Banque Transatlantique, part of leading French banking group Crédit Mutuel-CM11, is an international French private bank which has a long tradition in Private Wealth Management, having catered to wealthy French nationals living overseas since 1881. The bank has earned the trust and confidence of its clients through the specificity of its services and expertise, which involves looking after families, entrepreneurs, French citizens living abroad and foreigners living in France and major foundations. Banque Transatlantique is present in 12 cities worldwide, from the West Coast of the United States to Asia.

Robert will be responsible for developing a new discretionary and advisory wealth management offering that will complete the bank’s private banking service in the United Kingdom.

This development comes a year after the successful launch of Banque Transatlantique’s UK banking services. These services have seen a growing demand from the bank’s core French non-domiciled clients, as well as from an increasing number of British nationals with interests, such as property and business, in France.

Launching in January 2018, the wealth management service will offer clients access to a range of portfolios constructed using regulated third-party funds. Investors will gain access to a broad and diversified range of risk premia derived from global equities, government bonds, credit and alternative asset classes and strategies. Rotation of investment style and factor exposures will be used to add value on a tactical basis. Fund selection will be a truly independent process, managed in London, with the focus being on liquidity, transparency and cost efficiency.

Robert says, “Between now and launch in January, I’m taking time to meet with our banking clients to properly understand their investment needs. We have no legacy issues to deal with; we can design our investment offering in the best way to meet the client’s objectives and the new regulatory framework. People often ask me about our client’s attitude to Brexit; the outcome is clearly uncertain but what I hear is that our clients enjoy living in London and the UK and are too busy focusing on their careers, businesses and family matters to be overly concerned.”

Robert has over 20 years’ experience in investment management. His previous role was as Chief Investment Officer of C. Hoare & Co. He started his career at HSBC Asset Management, before moving to McKinsey’s European Asset Management practice and then to New Star where he was manager of the Asia portfolio.

Gwenolé Le Blevennec, General Manager of Banque Transatlantique London branch, said, “His considerable experience will enable us to grow a wealth management offering to serve the investment needs of our clients. Banque Transatlantique continues to invest in the development of its UK operations, as we remain optimistic about the City’s post-Brexit prospects, and as a French bank are committed to growing our presence in the UK.”

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January 12, 2017: CAMRADATA, a leading provider of data and analysis for institutional investors, has collated the top 10 global investment trends for 2017 from a range of its asset management clients.

Sean Thompson, Managing Director, CAMRADATA says, “Our asset management clients have predicted that 2017 will be an extremely interesting year for investors. We are in a midst of a sea change in the global environment that will create both opportunities and risks.”

The top investment trends for 2017 from asset management firms:

A year of volatility in global markets

The political uncertainty in both the USA and Europe following the election of Donald Trump, Brexit negotiations and the forthcoming French and German elections are all going to have a big influence on the markets and continued volatility.

According to Mark Burgess, Chief Investment Officer EMEA and Global Head of Equities at Columbia Threadneedle Investments, “2017 will be a year of volatility as markets make sense of the promises and policies that politicians have promoted, and that volatility in markets provides the perfect opportunity for active management.”

Steven Bell, Chief Economist at BMO Global Asset Management EMEA, believes that Trump’s victory will be the ‘key driver of change’ and that the global economy is starting to heal. “A number of key indicators suggest that the world’s economy has been healing for some time. Monetary policy has played an effective role in this healing process but seems to have reached its limits with negative rates having disappointing effects in Europe and Japan. The baton should be passed to the fiscal authorities and Trump looks set to run ahead with it. Whether other countries will follow suit remains to be seen.”

Interest rate rises and falls

Most companies are predicting interest rate rises in the USA, but a fall in emerging markets.

Ricardo Adrogué, Head of Emerging Markets Debt at Barings, says, “Over the next year, global interest rates will likely move in different directions. As the US economy continues to gain steam, rates will likely increase while Europe and Japan appear on track to continue their accommodative policies. On the whole, EM local interest rates continue to fall as inflation remains healthy and growth remains tepid.”

Global inflation on the rise

Ricardo Adrogué, Head of Emerging Markets Debt at Barings, says, “Global inflation may rise but will likely remain relatively subdued over the next several years. Due to the lower inflationary pressures, we expect to see lower overall interest rates for EM local bonds where nominal yields offer significant compensation for risk.”

Bonds poised for solid performance

Robert Tipp, Managing Director, Chief Investment Strategist and Head of Global Bonds at PGIM Fixed Income, says, “Between the Brexit vote and the Trump sweep, 2016 was a year of surprises and bumps, but it was a generally productive year for the bond market. And, when we look at 2017, our best guess is that the opportunity in the bond market will once again outweigh the risks and that bonds are poised for solid performance.”

