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Fund selector stars: the Citywire class of 2016

Here's a look back at the top fund selectors, wealth managers and pension chiefs Citywire Americas has profiled over the last year.

Mythbuster: Eli Bunaru

Mora Wealth Management

Miami, Florida, USA

Citywire Americas kicked off 2016 by featuring Venezuelan-born, Miami-based Eli Butnaru of Mora Wealth Management. Butnaru was not shy to dismiss a number of metrics touted by the investment industry.

‘‘One of the biggest beefs I have is with the term absolute return. That form of investment management does not exist.

‘Everything has an alpha and a beta, even when you have a money market. People have to start looking at how you start adding value through alpha. Gimmicks are just that.’

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Fighting Spirit: Christian Ledesma Garcia and Norberto Scotti

CLG Investments

Montevideo, Uruguay

Next up were fund selectors Christian Ledesma Garcia and Norberto Scotti of wealth manager CLG Investments who were going at it on their own after moving away from the big banking structure they both came up in.

The duo left Banco Santander in Buenos Aires to launch CLG and gain their independence. They wanted the freedom to pick the products they felt were in the best interests of their clients.

‘Being independent is not easy,’ says Garcia, president of CLG. ‘To see a prospective client and give them a business card of a company with my initials and not have a big-name bank behind us was not what we were accustomed to.’

‘We wanted to get away from the big banking structure. This gave us a chance to find funds and investments outside our tied banking relationships. Independence also gave us the ability to walk away from fund houses without worrying whether it would damage the bank’s partnerships.’

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Alpha hunter: Francisco Guzmán Molina

AFP Capital

Santiago, Chile

In April, we featured Francisco Guzmán Molina, the chief investment officer of Chile’s $30 billion AFP Capital pension fund. His long career has seen his investment approach evolve alongside the Chilean regulator as its continually broadened the investment universe the AFPs could choose from.

However, with the challenging investment climate, Guzmán Molina talks about lobbying the regulator for more freedom to invest in alternative investments.

‘Today we think it is important to open up this possibility, like we did many years ago with the international markets, to be able to generate more attractive risk-adjusted returns for Chilean pension funds.’

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Fighting fear: Jeff Lombardi

Itaú USA Asset Management

New York, New York, USA

Jeff Lombardi, head of Brazilian giant Itaú USA Asset Management’s fund selection unit, made the cover in May.

While technology has helped selectors become more efficient, it’s also created a new ‘short-term’ mentality across clients who used to be more passive in their dealings with wealth professionals. Clients are increasingly looking for higher returns in less time, challenging selectors like Lombardi who understand that sometimes slow and steady wins the race.

‘It’s like a doctor giving advice to a patient. If you want to lose 10% of your body fat during the course of the year, you can’t wait till December to decide to go on a diet. You have to follow that diet every month, every week.

‘The basic tenets of investing haven’t really changed in the 20 years I’ve been doing this. People invest in global bonds for safety and for yield, global equities for growth, and alternative investments for diversification.'

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Going the distance: David Itzkovits

Sanlam Global Investment Solutions

Boston, Massachusetts, USA

Marathon runner David Itzkovits was featured as our June cover star and talked about the importance of sticking the tough times out rather than making the wrong decisions based on fear.

A fan of behavioral finance, he wasn’t afraid to admit he learned his lesson when he acted out of fear after the 2008 financial crisis.

‘If you had asked me at the time, “David do you think equity markets will be higher in five years?” I would have said “100% they would be higher”, but I still sold 40% of my assets. I did this because I was scared. It’s very difficult to make rational decisions. I was a new father. I had just bought a new house. I had to protect my assets at all costs.

‘… the market is always backward looking. The best thing you could ever do is buy when there is blood in the water. That’s a good time to re-evaluate your portfolio and consider assets that have come down significantly.’

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Power of three: Rolando Arias, Carlos Samaniego and Marjorie Pich de Arguello

BG Valores

Panama City, Panama

Gracing our cover in September was Panamanian selector trio Rolando Arias, Carlos Samaniego and Marjorie Pich de Arguello from private bank BG Valores.

