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EDITOR’S NOTE When the virus brought much of the world to a standstill, it was only natural that we thought that life would be radically and permanently altered but realistically, the world post-pandemic is unlikely to be that different from the one we knew before. So what will be COVID-19’s lasting impact? In this issue, we’re exploring some of the industries that may well have changed for good, from fashion (p.08) to cities’ prioritising pedestrians (p.30). Some longer-term trends were accelerated by the pandemic. We became more reliant on digital services than ever in lockdown and it’s something that the industry noted. Islamic financial products and institutions are cropping all over the world (p.45) and many are using blockchain and fintech to revolutionise the way they do business (p.45). Taipei Fubon Bank has launched Taiwan’s first blockchain interbank transfer sandbox experiment (p.38). Meanwhile, with a third of the world’s wealth under their control, women have become a sizable economic force. We spoke to Boston Consulting Group’s Anna Zakrzewski about managing the next decade of women’s wealth (p.40). It would seem there is certainly a lot to be (cautiously) optimistic about and the recent global stock market gains are proof that many investors see a brighter economic future (p.22). If you know an organisation or individual who are working to make that future a reality and you think they deserve to be recognised, nominate them for an award! Enjoy, Sophie Rasbash
CONTENTS
22
40
08
26
40
The Perfect Fit for Sustainability
Putting the investor first
Managing the Next Decade of Women’s Wealth
An interview with Jess Fleischer, cofounder of innovative clothing tech company, Son of a Tailor.
Banner Asset Management is an experienced asset and funds manager, specialised in the Australian real estate market.
16
30
Re-shaping the PostPandemic Future
Travelling clean postpandemic
How can business leaders build back
COVID-19 will have a lasting impact on
better?
the way we travel. How will cities and public transport respond?
22 Investing in Optimism After a turbulent few months, global stock markets are looking more positive.
38 Transforming the Customer Experience Taipei Fubon Bank is using cuttingedge technology to deliver a better banking experience.
An interview with Anna Zakrzewski, a Managing Director & Partner of Boston Consulting Group.
45 Boosting the Islamic Finance Sector with Blockchain Both the Middle East and Southeast Asia are home to a growing number of Islamic fintechs.
48 What’s up with Swiss private banks? An update from Jan Langlo, Director of the Association of Swiss Private Banks.
52
82
Collaboration for innovation
The International Investor Awards
Innovation has been at the heart of Arca Fondi’s business model since its beginning.
We celebrate the organisations innovating and driving the world of Investment!
INTERNATIONAL INVESTOR MAGAZINE
54 Net-zero: Combining public and private investment How can the UK deliver on its net-zero ambitions?
64 Over a decade of sustainability Over a decade into their sustainability journey, Access Bank have aligned their corporate philosophy and sustainability strategy
54
64
71 Local Innovation, Global Recognition Cornèr Bank (Overseas) Ltd’s product innovation and overall client satisfaction set the pace for financial services worldwide.
74 The Rise of RoboAdvisors The growing robo-advisor trend marks a shift in how business is done.
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THE PERFECT FIT FOR SUSTAINABILITY: AN INTERVIEW WITH JESS FLEISCHER, SON OF A TAILOR CO-FOUNDER While we know that the majority of textiles end up in landfills,
Jess Fleischer: Two things. First, I saw the need as a
two Danish fashion entrepreneurs, Andreas Langhorn and Jess
buyer of T-shirts. I was asking myself: why is it that the
Fleischer, are tackling the problem of material waste upstream at the manufacturing stage. They developed an algorithm that creates a T-shirt tailored to your exact specifications. The result is Son of a Tailor, a clothing tech company with its sights now set
apparel item closest to your body did not come in more than five or six sizes? And then secondly, I had studied and worked intensely with manufacturing lines and supply
on producing the world’s first 3D-knitted pullover. We spoke with
chains and seen how things like customisation, technology
co-founder, Jess Fleischer, about how they got started and what
and just-in-time mindsets had changed industries - except
COVID-19 means for the fashion industry.
in fashion - here companies still mass-produced like we did
INSTEAD OF SEEING THE PURSUIT OF SUSTAINABILITY AS A BARRIER, SON OF A TAILOR CHOOSES TO SEE IT AS INSPIRATION FOR INNOVATION. WHAT KICKSTARTED YOUR REINVENTION OF TRADITIONAL PRODUCTION METHODS?
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100 years ago and in an extremely unsustainable way.
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T h e pe r f ect fit fo r sustainab il ity: an inter vi ew wi th Jess Flei sch er , Son of a Tai lor co -fou n d e r
HOW DID YOU GO ABOUT BUILDING AND TESTING YOUR IDEAL SIZE ALGORITHM?
HOW HAS COVID-19 CHANGED THAT? WHAT WILL BE ITS IMPACT ON THE FASHION INDUSTRY?
Besides that, there are substantial
I don’t really know. It was one of
In relation to COVID-19, traditional
those magic start-up epiphanies. We
pre-pandemic levels. Many studies
fashion brands have experienced
were annoyed how much trouble
indicate that this won’t be the case,
sudden changes in demand, many
customers had measuring themselves
so fashion brands will be forced
with a steep decline. This is painful
with a measuring tape. So we started
to provide a better online service,
for any business as there are fixed
acquiring torso measurement
including better representation of
costs that need to be covered. But for
data and after a month, our Lead
their products, better sizing options
fashion companies, it hurts all the
Developer, Jakob, suddenly said,
and a much better understanding and
more because they will have a ton
“I think I am on to something”.
service of the online customer. Take
of money bound in inventory that’s
He had found some initial unique
Hugo Boss and Ralph Lauren for
season-dependent. This is really
relationships in the data. After
example. Both have Trustpilot Scores
bad for both their economy and the
six months of iterating with our
of 1.9/5 - and they don’t even seem to
environment, as a lot of resources
customers, we had an algorithm
care.
go into producing this inventory.
that worked better than manual
Considering that many of these
measurements. Today you just need
companies have already had problems
to fill in your height, weight, age, and
with overproduction, their rule of
shoe size - for 96% of our customers,
thumb is often “we better produce
that provides a great fit.
one item too many, than one item too few”. This leads to large amounts of
THE SUCCESS OF THE KICKSTARTER THAT HELPED LAUNCH SON OF A TAILOR PROVES THAT PEOPLE ARE READY TO INVEST IN SUSTAINABLE CLOTHING. HOW DO YOU SEE THE FASHION SECTOR TRANSFORMING TO MEET CUSTOMER EXPECTATIONS?
The customer has come a long way in the last couple of years in terms of sustainability and they are demanding a change. We can actually see it in our marketing and customer support data! Unfortunately, the sector is not changing very quickly.
resources going to waste, negatively affecting the environment.
offline retail will ever go back to
Consumer fashion has been shifting towards sustainability for quite some time, in the sense that brands are increasingly focusing on essentials that last longer as well as meeting the expectations of people who want to consume less. These are trends that, I am sure, will be further accelerated by COVID-19.
COVID-19 has been a wake-up call for many of the big brands. This inventory insanity needs to stop. In 2018, H&M needed to liquidate $4 billion worth of stock - and that was in a year of economic growth! Supply chains have become too long and the topline growth targets too greedy. Still, many brands order their apparel more than six months before they will sell them. And they would commit to fabric long before that.
Most brands still think that if they have sustainable cotton in some of their collections, they are fine. It’s sad.
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doubts about whether classic
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NOW YOU ARE EXPANDING TO JUMPERS AND LONG-SLEEVES. WHAT’S NEXT? DO YOU HAVE A SPECIFIC LONG-TERM VISION OR ANY EXCITING DEVELOPMENTS IN THE PIPELINE YOU CAN SHARE?
Let’s see. The Son of a Tailor product pipeline is not expanding super fast. We want to make sure that every launch is perfect and provides the perfect fit. But there are indeed many subcategories within t-shirts, jumpers and knitwear to come!
T h e Bah amas:
THE BAHAMAS: THE JURISDICTION OF CHOICE
THE BAHAMAS: THE JURISDICTION OF CHOICE Any country heavily engaged in
The financial services sector has been
The vital features at the heart of
financial services bears a responsibility
impressively resilient and progressive
what distinguishes The Bahamas as
and commitment to the international
in the face events such as Hurricane
an international financial centre of
community with which it is intricately
Dorian, the current COVID-19 pandemic,
significance are: Expertise, Innovation and
involved, the financial institutions
international initiatives, and in midst of
Location.
operating within its borders, the clients it
the continued and sometimes challenging
serves and its citizens which rely on the
evolution of the global industry.
sustainability of the industry for continued
Everything The Bahamas offers is defined by these three words. Everything that
economic development. The Bahamas is
None of these challenges has impeded
comprises The Bahamas’ value proposition
such a country.
the country’s financial services industry
and continued success as a leading
f rom conducting business and delivering
international financial services centre is
The Bahamas has always sought to
bespoke solutions to meet changing and
guided by these distinguishing factors.
provide superior financial products
diverse client needs. Robust business
and services and a world-class client
continuity plans that are in place with
EXPERTISE
experience. It has proven itself to
all financial institutions have allowed
With a track record spanning more
be nimble and responsive to global
business to continue both during
than 80 years in financial services, few
changes – always mindful of the need to
Hurricane Dorian last autumn and now
jurisdictions offer the wealth management
adhere to international standards with
as the world deals with COVID-19. The
experience that The Bahamas has to offer.
respect to compliance, cooperation and
foresight evidenced by vigorous business
This heritage is the basis for the strong
transparency. This is complemented by
continuity measures has clearly worked to
legal framework that has been cultivated
the fact that The Bahamas is not only
cushion the implications of these events
for financial services, an investment
somewhere that offers bespoke private
and reinforces why the country is seen
climate that has been nurtured through
wealth management, it is also a beautiful
by many as an ideal location for financial
years of maturity, and a stable and
place to live and work.
institutions and the services they provide
predictable business environment,
to their international client base. This
anchored by the thousands of Bahamian
adaptability has been especially evident
wealth management professionals
in the Bahamas’ response to international
who work side-by-side with expatriate
initiatives, which has ensured adherence
colleagues in the more than 250 financial
with the highest standards of compliance
institutions that call The Bahamas their
with every internationally agreed standard
home.
The Bahamas is the leading international financial centre in the Latin America and Caribbean region, respected for its expertise in fiduciary services.
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of conduct.
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INNOVATION
LOCATION
Market responsiveness has long been a
The unique geographical location of the
part of The Bahamas’ DNA as a forward-
Bahamas, just 50 miles off the coast of
thinking international financial centre and
Florida and positioned as the gateway
has been the basis of legislation creating
to the wider Americas, is an undeniable
innovative, client-centric products and
advantage for The Bahamas. Its proximity
services in a modern, compliant regulatory
to the U.S., Central and South America
regime. Such innovation can be seen in
places The Bahamas in an enviable
the country’s evolving and often ground-
position to serve both traditional and
breaking trust legislation. It led The
emerging markets and presents an
Bahamas to become the first common law
opportunity to link commercial and
jurisdiction to introduce foundations. It
financial interests.
services sector ensures that the integrity of The Bahamas as an international financial centre is maintained. As a sovereign nation for more than 40 years, successive governments have consistently demonstrated the country’s commitment to international best practices, cooperation in the administration of justice, international tax transparency, anti-money laundering and the countering of financial terrorism initiatives.
sparked the Bahamas Executive Entity and has thrust The Bahamas to the foref ront
In recent years, as more and more
of the investment funds industry with
individuals have chosen to “follow their
the introduction of SMART Funds and the
money” with respect to where they live
Expertise, innovation and location
Investment Condominium (ICON) fund.
and work, The Bahamas, with its tropical
are the pillars of financial services in
environment, has become the preferred
The Bahamas. Combined, they form
choice for many who yearn for an
a compelling reason to consider The
excellent quality of life whilst being able
Bahamas as the place to do business and
to manage their financial affairs. Most
will continue to guide the jurisdiction’s
importantly, individuals, family offices
pathway to be a provider of unparalleled
and institutions will find a warm welcome
financial products and client experience.
With this innovative spirit, it should come as no surprise that the country’s once-dormant insurance business has re-emerged as a sought-after destination for captives.
THE JURISDICTION OF CHOICE
when they come to The Bahamas as the country is committed to using its natural resources and cultivated assets to create
The innovation experienced in the sector is fuelled by a progressive investment climate that seeks to place financial services in the context of development.
an environment that is attractive in terms of both business and leisure. Few competitive jurisdictions can offer the business and lifestyle combination The Bahamas provides naturally. Moreover, the strong regulatory regime that characterises the jurisdiction’s financial
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THE FUTURE OF ACTIVELY MANAGED CERTIFICATES
220m Actively Managed Certificates currently oustanding
WHO WE ARE
WHAT WE DO
An Institutional team
• Offer a flexible and integrated
created in 2014, grew
trading setup in a one-stop
from 2 to 6 highly
shop
qualified people, with diversified
• Structure products and
bespoke solutions for all asset
backgrounds, each in their own field, from trading to sales, from legal to operations.
classes
•
Distribution and access to established network of institutional clients
1.3bn Raised from institutional clients globally
70 Structured products sponsored in 3 years
AMC size Outstanding (CHF mln)
All types of possible investment strategies, converted into a liquid marketable instrument
145
220
175
110 60 8
25
H2 H1 H2 H1 H2 2020 H1 2017 2017 2018 2018 2019 2019 YTD
Number of Products H1 2017
6
H2 2017
Constant growth due to a sustainable business model and a flexible onestop shop approach
14
H1 2018 H2 2018 H1 2019
28 35 51 61
H2 2019
70
2020 YTD
Customers’ Geographic Segmentation
Innovative and highly technological business leveraging on a solid and fully diversified network of institutional clients
Central America
Switzerland
European Union
Trade Finance
Renewable Energy
Agriculture
Real Estate
Bespoke financing solutions tailored to the needs of our clients and suitable for a diverse range of projects in the real economy
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RE-SHAPING THE FUTURE AFTER COVID-19 BY ANDIA RISPAH RE-SHAPING THE FUTURE AFTER COVID-19 by Andia Rispah
TRANSFORM GLOBAL HEALTH AND DEVELOPMENT
However, this kind of work is complicated
immense proportion, it’s a catalyst for an imminent restructuring of the global
The COVID-19 pandemic has disrupted
supply chain logistics, safety, and financial
economic order.
the global health and development
stress. Every country has had to struggle
community. The world’s attention has
with a lack of equipment and supplies to
It offers individuals and organisations a
shifted to organisations fighting infectious
test and protect against COVID-19.
chance to reset and re-shape the world
diseases, health workers, delivery of social
towards sustainability. Here’s how business
services, and protecting livelihoods.
