Wealth & Finance November 2014

November 2014

www.wealthandfinance-intl.com

Wealth

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The Formula for Growth How to ensure your business stays profitable

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Regulation and Technology Why fund managers need to get their affairs in order

Direct Lending The new norm for

investment managers?

Women and Wealth Why it’s vital to maintain a strong system

Aim for the Stars How to build a truly

ambitious company culture

Plus...

We visit the historic Turkish city of Adana

Plain Sailing

How expats can build wealth for a happy retirement

November 2014 | Contents

5 6-11 News & Appointments Funds 12 Regulation and Technology: How the Funds Industry Needs to Adapt, and Soon The asset management industry is at a regulatory crossroads – and to move forward, managers need to get their digital affairs in order, says Melvin Jayawardana, European Markets Manager at Confluence, the investment data management firm

Finance Focus 16 The Formula for Growth Valuing a company is the easy part – creating that value in the first place so you have something to measure is a much more formidable task. John Collard, turnaround professional and Chairman of Strategic Management Partners, Inc., tells us how to build worth into a company by creating a value equation 18

Aim for the Stars Ambition may be the single most defining aspect of a company’s corporate culture, says Steven Van Belleghem, one of Europe’s thought leaders in the fields of social media, conversations and digital marketing

Banking Zone 22

Direct Lending: A Growing Appetite Brevet Capital, the New York-based investment management firm, tells us why, for managers, direct lending – no longer an option available only to banks – is set to become the norm rather than the exception

Wealth Corner 24 An Expat’s Guide to Growing Wealth In an extract from his new book, The Global Expatriate’s Guide to Investing: From Millionaire Teacher to Millionaire Expat, Andrew Hallam tells us why, for expats, index funds are an attractive investment – even if your financial advisor may tell you otherwise

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Women and Wealth A new Wells Fargo Survey shows that affluent women are showing greater confidence in the stock market and their investing skills as their financial worth grows

Editor’s comment Hello, and welcome to another packed issue of Wealth & Finance.

This month, we’re asking how expats, unable to contribute to their home countries’ pension schemes, can continue to grow their wealth and ensure a happy retirment. In an extract from his new book, Andrew Hallam tells us why investing in index funds may be the way to go (p.24).

Elsewhere in the issue, John Collard, a company turnaround professional, is on hand with some pointers on how to build a valuable company (p.16).

And in order to grow a valuable business, ambition is essential. Thought leader Steven Van Bellegham tells us how to integrate this vital attribute into a company (p.18).

We also take a look at the results of a new survey, which show that wealthy women are now starting to dabble more in the stock market (p.28).

In our down-time section, Relax, we take you to the fascinating historical city of Adana in Turkey, and the fabulous, brand-new Sheraton Adana (p.34).

And spa lovers are in for a treat as we experience the new Jade Stone Facial treatment at the Mandarin Oriental New York (p.38).

Relax

And of course there’s our regular roundup of the news affecting the major regions and markets from around the world.

34 A Turkish Delight

I hope you enjoy the issue.

The brand new Sheraton Adana is a luxurious base from which to discover one of Turkey’s most hitoric cities

38 A Cure for the Jaded Lucky souls discovering Iceland’s luxuriously comfortable Hotel Rangá have just possibly found the best way to enjoy the truly astonishing phenomenon of the Northern Lights

Ollie John, Editor ollie.john@ai-globalmedia.com

News & Appointments | November 2014

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News in brief Rolls-Royce Wins USMC V-22 Engine Contract Rolls-Royce has been awarded a new, two-year contract to provide aftermarket engine support for the US Marine Corps and Air Force V-22 fleets, which provides a more than 30 percent reduction in support costs.

The contract, through the company’s innovative MissionCare™ model, is valued at up to $287 million and will cover all V-22 aircraft across the Marine and Air Force fleets. Rolls-Royce is the sole engine provider for V-22 aircraft and has delivered 750 AE 1107C engines to the program.

Asia the Key Growth Region for FDI, Study Finds Along with healthcare and ICT sector preference, R&D and manufacturing activities represent key investment focus areas In spite of the recent drop in foreign direct investment (FDI) inflows, most developing economies have remained buoyant. According to a new Frost & Sullivan’s global research paper, titled Foreign Direct Investment, Asia is still seen as the key growth region for targeting FDI. At the same time, a further decline for developed economies is confirmed.

The Frost & Sullivan’s analysis covers global FDI trends, provides perspectives of Investment Promotion Agencies (IPAs) based on insights that have been obtained from a survey of 35 senior-level officials working in IPAs across the globe and best practices in investment promotion.

For the IPAs surveyed, the top countries IPAs target as a source of FDI are China, Germany, the United States, Japan and the United Kingdom. The key investment focus areas across regions include technology-related/computer software services and healthcare/pharmaceuticals/biotechnology. In addition, a large majority of FDI is focused on R&D – 19 percent of IPAs put it as a priority segment, followed in close second place by manufacturing.

“Behind IPAs’ preference for certain types of FDI lies strong economic rationale,” explained Frost & Sullivan Public Sector Practice Director Richard Wong.

“Factors such as the alignment of a particular type of FDI with national plans, the types of FDI that have historically worked, and the potential generation of high value-added activities and employment opportunities strongly influence IPAs’ decisions in this regard.”

To stimulate FDI, IPAs conduct promotional activities through various channels. Of the existing promotional channels, face-to-face, email and phone call are used most frequently. Investment tours/missions abroad are also popular tools employed to drive client development. The maintenance of long-term relationships was cited by 45 percent of IPAs as being an integral factor in the success of their promotional schemes.

“Nonetheless, the increasing competition for FDI, lack of sufficient funding, and inability to meet the growing demands of investors have been distinct challenges,” said fellow Research Analyst Sara Lai. “The insufficient coordination between government agencies has also been a cause of concern for IPAs.” While global and regional competition for FDI share has presented problems, it has also improved servicing and decreased bureaucracy. Other issues surrounding funding and coordination with agencies, however, need to be actively tackled. Remedial measures taken thus far include increased collaboration with local FDI players to reduce costs, and efforts to involve IPAs in all strategic government economic engagements.

“IPAs must consistently act as one-stop-shops, providing all forms of pre- to post- investment assistance to the investor,” said Strategic Partnerships Director Iain Jawad. “Agencies can also improve their success rates through greater strategic focus, prioritisation, and personalised approaches to client engagement.”

The reduced maintenance costs result from a significant improvement in engine time on wing since 2009 when the original MissionCare contract was signed.

Rolls-Royce has invested $90 million in capability and reliability improvements for the AE 1107C engine. Rolls-Royce has designed a series of upgrades that boost “hot and high” performance and add 17 percent more power to the engine over the original specification.

RenaissanceRe to Acquire Platinum Underwriters for US$1.9bn RenaissanceRe Holdings Ltd. and Platinum Underwriters Holdings, Ltd. have entered into a definitive merger agreement under which RenaissanceRe will acquire Platinum. Under the terms of the transaction, the common shareholders of Platinum will receive US$76.00 per common share in stock and cash, or approximately US$1.9bn. RenaissanceRe expects the transaction to be accretive to book value per share and earnings per share and that the combined company will have substantial financial strength and flexibility post-closing.

Kevin J. O’Donnell, President and Chief Executive Officer of RenaissanceRe, commented: “We are very pleased to have entered into the definitive agreement to acquire Platinum. It is a well-run company and its integration with RenaissanceRe will benefit our combined companies’ clients through an expanded product offering and broker relationships.

It will also accelerate the growth of our US specialty and casualty reinsurance platform and as a result, create enhanced value for our shareholders.”