The group’s main challenge is finding international funds that can compete with bank account deposits that offer returns of up to 3.25% and local investment grade bonds yields of 5-6%.

‘Our international investments compete against that,’ says Arguello, a senior product manager in Samaniego’s team. ‘For clients to find an investment in a fund compelling and worth the risk they usually expect at least a 5% return. Considering the current low yield investment landscape, this is no easy feat.’

Arias, the head of BG Valores, adds:‘At the end of the day the final decision [to invest in a fund] rests with our clients,’ he says. ‘We have distinct asset allocation profiles which our clients fit into and we try not to time the market but instead focus on our clients and the investment program they’ve had from day one.’

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Bucking the trend: James Jesse

Morgan Stanley Wealth Management

Purchase, New York, USA

Taking a different approach to our usual fund selector focused profiles, we featured James Jesse, head of Morgan Stanley’s international wealth management unit for our October issue.

Jesse has since left Morgan Stanley, but was integral to the reshaping of its international business which is now on the path to growth.

The child of a number of acquisitions and internal consolidations, Jesse explained the unit lacked direction and he was challenged to make the business more efficient. Over two years the firm revamped to focus on wealthier and more transparent jurisdictions in Latin America. Over the last year the firm set itself a goal of increasing its assets and advisor numbers and integrated the Credit Suisse Latin American private banking team it acquired in late 2015.

‘That flow [of wealth] continues to come. Morgan Stanley International Wealth Management is the fastest-growing client segment within wealth management for the last three years. That’s the trend, the fact.’

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Pitch Perfect: Ric Mayfield

SunTrust Bank

Atlanta, Georgia, USA

Georgia-born Ric Mayfield of SunTrust bank believes that fund selection, like baseball, is all about accumulating little victories over a long game, not who can have the most high-profile, high-scoring players on the roster.

His selection process boils down to making the right connections rather than the right calculations.

‘Quant is down to 10% of our process, it’s the science that goes into it but the art – or the qualitative side – is really 90% of it. It’s talking to the managers, to the analysts who are part of the process, to get a clear understanding and the conviction that everyone that is part of the strategy is on the same page. That’s what really takes time.’

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True Trailblazer: Javier Orvañanos

Afore Banamex

Mexico City, Mexico

Last but not least, December 2016's cover star was Afore Banamex CIO Javier Orvañanos, who has been forging the way for the Mexican pension industry as they start to open up to international investors.

As CIO of the second largest Afore with $24.5 billion of assets under management, Orvañanos and his team were the first of the country's 11 Afores to sign and implement an investment mandate with a foreign fund manager.

Despite the progress, he’s still fighting for more progress and greater access to international markets from the Mexican pension regulator, Consar.

‘The returns that we could get in international equity were attractive, so we decided to be the first Afore to invest in foreign equity and we took positions in the US, Europe and Japan.

‘We prepared for the regulator’s decision and got the teams and processes in place so the moment the regulator granted it we were able to invest.’

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Events
  • Citywire Santiago 2017

    Citywire Santiago 2017

  • Citywire Mexico 2017

    Citywire Mexico 2017

  • Citywire Miami 2017

    Citywire Miami 2017

  • Citywire New York 2016

    Citywire New York 2016

  • Citywire New York 2016

    Citywire New York 2016

  • Citywire Mexico 2016

    Citywire Mexico 2016

  • Citywire Mexico 2016

    Citywire Mexico 2016

  • Citywire Panama 2016

    Citywire Panama 2016

  • Citywire Latin America 2016

    Citywire Latin America 2016

  • Citywire Latin America 2016

    Citywire Latin America 2016

  • Citywire Miami 2016

    Citywire Miami 2016

  • Citywire Miami 2016

    Citywire Miami 2016

  • Citywire Panama 2016

    Citywire Panama 2016

  • Citywire New York 2015

    Citywire New York 2015

  • Citywire New York 2015

    Citywire New York 2015

  • Citywire New York 2015

    Citywire New York 2015

  • Citywire Santiago 2015

    Citywire Santiago 2015

  • Citywire Santiago 2015

    Citywire Santiago 2015