COVID-19 is more than a health crisis of
by challenges in terms of accessibility,
leaders can hasten this vital transition.
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Re - shaping th e futur e af ter COVI D -19
REVIVING AUTOMATED DOMESTIC MANUFACTURING
The resilient companies had
and development institutions, priorities, and occupations? Every country will
Western countries relied on off-shore
have to re-examine their supply chains
flexibility, cut costs, and built a
supplies for necessities, but now they
for critical health and livelihood related
can see the downside. Governments will
growth foundation to capture market
products. There will likely be a surge in
certainly revise domestic manufacturing
producing pharmaceuticals, equipment,
as part of their plan to build up strategic
and medical supplies locally. Countries
resilience after the current crisis.
So how will the pandemic re-shape health
without the existing capacity will want
created financial and operational
opportunities after the crisis. They had invested in software technologies, which gave them greater
to develop the tools needed as soon as
Automation will be a crucial component
possible.
predictability and efficiency - giving them
in reviving domestic manufacturing.
a competitive edge. Recent advances
Advanced automation and robotics
in AI and IoT technologies have enabled
will drastically increase productivity in
therapeutics, vaccines, and non-
tremendous efficiencies in predictability,
manufacturing processes. Automated
capacity, availability, and flexibility
medical methods of prevention.
manufacturing will replace low-skilled
of supply chain and manufacturing
labour with new jobs and opportunities for
operations. Digitisation is a fundamental
This could mean preventing deaths,
digitally savvy workers.
element for building sturdy chains. It
More countries will invest in research,
economic losses, and livelihoods for
makes the identification and recruitment
millions of poor people around the world.
DATA INFRASTRUCTURE WILL BE A STRATEGIC ASSET
A GOLDEN OPPORTUNITY IN THE GLOBAL SUPPLY CHAIN
The pandemic has made accessibility
McKinsey found that companies that
to reliable, real-time data an absolute
embraced these technologies earlier were
The COVID-19 pandemic has hit
necessity, especially when it comes to
already seeing a 7% growth in revenue
investment and global trade at an
coordinating the right medical response.
over their peers.
unprecedented speed and scale.
Data will become a more strategic
Multinational companies faced an initial
resource across multiple facets of business
COVID-19 has caused an economic and
supply shock and later a demand shock as
and community.
social downturn, but it will create a much
more countries ordered people to stay at
of new suppliers far less time-consuming.
deeper divide between companies who
home. Individual consumers, businesses,
This requires a significant investment
have just started to digitise and those
and governments struggled to procure the
in data connectivity, acceleration in
further along in their digital journey.
necessary materials and products.
developing the 5G networks and push for
The healthcare sector’s scramble for
indicators. It means the manufacturing
A SHIFT TO VIRTUAL COLLABORATION
protective equipment laid bare the
sector will significantly accelerate the
Manufacturers still require people to
inherent risks of inventory and single-
deployment of industrial IoT. Such
work physically on-site; operators to run
sourcing models driven exclusively by cost
advancements include sensing, data
machines, and maintenance staff to
control. As Chinese factories were closing
visualisation, remote collaboration
repair and maintain them. Contactors and
down, manufacturers struggled due to a
tools, and AI-based insights across their
external vendors need to access the site
lack of flexibility in their supply base.
operations.
to support operations. However, social
It forced every country to conf ront the
Data is a strategic asset to companies
f ragility of the modern supply chain. To
and a key factor in their competitive
reflect on its dependence on the rest of
advantage.
valuable insights into leading economic
distancing measures could render nearly
the world to maintain its way of living.
Now countries have the opportunity
DIGITISATION WILL BECOME A COMPETITIVE ADVANTAGE
50% of on-site staff jobless. Even as manufacturers face this dilemma, we will see the rapid adoption of remote diagnostic, collaboration, and management tools. It will lead to the
After the Great Recession, McKinsey
emergence of a “virtual shift.” We’ll have
diverse supply chains.
analysed the performance of publicly
a team of experts working remotely,
traded companies and found that only 10%
guiding, and supporting the reduced
Some will want to decentralise their
were more resilient to the crisis than their
“physical shift” of on-site personnel.
manufacturing capacity and consider
peers.
to design stronger, smarter, and more
local production. Policymakers also have an opportunity to consider whether certain products need local or regional manufacturing.
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Re - shaping th e futur e af ter COVI D -19
OPPORTUNITY FOR A GREENER AND MORE SUSTAINABLE ECONOMY
As the pandemic re-shapes the global
The threat of climate change has been
financial system, and as companies
gradually growing, with devastating
evaluate their diminishing returns,
effects for people and their livelihoods
investing in climate-friendly strategies
around the world. The COVID-19 crisis
could boost economic growth and create
presents an opportunity to learn the
new jobs.
lessons and reset ourselves on a more sustainable path and a new trajectory of
Most importantly, companies must place
sustainable employment.
sustainability at the heart of their business and investment strategies to avoid the
It has emphasised the importance of
pitfalls of a business-as-usual high-carbon
investing in areas such as technology and
path. It’s a business plan that’s positive for
innovation.
the environment and good for people and profitability.
It is time to align sustainable solutions with funding in a way that can transform the marketplace. Sustainable investment will boost economic growth and employment opportunities.
THE CLIMATE CRISIS OPENS UP ENORMOUS OPPORTUNITIES. This pandemic has served to highlight that the world’s most vulnerable citizens suffer the most during times of global crises. To repair lives after the pandemic requires billions of dollars to rebuild industries, supply chains, and create conditions for a resilient financial future. However, the global response to the COVID-19 outbreak also mirrors the approach that IFC uses to manage the climate crisis: that businesses, investors, and financial institutions must
Businesses should redirect finances into assets and investments that deliver concrete and measurable outcomes to rebuild economies to be more sustainable and resilient. For innovation and sustainable finance to flourish, the private sector must make the most of these opportunities.
PREPARE FOR THE NEW NORMAL From history, we learn that a global crisis creates a fundamental shift that affects consumer behaviour, government policies, and behavioural sectors for years to come. Countries must understand which part of their social, business, and political environment will change after the COVID-19 pandemic and invest accordingly to prepare for the new normal.
lead the way to a new, more sustainable economic model.
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INVESTING IN OPTIMISM At the start of the COVID-19 crisis, stocks around the world were plummeting as people feared how the disease might impact the global economy. A few months on and millions of people are out of a job and businesses in the hardest-hit industries such as tourism and hospitality are struggling to survive. But in recent weeks, the stock market has been surprisingly positive. Could it be that investors are much more optimistic about the future than scientists?
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Investing in optimism
Wall Street stocks rose sharply in early July, as bullish sentiment in China boosted investors’ optimism in markets around the world for a recovery f rom the coronavirus pandemic. Although the market is not currently at the record highs it was in midFebruary, it isn’t too far off. The S&P 500 is hovering around where it was last autumn. “Investors seem to have decided that the past three months were just a bad dream that we’re waking up f rom,” Scott Clemons, chief investment strategist for private banking at Brown Brothers Harriman, told the New York Times.
OPTIMISM IN CHINA
WHY INVEST NOW?
China’s yuan has strengthened to levels
Even for investors who remain sceptical of
last hit in March and Chinese financial
the optimistic recovery predictions, there
markets have rallied as confidence builds
are plenty of interesting opportunities.
that the country’s economy is well on
Favourable policies in countries around
its way to recovering from the COVID-19
the world - from lowering interest rates
pandemic.
and the discount rate, thereby increasing the weight attached to post-pandemic
As Bryce Elder, Harry Dempsey, and Daniel
earnings flows, to advantageous stimulus
Shane point out in the Financial Times,
packages - are encouraging huge
the f ront page of the state-run China
numbers of people to start investing.
Securities Journal promised investors a
It helps that technology has made the
healthy bull market and the mainland
markets more accessible than ever before.
Chinese stocks jumped accordingly. The CSI 300 index of Shanghai and Shenzhen-
WHAT’S NEXT?
listed shares rose to 5.7% on Monday the
The threat of a second wave looms large
6th of June, the biggest daily rise since
Following the Independence Day
even before much of the world has
February last year. It closed at a five-year
weekend, the S&P 500 rose 1.6% in New
recovered from the first. Nevertheless,
high, just 13% off its previous peak in June
York, despite an increase in new COVID-19
it would seem that the markets have
2015.
rebounded from the lows of early March
BEYOND WALL STREET
cases across the country and roughly 30 million newly unemployed Americans. The market’s behaviour can be explained in large part by the actions of the Federal Reserve, which has taken unprecedented measures to pump money into the economy and stabilise the markets. Since March, the Federal Reserve has created roughly $2.9 trillion, most of which has gone into financial markets. The federal government has said it would borrow a record-breaking $3 trillion f rom April to June, to support businesses during the pandemic. Such decisive steps have reassured investors. Meanwhile, many American first-time investors have taken the plunge during quarantine - perhaps hoping to make the most of low share prices or simply trying to alleviate their boredom. At Charles Schwab, clients opened a record 609 000 new brokerage accounts, with almost half of them created in March alone. Online trading platforms and investment apps have also helped new investors buy into the markets. Yet political tensions between the United States and China — the world’s two largest economies — remain high, potentially disrupting the American businesses’ recovery plans.
but some investors are now content
These increases are a clear indication
to wait for more substantial proof of a
that the millions of individual
recovery in corporate earnings. If this
investors are feeling optimistic.
optimism proves to be unwarranted, a fear
The driving force in China’s equity
not just retail investors, would face huge
markets, retail investors have been
losses. But for now, many investors are
banking on the technology sector in
anticipating a V-shaped recovery and are
particular.
buying accordingly.
Elsewhere in Asia, Hong Kong’s Hang Seng index added 3.8% to enter a technical bull market, defined as a 20% rise. Japan’s Topix added 1.6% while South Korea’s Kospi rose 1.7%. In Europe, the regional benchmark Stoxx 600 closed 1.6% higher. London’s FTSE 100 added 2.1%, with financial and mining stocks being particularly bolstered by the wave of Chinese optimism.
FIRST-TIME INVESTORS AROUND THE WORLD In what seems to be a global trend, India has also seen a large number of new retail investors entering the market directly through stock exchanges. Many of these first-time investors are young, looking to invest in their future while protecting their savings. Their arrival on the scene has increased retail participation in the stock market to new heights. Non-institutional investors have increased their share to over a decade’s high of nearly 70%.
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response could take over and everyone,
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BANNER ASSET MANAGEMENT – PUTTING THE INVESTOR FIRST BANNER ASSET MANAGEMENT – PUTTING THE INVESTOR FIRST THE MANAGER Banner Asset Management is an experienced asset and funds manager with a specialisation in debt and equity products in the Australian real estate market. Since 2010, Banner has invested in a range of real estate and development opportunities, primarily in the larger population centres on the east coast of
Banner was started in 2010 by Andrew
This organic and gradual growth
Turner, the CEO, and a small group of
guided and continues to guide the
initial investors and chiefly invested the funds of its principals. It grew organically, to gradually wider circles of associates and their companies, family members and f riends. The range of investors has expanded to institutions, corporates, and other funds. All the original investors remain.
Australia.
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investment principles of ‘putting the investor first’, through responsiveness, preserving capital and earning a return.
Banner initially matched individual
It complies with strict legislative
The Banner funds have funded property
investors’ funds with individual projects
requirements, including capital reserves
projects valued at over AUD8 billion. A
though the Banner Wholesale Fixed
(net tangible assets), process and
majority of Banner’s investors are non-
Interest Income Fund. That master fund
audit requirements. The head office
residents, and it is well-versed in dealing
remains the flagship fund of the group. It
is in Melbourne, with a Sydney office,
with the needs of off-shore investors.
has added pooled funds and opportunity
principals located and active in Japan and
funds to its product offering.
Singapore. Its investors are mostly located in Singapore, Hong Kong, Japan, Europe
Banner is a registered provider of
and Australia.
financial products in the highly regulated Australian financial services and funds management sector.
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Banne r Asse t Managemen t – Putti n g th e i nvestor f i r st
THE ASSET CLASS
PRESERVING CAPITAL
INVESTMENT CRITERIA
The Australian property market has
‘Preserving capital’ refers to the role of the
Defined investment criteria is a further
seen a near uninterrupted growth story
manager in ensuring that the value of the
part of the Banner risk strategy. Banner’s
of 40 years and in this environment
underlying asset is at least maintained,
investments are located in the major
property debt, as an alternate asset, has
or improved, during the term of the
population states of New South Wales
also grown. Where a stable and strongly
investment. Preservation of capital value
and Victoria - the depth of the market
performing property market is combined
has three stages:
is important in assessing the risk on a
with a mismatch in the funding demand/
• 1. asset selection
property and its potential for sale. Loan-To-
supply equation, opportunities present themselves to both individual and institutional investors.
Value (LTV) ratios are maintained at a level • 2. rigorous processes • 3. active on-going asset management
that provides some shelter for the fund from property price risk – LTVs averaging under 65% across the portfolio.
Banner Asset Management saw the
Asset selection relies upon an experienced
market dislocation in 2009 and has offered
and capable investment committee.
Banner does not invest in the large-scale
wholesale and professional investors
It has members with property, funds
high-density city apartment blocks. It
access to the property debt. The mismatch
management, financial, investment,
favours smaller, bespoke developments in
of risk and reward has continued over
development and legal backgrounds. and
the inner suburbs with proven demand.
the past decade due to events such
representatives The Banner investment
as increased bank regulation, capital
committee considers the financial
Banner also focuses on staged, land
requirements, and government actions.
parameters of the proposal, the sponsors’
subdivisions in prime locations and
experience and commitment (including
growth corridors. All such projects have
The underlying asset (predominantly
cash commitment), the project, location,
full recourse pre-sales with cash deposits
residential property) has low volatility,
quality of consultants, asset value and
paid and held by an independent
has shown consistent growth over
proof of proven demand for the end
stakeholder.
many decades, and has low to negative
product. It is a complex process and, as
correlation with the equities market,
asset selection is crucial, Banner adopts
Banner also invests for terms of 12-24
making it a sound investment strategy
a multi-stage investment committee
months on fixed rates with multiple exit
and alternate asset.
process for each proposal, to test and
strategies. This creates a pool of assets
re-test all assumptions. No proposal is
that are frequently maturing, decreases
a ‘take it or leave it’ proposition – the
the influence of longer-term cycles, and
Australia’s development funding market
investment committee will have a number
locks in a rate of return.
has been dominated by the big four
of requirements which must be satisfied
trading banks. The banks have been
before approval will be considered.