O’Donnell continued: “Platinum is a company we know well as we supported its formation and initial public offering in 2002. Platinum’s disciplined approach to underwriting and risk management is a strategic and cultural fit for RenaissanceRe and its book of business will be integrated within our risk management framework. After the transaction closes, we anticipate our combined company will continue to have the very strong capital and liquidity position you have come to expect from RenaissanceRe.”

November 2014 | News & Appointments

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Costs, Housing and Compliance Issues: The Top Global Relocation Challenges Facing Executives “Stealth expats” and visa/immigration issues also pose critical risks, with 51% of companies saying North America is most critical region for future business success; Greater China remains second The three biggest challenges causing global relocation managers to lose sleep are controlling costs (named by 77% of respondents), housing (47%) and compliance-related issues (45%), according to Cartus Corporation’s 2014 Trends in Global Relocation: Biggest Challenges survey of international mobility managers.

Greater China (53%) was ranked as the most challenging global region with respect to controlling costs, followed by Africa and Central America/South America, which tied for second (49% each). The Middle East was the third most challenging area when it comes to containing costs (47%).

North America (51%) remained in first place as the region most critical to future business success; Greater China (41%) retained its 2013 second-place ranking.

North America and China were followed by Europe (35%) and Central America/South America (29%).

North America was also tops in another key area: when asked which regions saw the biggest increases in relocation volume over the past two years, 53% of respondents ranked North America first, nine percentage points higher than last year (44% in 2013). Greater China, last year’s second-place location, fell to third this year, dropping eight percentage points (29%), while Europe rose from third last year to second this year (35%). North America was also named by respondents as one of the least challenging regions when it comes to managing employee relocations.

“North America continues to rank as the most important region for future business success and is a vital destination for multinational corporations that need to transfer employees,” said Matt Spinolo, executive vice president of Cartus. “This is reflected in the fact that this region has seen the largest increase in relocation volume over the past two years.

Not coincidentally, North America is also one of the least challenging regions to transfer employees both to and from.”

“The decrease in activity into China is in line with the country’s slower economic growth as well as the increase in assignee concerns over environmental conditions,” said Ian Payne, Cartus executive vice president and managing director, EMEA and APAC. “Meanwhile in Europe, economic growth remains

uncertain, creating concerns about corporate investment despite the region’s continued importance to world trading.”

Immigration and Visas: Hurry Up and Wait With visa and immigration regulations increasingly becoming more complex and companies continuing to send their assignees to an expanded number of locations, an increased focus in this area is not surprising.

In fact, the No. 1 immigration-related challenge in which companies are seeing an increase is the need for upfront planning due to the length of time it takes to obtain visas (83%).

Government concerns for full employment for nationals are also putting pressure on visa and immigration regulations.

Stealth Expats: Flying Below the Radar Can Be Risky Business Separately, as many countries become more focused on capturing tax revenue, they are also becoming more diligent in pursuing taxes owed by assignees. This can be a particular issue for employees on temporary or short term-assignments, who may not always be tracked or reported on with regularity, giving rise to “stealth expats.”

Among the temporary assignment types frequently used by companies are commuter and extended business travel, both of which have tax compliance as their No. 1 challenge, according to Cartus’ 2014 Policy & Practices survey. Approximately two-thirds (64%) of respondents to the Biggest Challenges survey said that they were putting increased focus on better internal tracking of assignees’ days in country.

The Cartus survey, which focused on challenges in 11 geographic regions worldwide, received responses from 164 international mobility managers who were asked to evaluate regional challenges, and to rank – by degree of severity – issues specific to each region.

Cartus found that many of the issues impact not only the company’s relocation managers, but also the daily lives and job success of their employees.

Appointments Infoblox Names Jesper Andersen President and CEO Infoblox Inc., the network control company, has named Jesper Andersen to the positions of President and Chief Executive Officer, effective 8 December, 2014. He will also become a member of the company’s board of directors. Andersen replaces Robert Thomas, who announced in May 2014 his intention to leave the company.

Andersen, 51, is a seasoned networking and software industry executive with a track record of building large businesses at Cisco Systems, Oracle and other technology companies. A native of Denmark, Andersen has a master’s degree in computer science from Aalborg University.

“Jesper Andersen brings a unique set of skills to Infoblox, with a deep understanding of networking technology, experience in running and growing complex global businesses, and a clear vision of how the shift from hardware-defined to software-defined networking infrastructure will create new market opportunities,” said Thomas.

The Investment Migration Council Appoints CEO The Investment Migration Council (IMC), the worldwide association which represents professionals in the investment migration industry, has announced the appointment of Bruno L’ecuyer as its first Chief Executive Officer.

L’ecuyer will lead the secretariat reporting to the governing board and will be responsible for all IMC operations. He will lead the formulation and achievement of the IMC’s mission, strategy and goals, in close collaboration with the board.

Prof Dr. Dimitry Kochenov, Chairman of the Board, said: “As the IMC enters the next phase of growth, the appointment of Mr. L’ecuyer to this key role will be pivotal in driving forward our strategic initiatives including setting standards on a global level, interacting with other professional associations, governments and international organisations.”

News & Appointments | November 2014

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Tax Professionals Rank UK as the Second Most Attractive European Economy UK and Netherlands rank as the most attractive European economies to operate in from a tax perspective, while 49% of tax professionals call for more certainty about the future of the tax system A report by Deloitte, the business advisory firm, finds that over 800 European tax professionals rank the UK and the Netherlands as the most attractive economies to operate in from a tax perspective.

ant. Over half of the UK respondents (57%) say they had started planning to deal BEPS and of those who had started planning, half had taken steps to ensure they meet the new requirements.

Once again respondents cite the Netherlands as the most attractive economy, followed closely by the UK. They praise the UK’s competitive tax regime and the UK’s tax authority for its transparency and ease of compliance. They commend the Dutch tax authorities for their responsiveness, ease of communication, accessibility of information and clear and simple procedures which respondents feel favours entrepreneurs and economic growth.

Wright said: “There is major change coming soon with the G20’s objective of providing comprehensive, balanced and effective strategies for countries concerned with base erosion and profit shifting and this inevitably adds further uncertainty even if the goals of the G20 are well understood.

Factors that could increase competitiveness Nearly half (49%) of the respondents say that simplifying the tax system would have a great impact on competitiveness, closely followed by more certainty around the future (48%) and 28% stress the importance of a very predictable and collaborative tax authority.

James Wright, tax partner at Deloitte, said: “Tax professionals want stable tax legislation as they believe it will have the most positive impact on their country’s commercial competitiveness. They do not like uncertainty and they suggest simplifying the tax system would also make their own countries more competitive.”

Challenges they faced doing business in Europe The majority of respondents (54%) think one of the main challenges they face is a high degree of tax uncertainty in their own country. This group refers to frequent changes to legislation (39%), ambiguity, weakness and reversals in the tax authorities’ doctrine of publicly available guidance (28%), and the long duration of tax disputes (12%) as the main challenges.

Tax professionals’ response to OECD changes When asked whether the BEPS project was important to their tax department, just over half (51%) say that it was important or very import-

“The BEPS project will affect companies in most countries. For example, 80% and 65% of companies in the UK and France, respectively, think it is important to their tax department. However, overall our findings suggest that some respondents did not think it was important to their tax department, which is surprising. It is also surprising that just 35% think it is important to their organisation’s leadership and 69% have not yet started planning for the likely impact. Of those who have started planning for BEPS, half have taken steps to meet the new compliance requirements for transfer pricing documentation, and 11% for hybrids. Only 47% acknowledge that BEPs will have an effect on their tax strategy and recognise that it will probably increase the cost of compliance.”