Embracing credit risk

Jan Straatman, Global CIO at Lombard Odier Investment Managers (LOIM), and Salman Ahmed, Chief Investment Strategist at LOIM, point out that in the world of largely low or negative rates, investors should consider increasing their exposure to credit risk through an allocation to corporate credit in 2017.

However, they say investors need to look beyond the higher-rated, investment-grade segment of this market where duration risk is a dominant force.

They comment: “We believe that to increase yield sufficiently, investors should move further down the credit spectrum. In our view, the so-called ‘crossover’ universe, which spans the lower quality investment-grade (BBB) and higher-quality high-yield (BB) rated issuers, provides significant return enhancement relative to investment-grade issuers while not exposing investors to the excessive default risk that is a feature of high-yield debt (rated B and below).”

Growth of global equities

The move into equities is another key trend.

Mark Burgess, CIO EMEA and Global Head of Equities of Columbia Threadneedle Investments, says, “Compared to their longer-term history, equities still offer better value than bonds – though this might change, should the ‘bond bubble’ burst in 2017.”

Steven Bell, Chief Economist at BMO Global Asset Management EMEA, says, “Higher US rates and a strong US dollar will see markets struggle to make much headway and although equities are our favoured asset class, stronger economic data could see bonds rally and shares fall at some point. In terms of sectors, recent trends look set to continue with cyclically orientated areas outperforming and bond proxies struggling. The prospects for emerging markets remain difficult as dollar strength and rising rates outweigh the benefits of better growth. But 2017 might be the year in which European equities finally outperform, ending half a decade of disappointment.”

Impact of technology

Technology will also have a significant impact in 2017.

According to Richard Turnill, Global Chief Investment Strategist at BlackRock Investment Institute, “Technological change is sweeping through industries, overhauling business models, reducing traditional jobs and limiting inflation. The rapid pace of technological change is causing disruption across industries and displacing jobs − and is arguably fuelling populist politics.”

Advances in artificial intelligence could have an even bigger impact on better-paying white-collar jobs in services industries such as finance. And fossil fuel companies risk being upended by renewables once energy-storage technologies improve.

Tony Kim, Portfolio Manager at BlackRock’s Global Opportunities Group says, “Artificial intelligence (AI) is the new electricity. The big bang is upon us. We have all this data, but we can’t do anything with it. AI is the solution.”

Opportunities for active investors to increase

Mark Burgess, CIO EMEA and Global Head of Equities at Columbia Threadneedle Investments, predicts that 2017 will be an active time for investors, and expects opportunities for discerning investors to increase. “Amid rising political uncertainty, fundamental analysis and expert asset allocation will be critical in order to achieve long term returns. The tide of global QE that had previously lifted all boats will begin to ebb in some regions and flow in others, and in that environment it will make sense to differentiate within and across asset classes.”

Challenges in Asia and Emerging Markets

Burgess predicts challenges for Asia and the Emerging Markets (EMs) that are exposed to the threat that Trump poses with protectionist policies. These include China, Mexico, Colombia, Malaysia, Korea and Thailand.

BlackRock Investment Institute also highlights China and the worries around China’s capital outflows and falling yuan. However, they also say China’s stabilising growth has eased some of the anxiety that rattled investors in early 2016. Nevertheless, there are still challenges ahead as ‘China is attempting a difficult balancing act: prioritising near-term economic growth while tackling debt issues for the longer-term good’.

Emiel van den Heiligenberg, Head of Asset Allocation at Legal & General Investment Management (LGIM), points out one of the key risks for 2017 is a significantly weaker Chinese currency driven by capital leaving the country. “Our base case is that the Chinese will manage a 5% real currency fall at the cost of lower foreign currency reserves and tighter capital controls, particularly given the Communist Party’s power transition in late 2017. We do not expect a sharp slowdown in growth. However, the risk of a faster devaluation is not immaterial and, as we saw in 2016, that would likely lead to weaker global equity markets.”

Major challenges in Europe

John Greenwood, Chief Economist at Invesco Ltd, predicts the challenges in Europe will lead to poor economic growth. The slow progress of bank resolution, the weakness of the European Central Bank’s (ECB) QE programme and the consequent descent into negative interest rates are among the headwinds holding back economic recovery.

He also highlights double-digit unemployment levels, leading to disruptive populist and xenophobic political movements, and referenda or elections in Italy, Holland, France and Germany. “At some stage, one or more of these electorates could overwhelm the governing elites, posing an existential threat to the established order – the European Union (EU) or even the Eurozone. Real GDP growth is likely to remain around 1.5% at best, with inflation falling far short of the ECB’s target of ‘close to but below 2%’.”