INVESTMENT RETURNS
of the property market, it specialises
reducing exposures to the market since the global financial crisis and that trend
Process is crucial. Each potential asset
has continued since due to Basel III,
must be subject to all facets of due
increased APRA (regulatory) oversight of commercial lending and more recently the Royal Commission into the banks. The reduced exposure of the major banks to property development has created an opportunity for private lenders to lend at good rates on secure development by very experienced developers -a very good risk and return trade-off. Banner has nine active wholesale investor funds under management. Returns have been impressive with an average annual return to investors of circa 10% annum for its pooled funds and 10-15% per annum for its single asset funds, over the past decade. Equity, like returns, has been over 20% per annum for its opportunity funds. It also offers some direct property exposures.
Whilst Banner invests across all sectors
diligence and only through a clear and rigid process, will this be ensured.
in the residential market with some industrial and mixed-use properties and non-discretionary retails, such long-term leased supermarkets.
Banner constantly reviews this process using its lending, risk, and legal expertise. On-going management must be active, regular and focused. For all its investments, Banner will obtain detailed monthly reports on the use of funds and progress of the construction. Banner investment portfolio managers will also personally attend all project meetings with builders, architects and developers to personally gauge and assess any issues with construction. All of the above is a daily activity for the manager, backed up by internal risk review to ensure processes are adhered to.
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Quarterly Property Report MARCH 2020
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Trave l li n g clean post-pan demi c
TRAVELLING CLEAN POST-PANDEMIC by Sam Morgan
COVID-19 is set to have a stimulating effect
brightly-coloured ride-share e-scooters
In mid-June, the US firm said that all of
on various forms of mobility, thanks in
and e-bikes largely disappeared from
its vehicles would be electric-powered
part to a change in people’s travel habits,
Europe’s streets during lockdowns due
by 2030 to prevent tens of thousands of
caused by the pandemic. The 2020s could
mostly to curfews and hygiene concerns,
tonnes of pollution from entering the
be a golden age for bikes, scooters, electric
the sector’s big players are planning a
atmosphere.
cars and trains.
comeback.
Lockdowns and the need for social-
Uber recently offloaded its flame-red
distancing have convinced city planners to
e-bikes and e-scooters to Lime, after
allocate more space to active mobility like
leading an investment round worth $170
cycling and walking.
million. The two firms have agreed to
As quarantines lift and more people go back out into the streets, space is at a premium. In capitals like Berlin, Brussels, Paris and Rome, kilometres of new bike paths have been created and existing routes widened. Roads that were previously the domain of cars are now blocked off and pedestrianised.
SUBSIDISING ALTERNATIVE TRANSPORT Governments want people to use mass public transport only when absolutely necessary and to leave their cars at home when possible - which was already an objective of sorts before the virus struck - and have offered purchase subsidies to thousands of people. Italians can qualify for a €500 voucher that can be spent on bikes, scooters, monowheels or hoverboards, while French citizens can get their bike repair bills paid for by the government.
“Now more than ever, we need to work together to create cleaner, healthier, and more equitable communities,” said Lyft co-founder
integrate better their apps and collaborate
John Zimmer. “Success breeds success,
more effectively.
and if we do this right, it creates a
“Lime is emerging from the crisis as the clear market leader, with expanded bike options and financing that will position us to build a sustainable long-lasting business,” said Lime Europe’s Ghassan Haddad. The deal suffered an immediate major hiccup though, as thousands of e-bikes were sent to the scrapheap, as Uber cited “maintenance, liability and safety concerns”. After a mass public backlash, the companies decided to reverse their decision.
CONSUMERS’ CLIMATE CONSCIENCE
path for others.” But his company did not reveal how much it is willing to spend to make that happen and convincing the huge number of people who use their own cars to work shifts will be a tall order.
CHEAPER AND CLEANER New research shows that electric vehicles can actually be cheaper to run than regular combustion engine cars though, depending on which country drivers are in and where they are able to recharge their batteries. According to a study by mobility group Transport & Environment, French drivers
Improved air quality caused by the slump
could save up to €3000 per year. In
in industrial and transport activity during
general, savings could reach 14% when
lockdown has also increased consumer
compared to a normal diesel motor.
awareness about health and climate issues. Uber’s ride-hailing rival Lyft has jumped on that bandwagon by pledging to go green in a big way.
Although the now ubiquitous sight of
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With more and more cities announcing or contemplating diesel and petrol bans, electric cars are rapidly becoming a financially sound decision for professional and personal use alike. A new raft of government multi-billion-euro bailouts prompted by the virus outbreak is also set to increase the choice of models available and a fall in list price, as companies like Renault and Volkswagen will have to hit ambitious production targets. According to Bloomberg, 10% of new sales globally will be electric cars by 2024 and 28% in 2030, with much of that demand coming from China and Europe. That boost will largely be prompted by a rapid decrease in battery costs, which form the bulk of purchase prices. Relatively new technologies aside, an old cast member of the transport scene is due for more than a cameo appearance in the coming years: train travel is due a resurgence too.
THE YEAR OF RAIL According to UBS Research, a shift in consumer habits will be a boon to Europe’s high-speed rail market, which is on track to grow 10% every year this decade. The EU even wants to declare 2021 ‘The European Year of Rail’. Passengers are generally willing to go on longer and perhaps more expensive journeys, if there are plus points like a lower carbon footprint and an improved travel experience, opening the door for trains to eat away at cheap short-haul flights. Rail operators are starting to cotton on to that change in behaviour by bringing nighttrains out of storage, long moth-balled due chiefly to lack of profitability and interest from rapid transit junkies. The coronavirus may have dealt a heavy body blow to the aviation and cruise industries but for slower nodes, better suited to a postpandemic world, the outbreak may prove to be the catalyst for a major shift in how we all get around.
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Trave l li n g clean post-pan demi c
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GOLDEN VISAS AROUND THE WORLD by Kenny Fowler
Trying to gain a traditional visa can often be quite difficult and time-consuming. Golden visas can save you a lot of time and effort, for a price.
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Golden Visas Around th e World
WHAT IS A GOLDEN VISA?
UNITED KINGDOM
EUROPEAN UNION
A golden visa is issued to individuals
The Tier 1 Investment Visa allows the
Golden visas are handled by EU member
who invest a certain amount of money
recipient to obtain temporary residency
states, but residency in an EU member
in the issuing country. The visa can be a
in the UK, for the investor and his or her
country allows one to travel across much
temporary or a permanent residency visa.
immediate family. The UK provides no
of the union without any additional
The most common means of gaining a
direct path to permanent citizenship. The
documentation. Citizenship enables one
golden visa is through the purchase of real
temporary residency lasts three years and
to work or travel within the EU, and even
estate.
four months. Applicants can apply to get
to non-EU countries which have visa-free
this residency extended an additional two
agreements with EU member countries.
The origins of golden visas go back to
years. After five years, investors can apply
Here is a sampling of some of the best
tax havens in the Pacific and Caribbean,
for indefinite leave. This can be shortened
golden visas in the EU:
which initiated investment programmes
with more investment. After six years, a
that allowed for tax advantages and
recipient can apply for British citizenship.
PORTUGAL
visa-free travel. In the early 21st century,
The Tier 1 Investment Visa requires a
Portugal has one of the best golden visa
the number of immigrant investor
minimum investment of £2 000 000.
programmes. It is the original “Golden
programmes has accelerated, with about a quarter of all countries offering these visas.
UNITED STATES
Visa” programme and is actually where Until March 2019, the UK offered the Tier
the name came from! It was launched in
1 UK Entrepreneur Visa. But at that time,
2012 to help bolster the Portuguese real
it was replaced with the Innovator Visa
estate market.
The United States grants permanent
and the Startup Visa. Unlike the previous
U.S. residency through the EB-5 visa to
entrepreneur visa, an applicant must now
A real estate investment of €350 000 is
investors of certain government-approved
provide an original business plan that
required to obtain a residency permit
projects in the U.S. This visa gives a
meets new or existing market needs. The
that allows for a spouse and dependent
recipient the right to live, work, study
applicant must also show they have the
children. You can apply for European
or retire in the U.S. Once the project is
necessary skills, knowledge and market
citizenship after five years. The visa can
complete, the recipient can receive their
experience to be able to run the business.
be renewed every two years as long as the
entire investment back. The visa allows not
applicant spends two weeks in Portugal
only for the residency of the investor but
For a startup visa, no funds are required
every two years. This visa also allows
also their spouse and any children under
to qualify. Recipients can live in the UK
travel to all 26 countries in the Schengen
the age of 21. The required investment for
with their families for two years. The sole
Borders Agreement.
obtaining an EB-5 is $900 000.
focus of the recipient during that time is developing their business. After these
SPAIN
The E2 visa is an alternative to the EB-5
two years are up, a startup visa holder can
Spain began its golden visa programme in
and can be obtained through certain
apply for an innovator visa.
2013. In order to gain residency for a family,
countries which have an E2 treaty with the
a real estate investment of
U.S. The required investment is $500 000,
The innovator visa requires a minimum
€500 000 is required. The visa can be
making it significantly cheaper than an
investment of £50 000. Recipients and
renewed every two years. An applicant
EB-5. An E2 visa can also be faster than an
their families can reside in the UK for
can apply for permanent residency after
EB-5. However, the E2 is a non-immigrant
three years. During these three years, the
five years and citizenship after ten years.
visa so in contrast with the EB-5, obtaining
recipients will be required to focus solely
There is no requirement to live in Spain
an E2 cannot lead to getting a Green Card.
on developing their business. Once the
to retain or renew the residency permit
three years are up, the applicant can apply
but applying for permanent residency or
for an extension to stay another three
citizenship requires you to have actually
years or to take up permanent residence
resided in Spain for five and ten years,
in the UK.
respectively. Like the Portuguese golden visa, with the Spanish golden visa, you can visit all 26 countries in the Schengen Borders Agreement.
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IRELAND
CONCLUSION
The Irish Immigrant Investor programme
Golden visa programmes are a way for
was launched in 2012 and then revamped
countries to increase investment by
in 2013. The update allows applicants
granting residency to foreign investors.
f rom outside the EU to gain residency in
Whether they are used simply as a
Ireland with a â‚Ź1 million investment in
way to invest and keep an eye on your
an Approved Investment Fund. Prospects
investment, a strategy for making travel
must be found of good character, have
easier or even as a means of gaining better
a clean criminal record, and they must
educational or professional options for
demonstrate a minimum net worth of
your kids, golden visas can provide a path
â‚Ź2 000 000.
to a better life.
OTHER COUNTRIES St. Kitts and Nevis have one of the oldest golden visa programmes in the world. It was created in 1984 to grant citizenship through donation or real estate investment to those applicants who qualify. The government requires an investment of $150 000 to the Sustainable Growth Fund or an investment of $400 000 in real estate. The real estate can be reduced to $200 000 for those investors with connections to the islands. These figures do not include any fees.
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Innovating th e customer experience
INNOVATING THE CUSTOMER EXPERIENCE Taipei Fubon Bank has earned the trust
Taipei Fubon Bank is rolling out a
of its customers with its customer-
Bank 3.0 digital banking environment
INNOVATION AND TECHNOLOGY DRIVING NEW TRENDS
that will use big data analysis to
To deliver a better, more convenient
develop new revenue streams and set
banking experience, Taipei Fubon Bank
oriented approach, pursuit of innovation and sophisticated service, and has championed sustainability on a foundation of financial innovation in the corporate,
up advanced information systems to
social and economic realms, earning
meet the growing demand for online
the bank considerable recognition from
and mobile banking services.
around the world. On the institutional side, the corporate loan business grew rapidly and the syndicated loan business ranked third among privately run banks. On the retail side, a branch renovation project that localised service and product and service innovation generated solid growth in deposit, investment, insurance and credit
At the same time, the bank continues to integrate its branches and virtual channels to meet customers’ evolving financial services needs. Branches around Taiwan are being renovated to be more efficient, while internet and mobile banking services are being optimised to drive innovation in the customer experience and boost the overall quality of service.
has pioneered new “financial living� models that integrate cloud computing, big data, and artificial intelligence into daily life settings. The J card, aimed at frequent travelers to Japan and South Korea, accelerates review processes and offers a unique feature - users can increase their credit card limit with a simple tap of their smartphones, creating a great user experience. By the end of 2019, 670 000 J cards had been issued, a new high for any single JCB credit card in Taiwan! It also moved Taipei
assets. Outstanding mortgages ranked
Fubon Bank into the top five credit card
second among privately run banks and
issuing banks with 3.29 million cards in
insurance sales ranked third among
circulation.
banking channels.
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The smart investment platform, Nano
Future Tycoon Outreach Programme
Investments, launched by the bank
to narrow the urban-rural divide and
in collaboration with Nutmeg, the UK
help disadvantaged elementary school
biggest robo-advisor, enables people
students in remote areas learn basic
to invest as little as US$ 100 in global
concepts on how to properly manage
diversified portfolios through f ractional
money.
shares technology, helping them minimise risks and earn stable returns. By the end of 2019, assets under management in the platform had reached NT$1.4 billion, and over 97% of investors had earned positive returns.
These long-term efforts have successfully planted the roots of financial literacy education in Taiwan.
Mobile payments are also ripe for innovation. The bank initiated Taiwan’s first blockchain interbank transfer sandbox experiment. The new technology simplified the transaction process and lowered costs, and may be extended in the future to cover cross-border remittances and supply chain financing. In another first, a new AI loan approval app was introduced that allows associates to check a company’s credit on the spot and calculate a precise credit line and loan rate, providing a more convenient SME loan experience.