Tax in the spotlight More than half (56%) of respondents think there have been increased levels of discussion and scrutiny around corporate tax strategy, especially from shareholders. The majority of respondents have not been asked by external (77%) or internal stakeholders (60%) to justify their tax strategy.

The west of Europe thinks that tax is more in the spotlight than the respondents in the east of Europe. In Western Europe, 81% of the UK, 80% of French respondents and 74% of the Netherlands think that tax is under more scrutiny now. This compares to Eastern Europe and Southern Europe, where it is not on the agenda. For example 86% of Bulgarian tax directors did not think tax was more of an issue now, than last year.

Appointments Bologna F.C. Appoints CEO Bologna F.C. 1909 has announced the appointment of Claudio Fenucci as Chief Executive Officer of the club at an official press conference at Stadio Renato Dall’Ara. “This is another great day for the Bologna Football Club. Fenucci is one of the top managers not only in Italy but also in Europe, as well as a highly esteemed and respected person,” said Joe Tacopina, President and Chairman.

Fenucci was most recently the Chief Operating Officer of Serie A club team A.S. Roma and served on their Board of Directors. Fenucci joined A.S. Roma in 2011 to lead the club’s off-field operations.

Prior to A.S. Roma, Fenucci served as CEO of U.S. Lecce where he helped advance and promote the club from Serie C1 to Serie A.

Xcel Energy Announces Executive Changes Xcel Energy has announced the retirement of long-time executive, David M. Sparby. Sparby, a 33-year employee of Xcel Energy or its predecessor company Northern States Power Company, most recently served as senior vice president, Revenue Group, and president and CEO of Northern States Power Co.-Minnesota.

Sparby held a variety of key positions throughout his tenure, including chief financial officer.

Under his leadership, Xcel Energy’s operations in the Upper Midwest significantly expanded investments in renewable energy and energy efficiency.

“Dave brought a unique ability to align stakeholders so that we could deliver in a way that worked for all,” said Ben Fowke, Chairman, President and CEO of Xcel Energy. “From cleaner power plants to transmission lines that bring wind energy to our customers, Dave drove results.”

Marvin McDaniel, senior vice president and chief administrative officer, will assume Sparby’s corporate-wide responsibilities as senior vice president, Revenue Group, Fowke said.

November 2014 | News & Appointments

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UK’s First Shariah-Compliant Seed Enterprise Investment Scheme Announced The ground-breaking, new ethical finance initiative – enabling investors to support small and start-up businesses – raises £1m within two weeks of its launch IFAAS, the leading international Islamic finance consultancy, has joined forces with Portillion Capital, an independent financial services provider with a specialism in Islamic finance, and Seed Mentors, an independent investment and mentoring specialist in start-up businesses, to launch the UK’s first Shariah compliant Seed Enterprise Investment Scheme fund.

The Portillion Capital Shariah Compliant SEIS Fund (SEIS Fund) is available to investors immediately; however, the first tranche of investment will close shortly, with more tranches to follow soon after.

The new SEIS Fund offers a compelling investment opportunity for UK-based individual investors; not only to invest in start-up and early stage businesses with high growth potential, but to do so in a Shariah compliant, socially responsible and ethical way. IFAAS acts as Shariah adviser to the fund, and ensures that investors can have total confidence that the Portillion Capital Shariah compliant SEIS Fund, and all of the investee companies, are Shariah compliant and will remain so throughout the investment period.

As the SEIS Fund appeals to both Muslim and non-Muslim investors alike, it is perhaps no surprise

that in the two weeks since its official launch earlier this month, the Fund has generated over £1m, 80% of which has come from non-Muslim investors.

compliant business activities, this means that they will be able to develop and grow their business activities in line with ethical and Shariah standards.

Farrukh Raza, Managing Director, IFAAS, said “IFAAS is proud to remain at the forefront of the rapidly changing landscape of Islamic finance industry with the launch of the new Shariah complaint SEIS Fund.

Portillion is a leading player in Shariah compliant financial services, and shares our commitment to pioneering new and innovative Shariah compliant financial solutions. The fact that the SEIS Fund is the first of its kind in the UK is particularly significant, as the UK leads the soaring demand for Islamic finance in Europe, with the rising market for Sukuk as a contributing factor.”

Kamran Sattar, Chief Executive Officer and Co-founder of Portillion Capital said: “The Portillion Capital Shariah Compliant SEIS Fund aligns with the UK government’s strategies of promoting entrepreneurship and creating equal opportunities for all communities, and we are proud to have worked with IFAAS on such a robust financial product.

The British Government launched the Seed Enterprise Investment Scheme in 2011 as part of its initiative to boost economic growth through the promotion of new enterprise and entrepreneurship.

It is designed to help small, early-stage companies to raise equity finance by offering a range of tax reliefs to individual investors who purchase new shares in the SEIS fund investing in those companies. For investors, this means that the level of capital at risk is reduced, and for suitable companies with Shariah

Speaking at the World Islamic Economic Forum in 2013, David Cameron said that never again should a Muslim in Britain feel unable to start a business because they cannot get a start-up loan, due to their religion. We feel that, with the UK’s first Shariah compliant SEIS Fund, we have taken the lead in helping to make his vision become a reality.”

For every £1 that an Investor invests in the SEIS Fund they can receive 50p SEIS income tax relief and 14p capital gains tax relief, meaning that the net cost to the investor is 36p for every £1 invested. If the investment fails then maximum loss relief of 22.5p is also available which together with SEIS income tax and CGT relief is equivalent to 86.5p relief for every £1 invested.

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November 2014 | News & Appointments

11

New Tax Efficient REIT Gives Investors Access to UK’s Mainstream Buy-to-Let Market Proposed IPO is the first to simultaneously offer shares to institutional and crowd funding investors, with minimum investment via the crowdfunding platform SyndicateRoom at just £1,000 Investors who are keen to gain exposure to the buy-to-let market without taking on the full cost of a property now have a highly tax efficient opportunity to do so, following the launch of the first mainstream UK residential Real Estate Investment Trust (REIT).

The company, which is managed by the property investment specialists Mill Group Residential, holds a portfolio of residential properties and as a REIT would pay no tax on its core rental income or capital gains.

Its IPO is the first to simultaneously target professional investors – via an institutional investor roadshow – and sophisticated online investors via the crowdfunding platform SyndicateRoom. Both are being offered the same class of shares.

Mill Group intends to list the REIT on a UK stock exchange, after which the shares will be tradable.

The minimum investment for those buying equity in the Mill Residential REIT via SyndicateRoom is just £1,000. To qualify as a REIT, the company will distribute at least 90% of its profits from its rental business to its shareholders in the form of dividends. Dividends have tax advantages for investors who hold their REIT shares in an ISA or Self-invested Personal Pension (SIPP).

Though their history goes back to nineteenth century America, REITs first appeared in the UK in 2007 as a highly transparent, tax efficient invest-

ment for those seeking to gain a broad exposure to the property market without the cost and hassle of owning property directly.

ment, and offer its shareholders a tax efficient, affordable and, when listed, more liquid alternative to owning a self-managed, buy-to-let property.

Previous UK REITs have mainly focused on commercial property, but Mill Residential REIT is the first to invest exclusively in the mainstream residential sector. Its initial portfolio is almost fully let and generating income, and consists of properties located in the REIT’s initial target locations of London, Southern England and the Midlands and ranging in value from £180,000 to £430,000.

“Mill Group Residential has always seen itself as an innovator in the property and finance space, and we view SyndicateRoom as a natural partner to help us raise funds from sophisticated crowdfunding investors in tandem with our IPO.”

The REIT is launching with seed capital invested or committed from its managers of circa £2million and is making an initial £300,000 of equity available via SyndicateRoom. It will seek to grow by taking an opportunistic approach – acquiring companies with portfolios of good quality mainstream residential properties where REIT shares or REIT tax advantages can be used, individual rental properties to be developed, and build to hold developments.

