross-Government Retail Round Table
FinanceInfrastructure and Project Finance

First Meeting of the Cross-Government Retail Round Table

Ms Soubry, along with Ministers from the Treasury, Department for Health and Department for Communities and Local Government met senior management from leading retailers including Asda, Sainsbury’s, Tesco, Morrisons, John Lewis Partnership, B&Q and the British Retail Consortium to discuss their priorities and consider the business environment for retail.

As well as discussing the future of the British retail sector other topics included:

– Business rates;
– Levelling the playing field between online only businesses and those with a high street presence
taking forward the obesity strategy;
– The group has huge influence on consumer behaviour in the UK, generating sales of £340 billion in 2015, and supported over 3 million retail jobs in the UK, up from 83,000 in 2010.

Following the meeting, Business Minister Anna Soubry said:

“The first cross-government retail roundtable is an important milestone in getting some of the country’s top retailers together to discuss collectively with government how we can work better to create an environment for them to grow, create more jobs and boost our economy.

“This government will keep on going further to back British businesses – cutting red tape, lowering taxes on jobs, getting more young people into work and promoting enterprise.”

Helen Dickinson OBE, Chief Executive of the British Retail Consortium added:

“It was a valuable to attend such a meeting with ministers across government and some of the country’s leading retailers. It gave everyone there the opportunity to directly consider issues facing the industry and their businesses with government and I was pleased with the open and constructive dialogue.

“I was also encouraged that retailers saw the benefit of such a meeting and I want to thank Anna Soubry for her personal commitment to these meetings. I look forward to working more closely with her and others throughout government, given the significance of the structural change underway within retail, and getting round the table at the next government retail roundtable.”

Winners Directory
FinanceInfrastructure and Project Finance

Winners Directory

The Business Elite UK MD of the Year 2016
Company: Whitescape Ventures Limited
Name: Andrew White
Email: [email protected]
Web Address: whitescape.co.uk
Address: Studio 5a, Upper Adhurst Farm, London Road,
Petersfield, Hampshire GU31 5AE
Telephone: 01730 897960

The Business Elite UK MD of the Year 2016
Company: Covenco Recovery Services Ltd
Name: Gurdip Sohal
Email: [email protected]
Web Address: www.covenco-dr.co.uk
Address: Unit 4, MXL Centre, Lombard Way, Banbury,
Oxfordshire, OX16 4TJ
Telephone: 01295272080

The Business Elite UK FD of the Year 2016
Company: Sellick Partnership Limited
Name: Nives Feely
Email: [email protected]
Web Address: www.sellickpartnership.co.uk
Address: Queens Court, 24 Queen Street,
Manchester M2 5HX
Telephone: 0161 834 1642

The Business Elite 2016
Company: Associated Joinery Techniques Ltd.
Name: Anneliese Polan
Email: [email protected]
Web Address: www.ajtlabfurniture.com
Address: Waterside, Marks Hall, Margaret Roding,
Chelmsford, Essex CM6 1QT
Telephone: 01245 231881

Most Outstanding Law Firm of 2016
Company: EmployEasily Legal Services Limited
Name: Gary H Sutherland
Email: [email protected]
Web Address: http://www.employeasily.co.uk
Address: Baltic Chambers, 50 Wellington Street,
suite 544-545, Glasgow, G2 6HJ
Telephone: 0800 612 4772

Most Outstanding Law Firm of 2016
Company: Lee International IP & Law Group
Name: Nicholas Park
Email: [email protected]
Web Address: www.leeinternational.com
Address: 14F, Poongsan Bldg., 23 Chungjeong-ro
Seodaemun-gu, Seoul 03737, KOREA
Telephone: 82 2 2262 6000

Most Outstanding Law Firm of 2016
Company: Cordell & Cordell
Email: [email protected]
Web Address: cordellcordell.com; cordellcordell.co.uk
Telephone: 1-866-DADS-LAW; 0330 60 60 161

Winners’ Directory
FinanceInfrastructure and Project Finance

Winners’ Directory

Asset Manager of the Year 2016 – Singapore
Company: APS Asset Management
Email: [email protected]
Web Address: www.aps.com.sg
Address: 3 Anson Rd, Springleaf Tower, #23-01 Singapore 079909
Telephone: (65) 6303 4595

2016 Private Debt Fund Manager of the Year
Company: Abax Global Capital
Name: Donald Yang
Email: [email protected]
Web Address: www.abaxcap.com
Address: Suite 1708, 17/F, International Commerce Centre,
1 Austin Road West, Kowloon, Hong Kong,
Telephone: 852 3602 1800

Hedge Fund Manager of the Year 2016 – Sweden
Company: Origo Capital
Name: Anders Nilsson
Email: [email protected]
Web Address: origocapital.se
Address: Birger Jarlsgatan 18, 114 34 Stockholm, Sweden
Telephone: 46 76 8430509

Hedge Fund Manager of the Year 2016 – Canada
Company: Marret Asset Management Inc.
Name: Kathleen Cooney
Email: [email protected]
Web Address: www.marret.com
Address: 2 Queen St. East, 12th Floor, Toronto,
Ontario M5C 3G7 Canada
Telephone: 1 416 214 5800

Real Estate Awards 2016
Investment Bank of the Year 2016
Company: QInvest
Name: Craig Cowie, Head of Real Estate Investments & Advisory
Email: [email protected]
Web Address: www.qinvest.com
Address: Level 39, Tornado Tower, West Bay,
P.O. Box 26222, Doha, Qatar
Telephone: 974 4405 6666, 974 4405 6548

Winners Directory
Corporate Finance and M&A/DealsFinance

Winners Directory

Business Elite CEO of the Year 2016
Company: ADVFN PLC
Email: [email protected]
Web Address: http://uk.advfn.com/
Address: 26 Throgmorton Street, London EC2N 2AN
Telephone: 44 (0) 207 0700 961

Business Elite CEO of the Year 2016
Company: Crescent Petroleum
Email: [email protected]
Web Address: www.crescentpetroleum.com
Address: P.O. Box 211, Corniche Al Buhaira, Sharjah,
United Arab Emirates
Telephone: 971 (6) 572 7000

Business Elite CEO of the Year 2016
Company: Maria Mallaband Care Group Ltd
Name: Philip Burgan
Email: [email protected]
Web Address: www.mmcg.co.uk
Address: Westcourt, Gelderd Road, Leeds LS12 6DB
Telephone: 0113 2382690

Business Elite 2016
Company: Moneyweb Limited
Name: Paul Robinson
Email: [email protected]
Web Address: www.moneyweb-ifa.com
Address: 11 Betton Business Park, Racecourse Road,
East Ayton, Scarborough, YO13 9HD
Telephone: 01723 378234

Business Elite CEO of the Year 2016
Name: Kelvin Kirby
Company: Technology Associates Limited
Email: [email protected]
Web Address: www.techassoc.com
Address: Technology House, Shottery Brook Office Park,
Timothy’s Bridge Road, Stratford-upon-Avon,
Warks CV37 9NR
Telephone: 44 (0) 1789 292 150

Business Elite MD of the Year 2016
Company: Delivered Health Solutions. Ltd
Name: Barbara McCall Meeks
Email: [email protected]
Web Address: www.deliveredhealthsolutions.co.uk
Address:The Bridge Business Centre,Cheshire
House,Gorsey Road, Widness,WA8 0RP
Telephone: 0151 422 9335

Business Elite MD of the Year 2016
Company: Hunters Solutions Limited
Name: Mark Hunt
Email: [email protected]
Web Address: www.hunterssolutions.co.uk
Address: 15 Fish Street, Northampton,
NN1 2AA
Telephone AND 01604 621110

Business Elite MD of the Year 2016
Company: Wick Hill Ltd
Name: Ken Ward
Email: [email protected]
Web Address: www.wickhill.com
Address: River Court, Albert Drive, Woking, Surrey,
GU21 5RP
Telephone: 01483 227600

2016 Tax Firm of the Year
Company: Lamont Pridmore
Name: Graham Lamont
Email: [email protected]
Web Address: www.lamontpridmore.co.uk
Address: Offices throughout Cumbria
Telephone: 0800 234 6978

Investing in Crowdfunding Projects
FinanceSustainable Finance

Investing in Crowdfunding Projects

Erik van Eeten started his career at IBM as a Business consultant and transferred to the Investment and Banking Industry. Realty Africa has a lot of expertise in the local markets with one co-founder born and raised in Zimbabwe as well as through the benefit of local teams which we establish in each country. Erik van Eeten imparts his expertise about Realty Africa and the opportunities of investing in Sub-Saharan Real Estate projects via their platform.