EXPANDING OVERSEAS Taipei Fubon Bank has assertively expanded overseas to support the global development of its customers, establishing a platform that spans Taiwan, Hong Kong, China, Vietnam, Singapore, and Indonesia and offers efficient channels, innovative products and professional service. The eventual goal is to create a one-stop shop service platform that will help corporate clients go international and expand their size and network, and have them make the bank their top strategic banking partner.
GIVING BACK As Taipei Fubon Bank develops a robust financial services platform across the region, it has not forgotten the spirit of giving back through tangible actions. The Bank has held an annual Budding Tycoon Money Management Camp since 1998 to foster healthy attitudes toward money among young Taiwanese and help them understand future financial trends. Another initiative was launched in 2012 in cooperation with the Fubon Cultural & Education Foundation called the
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MANAGING THE NEXT DECADE OF WOMEN’S WEALTH MANAGING THE NEXT DECADE OF WOMEN’S WEALTH IN CONVERSATION WITH ANNA ZAKRZEWSKI, A MANAGING DIRECTOR & PARTNER OF BOSTON CONSULTING GROUP (BCG). Zakrzewski along with Kedra Newsom, Michael Kahlich, Maximilian Klein, Andrea Real Mattar, and Stephan Knobel, wrote the BCG report Managing the Next Decade of Women’s Wealth, published earlier this year. Over the past few decades, women have become a sizeable economic force, but it’s these next few years that will be a defining decade for women in wealth, according to the new BCG report. Anna Zakrzewski, one of the lead authors, summarises, women are “adding $5 trillion to the wealth pool globally every year— outpacing the growth of the wealth market overall but in spite of the increasing power of their purse strings, women remain largely underserved by the wealth management community.”
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Managing the next decade of women’ s wealth
THE CONSEQUENCES OF COVID-19 While the report, Managing the Next Decade of Women’s Wealth, was published the week before the world went into lockdown, the long-term trends remain largely unaffected and women’s wealth is still expected to outpace global wealth growth over the next years. The trend is intensified by the growing number of women taking the lead in financial decisions. Some regions have more catching up to do than others. In Asia, 79% of women take the lead on financial decisions compared to 86% of men. In North America, 70% of women take the lead in financial decisions versus 92% of men; in Europe however the rate drops to only 40% of women compared to 85% men and, in the Middle East, this compares to only 20% of women and 93% of men.
As Zakrzewski explains, “over the last five months, we have seen that COVID-19 is accelerating sustainable investing. 64% of investors believe the pandemic is a tipping point for ESG.” ESG (Environmental, Social, and Governance) refers to the three central factors in measuring the sustainability and societal impact of an investment. For women, value investing is of higher importance than for men. These past months, ESG funds have begun to further diversify beyond the red button issue of climate change. “The full breadth of the definition is filtering into mainstream investment discussions,” says Zakrzewski. If wealth managers can avoid the pitfalls of common misconceptions and “personalise their approach to meet the specific needs and priorities of individual clients, regardless of gender”, Zakrzewski argues that the enormous business opportunity of female investors can be unlocked.
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SELL
s
WHAT WOMEN WANT Naturally, how women generate their wealth varies f rom region to region. Women in North America currently hold the largest relative share of wealth, with 37% of the total regional wealth pool. Asia, with the notable exception of Japan, is the fastest-growing hub of wealth creation for women, set to add $1 trillion per year to their total wealth over the next four years – setting Asian women up to hold more wealth assets than any other region in the world except North America by 2023. In the Middle East, women’s wealth segments in assets under management (AuM) are also poised to experience substantial growth in the years ahead with an expected CAGR of 8.8%. Female rates of primary and secondary education participation are now similar to those of
BUY
Despite these advancements, wealth managers are still using historical social norms as a reference point, regarding men as the primary financial decision-makers, and this attitude is not going unnoticed. 64% of female respondents to BCG’s survey felt that their bank or wealth management provider needed to improve its value proposition, with working women and those in the highest wealth bands expressing the most dissatisfaction. The women’s segment is too often dismissed, considered primarily in terms of marketing. Outdated assumptions about what female investors want, combined with an inadequate understanding of women’s actual behaviours and preferences, have contributed to subpar service. As Zakrzewski explains, women do think differently, just not in the way tradition dictates.
men, and women outnumber men at the university level in 15 of the 22 Arab countries.
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Managing the next decade of women’ s wealth
“There is a preconception that women
A GENERATIONAL SHIFT
ACCELERATING PROGRESS
are far more risk-averse when it
In a nutshell, “the future pool of clients,
Ten years ago, Zakrzewski was writing a
comes to investing but this simply
both men and women, will not just want
report with her colleagues on levelling
isn’t the case. It takes women longer
more, they’ll want better,” says Zakrzewski.
the playing field. At the time, it was
This means they’re looking for investments
thought that 2020 would see much less
that are engaged and purposeful. BCG’s
unconscious bias and women would
research shows that gender-based
no longer be treated as a homogenous
differences in investor behaviour diminish
group by wealth managers. Although the
with every new generation. Millennial
advancement has been slower than she
same risk profile as men. Once they
men and women share very similar views,
hoped, Zakrzewski remains optimistic
invest, it’s an equal playing field.”
including a shared preference for purpose-
that the speed of change is only going to
driven investing.
accelerate and is hopeful that we will see
If you dig a little deeper into women’s
Meanwhile, more women than ever are
typical investment behaviour, they tend
taking the lead in financial decisions - 70%
to spread their risk a bit more but remain
of millennial women, compared with just
more committed than men when it
40% of female baby boomers. Zakrzewski
comes to long-term investments, having
explains that “women’s empowerment
the patience to make investments
is fuelled by three main drivers - wage
with a longer-term perspective. If the
equality, more entrepreneurial activities
performance of two investments is more
by women, and more women in leadership
or less on par, women tend to choose
positions. Women that accumulate wealth
ESG-focused investments more than men;
themselves tend to manage it more
and also those that most align with their
actively. Our data shows that younger
own values. In addition, they are looking to
women delegate fewer financial decisions
invest to fund specific life stages or goals
than older women.”
much more than men.
to make an investment decision because they tend to gather data and information before committing. But when they do take the plunge, it’s the
the industry taking big strides in the next
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five years.
BOOSTING THE ISLAMIC FINANCE SECTOR WITH BLOCKCHAIN Sharia law prohibits banks from charging
f rom these late-payment charges, they are
for the technology to automate the
interest on loans to their borrowers.
not incentivised to collect these fees and
execution of Shariah contracts and
Islamic banks offer financing to individuals
distribute them to charitable organisations
minimise the risk of procedural errors. It
and businesses through real economic
in a timely manner. Meanwhile, the
could also improve the traceability and
transactions such as joint ventures,
debtors see these late fees as an act
transparency of certain funds in complex
deferred sale, and leasing agreements.
of charity, meaning that their sense of
humanitarian settings.
To offer credit financing, Islamic banks
urgency to pay their debt obligations on
need a mechanism to discipline debtors to
time might diminish.
Although the technology is still a
pay on time. A common practice involves
controversial topic in Islamic finance, both
charging debtors with late fees, which
Blockchain originally impacted Islamic
the Middle East and Southeast Asia are
are then donated to charity. However,
finance through optimisations like
home to a growing number of Islamic
because Islamic banks are not allowed to
blockchain-based Halal certification
fintechs.
incur any profit and in turn any benefit
schemes but there’s a growing demand
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A DIGITAL PIONEER
IMPLEMENTING BLOCKCHAIN IN CREDIT FINANCING
The partnership aims to leverage the
Islamic financial institution, was the first
The Islamic Research and Training
deploying blockchain systems to further
Islamic bank to successfully execute trade
Institute (IRTI) of the Islamic Development
the IsDB’s mission of enabling greater
finance distribution transactions using
Bank (IsDB) Group has partnered with
financial inclusion, alleviating poverty,
blockchain technology.
the blockchain technology firm Blocko
and accelerating the development of the
The cross-border transactions, which
to build a blockchain-based innovative
Islamic financial industry.
were completed with multiple banks,
credit enhancement system. It would
were made possible through ADIB’s
minimise the risks associated with credit
Phil Zamani, CEO of E24P, said, “the
partnership with TradeAssets, a trade
financing to businesses and consumers
implementation of blockchain systems
finance e-marketplace powered by
by using new economic incentive models
in complex processes like credit and
blockchain to help digitise the traditional
and advanced implementations of hybrid
insurance has long been sought after by
processes of origination and distribution
blockchain technology.
financial institutions around the world.
Abu Dhabi Islamic Bank (ADIB), a leading
Forward-thinking Gulf Cooperation
of trade assets. For the past year, ADIB’s collaboration with TradeAssets has
“The Islamic finance market is
enabled it to automate trade finance
growing rapidly, with projections
transactions and conclude transactions successfully with banking counterparts in emerging markets.
E24P blockchain teams’ deep expertise in
of a rise from around $2 trillion to an impressive $3.78 trillion by 2022. Yet certain technical and economic challenges have prevented the industry from truly flourishing,” said Dr Sami Al-Suwailem, Acting Director-General of IRTI.
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Council (GCC) countries, such as the UAE and Saudi Arabia, have been especially progressive, implementing blockchain projects to accelerate their digital transformation agendas and smart city innovation strategies.”
The new system being developed by IRTI
The system allows creditors to reduce the
“Fintech could stimulate growth by
and implemented jointly by IRTI and
credit default rate to improve their overall
making transactions quicker, more secure,
E24P uses a novel incentive mechanism
business performance and accelerate
and easier to implement. And we believe
that encourages early repayment and
efforts in areas of financial inclusion.
the social role of Islamic finance could
contributes fees to an insurance pool
unlock new growth opportunities as core
that covers involuntary credit defaults.
ACCELERATING GROWTH
markets implement the UN Sustainable
Such a system would not be feasible
According to a recent S&P report, the
Development Goals, and issuers and
through conventional arrangements but
global Islamic finance industry will
investors become more sensitive to
is facilitated through the use of high-
continue to expand slowly in 2019-
environmental, social and governance
performance blockchain technology. Once
2020 but fintech and blockchain could
(ESG) issues,� said S&P Global Ratings head
completed, the system will be of great
significantly accelerate the growth. The
of Islamic Finance, Mohamed Damak.
value to Islamic banks and other financial
COVID-19 pandemic has also shown the
institutions.
importance of leveraging technology and creating a nimbler industry. With
With this system, Islamic banks, and
the right coordination between different
indeed other financial institutions, can
Islamic finance stakeholders, the report
ensure that credit assessments are performed in a provably transparent and responsible manner while keeping
argues that the industry could create new avenues of sustainable growth that serve the markets.
the data and methodology used appropriately secure and confidential.
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WHAT’S UP WITH SWISS PRIVATE BANKS?
by Jan Langlo, director of the Association of Swiss Private Banks As Albert Einstein said, “in the midst of every crisis, lies great opportunity”. This is mostly due to being forced to do things differently. In the wake of the recent pandemic, many rules were introduced or changed. How did this impact Swiss private banks? Let’s look at this from the point of view of employees, clients and regulatory authorities. Nearly overnight, about 80% of bank employees were forced to work remotely. Business continuity plans were put to the test and proved the resilience of the banking system.
An evolution which would have taken years happened in a few weeks. Banks which were cautiously introducing home office now have, at most, 50% of their staff in their premises. Split teams are still the norm and this helps reduce the number of people who use public transportation. The good news is that most employees who work from home enjoy it and are as productive as before, some even more. Nevertheless, contacts in the office are still necessary for an optimal sharing of information and spreading of the company’s values. Banks were not closed during the lockdown, as their activities are always essential. Payments still need to be made, even if some mandatory ones like taxes or insurance premiums were postponed. Credits were crucial to maintain liquidity and in a single week, commercial banks, government and the Swiss National Bank set up a plan to grant loans that are interest-free up to 500 000 Swiss francs and guaranteed by the Swiss State to small and medium enterprises, to compensate up to 10% of their annual revenues. This scheme allowed a quick distribution of more than 14 billion Swiss francs. The employees of commercial banks did a fantastic job and did not count their hours to handle the more than 130 000 credit requests that came in. On the wealth management side, there was also a lot of activity during March, as clients wanted to reallocate their assets as the markets crashed. Although physical contact had to be avoided, human interaction remained at the heart of investment activity. Clients understood that their banker could no longer travel to meet them and adapted quite well to videoconferences. Many accounts were opened online, new applications were launched and contactless payments soared (and the limit under which no PIN entry is required was raised from 40 to 80 Swiss francs).
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Regulatory authorities also showed a lot of flexibility in light of the constraints that banks faced. For instance, they agreed to extend the deadline to obtain certified copies of passports or other documents when opening an account f rom abroad. They relaxed the capital and liquidity requirements linked to the credits mentioned above. They added some exemptions relating to the leverage ratio
• Banks accelerate the development of workflows without media discontinuity • Demand for financial products and services via digital channels rise quickly • Diversity and complexity of payment transactions increase • Trend towards smart working solutions intensifies
and risk diversification. All this shows the value and efficiency of the Swiss financial centre, where banks and authorities discuss and find practical solutions. Going forward, the pandemic showed
a stable power-grid and sustainable power stations. Huge investments in infrastructure need to be made, to prepare for a clean and healthy society. And let’s not forget security, as nothing will eliminate the fact that some also see an opportunity for ill-gotten gains whenever a new system is put in place. Amidst all these changes, private banks are there to help their clients identify the winners of tomorrow.