David Toplas, chief executive of Mill Group Residential, said: “With house prices disappearing out of reach for would-be buyers in several parts of the country and mortgage rates expected to rise in 2015, rental demand – and landlords’ incomes – are going from strength to strength.

“Mill Residential REIT will add further value to its portfolio through development and refurbish-

Gonçalo de Vasconcelos, founder and CEO, SyndicateRoom, said: “Mill Group has been successfully investing in and developing the UK’s property market for more than 20 years, and its exceptional pedigree underpins the launch of this pioneering REIT. “The Mill Residential REIT offers both large and small investors a more liquid way to hold a diverse range of buy-to-let properties in their portfolio, but at a fraction of the cost of owning a property outright.

“That this is the first time a traditional IPO has been combined with crowdfunding is both a testament to Mill Group’s progressive approach and a demonstration of just how sophisticated crowdfunding has become. SyndicateRoom has long established itself as the go-to option for sophisticated investors and companies alike; and we are delighted to be trailblazing by bringing this new class of property investment to market.”

Funds | Regulation and Technology: How the Funds Industry Needs to Adapt, and Soon

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Regulation and Technology: How the Funds Industry Needs to Adapt, and Soon In newmanagement book, hedge fundislegend Ian Morley takes onto the arrogance Theaasset industry at a regulatory crossroads – and move forward, and falsehoods of their the investment a collection managers need to get digital affairs inbusiness order, sayswith Melvin Jayawardana,of European Markets insightful homeManager truths,at orConfluence, “laws”. the investment data management firm

F Ian let W&F in on his four common sense laws for fund managers... ollowing my participation in Bloomberg’s Winning Strategies and Market Liquidity Conference in London, I am exploring here some of the challenges the asset management industry faces and what it should do to turn these challenges into opportunities.

Regulation will be one of the greatest challenges facing the industry, specifically the demand from regulators for clear and concise information. As a result, the increased demand from regulators will mean the cost of regulation is inevitably going to rise and asset managers have to decide the best way to comply as well as determine the associated costs involved, the number one issue being staffing. They also need to decide what is best left in the hand of external vendors, and in that regard, which vendor addresses best their business needs.

Fundamentally, we are at a regulatory crossroads and this is where the industry needs to make its mark. There is no point in the industry grumbling about regulation after it is implemented: once regulatory policies are decided and implemented, we all have to abide by them, even if they don’t fit our businesses. It is therefore vital for the industry as a whole to focus on relationships with regulators, politicians and other industry bodies – we all have a voice and an opportunity to provide input on policies to ensure they are suitable to the largest number of businesses.

One of the greatest shifts in all industries in recent years has been the leveraging of the internet.

Suddenly people have instant access to information on finance, and as a result, they are now savvier when making investment decisions. At the same time, the industry has been slow to embrace this shift, even when social and digital networks have become crucially important and marketing and distribution need to properly and proactively incorporate this trend. If the finance community

fails to adapt or does not do it quickly enough, it will face threats from more disruptive enterprises such as Google and Amazon, who already have huge captive audiences. If companies like these should one day decide to move into finance, they would have a ready-made channel to market and distribute to. An example of where this has already happened is with Apple’s new iPhone offering mobile payments, directly challenging the banks for business.

As the channels for the industry change, so does the customer – people are living longer and are more attuned to long term investments and building up a financial base for retirement. These people are looking to UCITS or other investment products that will give them long term options with steady and risk free returns. The crises of the last few years have also led to a demand for more simple and transparent products. Younger investors are also more savvy and inquisitive, questioning the industry more regularly, showing that the relationship of trust has to be rebuilt.

To conclude on an operational point, the industry needs to address its data. Today, many organisations totally underestimate the complexity of data in the industry and with further regulation, these problems will only be compounded. The ability to gather data from a multitude of sources can be demanding, as the data must be reviewed for accuracy and distributed to various channels, often with clients having to report to their own regulator across multiple jurisdictions.

Unbelievably, given all the high profile mistakes in the past few years, many organisations are still using spreadsheets for reporting, something that is error prone and has caused whale-like problems for the industry. The two challenges that stem from these data management problems are investment in infrastructure and choice: companies have to free up resources for investment in IT to

keep up with the data requirements, and businesses also need to gauge who the best solution providers are for their needs. Simply throwing in numerous teams to find, clean and distribute data is not cost efficient or sensible when technology providers can offer a better service and for less.

As the world evolves and the attitudes towards investment change accordingly, the industry needs to adapt; a tidal wave of regulation, multiple small vendors, disparate data solutions, the need for clean data and investor demand make this an exciting time to be in the funds industry - but wise long term decisions are needed by all to ensure businesses are operating effectively for customers and themselves alike.

About the author...

Melvin Jayawardana, Confluence’s European Market Manager, leads Confluence’s global initiative to further expand its statutory and regulatory reporting platform globally. Melvin has over 18 years of financial services experience gained with leading financial institutions in both the United Kingdom and Luxembourg.

Prior to joining Confluence, Melvin served as a Senior Vice President with JP Morgan in Luxembourg as part of the EMEA product management team. In addition, Melvin spent 16 years with State Street in London, Edinburgh and Luxembourg where he held several senior operational roles leading multi-regional teams in post-trade compliance, statutory and regulatory reporting and fund services operations.

Regulation and Technology: How the Funds Industry Needs to Adapt, and Soon | Funds

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Finance Focus | The Formula for Growth

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The Formula for Growth Valuing a company is the easy part – creating that value in the first place so you have something to measure is a much more formidable task. John Collard, turnaround professional and Chairman of Strategic Management Partners, Inc., tells us how creating a value equation can help build worth into a company

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uyers and sellers look at the component make-up of a company differently, and therefore, place different values on these ingredients and on the whole. To enhance real company value, analyze company components as they relate to worth in the mind of potential buyers.

Typically, strategic buyers of closely held companies purchase at six to 10 times earnings and/ or cash flow, while annuity buyers pay two to six times cash flow. The ultimate worth of the company depends upon who the buyer will be. These multiples are usually considerably higher in public companies, but the concepts of building value are the same.

From the start, plan to sell the business and put value creation into perspective. Free cash flow and the continued ability to produce it with reliable probability creates the greatest value.

Value Creation = Net Asset Value + Future Revenue Stream + Going Concern Value + Incentive to Purchase Net Asset Value (NAV) Sometimes called Orderly Liquidation Value, it is the cash net worth of assets less encumbrances if

you were to liquidate these assets at a fair market price under orderly disposition conditions when liquidation is not necessary. This NAV can equal Net Worth on the Balance Sheet, but is often adjusted for value of intangibles.

Tangible assets can be appraised to establish their worth. Conversely, intangible assets are harder to value because they are subject to interpretation.

Intellectual property is also hard to value, but filing more patents will generate value, particularly to those who can afford to protect them from infringement.

The real opportunity lies not in building asset base, but in building maximum return on that deployed capital. If assets sit idle, they are actually losing value, but if volume causes assets to work to produce output production, value is being created.

The closer the relationship of assets to realize $1 for each $1 dollar on the balance sheet the better.

Cash and Securities fit this description. Accounts Receivable will be discounted as they age; focus on keeping the days outstanding low. Utilize percentage completion contracts when possible to keep receivables low and cash flowing.

Utilize just-in-time and consignment agreements to keep raw materials at low levels and minimize obsolescence. Produce in-process work expediently to cover shortterm needs. Build finished goods for firm orders or reasonable short-term expectations of sale, don’t overproduce. Cover the risk with orders for goods. Seasonable businesses should cover production levels over the off-season with contracts for sale of goods just before the season. It may be better to have less than market demand if projections were off, compared to interest and carrying costs to hold artificial Christmas trees until next year.