Can you give a brief overview of what your company does as a property crowdfunding platform?

If I am asked to describe Realty Africa, I have to distinguish between two groups. We not only see the investors as our customers but also have a very strong focus on the developers.

From the start, we took the concept of investing in Africa very seriously and wanted to develop a new approach towards fiduciary responsibility and investor security in the crowdfunding space. It took longer to setup than we anticipated, but for investors, we can offer great investment opportunities in Real Estate which are fully securitized and well suited for retail, professional as well as institutional investors. We thoroughly vet all investments with the help of our service provider Deloitte and we stay involved to manage and monitor the investor interests until the end. We perform site visits and use drip financing to protect the investors. Large investors are welcome to perform their due diligence as well, even before the project lands on the platform.

At the same time, we want to really empower the local landowners, developers and architects in Sub-Saharan Africa. We developed a total service portfolio which we will launch in stages. These will support the local professionals and enable their businesses. Qualified projects have access to international funding on our crowdfunding platform. We are also soon launching our RA Connect platform where the landowner can meet developers and architects to achieve common interests and create joint ventures and more services will follow.

How does crowdfunding fit in the local tradition and how can the local community benefit?

We believe in the future of the African Real Estate markets. From an investment perspective and more importantly from the Impact that these developments have on the local community. We have a large variety of projects in the pipeline which includes Social Housing, Student Housing, Eco Lodges but also middle-income housing and luxury apartments. Africa has a long history with crowdfunding. Whole communities would pull funds for creating a building. For instance, the University of Botswana was largely “crowdfunded”. This process of financing not only facilitates the funding but also creates a feeling of mutual ownership and care for the longer term. We are enabling the African community to take this concept to the next level to get access to the international retail and professional investment community. With our additional services, we support the local developers already in the pre-finance stage. These services will also deepen our knowledge of the local markets, which is to the benefit of all our customers.

With crowdfunding growing in a variety of sectors, to what extent do you feel that businesses and investors are now starting to a pay attention to projects using this investment method?

It is a misconception that crowdfunding is only for small amounts and non-professional investors. Crowdfunding is a way of democratising investments. In our view it is ideal for investors who would like to have more control. You can select the project that you like instead of a mandate to a fund manager. At the same time, investing in real estate in Sub-Saharan Africa is also an ideal way for professional investors to spread risk in an investment class with higher yield and which is maybe outside of your expertise. Investors who prefer Impact investments can participate in Social Housing or Ecolodge projects. So property crowdfunding in Sub-Saharan Africa offers many opportunities to all kind of investors. When the pipeline grows, we are looking for partners to establish a managed fund or REIT of African Real Estate.

How can your Company’s expertise benefit our readers?

With our local teams and with the help of our service providers, we have a lot of knowledge of the local African markets where we are active. Many investors regard investing in Africa as very risky and scary. With our ECO System we are able to open up this market and to offer access to opportunities which were otherwise not available before to most investors. The additional services are vital in creating a stable company base and to support the core business of empowering the local people and of finding interesting, trustworthy and transparent investment opportunities.

Another interesting service we offer lies with a select group being the Diaspora Community, those living abroad outside their country of origin. With our network, we can not only provide investment opportunities in their home country, but we can also support an ambition to build a house back home. With the same structure we use to check on development projects for our investors, we can check on the quality of your build and make sure that only money is paid when the work is performed. We call this Diaspora Construction.

What can you tell about the reputation of your firm?

Realty Africa is a new company and the first projects will be online in the next couple of months. As a new business, we have to take good care of our reputation. Reputation is very important in Africa and therefore, we can’t rush the due diligence process and asked one of the Big Four to be our service provider. Also, we are actively expanding our local teams to gain even more knowledge. In parallel, we are also actively seeking for large investors or institutions that love Africa and that want to work together with us to open up this market and possibly underwrite some of the projects. The opportunities are endless and the double-digit returns provide an excellent opportunity compared to the current savings rates in Western Europe or the USA.

How can investors and developers sign up to access the services on your website?

Everybody can visit www.realtyafrica.com and signup or read the information that is available. After signup, we are legally required to perform a KYC on our investors. Professional and Institutional Investors can contact us on our Institutional Contact Page for more information.

Name: Erik van Eeten
Email: [email protected]
Website: www.realtyafrica.com
Address: Sumatrastraat 54, The Hague, 2585CT, The Netherlands
Phone: +31-852013894

CEO Of The Year 2016 in Commodity Trading and Risk Management
FinanceInfrastructure and Project Finance

CEO Of The Year 2016 in Commodity Trading and Risk Management

AspectCTRM is a full-featured E/CTRM suite for front, middle and back office with support for financial and physical trade activity. It’s available in three editions: Lite, Standard and Enterprise, expanding in functionality according to the needs and budgets of clients. Aspect is the only E/CTRM solutions provider with market data and analytics tools delivered with its trade and risk functions on the same platform, for convenient price uploads to CTRM.

Because AspectCTRM resides in the cloud, there are no software, hardware or IT investments required by clients. On premise installations are also available. Clients are able to trial AspectCTRM before investing in a system, which removes significant financial risks.

Aspect solutions are available on desktop, tablets and mobile devices and through its Aspect Partner Program (APP). Aspect was incorporated in 2000 and so this is our 16th year. Aspect has offices in Houston, New York, London, Moscow, Bengaluru and Singapore.

Aspect aggregates data from commodity exchanges and commodity- related news sources in real time to allow commodity trading firms to understand how the market is moving now and in the future. This information is used to make important decisions concerning the buying and selling of commodities such as oil and oil-related products, precious metals, base metals, concentrates, coal, agricultural products, food products and many other commodities.

Once such buy/sell decisions are made and executed, the AspectCTRM solution helps trading firms to manage their profit and loss, and perhaps more importantly, market risk. Every trade can be managed from trade execution and capture, through P&L and risk management, on to mid-office functions such as management of logistics and storage, right through to back-office functions such as cash management and payment reconciliation.

Aspect’s latest product, AspectSTP, allows direct and seamless integration between commodity exchanges where the trading is executed and its AspectCTRM solution. Straight-through processing is critical for trades to be efficiently processed throughout the supply chain with no re-entry which causes costly mistakes.

Aspect differentiates from the pack by providing all of its solutions via the cloud meaning clients do not need any hardware, software or IT expertise to successfully operate Aspect’s solutions. The only thing required is an Internet connection and a browser such as Explorer, Safari, Firefox, etc. With this, Aspect’s solutions may be implemented in record time, perhaps 4 to 6 weeks, rather than the very lengthy timeframes experience with using older technologies.

On being awarded Business Elite CEO of the Year 2016

Frankly, I am very flattered and deeply honoured to be recognised in this way. This is especially rewarding as individuals cannot apply for the award, a research team has to ‘discover’ the candidates based on their work and success. Winning any such award always depends on a team of people and the team at Aspect is the best I have worked with over more than 30 years of managing companies. Their motivation, dedication and expertise makes it easy for any CEO to manage a business.

The challenges at the helm of the business

Aspect started as a ‘cloud’ company some 16 years ago. Way back, few understood the benefits but over the last 3 or 4 years, this has changed.

The fear, uncertainty and doubt associated with new ways of doing things has evaporated and there’s an overwhelming acceptance of cloud solutions and the benefits they bring. This has led to Aspect’s astonishing success with an increase in contracts for its AspectCTRM solution growing by 71% in 2015 over the prior year. The main challenge here is to maintain the momentum and continue this level of organic growth.

The second area is the development and exploitation of indirect channels to market. Many solution providers have partnerships but none, other than Aspect, are able to train others to sell and implement its solutions without the help of the vendor. Aspect has achieved this by deskilling the implementation process and thus shorting the time needed (and the costs) to implement what are very complex systems.

The final challenge concerns inorganic growth. Aspect has a program of planned acquisitions in the coming years and this will test the corporation’s ability to rapidly absorb new entities and technologies. And so, we have spent the past quarter reorganising to ensure we are ‘acquisition ready’.