• Investments in high-quality and secure digital infrastructures grow • Authorities speed up end-to-end e-capability
that the economy will need to rely
Switzerland will also soon be voting on
more and more on digital solutions.
the introduction of an electronic identity,
Must we all really commute to work
supervised by the state, but implemented
every day? Do we need to go to stores
by private companies. As cloud solutions
to buy something? Most production
become more and more common,
and leisure activities require a physical
larger quantities of data will need to be
presence, but distribution only requires
exchanged, also on mobile devices. Swiss
drivers (or drones), and services can be
telecommunication operators are already
rendered online. In the field of finance,
developing their 5G network. All this will
SwissBanking sees six digital trends:
require a lot of energy, which implies
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Collaboration for innovation
COLLABORATION FOR INNOVATION THE COMPANY
THE FUNDS
Arca Fondi SGR is an Italian active asset
Innovation has been at the heart of
management company, founded in 1983
Arca Fondi’s business model since its
by the association of 12 cooperative banks.
beginning. After the introduction of the
Today, Arca Fondi manages around €32
law that established mutual funds in
billion divided between mutual funds,
Italy (Law 77/1983), Arca was among the
The innovation, however, is not limited to
pension funds, and institutional accounts.
first asset managers to be created in the
financial products, but also in creating
Thanks to a network of distributors made
country. The first two funds, Arca RR and
new services for its partners. Arca Fondi
up of more than 100 banks and other
Arca BB, were launched a year later in
has generated a digital ecosystem that
financial institutions scattered throughout
1984. Even today, these two funds are real
can support and guide its distributors and
the country, its client base is made up of
blockbusters, with an impeccable track
customers.
over 800 000 investors. With almost forty
record and a more than sevenfold increase
years of experience, Arca has established
in the net asset value. In 1998, the pension
The website, Arcaonline.it, has recently
itself as one of the country’s main asset
fund, Arca Previdenza, landed. In addition
undergone an important redesign to
managers.
to being one of the first open pension
improve the user experience through any
funds in Italy, today it is also the largest in
device. On the website, the partners can
the country.
find all the relevant information required
THE PEOPLE
step that led to the creation of a range of ESG funds and an innovative proprietary ESG Rating system.
THE SERVICES
to support operations. In addition, there
The strength of Arca Fondi is its people. Teams who continuously improve
In 2015, Sidera Funds Sicav was created, a
is a section dedicated to all the Arca
themselves to achieve corporate goals.
Luxembourg-based platform dedicated
Fondi products that can be viewed by
The corporate culture nurtures talent in
to private and affluent customers. Two
anyone and provides information on the
an environment that encourages self-
years later, the PIR funds (Piani Individuali
performance and composition of the
improvement and striving for excellence.
di Rispamio), a segment dedicated to
funds and much more.
Thanks to numerous innovative processes
investments in the Italian “real economy”,
implemented in recent years, the
made their debut. In a short time, Arca
The site is also an archive of all Arca’s
customer has been placed at the centre of
also conquered leading positions in this
commercial and multimedia production.
every single activity. The professionalism
market.
You can find videos that comment on the performance of the markets or
and creativity of all employees make Arca Fondi the ideal partner for the investor
Finally, in 2019 Arca signed the United
sectors, but also exclusive and always
looking for reliability and safety.
Nations Principles for Responsible
updated reports. These materials are
Investment (UNPRI), an important first
shared through dedicated newsletters
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and using Arca’s social media channels which cover a series of initiatives as well as being a tool for advertising campaigns, often in collaboration with partner banks. Moreover, Arca has recently launched a financial education project entitled 3 minutes with Arca, a blog that aims to help readers easily understand the risks and opportunities of the markets. ArcaClick is the area dedicated to all customers who own Arca funds. With the latest facial recognition technologies, the registration process has recently been improved. The procedure can be carried out independently with a personal device or at the bank. ArcaClick allows the customer to have their portfolio, documents and all their practices under control. Those who join the pension fund can also quickly pay their contributions online if they wish. ArcaClick is also accessible f rom the Arca Fondi App, a f ree and constantly updated application available on both iOS and Android. The app is an important tool especially for the growing centrality of smartphones in all of our lives. Customers can always have their portfolio under control or read the latest
THE LAB
InnovAction Lab is a division that makes colleagues’ collaboration the central part
In 2019, Arca created a new internal division called InnovAction Lab to further grow in the Italian market while facing
of its work. Everyone works side by side to bring different experiences to reach the most efficient conclusion. One of the main
up to the challenges of the future.
focuses is sustainability. For example, the
InnovAction Lab focuses on improving processes using the latest technologies, data analysis and by making the customer the centre of attention. Over the past year, several projects have been put in place
rethinking of many processes has led to better integration and, above all, has been able to reduce paper consumption. Today, many of these solutions have
to improve relations with partners and
become realities that can be appreciated
customers.
by both Arca Fondi’s customers and distribution partners. But this is only
An internal data warehouse has been created which represents the real brain of all commercial and analysis operations. To make the most of its potential, it’s been integrated with a latest-generation
the beginning. Thanks to talent and technology, Arca’s ecosystem is constantly evolving to guarantee the most efficient and safe experience.
CRM, adapted to the needs of an asset manager. To support commercial partners, new innovative solutions have been created such as a Smart Advisor to help distributors sell the most suitable products for customers. Recently a ChatBot, called Sara, has been developed to help anyone in the search for information on the Arca world through the website, WhatsApp or Telegram.
news, discover the fund manager’s videos and much more.
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Co mb ining pub l ic an d pr ivate i nvestmen t i n n et-zer o
COMBINING PUBLIC AND PRIVATE INVESTMENT IN NET-ZERO by Alex Kazaglis, Director of Vivid Economics
ONE YEAR AGO, THE UK BECAME THE FIRST MAJOR ECONOMY TO PASS NET-ZERO EMISSIONS INTO LAW.
To be a basis for growth in the longer
Since our work has been published, this
term however, jobs must be in areas
is a priority that has been reiterated by
where there are displaced workers. In
several reports, including the Energy and
the UK context, this means investment
Climate Intelligence Unit in the UK and
In recent days, however, the Government’s
opportunities that can boost the
the IEA globally.
statutory advisors, the Committee on
economic recovery of underperforming
Climate Change, have reported that
regions, such as by creating decent green
2. Investment in nature and biodiversity
government actions fall well short of what
jobs in those areas.
is a vital part of the UK recovery, including investing in rural employment and
is required to meet net-zero. A green stimulus package could help fill that gap
Many jobs are better suited to existing
adapting to adverse climate effects and
and deliver an internationally credible net-
market mechanisms and private-sector
impacts. This includes projects that lead
zero plan (vital in the context of hosting
delivery, rather than a stimulus effort.
to carbon sequestration and biodiversity, as well as flood management which
the COP26 conference in 2021) as well as generating economic activity (at a time
There are low-carbon sectors where
contributes to rural sectors. Our research
of recession and economic dislocation). A
private investment can deliver the levels
shows that investments in parks will
green stimulus could also help rebalance
of deployment required. For example, low-
reduce health costs, reduce air pollution,
pre-existing regional inequities, through
cost onshore wind can proceed through
and improve many other aspects of urban
investment in areas of the UK where there
the market. Industrial energy efficiency
life.
is underemployment.
can also proceed through the market but only if regulations are enhanced.
Vivid Economics’ recent work, A UK Investment Strategy: Building back a resilient and sustainable economy, set out priority areas for investment that also
Taking these factors into account, our report identified £30 billion annual
deliver against the net-zero agenda.
net-zero investments (combining
Key areas for investment are those that
generate economic activity before
support employment and economic
2030.
activity. While there are already over 460 000 UK jobs in low-carbon businesses
public and private) that would help
The five priority areas that emerged are:
and their supply chains, a further 200 000 jobs that could be supported
1. Investment in green buildings can
in the next 10 years. But not all jobs are
support the most jobs in the short run and
the same – the timeline and location of
provides societal and resilience benefits.
jobs are important. Over the short term,
The green building sector has a total
it is important that jobs boost overall
annual investment need of £12 billion and
economic activity. Fortunately for many
this will support at least 85 000 direct
large inf rastructure projects, jobs and
jobs in green retrofitting by 2030. For
economic activity are generated during
energy efficiency building retrofits, there
the construction phase.
is a skill overlap with current construction jobs, but low-carbon heating requires maintenance and installation engineers to upskill f rom gas boilers to heat pumps.
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3. Investing in clean energy
5. The UK automotive sector already
infrastructure, especially in offshore
supports over 100 000 jobs and low-
wind and electricity grids, can support
carbon investment in electric vehicles
green jobs. 28 000 jobs, including in
(EVs) and EV infrastructure could help
manufacturing could be supported in
support further growth. Currently, the
TO PAY FOR THESE INVESTMENTS, MAJOR, WELL-DESIGNED NEW POLICY INITIATIVES ARE NEEDED TO RAISE THE REQUIRED PUBLIC FUNDS.
raising the UK’s offshore wind capacity
sector is characterised by job substitution,
While the recently announced UK ETS is
f rom 8.5 GW to 40 GW. The sector is
where workers with skills to produce
a good starting point, it is unlikely to raise
already market-driven, but current
petrol/diesel vehicles can transfer these
sufficient revenue in the short term unless
contracts for difference (CfDs) can be
to EV assembly, supporting around
a high price floor is implemented. Other
widened. Government can play a key
11 000 jobs by 2030. New jobs can be
mechanisms, such as carbon obligations,
role in redistributing the co-benefits,
supported in complementary sectors:
could be used to shift costs onto the
by strategically choosing production
batteries and charging infrastructure,
private sector. Ultimately a balance of
locations in underdeveloped regions.
with an investment need of over £1
these tools will be required to raise funds
To support these larger power sectors,
billion annually, can support around
in the short term and yield the more than
investment in transmission and
5500 jobs, and these sub-sectors are
£90 billion of net annual benefits to the
distribution is also required, which has
especially interesting for creating a
UK.
its own capacity to support jobs and
competitive advantage internationally.
economic activity. Investing in over-
Additionally, creating a viable battery and
capacity of electricity grids is a smart
charging infrastructure sector will have
strategy for future grid development.
a positive spill over on EV producers to boost production, without having to use
4. Carbon Capture and Storage has the
subsidies or other incentives.
potential of supporting around 30 000 jobs. A net-zero pathway includes approximately 3 million metric tonnes of industrial CO2 captured per annum and will also require some form of carbon removal technology such as bioenergy with CCS (BECCS) or Direct Air Capture (DAC). Investment for industrial carbon capture alone will require around £400 million annually for both the capture units and the supporting transmission and storage inf rastructure.
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MANAGING MASTERPIECES: THE FUTURE OF ART COLLECTION MANAGEMENT From the city of Porrentruy, in the Swiss Jura, Herculis Partners
In an ever-changing global economy, art is now more accessible
(wealth management) and Herculis Guardians SA (storing
to a new public, through new channels. Art and finance are now
precious goods and renting individual safes) have a front-row seat
considered two fingers of the same hand – the union of culture
to the increasingly fierce competition in the wealth management
and wealth. So Herculis Group has gathered the right personnel,
sector and alternative investments. In particular, Herculis
developed its employees’ expertise, and built a high-security area
managers have seen the global art market fluctuate in the wake
to store, exchange or simply to share these valuable items.
of the financial crisis.
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Managing Masterpieces: Th e F uture of Art Collection Management
As in finance, transparency, regulation, and technological trends play an important role in the art market’s future. Therefore, a collaborative approach between all stakeholders (art professionals, collectors - young and old - and asset managers) is essential to respond to the pressing issues and challenges in the years to come.
COLLECTING ART IS AN ART BY ITSELF Today’s art market is full of forgeries and the forecast is grim. But people are making a more proactive effort to mitigate the risk. It is a challenge for gallerists, experts and other industry players. At Herculis Guardians, we have seen a significant change in the choices made by collectors. New collectors - young and from emerging regions - tend to use the services of others to help them with purchases. While most collectors tend to buy what they like, others acquire it as an asset class. And many are doing both. Nikolay Karpenko head of Herculis Guardians SA underlines, “our clients expect nothing less than perfection and know that they can count on us for unparalleled security and confidentiality to protect their most precious assets”. The general public believes investing in art is usually a high-risk, illiquid, opaque, unregulated investment, with high transaction costs, at the mercy of erratic public tastes and short-term trends. This misconception may be enough to dissuade many people f rom taking an interest in the art markets and related investments. The 2008 crisis stimulated the emergence of new compliance policies and new collective investment vehicles dedicated to art or other collectables around the world as well.
RESPONSIBLE ART There are a number of trends pointing to better transparency, from authorities’ increasingly strict requirements to much more accessible data. Actually, on the f ringes of the Geneva Art Fair, the Responsible Art Market (RAM) collective has been bringing together lawyers, experts, gallery owners and auction houses for the past four years. The RAM collective initiated a series of
This technology has been given a boost by the current health crisis and the cascading cancellations of fairs and other major art events. Like museums, actors have turned to online exhibitions and exchanges. This is a fundamental trend to emerge from the pandemic that will undoubtedly continue, just like teleworking or videoconferencing.
ART AS A NEW ASSET CLASS
recommendations aimed at drawing the
New financial vehicles make art an asset
attention of collectors and gallery owners
class by itself. Of course, the relationship
to the legal threats they face. For instance,
between art and finance has existed
any art piece sold for more than €10 000
for centuries, but today we are seeing
must submit to the new anti-money
a development of art services among
laundering directive that came into force
financial institutions and small asset
in early January across Europe. Gone are
management boutiques such as Herculis.
the days when a client could fall for a painting at the FIAC in Paris, buy it on the
From an investment point of view, art
spot and walk away with it!
is taking advantage of its attraction
To some extent, technology, whether that’s the internet or the more recent example of blockchain, is now helping to alleviate these issues of transparency, traceability and accessibility.
Technological evolution strongly supports art as an asset class, while also making it more accessible.
for diversification, especially in a period of low - or even negative interest rates in developed countries. Advice and risk analyses offered by the asset management companies are increasingly accessible to investors who wish to build up a collection of works of art. Although art items do not usually generate cash flow and are also virtually “unhedged”, we have seen the emergence
We are witnessing a democratisation of
of financial products linked to the art
this field. While some living artists can sell
domain.
their works at auction for more than $10 million, 68% of the lots sold in 2018 went for less than $5000. Blockchain has opened and decentralised the market. All network participants can see the artwork and all relevant information. Should they want to, they can go on to make direct contact with the seller, reducing the need for intermediaries. Thanks to blockchain and the internet, artists do not need galleries to present their work and attract buyers.
With the emergence of new business
THE ADDED VALUE OF COLLECTION MANAGEMENT. One might wonder whether art might not be ready for a transformation similar to what happened in real estate 40 years ago. Real estate today is a widely accepted investment class, accessible to many, and is generally included in portfolios for diversification purposes. Investing in young and little-known artists is very similar to venture capital financing. We can distinguish three categories of artrelated services: art advisory services, art
models such as online auctions, for
secured lending, art investment services.
artists creating and selling in the
Herculis Group supports its customers in
digital space, the possibilities seem endless.
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all these categories.