Customer Lists, contacts, name recognition, trademarks, reputation, Web distribution channels and Internet presence are often not considered in asset valuation because they are not carried on the balance sheet. These assets, however, are often worth considerable value in the market place.

These assets can be turned into cash; therefore, should equal the related value they could generate in return for their sale. These intangible assets can produce future sales, profits, and cash.

Future Revenue Stream Real value in any company starts with its revenue stream; the more you can count on it occurring,

The Formula for Growth | Finance Focus

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Clearly growth in revenue volume is an indicator of valuation in a company that investors are willing to pay for. If customers flock at above industry levels to a company for the services that they provide, this is a good indication of the company’s ability to perform at above expected levels. A motivated sales force with the ability to generate new revenues year after year has more value than a company who has a poor selling reputation. A lack of growth indicates that the company does not have an abi lity to increase its value over time.

When a company has a believable prospectus for the future, the buyer will often plan additional capital investment to fuel growth. The buyer could be motivated to pay a higher valuation for the company and then invest on top of it.

Going Concern Value (GCV) Here is where the fun begins in all transactions.

The going concern value and goodwill, or soft assets, will always draw the most controversy and discussion in terms of their valuation. These elements are most prone to differing interpretation by buyer and seller.

Here to is where you can build the most value into a company. Buyers and investors look more to the company’s ability to create additional value to enhance returns on invested capital as they hold their investment. Impart the elements that Future Buyers look for: Businesses that create value. Consistency is the key. You must demonstrate growth in revenue, profit, and cash flow.

High probability of future cash flows. A history of positive cash flow at increasing levels is very important.

Management team and human capital. Attract and motivate a marketing oriented management team with the ability to produce recurring profits, return on capital, and free cash flow as an annuity for the owners.

The ability to sell, compete, distribute, produce, develop products and thrive. This stand-alone entity track record demonstrates the viability of the market relationship between the products/services offered to meet customer

“

When a company has a believable prospectus for the future, the buyer will often plan additional capital investment to fuel growth. The buyer could be motivated to pay a higher valuation for the company and then invest on top of it

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the more value it has. The value becomes the net present value of the after tax free cash flow stream of revenue under contract, plus repeat customer base. Contract backlog is worth much more than revenue that you must locate every year. The cost to recreate the sale each year is high in terms of time and human energy. Locate customers where multiple year contract environments can be set up.

demand and need, ability of the company to compete, and company reputation in the marketplace. Remember, products do have a life cycle and require improvements to remain in demand.

Leadership’s role must be to build Going Concern Value. The GCV can be best maximized with stable leadership, setting and following sound strategies to consistently bring products and services to market, all the while nurturing resources and implementing processes to manage the company.

Perhaps the greatest value resides here.

Conclusion Build on any one element in the Equation and you increase its individual value. Build up all elements in the Equation and you realize an exponential creation of value to the right buyer. The buyer looking for a standalone entity to produce an annuity stream will place the highest value on the company when all components are strong and it operates with little owner intervention. Buyers looking only for parts of a business to augment their own, will want to invest less and only place value on some components, regardless of how strong they are.

Remember, as in Field of Dreams ... “Build it, they will come.”

About the author...

John is a Certified Turnaround Professional (CTP), and a Certified International Turnaround Manager (CITM), who brings over 35 years senior operating leadership, $85M+ asset and investment recovery, 45+ transactions worth $1.2B, and $80M fund management expertise to run troubled companies, serve on boards, advise boards, litigators, institutional and private equity investors, and raise capital. John has parachuted in as the Interim CEO, CRO or senior executive to turn around troubled entities, and serves as an outside director. John is Chairman of Strategic Management Partners, Inc. in Annapolis, Maryland.

Strategic Management Partners (SMP) is a turnaround management firm specializing in interim management and executive CEO leadership, asset and investment recovery, board and private equity advisory, raising money, and investing in and rebuilding distressed underperforming troubled companies. The firm has been advisor to Presidents Bush (41 & 43), Clinton, Reagan, and Yeltsin, World Bank, EBRD, Company Boards, and Equity Capital Investors on leadership, rebuilding troubled companies, investment recovery, turnaround management and equity investing. SMP is celebrating 25 years of service to its clients.

Finance Focus | Aim for the Stars

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Aim for the Stars Ambition may be the single most defining aspect of a company’s corporate culture, says Steven Van Belleghem, one of Europe’s thought leaders in the fields of social media, conversations and digital marketing

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veryone has ambition. In fact, if you speak to entrepreneurs “ambitious” is one of the adjectives used most frequently to describe themselves. Clearly some people are more ambitious than others, and every business has its own plans, goals and dreams – but my view on what ambition should be was completely turned on its head when I was recently introduced to the world of Elon Musk.

In September 2014 I had the privilege to visit SpaceX, together with a group of Flemish managers and entrepreneurs. After selling PayPal in 2002, Elon Musk founded two new companies: Tesla, the innovative electric car company where he can be found two days a week, and SpaceX, where he spends the other five.

SpaceX has redefined the word ‘ambition’ for me. As we met the team at their headquarters in California, quite matter-of-factly, the people at SpaceX told us about their ambition: to colonise Mars in the not too distant future. They are very clear that they are not just looking for a scientific showcase, or for one man to simply parade around on Mars without any follow-up – their plan is the actual colonisation of Mars, with the first people brave enough to embark on the sixmonth journey will get a one-way ticket.

Some people will undoubtedly say their plan is unrealistic while others will be even more cynical.

At this stage there is no saying whether or not their ambition will ever be realised, but what I can say with absolute certainty that I have never known a company where ambition is so stamped into the very DNA of all the staff working there. It really inspired me and the rest our group.

Coming away from such a remarkable visit caused us all to take a look at ourselves and our businesses. Are we ambitious enough? Do our colleagues and countrymen still have the guts to dream big?

Quite simply, I think there are not enough people with extreme ambitions. This is a pity really, because ambition is what inspires your colleagues, peers and can even push the market forward as a whole. The people who harbour big ambitions are often the people who will combine innovative thinking with drive and determination to create whole new product categories altogether.

When it comes to setting your ambitions, just take a moment to ask yourself: what is it that you truly dream of? What are those far-reaching ambitions that perhaps you’re reluctant to voice out loud?

You might have a clear vision of what it is you want to do and how you want to get there, but without sharing them it is difficult to get other to come along and support you on the journey.

Expressing those dreams, plans or desires can have such a beneficial effect on a company and its culture that it is a real shame to keep them quiet.

If I could share one lesson we learned from our visit to SpaceX it would be to encourage people with extreme ambitions whenever they cross our path. If we want our companies to survive the coming decades of globalisation and digitisation, we must avoid cynicism in all its manifestations and close ranks behind the ambitious managers and entrepreneurs who are innovating and pushing forwards.

Ambition may be the single most defining aspect of the corporate culture of your business, so stretch your ambitions and voice your dreams so everyone on your team can act upon them.

You’ve got my full support!

About the author...

Prof. Steven Van Belleghem is author of The Conversation Company and The Conversation Manager (Kogan Page).