Prior career background

I started in the IT industry back in 1979 and spent the first 11 years at the National Computing Centre (now NCC). I refer to this part of my career as my apprenticeship and I did computer operations, programming, systems analysis and design, project management and eventually I managed two of their business units. From here, I joined a series of US-based firms in senior management positions – Legent Corporation (systems management), Seer Technologies (application development environment), Point Information Systems (customer relationship management) and Youcentric (customer relationship management). I then joined Carnegie Information Systems (customer relationship management) as CEO. Almost all of these firms bought other firms and/or were sold and I gained a lot of experience in mergers and acquisitions. I joined Aspect in 2005 as CEO. Aspect is the toughest job I have had, but it’s also the best job I ever had. I think it was Confucius that said, ‘Find a job you love and you will never work another day in your life’. Many at Aspect feel the same way.

Clients

Aspect and its solutions appeal to commodity trading firms of all sizes but that wasn’t always the case. Aspect’s approach was to ‘avoid’ tier-1 clients – the large integrated majors, global trading firms and national energy companies. Why? Because each already had a solution and business there was drying up for the market leaders. Aspect focused on mid-tier clients where often the only ‘system’ in place was spreadsheets, very complex, easily-broken spreadsheets. A rich functional capability coupled with delivery via the cloud was perfect for such firms especially as lines of credit were increasingly difficult to secure and new regulations meant spreadsheets were no longer acceptable. This has now changed in the last two years as tier-1 firms are now turning to Aspect as its reputation grows for massively reducing the cost of commodity trading and risk management systems; hence, firms such as Sumitomo, Mitsubishi, Trafigura, BP, Hess, Aegean, Klesch and Gulf are now Aspect clients

Challenges in 2016 as a CEO of the company

As CEO, my main challenges concern our outsourcing program and ensuring we are ‘acquisition ready’. 

Aspect is constantly changing and the changes are often fundamental. In Q1 2016, Aspect outsourced all of its product development, infrastructure and quality assurance to India having spent many years with its development centre in Russia. The migration has just been completed but we have a challenge ahead to stabilise the processes, improve productivity, quality and provide more flexibility. The management team understands the challenge and I’m confident we will see it through.

Coupled with this, Aspect has just undergone a major reorganisation starting with the management team but effecting just about every team member. This was done to ensure that Aspect can quickly and effectively absorb new firms under our acquisitions programme, codenamed, ‘Project Acorn’. It means the roles and responsibilities have changed for many people at Aspect and, whilst this can be challenging, I am confident that each will ‘step up to the plate’ and succeed. Aspect has won many awards for its technology and innovative solutions. This all comes done to the team and I know how readily each will embrace the changes.

Industry based challenges and future plans

The commodity trading industry is under tremendous pressure right now with shrinking lines of credit, regulatory changes and the ultra-low price of many commodities. However, each of these pressures drive new clients to Aspect’s solutions. We are in the right place at the right time… by design.

This falls in line with my thoughts above concerning the challenges at Aspect, namely, continuing our exceptional organic growth through direct and, more recently, indirect sales channels plus driving our acquisitions program

It’s difficult to explain to others about life at Aspect but employees often use the word ‘family’. Aspect people feel like part of a family and Aspect always puts family first … even when some employees forget that their immediate family is more important than their ‘Aspect family’. We do things differently but that’s beyond the scope of this article. We run a meritocracy. Aspect is blind to gender, race, creed or colour. Three of the four members of the Executive Management team are women – no ‘glass ceiling’ here – and this balance continues throughout the company. The London office has 22 members of staff with 12 countries of origin represented and more than 12 languages spoken. Aspect only ‘sees’ contribution and capability in people and that drives all of us forward.

Company: Aspect
Name: Steve Hughes
Email: [email protected]
Web Address: www.aspectenterprise.com
Address: Castlewood House, 77 – 91 New Oxford Street,
London WC1A 1DG, United Kingdom
Telephone: +44 (0) 207 632 0170

Volkswagen Posts Growth of 5.4 Per Cent in April
FinanceInfrastructure and Project Finance

Volkswagen Posts Growth of 5.4 Per Cent in April

As Europe’s biggest car manufacturer, Volkswagen was amongst those affected, and its growth figures slowed dramatically. The motoring behemoth had to fight tooth and nail to maintain its supremacy, and fight it undoubtedly did.

Yet even for this giant, it has been hard to reach the dizzying heights of their pre-2008 success – until April 2016. Now, it looks like everything is about to change for the better. With growth once more beginning to soar, we look at what’s ahead for Volkswagen…

An Impressive Growth

April 2016 was a great month for car manufacturers across Europe, and Volkswagen was right there with them to ride the wave of success. With car sales returning to growth for the first time since September 2015, they booked an extraordinary return to form, with an increase of 5.4 per cent.

This mirrored the trend seen across much of the continent, with new passenger car registrations in the European Union rising by an astonishing 9 per cent over the course of the year. With 1.3 million vehicles recorded, this marks the most impressive performance since April 2008.

Carmakers across the board contributed to these figures, with the Brussels based Association of European Carmakers proving eager to share this record result with the rest of the world.

The Rise in Volkswagen Sales

Volkswagen is Europe’s biggest car manufacturer, and with April’s growth figures in mind, it looks clear that it’s set to maintain its place on the top spot.

Overall sales rose a fantastic 5.4 per cent over a 12-month period, with sales up 2.7 per cent in April alone. The Audi and Porsche brands that shelter beneath its umbrella recorded more impressive figures yet, with growth in the double digits for each.

This means that the group’s overall market share sits at a steady 25.2 per cent.

A Full House for Europe

The growth in Volkswagen sales and the motoring industry can be seen across the board in Europe, with all five of its major economies relaying sales increases. The rise in registrations was greatest in Spain, coming in at 21.2 per cent, with Italy, Germany, France, and the UK posting scores of 11.5 per cent, 8.4 per cent, 7.1 per cent and 2 per cent respectively.

In a statement released by the ACEA, the body said that: “The EU passenger car market posted strong results again, marking the 32nd consecutive month of growth. This is the highest result in volume terms since April 2008, just before the economic crisis hit the automotive industry.”

With Volkswagen and its peers already in the process of offering retail incentives, and set to launch an array of new and exciting products for 2016, it seems that Europe and its biggest car manufacturer are set to take the world by storm once more.

Five Ways that SMEs Can Prepare for Brexit
Corporate Finance and M&A/DealsFinance

Five Ways that SMEs Can Prepare for Brexit

 #1: Fix International Money Transfers

The very spectre of Brexit has caused shockwaves across the currency markets, so it seems likely that a ‘leave’ vote would have a significant impact on the value of sterling. According to expert Ali Steed, once of the biggest complications for SMEs would lie in sending currency overseas, thanks to an almost inevitable short-term weakening of the pound. Although this may not be the worst news for companies with little interest in overseas markets, any enterprises that deal with companies abroad, either to import or export, would certainly feel the fallout.

The solution is surprisingly simple: you need to use a currency service rather than the bank. In doing so, you’ll be able to make sizeable savings on your international money transfers, and may even be able to negotiate fixed rates for a set period of time. This will help you to plan ahead and lessen the impact on your business, leaving you clear of the current and able to strike out for the shore.

#2: Reassess Employee Contracts
EU law has played a significant role in shaping the rules and regulations that constitute employment law within our own country, and without its strictures in place, the format of current contracts could be open to amendment. Although the government may choose to preserve what is already set down, there would be no onus on it to do so, so experts suggest looking at existing documents with a Brexit in mind.

Holiday pay and rest breaks should be particular areas of focus, and you’ll need to decide whether or not you would want to amend these if changes were to be implemented on the heels on an EU exit. Although your existing contracts would have to remain unchanged, as this is what both parties have agreed to, this could offer some room for manoeuvre in the event of employing new members of staff.

Furthermore, you will need to ensure that any non-British workers would be legally permitted to remain within your employ should the country vote to leave. It may be worth talking over these issues with any members of staff concerned, and forewarning them if you feel it likely that a visa or work permit may become necessary. Alternatively, if you feel it unlikely that they would be able to remain in their positions, you may want to consider how you would fill their job roles in the event of their departure from your company.