At Herculis Guardians, we offer a safe storage solution in a high-security environment with specially equipped vaults while making the collector’s life easier with a secure dedicated showroom. Here, the collector might simply enjoy the work to the fullest or arrange for appraisal and commercial operations without making the paintings travel, saving both money and reducing risk - most accidental damage to artwork occurs during transport.
“It looks more like a museum of contemporary art than a warehouse,” says Claude Gaudin, Director. We can store precious good in our EDO-FREEPORT warehouse, allowing the postponement of VAT, while waiting for the goods to be delivered to end customers anywhere in the world. Customers benefit f rom lower insurance premiums, tax-free storage space and easy access to the nearest airport.
POST-PANDEMIC Naturally, COVID-19 is weighing on the market, particularly in Asia, a region that has certainly been key to the growth in demand for art in recent years and it will probably urge the fair organisers to review their models. Our concluding suggestion to a potential art buyer: at this stage of the cycle, selectivity is paramount. But most importantly: follow your instincts and buy works of art that speak to you. Beyond purely speculative considerations, they could stay in your possession longer than you think!
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Managing Masterpieces: Th e F uture of Art Collection Management
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BREITLING’S DIGITAL PASSPORT In a global first, the Swiss luxury watch brand, Breitling, is accelerating its blockchain-based innovation with the release of a limited-edition watch, featuring a blockchain-based digital passport powered by Arianee to prove authenticity and ownership.
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TOP TIME For now, the digital passport is exclusively available to Top Time owners and will enhance Breitling’s already best-in-class e-warranty programme by linking the guarantee directly to the watch and empowering clients to engage with the brand as they wish. The 1965 classic gets a modern twist as the new limited edition series is Breitling’s first watch offered with a blockchain-based digital passport attached that confirms the authenticity and ownership of the watch throughout its lifetime. The protocol developed by Arianee gives a digital, inalterable, and augmented identity to each product; like any blockchain-based network, it is entirely secured and private.
Breitling is the first watchmaker worldwide to propose a warranty programme enabled by blockchain. Each Top Time owner will benefit f rom a private and unique digital passport securely linked to his or her limitededition watch. By scanning the validated e-warranty card, they can access and download an encrypted private wallet where the passport is securely stored.
With such blockchain-based digital
Antonio Carriero, Breitling’s Global CDTO
passport, collectors no longer need to
said, “with Arianee and its blockchain
keep paper records and can engage with the brand as much as they wish,
The passport includes all the details about
under full anonymity.
the watch, including its serial number, and
technology, we have the unique opportunity to strengthen the link with our customers. This is only the beginning, but we are already working on innovative ideas on how to further leverage Arianee
is stamped with an event representing the date of the warranty activation on
COLLABORATION FOR INNOVATION
the purchase date. Only accessible by the
Breitling’s ambitions don’t end with
owner through the wallet, this passport
the digital passport. As a sign of their
includes a transfer feature that enables
commitment to developing blockchain’s
the owner to prove the authenticity of the
potential for the industry, Breitling has
watch, and his or her legal ownership.
become an active participant within the Arianee consortium.
This innovative service will offer an additional layer of value for Breitling Top Time owners by eliminating the need for a physical authenticity certificate. Additionally, it will enable the transfer of the warranty.
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to bring additional services to our customers”.
Arianee were pleased to welcome Breitling into the consortium. Co-founder, Emmanuelle Collet, added that “this project is a great illustration of how our open-source protocol can add a layer of value to existing innovative programmes. Our open-source protocol is specifically built to make it easy to create and manage digital identities to ultimately add more value to brands and clients”.
A DIGITAL FUTURE As Carriero explains, “at Breitling, customer engagement is at the heart of everything we do. Technology empowers customers and digital is how they live. It is on us to change and to keep the pace with the speed society is moving”. Keeping up with customers’ expectations of what products can and should be able to deliver means Breitling will be one of many investing more in digital technologies to revolutionise the luxury good market.
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Towards a Sustainable Future: Over a D ecade of Sustainability
TOWARDS A SUSTAINABLE FUTURE: OVER A DECADE OF SUSTAINABILITY TOWARDS A SUSTAINABLE FUTURE: OVER A DECADE OF SUSTAINABILITY A sustainable business involves long-term, strategic planning for business growth with positive environmental, economic and societal continuity. It is about ensuring the prolonged existence of an organisation in a way that benefits the business, its stakeholders, and the environment. Organisations need to understand the impact of sustainable development on their longterm survival and the importance of its leaders’ commitment. The triple bottom line of People, Planet, and Profit captures the essence of sustainability by measuring the impact of an organisation’s activities on profitability, shareholder values as well as its social, human and environmental capital. People and organisations today are constantly working towards balancing their triple bottom line. The sustainability sector has grown rapidly, with global annual revenues at about $1 billion and projected revenue of over $12 trillion by 2030. The success or failure of sustainability goals must be measured in terms of the wellbeing of people and the health of our planet, and not only in terms of profit and loss. At Access Bank, one of Af rica’s leading financial institutions, we are committed to contributing significantly, towards the achievement of the Sustainable Development Goals (SDGs). We are aware that our operations have a direct impact on the economy, people, and the environment. Therefore, we always ensure that our business operations and practices are environmentally responsible and socially relevant. Part of our contributions to the SDGs is also facilitating and financing sustainable economic growth as well as increasing our efficiencies to mitigate adverse environmental impact.
Over a decade into our sustainability journey, we have
PEOPLE We strengthen the people and businesses in our local communities by supporting various projects, organisations, and events that are focused on making a positive difference. Our priority areas of support include health, education, sports, arts, social welfare, and environment. We have invested over N9.34 billion in various corporate social responsibility efforts since 2015, impacting more than 1316 communities and touching 30 075 356 lives and 793 NGOs. Some of our notable community investment programs include the 2020 HIV Testing and Counselling Services at the Access Bank Lagos City Marathon. At the event, we tested and counselled 3235 people. We also reached 33 468 people with HIV educational materials and distributed 10 000 condoms. In July 2020, amidst the COVID-19 pandemic, Access Bank partnered with 9iJaKids to deliver an online financial literacy and educational gamification modules to children. More than 2000 children were able to access financial literacy education through the programme. In 2019, the bank partnered with ACT Foundation to provide grants to 28 NGOs to implement projects in the areas of health, entrepreneurship, environment and leadership. The grantees have so far impacted over 685 505 lives through their programmes. The bank partnered with SME FUNDS, to develop the Green Social Entrepreneurship Program (GSEP), a social enterprise focused on ending poverty by promoting sustainable enterprise development. The program empowered entrepreneurs with clean cooking stove technology, which makes use of Bio-Gels made from water hyacinth, biocremol, caustic soda, fragrance and chlorophyll, to replace existing cooking technologies that are harmful to both human health and the environment.
aligned our corporate philosophy with our sustainability strategy and remain committed to setting standards for sustainable business practices. We provide innovative solutions and implement strategic initiatives for our shared future, as we pursue our vision to become the world’s most respected Af rican bank.
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Thanks to this programme, 598 households now use clean stove technology across Nigeria while 2100 people use clean stove technology, displacing 292 metric tonnes of CO2.
In addition to Access Bank’s community investment efforts, its
In 2018, we launched the Africa’s Gateway to the World campaign,
employees advance sustainable social development in their
a strategic initiative which promotes global access to finance
communities through the Employee Volunteering Scheme.
in Africa, thereby increasing economic opportunities and
Employees contribute ideas, skills, and resources to address social
investments to further boost national savings.
issues while gaining hands-on experience and fulfilment. Our Access Africa product is an instant fund transfer product Between 2015 and 2019, employees devoted 2 735 011 hours in over
designed to simplify global payments by Person-to-Person (P2P),
320 strategic initiatives across six geo-political zones in Nigeria!
Business-to-Business (B2B), Person to Business (P2B), Government
Volunteering is embedded in the performance appraisals of all
to Person (G2P) and any other payment activities/flows. Access
staff, thereby encouraging active participation.
Bank has leveraged its extensive partner network to extend the reach of Access Africa to about 15 countries which include the UK,
PLANET
France, Germany, China, and Benin. Within the year, transaction
Access Bank’s culture recognises that a better and prosperous
value stood over $41 million in approximately 14 000 transactions.
future is linked to the well-being and health of our planet. The bank invests in innovative technologies and techniques that promote the efficient use of resources and address sustainability issues when managing risk. Access Bank’s dedication to a cleaner environment is evident from its investment in alternative energy sources. Alternative sources of energy will power the future and Access Bank continuously seizes opportunities to harness energy derived f rom environmentally conscious means. The bank currently has 58 branches powered by alternative energy (hybrid); 559 solar-powered ATMs nationwide; LED lightings and motion-sensitive lightings in the Head Office and some branch locations. It recycles its waste across 75 business locations, there are water-efficient taps at its Head Office. It also ensures regular reporting, monitoring, and evaluation of electricity consumption across all branches. The bank has an early shut-down policy which ensures that staff members shut down systems at 7 p.m. These efforts have contributed towards reducing our carbon emissions as we recorded a 33.6% decrease in our electricity consumption at our Head Office and 31% decrease nationwide in 2019. Our ‘No-Paper’ initiative focuses on saving trees to help protect the environment. We have automated our business processes with the launch of the ERP Dynamics 365 and ProcessMaker applications. This year, the bank launched the Paper to Pencil recycling initiative, converting old branded paper items of Access Bank to pencils.
PROFIT Access Bank’s goal is to facilitate and finance sustainable economic growth, leading the way on sustainable finance, financial inclusion, helping develop enterprises and championing sustainability regulation and thought leadership. This is done through our strategic partnerships and collaboration with formidable institutions, to address responsible business needs as well as provide solutions that help improve communities. In 2019, Access Bank launched the first-ever N15 billion Corporate Green Bonds, certified by the Climate Bonds Initiatives (CBI). The Bond was listed on the FMDQ platform, the Nigerian Stock Exchange, and the Luxemburg Stock Exchange. The proceeds f rom the bonds financed environmentally f riendly projects.
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Towards a Sustainable Future: Over a D ecade of Sustainability
THOUGHT LEADERSHIP
RECOGNITION
Access Bank has continued to comply with environmental and
Over the years, Access Bank has gained recognition and
social laws as one of Af rica’s foremost banks in sustainability. In
remained a pioneer among its peers mainly due to its strategic
2019, the bank served as the regional lead in drafting the Global
collaborations and efforts in promoting sustainable development
Principles for Responsible Banking in collaboration with UNEP
both in Africa and globally. As a result, the bank received
FI. The princinples serve as a global framework for financial
numerous awards from prestigious awarding bodies, both locally
institutions to comply with a set standard for interacting with the
and internationally.
environment. Access Bank continues to set the pace for sustainable finance The bank also serves on the board of several leading local and
in Nigeria and Africa by delivering value-adding products
global organisations, including:
and services, improving the economic and social status of
• Co-Chair, Corporate Alliance on Malaria in Africa
our communities. Our commitment to sound sustainability practices means we constantly monitor the socio-economic and
• Co-Chair, Nigeria Business Coalition Against AIDS • Chair, Nigerian Sustainable Banking Principles Steering Committee • Member, Private Sector Delegation to the Global Fund Board • Board Member, United Nations Global Compact Local Network Nigeria • Af rica Consultative lead, Global Principles for Responsible Banking • Member, United Nations Environment Programme Finance Initiative • Member, Equator Principles • Gold Member, Global Reporting Initiative • Member, International Council for Sustainable Standards and Certification Initiative
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environmental impact of the activities of all our stakeholders and remain at the vanguard of sustainability regulation and thought leadership.
THE SPREAD OF ISLAMIC FINANCE OUTSIDE THE MIDDLE EAST by Aykut Alan
• Ijara (Islamic leasing): These are
Islamic banks have been integrated
finance tools are used in about 60
into the world financial and banking
countries. The Islamic financial market
operational or financial leasing
system in the last 20 years, although the
accounts for 1% of the global financial
contracts similar to leasing. The bank
banking system in Islam is much older.
system, estimated at roughly $2.5 trillion,
buys assets on behalf of its customer
However, Islamic banking and financial
covering some 1400 institutions spread
and makes it available to third parties
instruments offer a limited service to
across 80 countries.
with a fixed lease. The property is owned by the bank but shares the
investors compared to the banking Islamic financing is not to use interest or
THE MAIN STRUCTURES OF ISLAMIC FINANCE
“riba” in the words of those who manage
The basis of Islamic finance is the
these banks in any financial investment or
prohibition of interest. There is no problem
banking transactions.
in terms of profit from an investment. The
practices we know. The basic principle of
basic principle is not to make money from The concept of Islamic finance, defined as
money, but to make money by turning
“interest-f ree banking” or “participation
your money into an investment, but in this
banking” in the economic literature,
case, there is a possibility of loss. The main
requires that financial transactions and
structures used in the Islamic financial
banking operations be carried out in
market are:
not applied when borrowing or lending. It is also prohibited to use financial instruments open to speculation in the Islamic financial market. Today, Islamic
• Mudaraba (instalment sales): It is a partnership in which the bank provides capital and the other party provides labour, knowledge, and experience. • Sukuk (Islamic bonds): Islamic bonds give partial ownership. The holder gets assets.
• Istisna’a: It refers to the exception to the financial institution borrowing to its clients for a project that has not been produced yet, to provide capital with a contract.
investor.
a fixed share of the income from the
accordance with the basic rules of Islam. In Islamic financial institutions, interest is
profit from the rental fee with the
These various forms of financing provided by both Islamic banks and the Islamic finance departments of international banks can be provided as part of a project finance package, in line with traditionally lending banks.
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THE SPREAD OF ISLAMIC FINANCE Islamic finance reached a significant size in the Middle East and
The size of the financial sector is 8-10 times the size of the global
Malaysia in the 2000s. It sees limited demand from Turkey, as the
gross domestic product. The 2008 crisis, in particular, highlighted
country is integrated into the global banking system. Over the
the risks of this imbalance. The rise of Islamic finance, the capital
past five years, Islamic banking has also started to grow in Africa
system which is based on net assets, really came after 2008.
and Asia.