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Suparna Goswami Bhattacharya

February 2, 2016: Europe had been in the news in 2015, not every time for the right reasons though. Grexit, the Volkswagen scandal, migration crisis, Paris attacks were some of the low points which made economists and investors wonder whether or not to pin their hopes on this continent for 2016.

Though shakiness in the world economy, oil price slump, China’s slow growth did contribute to the sombre mood, not much improvement in the scenario is expected.

Angela Bouzanis, senior economist at FocusEconomics, believes that Europe’s recovery will continue in 2016. “We see Eurozone economy expanding 1.6%, slightly above what we predicted in 2015 (1.5%), amid solid domestic demand and continuation of an accommodative monetary policy,” she says.

Dan Kemp, Chief Investment Officer, EMEA, Morningstar, an investment research and management firm, says that while looking at Europe one needs to separate economic outlook from that of capital markets. “In economic terms, there is clear strength in business and consumer survey data and increased support from domestic demand. These indicate underlying trends remain robust,” says Kemp. However, in capital market terms, much of the good economic news appears to have been already priced into European equities and, consequently, most equity markets look expensive. “The risks appear to be on downside. Opportunities stem mainly from the structure of their capital markets, like their exposure to energy companies,” he said.

Though energy companies have been a drag on returns, the fact is that they are now materially underpriced and, therefore, represent an attractive long-term investment opportunity. “As we create our expected returns at a country and regional level from the bottom up, the value we perceive in these stocks is having a positive impact on our expected returns for those countries with significant exposure to energy companies,” he says.

However, a number of challenges remain, namely the political landscape, persistent high unemployment and very low inflation expectations. In addition, while a weak euro is conducive to export growth, external conditions are not. The emerging market slowdown, particularly in China, and overall pattern of slowing global trade will weigh on growth prospects this year.

Satyajit Das, a former banker and author of Age of Stagnation (published as A Banquet of Consequences in UK, Europe, Australia and NZ), says, “One has to understand that Europe’s tentative recovery was driven by negative short term rates, massive QE, a weaker euro (driven in part by these policies) and low oil prices. But the continent has a deteriorating outlook.”

For instance, German exports to emerging markets are slowing. Exports in August 2015 for Germany were 5.2 per cent lower than July, the sharpest monthly fall since the financial crisis, according to the national statistics office. Germany, which happens to be Europe’s biggest exporter, sends 6.5% of its exports to China, which has been experiencing a slowdown.

“Additionally, the Volkswagen emissions scandal has brought into question much vaunted European technical prowess. European debt problems remain unresolved. In the aftermath of the attacks in Paris, the French government has announced that they will not abide by deficit and debt limits. Italy refuses to bring public finances under control, despite a worsening debt-to-GDP ratio,” says Das.

As far as Greece is concerned, it is likely to be in spotlight this year as well. “Our panel sees Greece’s economy worsening this year, as tough economic reforms and austerity measures are expected to dampen private consumption and stifle the recovery. High unemployment, tax increases and pension reductions will likely push the economy to a 0.7% fall this year,” says Bouzanis

To be honest, Greece’s situation remains in flux. While the current government has been largely compliant with last summer’s bailout agreement, a number of key and controversial reforms still need to be passed. “The government holds a slim three-seat majority and political stability (or willingness to comply with creditor demands) is far from guaranteed. In addition, in the long-run, there is a large risk that this bailout could suffer from the same obstacles as its predecessor: foot-dragging on reforms, poorer than expected economic growth or political upheavals and the question of request of debt relief is yet to be answered,” adds Bouzanis.

Das echoes these views. “The government will find it difficult to meet bailout conditions raising the issue of default, Grexit or both, amidst growing reluctance for further support,” he says.

Greece apart, Portugal too has nothing positive to offer. Its new government, an uneasy coalition of foes, has sworn allegiance to the EU and the euro but is seeking major concessions. “With the highest total debt-to-GDP in the EU, a Portuguese debt restructuring, explicit or de facto, is not unimaginable,” Das says.

Despite positive talks, Spain’s public finances remain poor and unemployment unsustainably high. The recovery remains uneven with excessive reliance on domestic consumption and exports, primarily automobiles, to other European countries. With no clear winner emerging in the 2015 election, Spain remains vulnerable to political instability.

Adding to all these woes is Europe’s refugee crisis. “The current refugee situation in Europe is incredibly complex.  However, it is worth noting that the productive capacity of Europe has increased through the influx of a large number of additional workers,” says Kemp. The key challenge faced by governments is how to quickly integrate these new arrivals and manage the additional strain on the social infrastructure of the countries they settle in.

Das says that though Europe’s refugee crisis may boost economic activity but it is expensive, at around €10,000 per refugee per year initially, putting pressure on weak finances. “It has also highlighted deep divisions within the EU. Serious opposition to immigration and free movement of people required by the Schengen treaty has emerged.”

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