#3: Start to Budget
The likelihood is that a vote to leave the European Union would cause significant financial upheaval for many British businesses, at least in the short-term. This would likely necessitate a reduction in expenditure, and it can be handy to see where you can cut costs in advance of the event itself. Even if such measures prove redundant, you’ll still have minimised your outlay and increased profitability, so you have little to lose by reviewing your spending.

So where should you start? Your energy bills ought to be an early point of focus, and you may find that you can save a sizeable amount simply by changing your provider. On top of this, it may be a good time to review your insurance policy, and to look at whether a new supplier could offer you more competitive terms than your current one. Although these actions may prove time consuming, the more money you save, the stronger the position you’ll be in if uncertainty reigns.

#4: Communicate with Your Overseas Clients
Planning ahead is part of running a successful business, but when uncertainty looms, its importance escalates. If we are to leave the European Union, this could have extensive implications for your relationships with overseas clients, and it’s important to talk over how this might affect you, and how its impact could be lessened.

Open communication is key, and rather than burying your head in the sand, you need to consider the import and export complications that would be caused by a departure. Only by discussing this will you be able to solidify supply chains in advance, so take the time to explore the potential problems that may be caused, and how you and your clients or suppliers can best work around them. This may include forward contracts to ‘fix’ current exchange rates for a period of a year or so, helping to clarify where each of you will stand despite the pervasive uncertainty that surrounds you.

#5: Start to Look Beyond the EU
International trade can be essential to SMEs with growth on their minds, but it needn’t all be tied up with the EU. There are hundreds of countries whose markets you could tap into, and if relations between existing partners become muddied by the after-effects of a departure, it’s handy to have a diverse client base in place to fall back on. This means that now might be the ideal time to start expanding your horizons.

As expert Martin Campbell explains: “If the UK does vote for Brexit, then trading with the EU will become harder. Small British businesses will have to develop new markets and opportunities.”

Whatever the outcome of June’s referendum, the only thing we can reliably predict is that it will have consequences. How greatly they affect you, however, is down to you, and so we’ve given you the tools to stand firm against whatever the future holds. Will you choose to use them?

Winckworth Sherwood Advises Genesis on Innovative Development and Funding Partnership
FinanceInfrastructure and Project Finance

Winckworth Sherwood Advises Genesis on Innovative Development and Funding Partnership

LINQ will support housing associations in the development and financing of mixed tenure housing including affordable, shared ownership, market sale and market rent. Genesis will provide full property management services to LINQ.

LINQ was launched in March 2016 with the purchase of its first long term housing assets from Genesis. The market rent units are drawn from two multi-tenure schemes in London – 50 flats at Zenith House, Colindale and a further 27 flats in the Mildmay regeneration scheme, Shoreditch. All are new units which will be held by LINQ for market rental on a long term basis.

By acquiring and holding rental properties on a long term basis, LINQ provides true off balance sheet treatment for the properties acquired – without the need for guarantees from existing corporate entities.

Elizabeth Froude, Executive Director of Finance, Genesis Housing Association said:

“I expect this new model to be of great interest to the social housing sector because it offers an efficient long term funding structure that can be used to de-risk development programmes of housing associations or house builders. This model helps to address many of the financial challenges around delivery faced by housing associations and other developers in terms of valuations, loan covenants and restrictions arising out of their existing funding arrangements.”

LINQ will, going forward, acquire properties from a range of housing associations, local government and developers.
Louise Leaver, Partner and Head of Housing Finance at Winckworth Sherwood said:

“Housing associations and local authorities have great potential to develop and manage properties on a long-term basis, but restrictions and covenants in existing loan portfolios can make it challenging to realise that potential. This project required great teamwork from all parties involved and is an exciting step in unlocking the sector’s ability to develop and manage properties in a sustainable, responsible and long-term way.”

Winckworth Sherwood advised Genesis on various aspects of the new funding model, including Corporate law (Partner James Duncan), Property law (Partner Andrew Murray) and Finance law (Louise Leaver).

SpaceZero Holds Majority share as Preferred Partner in Country’s PSBP Schools
FinanceInfrastructure and Project Finance

SpaceZero Holds Majority share as Preferred Partner in Country’s PSBP Schools

Having recently bid on four out of five PF2 batches across the UK, SpaceZero secured contracts with two schemes – one in the North East region, and another in the North West. Out of the country’s 45 PSBP PF2 schools, SpaceZero has bid on, completed work with, or is currently working on 24 – more than any other interior architecture company in the country.

In December, Hylton Castle Primary School, Sunderland, became the first government funded PSBP PF2 school to open its doors, welcoming students to transformed education environments, complete with furniture, fixtures and equipment specially designed to improve learning outcomes and inspire students for generations to come.

SpaceZero has also bid on, completed work with, or is currently working on 27 per cent of the 208 PSBP1 capital batch schools in the UK.

The most recent of the PSBP1 batches SpaceZero has secured is on the Isle of Wight – the last PSBP1 batch planned for construction in the UK.

Wayne Taylor, managing director of SpaceZero, said:

“We’re pleased to have been selected as the FFE consultancy on such a high proportion of schools under the PSBP schemes which, like SpaceZero, create learning environments that set new standards in the education sector – but the work has not been without its challenges.

“Designing and developing education spaces that are intelligent, provide long-term flexibility and are inspirational while functional is something that’s been part of SpaceZero’s ethos since we won our first education contract in 2009, though some members of the team were working on education projects seven years prior to this. We’ll be working closely with the architects contracted to these batches to ensure we meet the individual needs of each school, adapting our designs to their core values to ensure students enjoy stimulating educational, social and recreational facilities that promote positive learning outcomes.”

The Priority Schools Building Programme was established in 2011 to address the needs of the schools across the country that are in poor condition and require urgent repair. Through the programme, the majority of schools highlighted as needing to be rebuilt or refurbished to transform working and environmental conditions will be funded by the Education Funding Agency (EFA). However, under the PSBP scheme, the EFA will also deliver five batches of 46 schools through ‘PF2’, the government’s new approach to private finance.

PSBP2 – a further phase of the Priority School Building Programme (PSBP), with a value of around £2 billion – is expected to launch later this year.

London and San Francisco Agencies team up to Create International Challenger Network
Corporate Finance and M&A/DealsFinance

London and San Francisco Agencies team up to Create International Challenger Network

Developing a presence in the U.S. market has been a key strategic goal for VCCP and coincides with MUH-TAY-ZIK | HOF-FER’s rapid growth and high-profile account wins since its inception in 2010. In the past year MUH-TAY-ZIK | HOF-FER has more than doubled its staff from 40 to 85 people, with plans to open an office in New York City, and increased its revenue by 88% from $9 million to $17 million. VCCP intends to further grow its presence in Europe and Australia and MUH-TAY-ZIK | HOF-FER in the Americas and Asia.

The partnership between the two agencies heralds the creation of a “Challenger Network for Challenger Brands” with both sharing creative and business objectives centred on challenger brands, that will be amplified into greater global opportunities. VCCP’s current clients (O2,BMW Motorcycles, Molson Coors, and easyJet), will be joining the likes of AAA, Audi, method, Netflix, OXO, and SoFi from the roster of MUH-TAY-ZIK | HOF-FER.

The acquisition has been financed by Providence Equity Partners, a private equity investor in media and communications businesses, which acquired Chime Communications in 2015. Terms of the deal are not disclosed.

Adrian Coleman, Co-Founder and Chief Executive Officer of VCCP, commented:

“This marks a landmark achievement for VCCP, which has experienced rapid growth since it was founded 14 years ago. We’ve grown to become an increasingly global advertising agency of 500 people and continue to deliver disruptive and creative campaigns for our clients.

“We believe that creativity is the biggest multplier for any business and together with MUH-TAY-ZIK| HOF-FER we will be able to deliver campaigns all over the world as we continue to expand and grow the business.”

John Matejczyk, Co-Founder and Executive Creative Director at MUH-TAY-ZIK | HOF-FER, commented:

“At MUH-TAY-ZIK | HOF-FER, we look forward to working with VCCP to realise our shared visions, grow the business and to unleash creativity for our clients.”

Matt Hofherr, Co-Founder and Director of Strategy at MUH-TAY-ZIK | HOF-FER, commented:

“VCCP is a perfect fit for our agency. We share a like-minded attitude,culture and unique dedication to the brands we work with.”