Follow him on twitter @StevenVBe or visit: www. stevenvanbelleghem.com

Aim for the Stars | Finance Focus

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Banking Zone | Direct Lending: A Growing Appetite

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Direct Lending: A Growing Appetite Increased regulation following the financial crisis means direct lending is no longer an option available only to banks – investment managers are now also able to make loans to private companies without an intermediary. Brevet Capital, the New Yorkbased investment management firm, tells us why, for managers, direct lending is set to become the norm rather than the exception

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he financial crisis created regulations for banking institutions that forced them to deleverage, reducing risky assets. As a result, investment managers now have new opportunities that were once available only to banks. One of these opportunities is direct lending: investment managers making loans to private companies without an intermediary. This strategy is expected to become the most allocated private debt class in 2015, surpassing mezzanine and distressed debt, with 72% of institutional investors planning to invest in direct lending.¹ The expected commitments to the strategy for the coming year is more than $100 billion with expected growth in the future.² Direct lending’s rise in popularity comes as no surprise to Brevet Capital which anticipated the surge in interest and is very experienced in the strategy.

Due to the large size of the balance sheets of the banks, deleveraging has provided a direct lending opportunity for investment managers in the primary and secondary markets. Most investment managers did not have experience with direct lending and were slow to embrace the strategy because lending to mid-sized businesses was dominated by banks. Furthermore, the illiquid nature of the loans relative to corporate debt and perceived complexity can be a hard sell to investors.

The characteristics of direct lending are similar to traditional fixed income products and usually are structured as senior secured financings. The loans provide diversity to fixed income portfolios and comfort for conservative investors. Senior secured loans are situated at the top of the capital structure, which reduces expected losses.

Compared to traded corporate debt, which is usually unsecured, direct lending is illiquid. Relative to private equity, most direct lending funds have shorter lockup periods, constant cash flow, increasing liquidity, and reduction of any J-curve effect. In addition, most loans have floating rate coupons which offer interest rate protection, as many anticipate rates to increase in the coming years. With comparable expected returns to high yield corporate debt, direct lending vehicles offer valuable returns and lower risk to a portfolio on a monthly basis.

Brevet anticipates direct lending to become the norm rather than the exception in managers’ product offerings even as rates rise because of the demand from both investors and borrowers.

Demand, however, does not guarantee a conservative fund product. As in similar markets, too much liquidity can cause a distortion of the balance between risk and reward. Direct lending is a complementary asset class for investors’ port-

folios, but the experience of the manager must be carefully considered. Brevet’s product strategy has concentrated on direct lending for over fifteen years. The firm is uniquely positioned to participate in the increased demand from borrowers and investors, to continue to maintain its differentiated market position, and to produce above market returns for market levels of risk. ¹ http://www.valuewalk.com/2014/11/direct-lendingset-spur-growth-private-debt-alternative-asset-class/ ² https://www.bnymellon.com/us/en/our-thinking/foresight/beyond-banks-the-emerging-opportunity-in-european-direct-lending.jsp ³ https://www.bnymellon.com/us/en/our-thinking/foresight/beyond-banks-the-emerging-opportunity-in-european-direct-lending.jsp

Brevet is an institutional investment manager dedicated to principal finance, investing in financial assets and originates private, middle market, senior-secured loans.

For more information, please visit www.brevetcapital.com.

Direct Lending: A Growing Appeteite | Banking Zone

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Wealth Corner | An Expat’s Guide to Growing Wealth

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An Expat’s Guide to Growing Wealth In his new book, The Global Expatriate’s Guide to Investing: From Millionaire Teacher to Millionaire Expat, Andrew Hallam offers some pointers on how those of us who have set up home abroad can still continue to grow our wealth for retirement.

In this extract, Andrew tells us why, for expats, index funds are an attractive investment – even if your financial advisor may tell you otherwise

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f you’ve never read an investment book before, chances are you’ve never heard of index funds. No, your financial advisor won’t likely discuss them. Index funds are flies in caviar dishes for most financial advisors. From their perspective, selling them to clients makes little sense. If they sell index funds, they make less money for themselves. If they sell actively managed mutual funds, advisors make more. It really is that simple. Most

“

expats, however, should be interested in funding their own retirement, not somebody else’s.

Index funds are flies in caviar dishes for most financial advisors.

From their perspective, selling them to clients makes little sense. If they sell index funds, they make less money for themselves

“

An out‐of‐town visitor was being shown the wonders of the New York financial district. When the party arrived at the Battery, one of his guides indicated some handsome ships riding at anchor.

He said, “Look, those are the bankers’ and brokers’ yachts.” “Where are the customers’ yachts?” asked the naïve visitor.

- Fred Schwed, Where Are the Customers’ Yachts?

The term index refers to a collection of something.

Think of a collection of key words at the back of a book, representing the book’s content. An index fund is much the same: a collection of stocks representing the content in a given market.

For example, a total Australian stock market index is a collection of stocks compiled to represent the entire Australian market. If a single index fund consisted of every Australian stock, for example, and nobody traded those index fund shares back and forth (thus avoiding transaction costs), then the profits for investors in the index fund would perfectly match the return of the Australian stock market before fees. Stated another way, investors in a total

An Expat’s Guide to Growing Wealth | Wealth Corner

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Wealth Corner | An Expat’s Guide to Growing Wealth

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Australian stock market index would earn roughly the same return as the average Australian stock.

Global Investors Bleed by the Same Sword Now toss a professional fund manager into the mix – somebody trained to choose the very best stocks for the given fund. Unfortunately, the fund’s performance will likely lag the stock market index. Most active funds do. Regardless of the country you choose, actively managed mutual funds sing the same sad song.

Professionally managed money represents nearly all of the money invested in a given market.

Consequently, the average money manager’s return will equal the return of the market – before fees. Add costs, and we’re trying to run up that downward‐heading escalator.

Consider the UK market. According to a study published by the Oxford University Press, “Mutual Fund Fees around the World,” the average actively managed fund in Great Britain costs 2.28 percent each year, including sales costs. Regardless of the market, the average professionally-managed fund will underperform the market’s index in equal proportion to the fees charged.

Ron Sandler, former chief executive for Lloyds of London, reported a study for The Economist, suggesting that the average actively managed unit trust in Great Britain underperformed the British market index by 2.5 percent each year. It’s no coincidence that the average UK unit trust (mutual fund) cost British investors nearly 2.5 percent per year.

In Canada, Standard & Poor’s reported that 97.5 percent of actively managed Canadian stock market funds underperformed the Canadian stock market index from 2005 to 2010, thanks largely to the funds’ high management expenses. In South Africa, nearly 90 percent of actively managed unit trusts underperformed the South African stock index, as measured by the Satrix 40 exchange‐traded fund (ETF) during the five years ending 2010.

In Australia, according to the Standard & Poor’s Indices versus Active (SPIVA) funds scorecard,

72 percent of actively managed funds underperformed their indexed benchmarks over the three‐year period ending 2012. As for American expatriates, beating a portfolio of index funds with actively managed funds (especially after taxes) is about as likely as growing a third eye.

American Expatriates Run Naked Unlike most global expats, Americans can’t legally shelter their money in a country that doesn’t charge capital gains taxes. And actively managed mutual funds attract high levels of tax. There are two forms of American capital gains taxes. One is called short‐term ; the other, long‐term .

Short‐term capital gains are taxed at the investor’s ordinary income tax rate. Such taxes are triggered when a profitable investment in a non‐taxdeferred account is sold within one year.

I can hear what you’re thinking: “I don’t sell my mutual funds on an annual basis, so I wouldn’t incur such costs when my funds make money.”

Unfortunately, if you’re an American expat invested in actively managed mutual funds, you sell without realizing it. Fund managers do it for you by constantly trading stocks within their respective funds. In a non‐tax‐sheltered account, it’s a heavy tax to pay.

Stanford University economists Joel Dickson and John Shoven examined a sample of 62 actively managed mutual funds with long‐term track records. Before taxes, $1,000 invested in those funds between 1962 and 1992 would have grown to $21,890. After capital gains and dividend taxes, however, that same $1,000 would have grown to just $9,870 in a high‐ income earner’s taxable account. American expats must invest the majority of their money in taxable accounts.