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USA Thanks to the USA’s relatively small Muslim population, the
The American Finance House LARIBA, founded in California in
number of participating banks in which individual investors
the eighties, and the Amana Funds, founded in Washington,
have access to Islamic finance products is small. Although some
are two of the first Islamic financial institutions established in
banks in the USA have announced Islamic financing packages
the USA. The Dow Jones Islamic Market U.S. Index is designed
that contain products compatible with sharia, Islamic financing
to measure the performance of U.S. equity securities that have
instruments are not currently in high demand in this country.
been screened for adherence to sharia investment guidelines. Other index providers such as Standard & Poor’s, Morgan Stanley Capital International, Financial Times Stock Exchange, and Russell Investment publish an Islamic stock index that attracts investors from all over the world.
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UK The country where Islamic financing is most common in Europe is England. As a financial centre, London is a magnet for many Muslim investors due to the minor time difference. The UK’s Muslim population, of roughly two and a half million people, use Islamic finance products prolifically. The beginning of Islamic finance in the UK dates back to the eighties. Founded in 1982 to operate in the field of housing finance, Al Baraka International was the first Islamic financial institution in the UK. In 2005, the UK’s first Islamic investment bank was established, the European Islamic Investment Bank. Some of the retail and investment banks operating in the UK include Abu Dhabi Islamic Bank, Al Rayan Bank, Bank of London and the Middle East, Gatehouse Bank, and QIB UK.
Outside of the UK, there are just a few initiatives in Europe leading the charge for Islamic finance. Luxembourg is the first eurozone country to issue national interest-f ree bills and to offer 49 shariacompatible funds. The first Islamic bank in Germany, KT Bank AG, was established in 2015. In Switzerland, Islamic insurance and takaful services are offered rather than broader Islamic financing. There are no Swiss laws specifically addressing Islamic finance so the Islamic finance products are subject to the same regulations as conventional instruments. However, the Swiss legal system is, generally, shariaf riendly, given that Swiss contract law is based on two key principles: the freedom of contract and the freedom of form.
AFRICA With $500 million worth of sukuks issued in Africa in 2018, the continent accounts
In 2014, the UK strengthened its position
for only 0.5% of the world’s sukuks in
as the centre of Islamic financing in
circulation. However the large Muslim
Europe, when it became the first non-
population, currently underbanked and
Muslim country to issue sovereign sukuk.
underserved, could be “a solid foundation on which Islamic financial assets, and
The London Stock Exchange is now a preferred global market for sukuk issuances. London aims to be the leader in shariacompatible finance in the West. There are five licensed Islamic banks in the UK today and over 20 traditional banks offer Islamic financial products. Apart f rom this,
therefore profits, can grow rapidly,” say Moody’s analysts. One clear example is Nigeria’s Sterling Bank, whose Islamic banking section experienced a 24% growth in profits last year despite a 16% contraction in total assets in the Nigerian commercial banking segment, according to Moody’s.
there are 65 interest-free bonds with a total amount of $50 billion on the London stock exchange, along with Islamic funds of $700 million assets.
EUROPE After the 2008 crisis, Islamic finance began to seem relatively safe to Western banks. Interest-f ree bonds were a positive signal for new markets. Islamic funds provide an opportunity to reach a large amount of liquidity, and Islamic banks enable profits f rom local Muslim communities.
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SOUTH AMERICA In South America, Islamic finance is just getting started. With the opening of Trustbank Amanah in Suriname in 2017, the region had its very first Islamic Bank. The other South American country opening up to Islamic finance is Guyana, with the support of the Islamic Development Bank. While there is currently no regulation on Islamic finance in Guyana, and also no Islamic bank, the country received $900 million in financial and technical assistance from the Islamic Development Bank over a three-year period, starting in 2018. The money will be used to develop Guyana’s economic infrastructure, rural development, educational capacities and improve trade and competitiveness. The establishment of Islamic banking institutions is planned for later.
LOCAL INNOVATION, GLOBAL RECOGNITION When the bulls are running, success stories are everywhere. However, in complex and volatile times, the innovative alone lead the charge. Cornèr Bank (Overseas) Ltd, ever a pacesetter, pioneer, and catalyst for positive change in The Bahamas, has just been awarded the Best Private Banking Services - The Bahamas 2020 title. It’s in recognition of Cornèr Bank’s reputation as a beacon of banking excellence and innovation, developing services and educational materials that give Bahamas-based investors local access to the full gamut of global investment opportunities, opening the door to a new financial era in the islands. Cornèr Bank’s proven track record of bringing new and awardwinning offerings to the Bahamian financial sector, as well as educational services designed to inform new clients about these products’ use, have made the bank the clear choice.
THE BUILDER’S CORNERSTONE Every successful pioneering expedition launches f rom a wellstocked base camp - and Cornèr Bank’s Bahamian affiliate is no different. Founded in 1952 in Lugano, Switzerland’s third-largest banking centre, the Cornèr Bank Group focused on building a strong financial foundation to keep the ship sailing smoothly, even in rough seas. Today it boasts an exceptional Tier 1 capital ratio of 24.4% - three times higher than the minimum regulatory requirements - and has been listed first in financial soundness on The Banker’s Top 1000 World Banks list for four consecutive years. From this excellent footing, Cornèr Bank Group has consistently extended its range of services and areas of operation to match increasingly global demand for sophisticated and seamless banking solutions. Its extensive list of financial services is offered f rom Switzerland, London, Milan, Vaduz, and of course, through Cornèr Bank (Overseas) Limited, Nassau, the capital city of The Bahamas. From its parent company’s deeply-rooted foundation, Cornèr Bank Bahamas has been successfully providing financial solutions in the islands since 1996.
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Local Innovation, Global R ecognition
The Bahamas has long been a prominent
Cornèr Bank (Overseas) Ltd’s CEO,
For Bahamas-based investors less eager
financial hub in the western hemisphere,
Christine Russell — a Bahamian national
to dive into markets unassisted, Cornèr
thanks to its proximity to both North and
herself, and a seasoned veteran of
Bank (Overseas) offers additional types
Latin America, its stable democracy, and
the Bahamian financial sector — best
of accounts alongside its Cornèrtrader
favourable tax environment (though no
articulates the significance of this
platform that provide users with
doubt the gin-clear waters, bone-white
achievement:
assistance and recommendations tailored
beaches, and balmy weather played a role as well). Without taxation on capital gains, inheritance, or income, The Bahamas has been a private banking nexus for decades — the benefits of which had only been available to foreign residents. Despite
to their preferences. Holders of Investment
“The advent of Cornèrtrader marked a milestone in Bahamian financial culture, as it empowers Bahamians like never before. For the first time,
serving wealthy foreigners in the country’s
we gave Bahamians and residents
extensive financial services industry for
alike the opportunity to engage in any
more than half a century, Bahamians
of the world’s major stock exchanges
had been limited to investing within their island’s coastlines. On the horizon would come unprecedented relaxations
from virtually anywhere - in their homes or even on the beach.”
Advisory Accounts receive proposals based on their personal level of risk aversion and investment goals. To take it further, Cornèr Bank (Overseas) offers Discretionary Investment Management Accounts, which are managed according to the client’s risk profile. “I would like to thank the International Investors Awards, and the subscribers of International Investors magazine, for
in the archipelago’s foreign exchange
To a country previously limited to a shallow
recognising Cornèr Bank’s continued
regulations, opening the door for Cornèr
pool of relatively undiversified investment
leadership and excellence,” says Russell.
Bahamas to lead the charge.
offerings, this was a giant leap forward.
“It’s an honour and a privilege to accept
THE DAWN OF A NEW ERA
“With a click of a mouse, Bahamians could
but the true reward comes from knowing
In 2018, The Central Bank of The Bahamas
easily purchase anything they wanted on
that we are making a real difference in the
relaxed its restrictive regulations, and
Amazon, but until Cornèrtrader, they could
quality of our clients’ investment options.”
overnight, the doors to world markets
not say the same for a share of Amazon
were thrown open. Native holders of
itself. No longer are we just consumers,
Cornèr Bank (Overseas) Ltd’s product
Bahamian dollars were liberated and able
now we can be owners too.”
innovation, consistency in client
this award on behalf of my organisation —
communication, transparency and overall
to finally reap the benefits the world of trading and investing could offer.
COMMITMENT TO THE CRAFT
True to its pioneering spirit, Cornèr was
In a further show of exemplary
poised and ready to guide Bahamians
commitment to their clientele, Cornèr
through the unfamiliar waters of the
Bank (Overseas) offers the learning tools
international markets. The bank had spent
necessary to use its new and exciting
two years preparing to offer to Bahamians
products. At the Bahamian launch of
its online trading platform, Cornèrtrader,
Cornèrtrader, the bank’s director Luca
and its 2018 launch marked the first time
Salzborn summarised the efforts, saying,
a local firm had offered real-time access to
“we are committed to offering to all
the NYSE and the NASDAQ. Not only was
our existing and prospective clients’
Cornèr Bahamas prepared to welcome
continuous education with seminars or
new clientele, but the bank also positioned
one-to-one meetings about markets and
itself as a financial hub for newcomers
the use of our platform, as we believe that
navigating the markets, proving itself to
a key element for successful investing lies
be a true cornerstone of the Bahamian
in mastering the technical and financial
community.
aspects that go with it”.
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client satisfaction will continue to propel the bank not just to the top of the award podium, but into the future, setting the pace for financial services worldwide.
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THE GROWING IMPACT OF ROBOADVISORS by Cameron Williams
Just a few years ago, there used to be a running joke about robots taking over the world. Back then, if I were to say that robots would be the norm for how we manage our money in the future, no one would have taken me seriously! Today, in its most literal sense,
• How much investing experience do you have? • How soon will you need the invested money? • How tolerant are you of market volatility?
technology-based wealth management
• How comfortable would you feel if your
is actually starting to take over many of
portfolio dropped 10% in value in the
the mundane tasks related to how we
short term?
manage our money. These technologybased money management tools are
• What is the primary objective of
called “Robo-Advisors,” and they already
your investments? (growth, income,
represent a nearly trillion-dollar industry
maintain value, etc.)
within investing and wealth management.
• Do you have other invested assets?
WHAT IS A ROBO-ADVISOR? Not to be confused with a walking, talking
These questions are used as binary
robot, a robo-advisor is a technology-
indicators to the robo-advisor algorithm.
based algorithm that builds a custom
Your responses will direct the robo-advisor
investment portfolio for you based on
to build a portfolio that is in your best
a few common investing questions.
interest and customised to your investing
The algorithms are built with the aid
style based on your responses.
of financial experts and tech gurus, to automate some of the basic tasks in
For example, you may be a young
wealth management.
investor just starting out and looking for a diversified portfolio with moderate risk.
Here are some example questions asked
This will be noted upon answering some
when setting up a robo-advisor account.
investing questions, and the robo-advisor
These questions help the technology-
will automatically build you an investment
based algorithm automatically customise
portfolio that is well-diversified among
an investment portfolio for you.
different companies and investments, as well as create a portfolio with moderate risk tolerance.
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Examples of some of today’s reputable robo-advisors today are: • Wealthfront • Betterment • Acorns • Wealthsimple Many of these robo-advisors give their clients access to financial experts in case you have a more complicated question. In short, robo-advisors save customers and investment banks time and money.
It’s no question that robo-advisors make investing more convenient, costeffective, and less time consuming to manage.
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HOW ARE ROBO ADVISORS IMPACTING WEALTH MANAGEMENT GLOBALLY?
available to invest. Fortunately, one of the
For now, I think it’s safe to say that
goals of robo-advisors in the first place is
robo-advisors are great for basic wealth
to allow more people to invest with less
management activities such as portfolio
It’s safe to say that robo-advisors are more
required money to begin.
diversification, building customised
popular among younger generations,
investment plans to your personal risk
COUNTRIES ADOPTING ROBO ADVISORS FOR WEALTH MANAGEMENT
tolerance, portfolio rebalancing, and
The five countries that have the most
companies that offer their robo-advisor
In fact, that may be a clear indicator of
assets under management within the
customers the ability to set up a meeting
how the growth of robo-advisors will
robo-advisor segment are:
with a human financial expert for more
due to their natural understanding of technology, having grown up with smartphones and voice assistants.
trend globally with younger generations becoming more dominant as the years progress. Consider the following market trends, courtesy of Statista.com.
ASSETS UNDER MANAGEMENT
1. The United States - with $682.73 billion under management 2. China - with $74.57 billion under management
In 2017, the reported assets under
3. Japan - with $30.32 billion under
management within the robo-advisor
management
segment was $297.72 billion. Today, the total assets under management in 2020
4. The United Kingdom - with $18.23 billion
is projected to be $987.49 billion or over
under management
three times as much as reported in 2017. 5. Italy - with $15.27 billion under By 2024, the total assets under
management
management within the robo-advisor segment is projected to be $2.487 trillion!
NUMBER OF ROBO ADVISOR USERS
As you can see, the potential growth opportunity for robo-advisors is massive, and one that is likely to spread to more
In the year 2017, the total number of users
countries extremely fast. The stock market
within the robo-advisor segment was
alone has a total market capitalisation size
approximately 42.78 million. Today, the
of approximately $70.75 trillion, leaving a
total number of reported users for 2020
lot of untouched territory for the robo-
is 224.52 million. That’s over five times
advisor industry.
growth in just three short years. Suffice it to say that we’re still in the The number of total robo-advisor users
beginning stages of the global impact of
in the year 2024 is projected to be
robo-advisors.
approximately 436.33 million users, or almost double what it is today.
ARE ROBO ADVISORS BECOMING THE NEW NORM?
AVERAGE ASSETS UNDER MANAGEMENT PER USER
Are robo-advisors taking the place of the
While the total assets under management
cases, yes. But I would consider the
and total number of robo-advisor users
growing robo-advisor trend more of a shift
have been on a drastic upward trend,
in how business is done than anything
the average amount of assets under
else.
traditional financial advisor? In some
management per user has slightly declined since 2017 from $6959 down to $4398. It’s expected to grow to about $5700 by the year 2020.
Traditional financial advisors will most likely always be needed. Janine Menasakanian, the director of
What does this data suggest? More people
Key Accounts at one of the most famous
can invest today due to the growth and
investment companies today, Vanguard,
convenient features of robo-advisors.
believes that “Robo is great for simple,
Naturally, as younger investors enter the
self-directed work, but not for complex
market, they will likely have less money
planning activities.”