Andrew Tisdale, Managing Director at Providence Equity Partners, added:

“This is a really exciting combination for both agencies. John, Matt, Adrian and Charles have a really clear view of how they will collaborate closely to bring great ideas to their clients around the world and build a strong global business together.”

Wealth Managers face ‘Fight for Survival’
FinanceSustainable Finance

Wealth Managers face ‘Fight for Survival’, says Temenos Study

The report, The Rise of Bionic Wealth: A Hybrid Model of Cutting-Edge Technology and Advisor Expertise Heralds the Future for Wealth Managers, explores how Generations X and Y now move ‘effortlessly across both the analogue world of face-to-face meetings and the virtual world of digital platforms that enable the fast and accurate service they expect’.

The research suggests that success, even survival, for wealth managers will depend on giving rising client segments what they need in terms of service and financial performance. An increasingly complex set of customer demands will mean that firms must modernise their technology approach without alienating older clients, still the bedrock of their business.

Pierre Bouquieaux, Product Director, Wealth Management at Temenos, said:

“With this generational transfer of wealth underway, firms must be alert to the challenges presented by a more complex set of customer needs – as well as growing cyber risks. Yet, this is a fantastic opportunity. These findings highlight that increasingly intelligent technology will help wealth managers redefine processes, find new efficiencies and build better relationships with their clients.”

Temenos, in partnership with Forbes Insights, surveyed more than 60 wealth managers and 35 High-Net-Worth (HNW) clients about the evolving banking experience—how they communicate, their needs and the importance of technology. The report includes commentary from executives at leading investment and private banks. Key findings include:

• Over 40% of wealth managers believe that a mix of digital and offline ways of communicating is ideal;
• Over a third (34%) of HNW clients now demand some form of digital communication from their wealth manager;
• Almost two thirds (62%) of HNW clients are now in favour of ‘the digitisation of wealth management services’ – but still want to meet often with an advisor;
• Just under a fifth (17%) of HNW clients say technology is now essential;
• Around half (48%) of HNW clients rate cyber risk and hacking as a top concern related to the use of technology.

High net Worth Individuals’ Investment Mistakes
FinanceInfrastructure and Project Finance

High net Worth Individuals’ Investment Mistakes

In the survey carried out by deVere Group, one of the world’s largest independent financial advisory organisations, the number one cited mistake (27 per cent) was a failure to properly diversify portfolios.

The other errors were not having started to invest earlier (23 per cent); focusing on the short-term (20 per cent); being emotional over investments (15 per cent); and not having kept enough cash in reserve (8 per cent). 7 per cent did not know or did not respond.

A sample of 652 deVere clients in the UK, Asia, Africa, the Middle East and the U.S. who have investable assets of more than £1m (or the equivalent) were polled.

deVere Group CEO and founder, Nigel Green comments:

“All serious investors, including myself, have made previous investment mistakes that could have been easily avoided.

“It is almost universally recognised that seeking professional independent financial advice allows you to avoid most of the common mistakes that have been flagged up by high net worth investors in this poll.

“All this could make it sound like investing is somewhat perilous. Yet nothing could be further from the truth – not investing is probably more dangerous over the longer-term. This is evidenced by the fact that most of the world’s wealthiest people are themselves dedicated investors. It is just a question of being sensible, taking proper advice and, where possible, learning lessons from others to avoid the obvious mistakes. This is why we conducted this poll.”

Of the poll’s results, he says:

“Ensuring your portfolio is properly diversified is one of the fundamentals of successful investing. Yet it is surprising how many people fail to do this. Having a well-diversified portfolio across asset classes, sectors and regions means you are best-placed to mitigate risks and best-placed to take advantage of important opportunities.

“All too often even experienced investors focus on the short term heavily and there are many disadvantages to this. Typically, a short-term investment strategy involves considerably higher risks, compared to investing over a longer period. Other pitfalls of a short horizon include that investors can often sell a quality investment too early due to over focusing on short-term valuation metrics. Alternatively, they may sell an investment if it drops in the short term, meaning that they would then miss out on it potentially growing steadily in the longer term with increasing returns.”

He continues:

“Stock market performance is fairly predictable over the longer-term – they usually go up. For this reason, investing in equities is recognised globally as one of the optimum ways to accumulate wealth over long periods. If you put off investing you are likely to miss out on the long-term benefits you could have been gaining.

“Making decisions based on heartfelt emotions and loyalty are admirable traits in most parts of life – but not when it comes to investing. Investment decisions based on pure emotions, such as fear, greed, or the desire to follow the crowd, amongst others, can be disastrous. Objectivity is key.

“Finally, not having kept some powder dry is another common error highlighted by many investors. It is always advisable to have some cash at the ready and be prepared to use it should a clear trend and/or opportunity present it itself.”

Corinthia Hotels Announces the Acquisition of the Grand Hotel Astoria
Corporate Finance and M&A/DealsFinance

Corinthia Hotels Announces the Acquisition of the Grand Hotel Astoria, Brussels

The Corinthia Grand Hotel Astoria will comprise 121 bedrooms and suites, as well as extensive banqueting, dining and spa facilities.

Situated in a prime location on Rue Royale in the heart of the city, the hotel was built in 1909 at the request of King Leopold II. It was for many years considered to be among the world’s finest luxury hotels and has welcomed a number of illustrious guests during the course of its history including former British Prime Minister Sir Winston Churchill and former US President Dwight Eisenhower.

Corinthia is committed to restoring the property, which has been vacant for the past decade, to its former glory.
Corinthia chairman Alfred Pisani said:

“We have earned an unparalleled reputation for restoring buildings of historical value and turning them into luxury hotels. The Corinthia Grand Hotel Astoria will be no exception.

“We aim to make this hotel the best in Brussels – committing the same passion and attention to detail as we have done with our hotel redevelopments in London, Budapest, St Petersburg and other major cities. We have full confidence in the city and are proud to have acquired such a gem in the heart of Europe.”

The Corinthia Grand Hotel Astoria’s façade and ground floor enjoy listed protection status, though the upper bedroom floors are currently stripped down to brick work awaiting full reconstruction. The property also includes adjoining land upon which the current structure will be extended. Works shall commence once all designs are completed.
Further luxury hotel projects are expected to be announced in the coming weeks to complement Corinthia’s growing portfolio of luxury hotels in prime locations.

Investing in Crowdfunding Projects
FinanceInfrastructure and Project Finance

Investing in Crowdfunding Projects

“If I were to describe Lendified in my own words, I would describe us as a lending technology company, and our primary focus being originally on the provision of working capital loans to small businesses in Canada and secondly to now more broadly supporting financial services companies seeking credit risk review process enhancements and efficiencies globally. Our platform provides us with a tremendous amount of opportunities through a variety of applications to generate service/subscriber-based revenues, while maintaining a stable base of revenue through short-term lending to the small business market all across Canada, actually using the same portal/credit adjudication process tools we now are licencing”.

Although early in the development of their licencing model, Lendified’s perhaps more interesting area of revenue generation is this services aspect of supporting, enhancing and streamlining credit risk analysis and SME lending activities for other financial services institutions. “This model can be used for other institutions to use and analyse the credit performance of small businesses for strategic benefit – like for insurance companies, leasing companies, trust companies, banks and just about every firm that’s analysing SME credit these days”.

Another unique aspect of Lendified, is the wealth of experience they can provide their customers. Both Clark and Wright, spent 30 years with the Bank of Nova Scotia, which is one of the Canadian ‘Big 5’ banks. During this time, they held executive positions in operations, client-facing sales businesses, and broader general management responsibilities, both domestically and abroad, with Lendified being born out of the awareness of the SME segment not being served well in the Canadian market and to some extent ignored by the “Big 5”. Canada is by no means exceptional in this area, and this is a prevailing issue across many markets.

From their experience of working in a major bank, they’re very aware that small business lending can be a difficult area to achieve acceptable returns because of its cost structures. The fintech industry in general, and certainly Lendified, however, without legacy systems and overhead, has developed a business platform that holds the per-customer cost to 10 and maybe 5% of the cost that traditional institutions incur to review and adjudicate credit with the same output. And additionally, models like the Lendified model are built with significant scalability. And as Clark indicated, “banks are very keen to maintain deposits to help strengthen their capital base, but are shy in terms of providing that same customer access to credit because of the cost of doing so”.