Because index fund holdings don’t get actively traded, they trigger minimal capital gains taxes until investors are ready to sell. And even then, they’re taxed at the far more lenient long‐term capital gains tax rate.

In a 2009 New York Times article, “The Index Funds Win Again,” Mark Hulbert reported that Mark Kritzman, president and chief executive of

Windham Capital Management of Boston, had conducted a 20‐year study on after‐tax performances of index funds and actively managed funds. He found that, before fees and taxes, an actively managed fund would have to beat an index fund by 4.3 percent a year just to match the performance of the index fund. Flying parrots will serve you breakfast before a portfolio of actively managed funds beats a portfolio of index funds (before fees) by 4.3 percent over an investment lifetime.

Researchers Richard A. Ferri and Alex C. Benke reported in their 2013 research paper, “A Case for Index Fund Portfolios,” that the slim number of portfolios that beat index funds before taxes between 2003 and 2012 did so with an annual advantage ranging between only 0.29 percent and 0.54 percent per year. And that’s before taxes.

This is an edited extract taken from The Global Expatriate’s Guide to Investing: From Millionaire Teacher to Millionaire Expat, by Andrew Hallam. Hardback and e-book, published by Wiley, RRP £19.99

About the author: Andrew Hallam built a million-dollar investment portfolio on a high school teacher’s salary. He is the author of the best-selling book, Millionaire Teacher, which has sold more than 40,000 units to date. He is currently writing a regular investing column for Canada’s national paper, The Globe and Mail.

He also writes frequently for Canadian Business Magazine, and for the U.S.-based financial service company, Assetbuilder. Andrew is a regular on TV and radio and his website www. andrewhallam.com has become a beacon for expatriate investors from around the world.

Wealth Corner | Women and Wealth

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Women and Wealth A new Wells Fargo Survey shows that affluent women are showing greater confidence in the stock market and their investing skills as their financial worth grows

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strong majority (93%) of affluent women “enjoy making and accumulating money” and more than half (53%) believe that money helps buy happiness, according to a new Wells Fargo survey of affluent women. Women have a strong sense of pride in earning money with 85% of them saying they feel proud about their earning power. Versta Research conducted the survey of 1,872 women, ages 40-79 with at least $250,000 in household investable assets, to examine their perspectives on wealth, investing, work and retirement.

Affluent women are taking the lead in managing the daily finances with 82% percent managing the household budget and purchase decisions, 79% managing the household cash flow and 75% paying the bills. But only 46% of these women are taking primary responsibility for choosing and managing investment accounts, and this rate falls to 34% among married women.

Affluent women in their 40s buck this trend, with more than half (56%) choosing and managing investment accounts.

As their wealth has increased, 43% of affluent women say they have become more competent

at handling investments, while 53% stayed the same and 4% became less competent. Along similar lines, a minority of these women (36%) say they have become more involved in financial decision making, while a majority (58%) say their involvement in financial decision making has stayed the same and 6% became less involved.

“I don’t think I’ve seen a study where women so overwhelming express joy at earning money and pride in their capacity to do so. And, they credit the stock market for increasing their wealth.

However, we see fewer women managing their investments, although that is changing. The good news is more younger women in the workplace are taking on the role of investing for their households. If you are making money and you think the market is helping your money to grow, then it makes sense to be more directly involved in investment decisions,” says Karen Wimbish, director of Retail Retirement at Wells Fargo.

generated by investments and growth in the stock market. More than three-quarters (78%) feel the stock market is the best way to grow savings over the long term. In fact, nearly two-thirds (64%) of affluent women say it’s more exciting to watch assets grow through good investments in the stock market versus watching it grow by earning and saving them (36%).

Given the stock market’s growth over the last five years, 37% of affluent women say they are “more eager to put money into the market right now,” while 23% are “more reluctant to put money in the stock market now” and 40% admit they “don’t pay much attention to the stock market.” Interestingly, almost three-quarters (73%) disagree that the stock market is too risky for them while 27% agree. But this is tempered with the more than half of women (54%) worried about losing money in the stock market.

The Role of Work

Wealth and the Stock Market While a majority of affluent women (94%) feel they’ve worked hard to create their wealth, 68% acknowledge that most of their wealth has been

Work is an instrumental part of life for affluent women. In fact, three-quarters of affluent working women say having a job or career is important to them even if they don’t need the money. Two-

Women and Wealth | Wealth Corner

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“

The good news is more younger women in the workplace are taking on the role of investing for their households. If you are making money and you think the market is helping your money to grow, then it makes sense to be more directly involved in investment decisions

“

Wealth Corner | Women and Wealth

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thirds feel they are fairly compensated at work today. Yet, 59% of affluent working women don’t think women will achieve pay equality in the workplace in the next 10 years.

Sixty-two percent believe that women can “have it all” when it comes to balancing their career and family. However, only 38% say “having it all” is their goal (of whom 81% feel they are succeeding at it). Two-thirds (65%) of affluent women believe fathers should be more proactive about staying home to help raise children. Even if “having it all” is not the goal of many affluent working women, 58% say they are struggling with worklife balance. If given the opportunity for a big promotion at work that offered a significant step up from their current role and level of responsibilities, two-thirds (66%) of affluent women would accept it (of which 31% would be “excited, eager, and ready for it” and 35% would “accept it, but with reservations”) and 34% would decline it.

Of those who would “accept it, but with reservations,” 53% worry about managing work-life balance, 30% worry about whether they are ready and have the skills to succeed, 16% are not sure if their current career path is what they really want and 23% cite other reasons.

Bequeathing the Financial Knowledge While generally most affluent women would agree their parents did a good job teaching them about managing and saving money when they were growing up, more than two-thirds say no one ever taught them how to invest in the stock market. Nearly all affluent women (98%) say it’s important for women to feel confident about investing, but fewer (71%) actually do. One in five (21%) say one of their biggest financial regrets

is not learning more about money and finance.

While nearly one-third (30%) think that men are more interested in finances and investing, a majority (89%) don’t think men are better at it and half of affluent women think that men are overconfident when it comes to investing.

“It is interesting to see that affluent women credit their wealth to the stock market even though most say that no one taught them how to invest in the market,” says Wimbish. “These are successful women that should have the confidence and interest in making investment decisions for their future.”

Saving for Retirement Affluent women are well-positioned for retirement. While the financial crisis did not affect the financial well-being for a majority of affluent women (57%), it did impact their savings behavior. More than half (54%) say it made them “more aggressive about saving money.” Only 48% of non-retired affluent women have an annual savings goal, and the median annual goal is $20,000.

Non-retirees have saved a median of $600,000 and have a median goal of $1 million. They plan to retire at the average age of 64. While three out of four affluent women agree that they need at least $1 million to “feel wealthy,” 42% feel they would need $2 million or more.

“It’s crucial to have a savings goal so you know if you are on track. These women have the means and are disciplined savers, but having a financial plan with an investment strategy can put them on an even better path,” says Wimbish.

The affluent women surveyed exude confidence about having enough money. Four out of five (82%) non-retirees feel confident they will have

enough money to live the kind of retirement they want. Nearly all (95%) of retired affluent women feel they will have enough money in retirement.

Seventy-two percent of non-retirees value their assets and wealth more for the lifestyle and security it will afford them in retirement versus the lifestyle and security it gives them right now (28%). The top three things that scare affluent women about retirement are: losing their health (55%), losing their mental abilities (52%) and running out of money (29%).

Defining a Successful Retirement In defining a successful retirement, more than half of affluent women feel it is having enough money for their preferred lifestyle (55%), with other top choices including being healthy (23%) or spending time with family and friends (13%).