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tax-loss harvesting. Most robo-advisors are gateway products for investment
complex planning. It’s a great option to start investing if you don’t have much experience, don’t have extra money to pay for a costly advisor, and don’t have complex investing needs like detailed estate planning, tax planning, and business succession plans. Roboadvisors are here to stay and will continue growing at an accelerated pace.
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THE CALAMITY OF UNCERTAINTY FOR BREXIT BRITAIN By Rob McNamara
2020 will go down in history as a hard
Johnson’s government had it all under
that they had this all under control, the
blow to an already weakened economy,
control, we were reassured, and they were
universe threw a corona-shaped curveball.
but what will be its legacy for investor
well on their way to ‘Get Brexit Done’.
The catastrophic loss of life has been
confidence?
devastating. The economy is a secondary There was even optimism from the 3000
victim.
By September 2019, Brexit had already
Chief Financial Officers surveyed by the
made its mark on the UK economy.
DMP, working in collaboration with the
The Bloomberg Brexit Barometer tracks
According to the Decision-Maker Panel
Bank of England, which indicated that
economic well-being in the United
(DMP), set up by Nottingham and Stanford
investment might be set to increase. There
Kingdom and is updated daily, using
universities, investment had reduced
was a real expectation that investment
weather icons to indicate how inclement,
steadily by around 11% while productivity
could grow by as much as 4.6%, an
or not, the state economy is since the vote
had decreased by between 2 and 5% since
increase from 2.4% from the three months
to leave. Today it shows a dark cloud with a
the referendum result hit the headlines.
preceding. It would be absurd to claim
flicker of gif lighting protruding.
Analysts were bracing for hard times, but
that uncertainty had been significantly
at least ref reshed voter confidence in
dialled down, but investors were
MORE STORMY WEATHER
the Conservative agenda had put a little
beginning to see some strong reasons to
There can be no denying the fact that
fire back into the negotiation process.
invest once more in the UK.
much of the economic trouble right
Investors might have begun feeling like perhaps things were on the up.
IF ONLY THINGS WERE SO SIMPLE
now stems from the early impacts of COVID-19 and the lockdown, and not
The last thing the government needed
from Brexit itself. Yet both COVID-19 and
In January 2020, The Investor Confidence
was a global pandemic. Perhaps this
Brexit mean uncertainty, and uncertainty
Index had jumped by 21% to its highest
is why it took so long to accept the
is what investors are agitated about. The
level since November 2015, with increasing
magnitude of this new virus; they simply
combination is intimidating.
interest in UK investment. Traction was
could not believe their bad luck. Having
steady and the fearmongering had died
fought so hard to inject certainty back
down somewhat across the media. Boris
into the economy and reassure the public
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The calamity of uncertainty for Brexit Britain
The markets have recovered a little since their initial crash in March, but there is a real risk that a second crash is on its way. As tensions rise between the US and China and another wave of redundancies across Europe looms as governments’ fiscal interventions tail off, a hard Brexit may just be enough to cause another sharp decline in investor sentiment. 2020 seems to be a triple threat year.
VIDEO KILLED THE RADIO STAR Face-to-face negotiations resumed last week between Britain and the EU after three months of video conferencing. They
IS THERE GOOD NEWS? In short, maybe. For some investors, the opportunity to buy cheap stock right now might be very attractive. If the second crash does come as expected, it could be a prime time to pick up a few bargains. It’s still a brave person’s game though and buying shares on the decline isn’t always going to net you the long-term gains you’re looking for.
Diversification across a number of industries, especially renewable energy and technology, both of
quickly broke down as discussions reached
which showed strong potential pre-
an impasse, and the two opposing sides
pandemic, might offer a little light at
failed to reach even basic consensus on
the end of the 2020 tunnel.
the terms of the divorce. Investors fear now that crashing out of the EU will result
Uncertainty seems to be the presiding
in defaulting to World Trade Organisation
theme this year, and there is little
terms, which means unfavourable tariffs
indication this is set to change any time
and quotas. For many, this makes other
soon. For many, pragmatism is the new
markets outside of the UK look far less
normal and lack of information and clarity
uncertain, and thus alluring.
f rom the Brexit negotiations will only prolong that. It might be a year to wait
Asia is set to continue to benefit from a
and watch to see how things unfold, with
tumultuous Europe.
investors both inside and outside of the
Nausicca Delfas, the Financial Conduct
Perhaps we’ve had enough uncertainty
Authority’s Director of International,
already to last us a lifetime.
UK taking advice to not hold their breath.
was quoted in a recent interview with Bloomberg, “if the two sides fail to provide companies cross-border access, known as equivalence, equity and derivativestrading business could face disruption. European investors might also be required to trade shares inside the bloc unless they’re given access to U.K. markets”. Furthermore, with a continued lack of information from the negotiations about what it will cost to do business once Britain and the EU part ways, plenty of investors will see this uncertainty as a reason to keep their money away from such worrisome markets.
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ACCESS
ARCA FONDI SGR
AVATRADE
Access Bank Plc. is a leading full-service
Italy’s ARCA Fondi SGR is an asset
Since 2006, AvaTrade has been one of
commercial bank with a network of more
management company that is also
the most regulated brokers in the world.
than 600 branches and service outlets,
authorised to manage individual portfolios
Licensed in nine jurisdictions and running
spanning three continents, 12 countries
of institutional clients. The company was
local offices around the world, it provides
and 31 million customers.
born f rom the history and experience of
ultra-low spreads on over 1000 trading
ARCA SGR, founded in 1983 by 12 popular
instruments across a range of market-
banks.
leading trading platforms.
financial institution which combines
The distributor network is made up
Awarded ‘Best Affiliate Programme 2020’
a strong retail customer f ranchise and
of more than 120 financial regulated
by International Investor, AvaTrade also
digital platform with deep corporate
institutions operating across more than
offers a partners programme, ‘AvaPartner’.
banking expertise and proven risk
8000 branches and on-line channels,
With a wide selection of partnership
management and capital management
with a team of independent financial
models from introducing brokers, online
capabilities. The bank serves its various
advisors. The company has grown in time,
affiliates, trading academies and service
markets through four business segments:
expanding its network of distributors and
providers, AvaPartner contains attractive
Retail, Business, Commercial and
serving more than 800 000 final clients.
payment structures, robust customer
Corporate. The bank has over 900 000
With one of the largest distribution
relationship management (CRM) and
shareholders (including several Nigerian
networks in the Italian asset management
effective risk management tools. With
and international institutional investors)
industry and the long-standing presence
over 90 000 registered partners, more
and has enjoyed what is arguably Af rica’s
of its brand in the marketplace, ARCA
than $250 million paid in commissions
most successful banking growth trajectory
Fondi SGR is ranked by Italian investors
and up to $1000 CPA or 40% revenue share
in the last twelve years.
as one of the most well-known asset
– it’s no wonder so many partners choose
managers in Italy.
AvaPartner!
Listed on the Nigerian Stock Exchange since 1998, Access Bank is a diversified
Following its merger with Diamond Bank in March 2019, Access Bank became one of Africa’s largest retail banks by retail customer base. As part of its continued growth strategy, Access Bank is focused on mainstreaming sustainable business practices into its operations. The bank strives to deliver sustainable economic growth that is profitable, environmentally responsible and socially relevant, helping customers to access more and achieve their dreams.
AWARD WINNERS I N T ER N AT I ON AL I NVESTOR MAGAZ INE | 0 83
Award Winners
BANCO INTERNACIONAL
BANK NIZWA
BANNER ASSET MANAGEMENT
Founded in Chile in 1944 as Banco
Launched in January 2013, Bank Nizwa
Banner is an experienced asset and funds
Israelita, Banco Internacional now uses
offers the people of Oman a unique
manager, specialised in debt and equity
a nationwide network of 12 branches
banking experience that combines Sharia-
products in the Australian real estate
and four business centres, staffed by
compliant products and services with
market. Banner was started in 2010 by
over 500 employees, as well as a suite of
today’s dynamic financial requirements.
Andrew Turner (CEO) and a small group
digital platforms to bring it closer to its
of initial investors and chiefly invested
customers and help it lead the corporate
Over the past seven years, the customer
the funds of its principals. The range
segment in the Chilean banking industry.
base has grown steadily as more
of investors has organically expanded
people seek an alternative solution to
to institutions, corporates, and other
Since 2016, Banco Internacional has
conventional banking. As Islamic banking
funds. All the original investors remain.
been the fastest-growing bank in Chile,
gains momentum in Oman, Bank Nizwa
This organic and gradual growth guided
with a business model that allows
continues to offer reliable competitive
and continues to guide the investment
for diversification between strategic
propositions for customers looking to lead
principles of ‘putting the investor first’,
segments, revenue sources and high
financially secure lifestyles.
through responsiveness, preserving capital
organic growth.
and earning a return. The bank currently offers a suite of
Banco Internacional is majority-owned
financing, savings and investment
Banner is a registered provider of financial
by Inversiones La Construcción SA, a
products for individual customers. The
product in the highly regulated Australian
successful track-record and proven
bank also has an extensive portfolio of
financial services and funds management
financial stability, which bought the bank
services catering to SMEs, corporate and
sector. The head office is in Melbourne,
in 2015. Good governance, which is also
commercial customers, while providing
with a Sydney office, principals located
ensured through a reputable board and a
tailored products for investment banking
and active in Japan and Singapore. Its
solid management team with experience
and global markets. Bank Nizwa has been
investors are mostly located in Singapore,
in the industry.
consistently introducing forward-thinking
Hong Kong, Japan, Europe and Australia.
products and services, such as its online The bank’s values include delivering
and mobile banking solutions.
quality to every customer with the
The Banner funds have funded property projects valued at over AUD8 billion. A
highest ethical standards. Banco
Bank Nizwa launched its Strategy
majority of Banner’s investors are non-
Internacional incorporates sustainability
2020, a five-year vision to become the
residents, and it is well-versed in dealing
as a fundamental part of its management
Sultanate’s leading Islamic financial
with the needs of off-shore investors.
through four pillars:
institution. The strategy focuses on five pillars of development including financial
- Culture of service and ethics
performance, technological advancement,
- Responsible investment
market share, team and culture, in
- Inclusion, quality and access
addition to a progressive organisation.
- Contribution to public debate Guided by the principles of Sharia, and a firm dedication to giving back, Bank Nizwa has taken a leading role in promoting the social development of local communities.
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CORNÈR BANK (OVERSEAS) LTD.
ICU
PRIVATE WEALTH SYSTEMS
Cornèr Bank (Overseas) Ltd. has been
ICU is an independent asset management
Private Wealth Systems is a global
a paragon of excellence in the world of
and investment advisory firm specialising
financial technology company that is
private banking for over 20 years. Built on
in the emerging markets of Central and
solving the financial industry’s structural
a solid foundation of constant innovation,
Eastern Europe.
challenges of data, scale, and security in
strong financial positioning, and capital
order for those who manage complex
soundness, Cornèr Bank offers its globally
Founded in 2006 by senior investment
investment portfolios to have the
diversified clientele competitive and
professionals from ING, ICU is Ukraine’s
information they need to make the most
tailored solutions in an increasingly
leading asset manager with over $500
informed decisions.
complex world.
million in assets under management. Their current strategy includes significant
The team’s collective experience includes
Cornèr Bank brings expert knowledge and
allocations to venture capital and
designing and building three of the
a wide range of top-tier financial services
distressed debt.
leading family office investment reporting
to serve not only international clients
and portfolio accounting systems.
but to Bahamians and residents alike.
ICU’s veteran investment team has
Through consistent product development,
experience in private equity & venture
The company’s private cloud suite of
Cornèr has diversified its offerings to
capital, high yield corporate debt,
multi-asset, multi-manager investment
include the Cornèrtrader platform and
distressed debt, restructurings and other
software includes account aggregation,
an array of investment services. Cornèr
special situations across a number of
data reconciliation, performance
Bank continues to experience remarkable
emerging markets. Investment decisions
calculation and client reporting that
growth and increased stability as it
are supported by robust macroeconomic
supports even the most complex global
takes pride in maintaining its stellar
and sectoral analyses from the firm’s in-
balance sheets.
international reputation.
house team of research economists.
Cornèr Bank (Overseas) Ltd. is an affiliate
ICU aims to provide their clients with
of Swiss-based parent company, Cornèr
superior risk-adjusted returns across
Bank Ltd, and is licensed with and
a number of asset classes. The firm is
regulated by both the Central Bank of The
expanding its reach into key European
Bahamas and the Securities Commission
markets via a combination of organic
of The Bahamas.
growth and acquisition and continues to expand the range its investment offerings.
I N T ER N AT I ON AL I NVESTOR MAGAZ INE | 0 85
TAIPEI FUBON BANK
TICKMILL
Taipei Fubon Bank, a 100% owned
The Tickmill Group, consisting of Tickmill
subsidiary of Fubon Financial Holdings,
Ltd, Tickmill UK, Tickmill EU and Tickmill
was created through the merger of Taipei
Asia, provides a secure and professional
Bank and Fubon Bank. The merger,
trading environment where clients can
formally completed on the first of January
trade a plethora of instruments including
2005, was the first in Taiwan’s banking
forex, stock indices, precious metals,
history involving a state-owned bank
bonds and energies.
and a private bank. As of April 2020,
With innovative tools and advanced
Taipei Fubon Bank had total assets of
technology, Tickmill facilitates trading for
NT$3.168 trillion and operated a total of
professional, institutional and retail clients
127 domestic branches and five overseas
across the globe, giving access to over 80
branches plus one office. It has the most
financial instruments, spanning four asset
branches in Taipei of any private bank in
classes.
Taiwan. Tickmill UK Ltd is regulated by the UK Backed by a highly efficient channel
Financial Conduct Authority (License
platform, an unrivaled line of products
Number: 717270). Tickmill Europe Ltd is
and services, and extremely effective
regulated by the Cyprus Securities and
operations, Taipei Fubon Bank is
Exchange Commission (License Number:
determined to emerge as the preferred
278/15). Tickmill Ltd is regulated by the
financial strategy partner for customers
Financial Services Authority of Seychelles
in the Greater China market and move
(License Number: SD008). Tickmill Asia
steadily toward the vision of becoming “a
Ltd is regulated by the Financial Services
top regional bank in Asia.”
Authority of Labuan Malaysia (License Number: MB/18/0028).
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