As a company operating in the ever-evolving fintech industry, the business is also built on having a combination of highly innovative technology and data science skills. It is fundamental for them that they can design and build the tools necessary to adjudicate the credit with the same (or better) outcomes of portfolio performance. This process, simply-speaking, involves the gathering of data, and deciphering that data to draw conclusions based on historical performance on what will happen in the future. Building out the model to ever-increasing capability and increasing amounts of data-input is critical to its developing technology. “Behind our products and services is a team build on a variety of core skills to ensure delivery of the most advanced use of technology, the best possible coding to drive our decisions and a methodology to reduce the friction in the customer experience. More specifically in the fintech industry, having a very capable skillset is crucial”.

Being successful in this industry is an ongoing process, so companies in this space must constantly have their eye on any emerging developments in the industry. Recently, Wright attended the “Lendit conference” in San Francisco, which brings together all the major players in the financial technology sector. During this year’s conference, 4500 people attended, whereas last year’s had 2500 and the year before had only 800 – a clear testament to the direction the industry is moving, with more and more desire for involvement. During that conference, one of the main points addressed was the urgency in which companies need to move to gain traction in their particular product application. There is no doubt that the technology is constantly advancing, with windows of opportunity becoming tighter.

Funding costs for these new lending businesses can be challenging – the cost of capital being potentially high and dependent on many factors. “For us, crowdfunding may or may not play a role in our development. Certainly it is important to be aware that crowdfunding is both a source of debt capital and equity, and the term seems to be very liberally used as of late. Generally speaking, I think conceptually, the process has been great for companies who are in start-up mode. Interestingly in Canada, the incubator process and investment interest has been been quite strong with crowdfunding becoming a successful source of equity capital in the fintech marketplace. Such is the popularity of this particular type of funding, that I would argue that it’s even harder to find secondary capital than it is to find start-up capital”.

“On the whole, crowdfunding has the benefit of attracting smaller investors. However, there is still an uncertainty in terms of capital coming back given its infancy. It will be interesting to see when these investments start to show returns. When they do, and a general understanding of what the average length of time is for these investors, we will get a better feel for its permanency as an investment class.”

Looking further down the road, the fintech industry is only going to grow and the future looks very bright for companies like Lendified. As Clark notes “although we are clearly aware that the future is unpredictable, particularly in the financial services world, there’s no doubt that there is huge innovation being developed and opportunity to leverage that. It is certainly an exciting place to be.

Company: Lendified
Web: www.lendified.com
Address: 330 Bay St #306, Toronto, ON M5H 2S8, Canada
Phone: +1 844-451-3594

The Value of Mergers and Acquisitions Targeting Industrials Companies
Corporate Finance and M&A/DealsFinance

The Value of Mergers and Acquisitions Targeting Industrials Companies

By contrast, volume actually declined from 12,223 to 12,089 over the same timeframe. 2016 has gotten off to a fairly slow start; in the first three months of this year USD 264,287 million has been invested across 4,684 transactions. If the first quarter is a sign of things to come H1 2016 is unlikely to be a record breaker and will probably bring to an end two consecutive six month periods of increasing values. The result is hardly surprising as 2016 has been fairly quiet in terms of M&A activity across the board so far. Zephyr’s Global Q1 2016 report shows dealmaking of USD 861,749 million across 20,040 deals worldwide in the first three months of the year, marking a decline on both fronts from Q4 2015 and Q1 2015.

Despite the fact that 2016 has not been a recordbreaker thus far, either globally or within the industrials segment, the latter has actually seen a few sizable transactions signed off. All of the year’s top ten deals to date were worth over USD 3,000 million, while one broke the USD 40,000 million barrier. This was ChemChina’s USD 43,000 million agreement to acquire Swiss agricultural pesticides and fertilisers maker Syngenta via its CNAC Saturn (NL) subsidiary. This was followed by a transaction worth USD 11,300 million as the Sherwin-Williams Company agreed to buy Minneapolis-headquartered paint, coatings and coating intermediates manufacturer the Valspar Corporation. Third place was taken by a deal worth USD 5,729 million as Anhui Water Resources Development Co signed on the dotted line to take over Anhui Construction Engineering Group Co. If transactions of similar sizes can continue to be announced between now and the end of June, there is still hope that dealmaking can reach similar levels to those recorded in 2016.

A number of world regions have been targeted in industrials deals worth a significant amount in 2016 to date. The most valuable region is the Far East and Central Asia, which has received investment of USD 114,241 million, placing it well ahead of second-placed Western Europe with USD 75,817 million. North America was third with USD 53,725 million. Despite the gulf between these regional values, the three regions were actually targeted in a very similar number of deals; Far East and Central Asia topped the rankings with 1,621, followed by Western Europe with 1,419 and North America with 1,000. The Far East and Central Asia’s impressive value result is not surprising given that companies in the region were targeted in four of the quarter’s ten largest transactions. The most valuable of these was the aforementioned Anhui Construction Engineering Group Co deal, while others targeted in high value deals include CITIC Real Estate, Liaoning Zhongwang Group and Inotera Memories. The USD 75,817 invested in Western European industrials firms was significantly boosted by the USD 43,000 million Syngenta deal, which was the largest deal signed off worldwide across all sectors in Q1 2016.

Although 2016 has not exactly sprinted out of the blocks in terms of deal activity in the industrials sector, there is every chance that a few more deals on a similar scale to those mentioned could be announced over the coming months. This would undoubtedly have a considerable effect on overall results for the sector and could even push results closer to the levels recorded throughout 2016. However, it is worth noting that 2016 hit record highs in terms of dealmaking worldwide and will likely prove a hard act to follow.

Company: Bureau van Dijk
E-Mail: [email protected]
Web Address: www.bvdinfo.com

Study Proves Female Board Members Improve Share Price
Corporate Finance and M&A/DealsFinance

Study Proves Female Board Members Improve Share Price

Michael Ferrary’s ‘Observatory on the feminisation of companies’, a nine-year study into the feminisation of business, has exposed that the 15 companies in the French CAC40 with the most women managers have significantly outperformed the 25 other listed companies.

Shares in these firms have risen by 60% from 2006 to 2016, despite the overall benchmark falling by 4.43% in the period.

Ferrary says: “The lesson businesses must learn is that having female managers on the board not only lends itself to the firm’s reputation, but also drastically affects its bottom line. By bringing in top female talent, companies are both increasing their intake of professionals and staying ahead of the curve. This applies not only at the top levels of business, but across the whole spectrum and around the world. In countries such as the UK, for example, only 2% of CEOs in all its listed companies are female, rising to 4% for senior managers – but this needs to change if businesses are looking to outperform their competition.”

He says: “It’s time for managers to sit up and take notice of the facts, not only for their own profitability, but for the many other benefits. Female board members are likely to increase a company’s reach – or at least effectiveness – due to their influence, yet this is not where their impact stops. Placing inspiring women at the top could motivate other female members of staff, directly enhancing their individual performances. And with business so competitive, can companies really afford not to be strategically planning their board room gender ratios to maximise their bottom lines?”

Infrastructure Fund Manager of the Year 2015 - USA
FinanceInfrastructure and Project Finance

Infrastructure Fund Manager of the Year 2015 – USA

Founded in 2012, I Squared Capital has offices in New York, Houston, London, New Delhi, Hong Kong and Singapore, offering a truly global reach and a wealth of investing experience. The firm invests in energy, utilities and transportation sectors, and seeks to invest in India, China, North America and Europe. It seeks to invest between $125 million and $400 million. Many of the firm’s executives have strong experience in investing with major corporations previously, ensuring that investors receive strong, risk averse returns.

Recent developments include, its through its ISQ Global Infrastructure Fund, the acquisition of Lincoln Clean Energy (Lincoln), a developer, owner, and operator of wind and solar projects in North America. The transaction includes an operating solar facility in southern New Jersey and Lincoln’s development and asset management platforms, including a robust development pipeline. Lincoln plans to deploy $250 million in equity investments through 2018. Founded in 2009, Lincoln has developed more than $1.5 billion of clean energy projects totaling 1,000 megawatts across North America. The company has assembled a team of veterans from the power industry.