When non-retirees think about their future in retirement, they look forward to spending more time with family (64%), focusing on physical fitness (63%) and becoming more charitable with their time (58%).

While it is hard to imagine what life will be in retirement, half of non-retirees (52%) anticipate their expectations and goals will change once they retire. Fifty-eight percent of retired affluent women say they did not have a realistic picture of what life in retirement would be like until they were in their 60s and beyond. And 43% of retired women say their retirement years are different from what they imagined.

“Life in retirement is hard to imagine until you are actually living in it. Having the fortitude to have a financial plan with realistic goals for saving and investing will allow you to recalibrate your retirement dreams when the time comes,” says Wimbish.

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Relax | A Turkish Delight

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A Turkish Delight | Relax

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A Turkish Delight The brand new Sheraton Adana is a luxurious base from which to discover one of Turkey’s most hitoric cities

Relax | A Turkish Delight

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According to numerous sources, the name Adana is derived from the Hittite Adaniya of Kizzuwatna, while others assert that it is related to the legendary character Danaus, or to the Danaoi, a mythological Greek tribe who came from Egypt and established themselves in the Greek city Argos. After the collapse of the Mycenean civilisation, in 1200 BC, refugees from the Aegean area travelled to the coast of Cilicia.

Today, Adana remains a place steeped in history and myth. And the new Sheraton Adana Hotel, Ideally located on the bank of the Seyhan River in the city centre, is the perfect place from which to explore it.

The hotel, imagined by Turkish architecture and design specialists Iki Design Mimarlık and Metex Design, is already a landmark in the city with its iconic architecture inspired by local cultural and heritage elements.

Located where the city and the Seyhan River meet, the stunning building captures the movement of the river across its wave-like façade energising the city silhouette as an “urban curtain.”

Located 4.5 kilometres from Adana Şakirpaşa Airport, within walking distance of Merkez Park and in proximity to Optimum Outlet, the city’s most central shopping mall, the 17-storey Sheraton Adana has 240 rooms including 18 suites, all offering an excellent sleep experience with signature Sheraton “Sweet Sleeper”

beds. In addition, guests staying in Sheraton Club rooms have access to the Sheraton Club Lounge on the 10th floor to enjoy breakfast, afternoon tea and evening cocktails with stunning views over the Seyhan River and Sabancı Merkez Camii, Turkey’s largest mosque, with the capacity to offer service to 28,500 people, with its six beautiful minarets.

Guests can enjoy a range of cuisines – including the local specialty, the Adana Kebab, a long, hand-minced meat kebab mounted on a wide iron skewer and grilled on an open mangal filled with burning charcoal – with restaurant options ranging from all day dining restaurant La Spezia offering international and Turkish cuisine

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The hotel, imagined by Turkish architecture and design specialists Iki Design Mimarlık and Metex Design, is already a landmark in the city with its iconic architecture inspired by local cultural and heritage elements

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ocated at the northeastern edge of the Mediterranean, the city of Adana serves as the gateway to Turkey’s fertile Cilicia plain southeast of the Taurus Mountains.

to signature seafood restaurant Villa Mare which serves seafood accompanied with a view over the Seyhan River and the city of Adana. In addition, the Link Café has a menu of homemade sweet delights accompanying afternoon tea while the Brook Bar offers refreshing cocktails by the pool.

Score Fitness, the hotel’s fitness facility features a sauna, steam room and Turkish hammam – or Turkish bath – for optimum relaxation. Guests can also enjoy wellness, beauty, massage and spa programmes in one of the eight treatment rooms in Puri Spa. For business or major events including weddings, the banquet area of Sheraton Adana offers more than 2,000 square metres with a ceiling height of 11 metres featuring a Grand Ball Room and a Junior Ball Room. The Grand Ball Room spans 1,000 square metres and can accommodate up to 700 guests. A boardroom and four conference rooms complement the offer for smaller group meetings.

The hotel lobby also features the Link@Sheraton – a signature social technology hub where guests can enjoy complimentary WIFI and stay connected.

For more info and reservations...

Tel: +90 322 237 171 Email: sheraton.adana@sheraton.com Web: www.sheratonadanahotel.com

A Turkish Delight | Relax

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Relax | A Cure for the Jaded

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A Cure for the Jaded The Mandarin Oriental New York’s new Jade Stone Facial is a treat for tired complexions, leaving you rejuvinated and looking years younger

A Cure for the Jaded | Relax

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he award-winning Spa at Mandarin Oriental, New York has this month launched the Jade Stone Facial. Based on Eastern Medicine, this non-invasive, anti-aging treatment uses a patented jade beauty stone that helps detoxify, firm and lift facial tissue for a more healthy and youthful appearance.

The 80-minute Jade Stone Facial was developed by Dr. Ping Zhang, a licensed acupuncturist and certified herbalist with a PhD in Oriental Medicine who has specialized in anti-aging and facial and body rejuvenation for the past 15 years.

As the first recipient in the United States of a PhD in Oriental Medicine specializing in anti-aging, Dr. Zhang is a pioneer in the field of Traditional Chinese Medicine anti-aging and facial and body rejuvenation. She was the first to develop and teach graduate level courses in the United States regarding Traditional Oriental Medicine facial and body rejuvenation for New York College for the Health Professions.

Dr. Zhang is also the author of the books ‘Anti-Aging Therapy’ and ‘A Comprehensive Handbook for Traditional Chinese Medicine Facial Rejuvenation’ which have been published and sold internationally.

and regenerate. To finish, guests receive a Nefeli® face mask that nourishes and moisturizes while enjoying a soothing hand and foot massage.

Dr. Zhang developed the Jade Stone Facial from the Eastern Medicine practice of Gua Sha, a healing treatment to improve energy flow throughout the body.

By using vigorous strokes on the skin, the treatment activates energy points and opens up energy channels for improved circulation and toxin elimination.

By using vigorous strokes on the skin, the treatment activates energy points and opens up energy channels for improved circulation and toxin elimination

Using products from Dr. Zhang’s natural, herbal-based Nefeli® beauty line, the facial begins with a gentle exfoliation made from fresh water pearls ground into a fine powder. Following a thorough cleansing, the skin is manipulated with a patented jade beauty stone that has been custom cut to fit the intricate contours of the face and neck. The massage-like manipulations are designed to “exercise” the face by stimulating muscle receptors and energy points beneath the surface of the skin, including sinews and tendons. The treatment also helps to promote healthy lymph drainage and the skin’s natural ability to nourish, heal

“The Jade Stone Facial focuses on the ‘Youth Line,’ an innovative application of ancient knowledge contained within Eastern Medicine. This channel, parallel to the stomach meridian, runs up along the jaw line’s lymph system and to the upper and lower gate located where the jaw and cheek bone meet. Opening up and facilitating energy flow along this ‘super highway’ helps to nourish and promote tissue and bone health, optimize the skin’s ability to rejuvenate, and enhance overall health and balance,” explains Dr. Zhang.

“The overall result is a brighter, clearer and healthier looking complexion along with the appearance of a more defined jaw line, reduced look of pigmentation and a reduction of the telltale signs of aging typically found on the neck, forehead and around the eye and mouth areas.”

“We are excited to expand our spa’s one-of-a-kind offerings with the introduction of this new and exclusive treatment,” says Heather Hannig, Spa Director. “The Jade Stone Facial is highly effective and gives guests immediate visible results using non-invasive, proven techniques from Eastern Medicine practices and methodologies.”

The Jade Stone Facial is available only at Mandarin Oriental, New York and is priced at US$350 on weekdays and US$365 on weekends.

Bookings can be made by contacting The Spa at Mandarin Oriental, New York directly at +1 (212) 805 8880 or emailing monyc-spa@mohg.com.