Declan Flanagan, Founder and CEO, is the former CEO of Airtricity North America. He went on to become CEO of E.ON Climate & Renewables following the 2007 acquisition of Airtricity North America. Declan has led the deployment of over $5 billion in capital in wind and solar projects in the U.S. and Europe and is a former board member of both the American Wind Energy Association and the Solar Energy Industry Association. The Lincoln team includes 18 professionals with over 150 combined years of experience in the renewable energy industry. The wind and solar industries have received a regulatory boost in the United States following the recent extension of the 30 percent investment tax credit for solar energy and the 2.3-cent-per-kilowatt-hour production tax credit for wind power. “This is an opportune time to invest in the renewable energy sector and we are delighted to partner with Lincoln’s high caliber management team, with its proven track record in the development and management of clean energy projects.” said Adil Rahmathulla, Partner at I Squared Capital. “Lincoln’s operational experience and track record, combined with I Squared Capital funding and expertise, positions Lincoln to become a premier renewables generation company in the U.S.” Commenting on the transaction, Declan Flanagan, CEO of Lincoln Clean Energy said “The Lincoln team is extremely excited to work with I Squared Capital. This partnership allows us to enhance both execution and value creation while we capitalize on the tremendous market opportunity before us.”

Company: I Squared Capital
Address: 410 Park Avenue, Suite 830, New York, NY 10022
Email: [email protected]

Capital Partnership to Acquire Northgate Capital
Corporate Finance and M&A/DealsFinance

Capital Partnership to Acquire Northgate Capital

Religare, the India-based diversified financial services group, acquired a majority interest in Northgate in 2010. Completion of the transaction is subject to the satisfaction of certain conditions precedent, including certain regulatory approvals. Terms of the transaction were not disclosed.

Founded in 2000, Northgate is a leading venture capital and private equity firm with $4.8 billion in assets under management (AUM) as of 1 April 2016 on behalf of institutional and private investors in North America, EMEA and Australia. The firm makes both direct company venture capital investments, where it leverages its network of global relationships to help create value for its portfolio companies, and indirect company investments by investing in venture capital and private equity funds. Northgate portfolio companies represent some of the most successful start-up companies across multiple verticals including Telecom, Fintech and Media. Northgate portfolio companies have had multiple IPOs and successful exits.

The Capital Partnership has maintained a strong relationship with Northgate for the past 12 years and its managed funds collectively represent one of the largest investors in the Northgate funds. The proposed acquisition will build on The Capital Partnership’s growing venture capital and private equity investment portfolio, which currently accounts for around 25 percent of its assets under management, and reinforces the firm’s commitment to the US market. This acquisition will enhance the alignment of interests between investors and shareholders of Northgate, creating “a firm owned by an investor, for the investors.” Following the acquisition, Northgate will retain its investment and operational autonomy as distinct from The Capital Partnership.

In conjunction with the transaction, it is anticipated that Ali Ojjeh, Managing Partner of The Capital Partnership and a 12-year member of Northgate’s Limited Partner Advisory Board, will assume the additional role of Chairman of Northgate. Dr. Hosein Khajeh-Hosseiny, a current member of Northgate’s Management Committee, will continue to lead the firm as its Managing Partner and as CEO. Following the closing of the transaction, it is proposed that each of Mr. Ojjeh and Dr. Khajeh-Hosseiny will participate as members of the Northgate Investment Committee, together with Brent Jones and Thomas Vardell, two of the co-founders of Northgate.

Commenting on the proposed acquisition, Ali Ojjeh, Managing Partner and co-founder, The Capital Partnership, said:
“The Capital Partnership has a successful 18-year track-record in venture capital and private equity investments, which is highlighted by our existing 12-year relationship with Northgate. Silicon Valley plays an increasingly important role in global value creation across all sectors which is highlighted by technology companies’ share of the S&P 500, which has more than doubled in the last 30 years and represents approximately 20% of the index today. Technology remains a significant driver of global economic output and growth and we believe that expanding our commitment to Northgate will help our investors capitalize on the growth opportunities in one of the world’s major hubs for innovation and entrepreneurship.”

Dr. Hosein Khajeh-Hosseiny, Managing Partner, Northgate, said: “We are excited to expand our collaboration with The Capital Partnership, which manages funds with longstanding investments in our (Northgate) funds. Since purchasing its ownership stake in 2010, Religare has made tangible contributions to our institutionalization and the growth of our network beyond the US. We are delighted with Religare’s choice of The Capital Partnership as our buyer. With a strong understanding of Northgate, global technology and capital markets as well as investors in start-ups and funds, The Capital Partnership is well-suited to help us build on our growth and network to fully realize our potential as a strong, long-term, value-creating platform for our ecosystem of partners.”

Sunil Godhwani, Chairman and Managing Director, Religare, said: “Given the tremendous future growth potential that India offers for a diversified financial services platform like ours, we have taken a strategic view to consolidate and refocus our energies on our existing lending and other domestic businesses. Before deciding to divest our stake in Northgate and arriving at the best possible course of action, we had carefully considered a number of factors keeping in mind the best interests of the investors and the franchise. Our partnership over the years with Northgate has been enriching and we extend our best wishes to the team for their future endeavors.”

For The Capital Partnership, the deal was headed by Ali Ojjeh and led by Amy Harvey, head of legal and compliance, Casey Gordon, head of private equity and business development, and Tim Savage, CFO. Paul, Weiss, Rifkind, Wharton & Garrison LLP acted as legal advisors to Religare. Morrison & Foerster LLP served as legal advisor to The Capital Partnership.

The Capital Partnership’s team will continue to work with Northgate to help identify resources necessary to build on its leadership position, expand globally, and continue to deliver world-class investments to its investors.

Small Business Demand for Alternative Finance Continues to Soar
FinanceSustainable Finance

Small Business Demand for Alternative Finance Continues to Soar

The findings showed that small firms predict demand for alternative finance will increase by an average of 28% over the next two years. This represents an increase of 2% from last year’s survey2 where 26% forecasted growth. In 2015 the combined market activity for the UK online alternative finance industry grew to £3.2 billion, representing an 84% increase compared to the £1.74 billion in 20143.

More than half (51%) of small and medium sized enterprise (SME) owners said they have used or considered using alternative finance, up from 42% in last year’s survey. The most popular option, considered by 47% of respondents, was again crowdsourcing finance, including peer-to-peer lending and crowdfunding. This was followed by cash flow / invoice finance (32%), property finance such as bridging loans and commercial mortgages (29%) and asset finance (24%), which covers areas such as plant and machinery and business equipment.

On a regional basis, more than two thirds (69%) of small business owners in the North West predict a rise in demand for alternative finance over the next two years, the largest portion in the UK. Business owners in the East Midlands and West Midlands were second and third with 67% and 62% respectively. Just over half (52%) of small business owners in London predicted a rise in demand for alternative finance. SME owners in the North East were the least enthusiastic about alternative finance with 29% anticipating an increase.

The research also revealed the specific areas that SME owners are targeting for investment over the next 12 months. Two in five (39%) SME owners will look to invest in IT equipment, and nearly one five (18%) in cars, spending on average £14,496 and £5,290 respectively. 13% of SME owners said they would invest in telecoms equipment (£5,368) and 12% in plant and machinery (£7,426). One in ten (11%) plan to buy commercial vehicles, spending on average £11,163.

John Jenkins, CEO of Amicus commented: “This research shows that the business finance landscape continues to change. Demand for alternative finance is set to go from strength to strength over the coming years as mainstream lenders struggle to evolve to adequately support a thriving small business community.

“Small businesses are increasingly turning to specialist lenders who have the skills to understand their specific needs. Having built a strong business base from our property lending expertise we have significantly broadened our proposition into other areas of specialist lending. Our relationship-based approach resonates well in specialist lending markets that are poorly served by mainstream lenders.”

Investment Outlook for Q2
FinanceInfrastructure and Project Finance

Investment Outlook for Q2

Problematic liquidity issues in bond markets

Conditions in the first quarter created a perfect storm. The way spreads widened in corporate and high yield bonds suggested that a re-pricing of systemic risk was happening, and we were left with a sense that there was possibly something out there relating to a bank or a hedge fund that we were unaware of. So our recommendations at this time are a bit of a balancing act.

As a result of regulation and investment banks’ diminished desire for risk-taking, liquidity conditions in bond markets have become problematic, and this tends to exaggerate price movement responses to bad news. Both credit market weakness and bank share performance were worrying: for example, Barclays lost nearly a third of its value before finding a floor, whilst Deutsche Bank shares were moving 10% a day in both directions.

Fears of a Chinese hard landing and banking crisis

Various causes have been suggested. Fears of a Chinese hard landing and a possible banking crisis unsettled both Chinese shares (which lost a quick 20%) and international markets. We will have to get used to lower growth figures from China – its GDP grew at 6.8% in Q4 2015, the lowest since 2009. It was, however, encouraging to see that services and consumption compensated for weak exports and manufacturing, which is compatible with China’s move towards a domestic demand economy and becoming less export dependent.

There were concerns about the prospects of a substantial Renminbi devaluation, arising from a poorly communicated change in how the currency is now to be measured. Markets were also unsettled by speculation that the US economy was slowing and the risks of a US recession were increasing, while equity markets also chose to be unsettled by falling oil prices. This seemed extraordinary, as rising oil prices would be net only the oil producers, while lower prices are good for consumers and the global economy.

Rebound in oil – is the low over?

The rebound in oil has helped stabilise market sentiment, and price movements in March suggest that the low is over. Most commodity prices became heavily oversold in the first quarter and it is not unreasonable to expect a gradual recovery in 2016. However, for commodities as a whole we are only suggesting a bounce from an oversold position and not the start of a new bull market. The medium-term outlook is still constrained by excess supply in many commodities, and this situation is likely to persist for a few years yet.

The outlook for 2016?

While some experts believe that Quantitative Easing (QE) and Central Bank interventions have merely in inflated asset prices, markets will continue to be underpinned by accommodative policies.

The minutes of the March Federal Open Market Committee (FOMC) meeting were more dovish than expected. The Committee noted that US economic activity has been expanding moderately, fuelled by an improving housing sector, consumers spending their profits from low oil prices, and improvements in the labour market. Although there are weak spots, such as business investment and exports, the US economy is performing relatively well.

We were interested in the comment in the minutes that “global economic and financial developments continue to pose risks”. Whilst this is true, the Fed is in no hurry to raise interest rates a second time and we do not think they’ll be able to deliver the four interest rate rises they alluded to in December. Just one further rise this year now looks most likely.
This will obviously support market sentiment, and with wages picking up, unemployment falling and household debt lower relative to disposable income, US consumers are in good shape – and they’re a bigger driver of economic growth than Chinese output.

It is just over seven years since the S&P 500 lows in March 2009. The US has substantially outperformed the rest of the world over this period, especially since 2011. This trend may continue in the short-term but can’t do so indefinitely, especially as the US Dollar should rise further in response to positive interest rates and the strength of the economy. Valuations have become a little stretched and long-term cyclically adjusted price-earnings ratios are above their long-term average. The earnings outlook has also deteriorated, so it’s likely that, over the longer term, the US will start to underperform cheaper markets.

Budgeting for Brexit

The EU Referendum makes it difficult to be positive about short-term prospects in the UK. Brexit fears will adversely affect investment, growth and job creation. From a long-term economic standpoint it probably doesn’t matter whether the UK remains in Europe or not, but the short-term rami cations of a ‘leave’ vote are worrisome. The exit negotiation could take up to ve years, while another SNP independence referendum could result in further Sterling weakness.
There seems to be a degree of complacency about the vote and a consensus that a vote to stay in is likely. We don’t necessarily disagree with this view, but we’ve made sure we’re underweight in UK equities and Sterling. It’s not surprising that the UK’s GDP growth target was revised down to 2% for 2016 by the Office for Budget Responsibility in March’s Budget. It’s difficult to argue with Chancellor George Osbourne’s assessment that the UK faces a “dangerous cocktail of risk” up to the Brexit vote.

In Europe the recent European Central Bank (ECB) monetary easing package contained some interesting measures, buying highly rated corporate bonds for the first time and announcing a new long-term refinancing package. This will allow banks to borrow at negative interest rates, i.e. they are being paid to borrow and hopefully encouraged to lend more. The signs are encouraging and credit demand has picked up.

Overall, data points to a modest recovery, although most recent estimates for 2016 GDP growth are nearer 11⁄2% than 2%. Similarly to the US, consumer spending should prove resilient, so with some wage growth coming through we find it relatively easy to be overweight in Europe. However we are mindful that a vote for Brexit would prove nearly as problematic for Europe as for the UK.

Japan’s economic performance in 2015 was weaker than expected, especially consumption. Consumers remain cautious and there are on-going concerns about Abenomics. Further growth measures are likely by the summer. There is even the possibility that the next consumption tax hike might be cancelled, which would benefit sentiment. We are a little concerned that the Nikkei has not rallied as quickly as other major markets from their recent lows, but we’ll persist with our modest exposure for the time being.

The Bank of Japan announced during the quarter that they would be joining the negative interest rate club; this has unsettled short-term sentiment. However, it’s always important to differentiate between the economy and the stock market. The latter is cheap relative to other major markets and trades on a forward P/E ratio of 14x. The greater emphasis on corporate governance, resulting in higher dividends and increased share buybacks, is helpful.
We entered 2016 with our asset allocation at a near benchmark weighting to risk assets. Although the sell-off has proven to be a short-term buying opportunity, we decided not to go overweight in equities because the ‘feel’ of the market was as fragile as early 2009. We were not tempted to increase pressure by the news background and liquidity issues, especially as the extent of the move has seriously damaged longer-term chart patterns.

Keeping a balanced outlook

As stated earlier, we don’t believe the outlook is as bad as January price movements suggest. We still believe equities will outperform, central banks will remain accommodative and interest rates will stay low. However, we are also mindful that the benefits of declining oil prices on inflation are ending, so the inflation outlook could deteriorate quite rapidly.
We believe we should get another opportunity to increase equity exposure in the first half of 2016. In a low growth environment markets are particularly vulnerable to surprises, and the geopolitical backdrop is not that constructive. The Middle East situation, the European refugee crisis, the rise of populism and Brexit could all cause a wobble on the tightrope.

Since sentiment has been damaged, markets may require evidence that recent recessionary fears were unfounded and will now need to consolidate. They are therefore likely to trend sideways, at best, in the short term. We’ll remain vigilant and look for opportunities; for example, we are considering India and the global banking sector as possible future investments because, whatever the level of uncertainty, there are always opportunities.

Later-life Parents Left in debt
FinanceSustainable Finance

Later-life Parents Left in debt

A poll of almost 9,000 over 50s shows that 12% still have a mortgage. However this figure rises to 20% for ‘second-lifers’ – people over 50 who have children with a new partner following a previous marriage or long term relationship.

Furthermore ‘second lifers’ have a bigger mortgage than people their own age without a new family. On average, these people estimate that they have more than £80,000 left to pay on their mortgage, whereas those without a new family have to find around £60,000 before they own their home outright.

As well as having a bigger mortgage to pay off, second-lifers are also more likely to have non-mortgage debts, such as loans. Around 18% of those with a second family have almost £12,000 of outstanding debts on average, compared to 12% of traditional families who have to find around £10,000 before they’re back in the black.

Analysis of Saga Equity Release Advice Service data shows that some of these may be turning to the value in their property to help clear some of this debt, with around one in five people releasing equity from their home to pay off their mortgage, while one in three used the service to clear debt.

The Populus survey also shows that it has become more common to have children in later life, whether that is because people are concentrating on their career and having children later on or starting a family with a new partner. On average, one in five people in their 50s had their last child between the ages of 32 and 34 and a further 20% had a child between 35 and 40 years old.

However, 1 in 17 said they were 41 years or older when their youngest child was born, presumably leaving many people in their 60s paying for teenage children’s driving lessons and university fees. Those having children in later life would be wise to take out a life insurance policy so that their family is financially protected.

Jeff Bromage, Chief Operating Officer at Saga Personal Finance, commented:

“Having children in later life keeps people on their toes and feeling young at heart. However, the cost of raising a child is continually increasing and these days people need to keep a close eye on their finances and make sure that they are getting the best deals, whether that’s when you’re borrowing money or investing it in the stock market.”