• Save
C.Y Actuaries Conference 2014: The Future of Asset Management in Cyprus and Greece
Upcoming SlideShare
Loading in...5
×
 

C.Y Actuaries Conference 2014: The Future of Asset Management in Cyprus and Greece

on

  • 587 views

The presentations from the Cronje & Yiannas Actuaries and Consultants Ltd conference held on 28 May 2014 at the Hilton Park Hotel in Nicosia, Cyprus. The title of the conference was "the Future of ...

The presentations from the Cronje & Yiannas Actuaries and Consultants Ltd conference held on 28 May 2014 at the Hilton Park Hotel in Nicosia, Cyprus. The title of the conference was "the Future of Asset Management in Cyprus and Greece."

Statistics

Views

Total Views
587
Views on SlideShare
305
Embed Views
282

Actions

Likes
1
Downloads
0
Comments
0

4 Embeds 282

http://www.cyactuaries.com 218
http://cyactuaries.com 41
https://www.linkedin.com 12
https://twitter.com 11

Accessibility

Categories

Upload Details

Uploaded via as Microsoft PowerPoint

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

C.Y Actuaries Conference 2014: The Future of Asset Management in Cyprus and Greece C.Y Actuaries Conference 2014: The Future of Asset Management in Cyprus and Greece Presentation Transcript

  • #CYconf2014
  • Opportunities for the Asset Management Industry in Cyprus & Greece – A Consultant’s View Marios Yiannas 28 May 2014 The information in this presentation is confidential and should not be distributed to third parties without the prior approval of Cronje & Yiannas Actuaries and Consultants Ltd.
  • Setting the Scene Love is NOT in the air… 46 49 50 57 57 60 62 66 73 Financial Services Banks Media Pharmaceuticals Energy Consumer… Food & Beverage Automotive Technology 2013 48 51 51 59 59 65 66 70 79 Financial Services Banks Media Pharmaceuticals Energy Consumer… Food & Beverage Automotive Technology 2014 Sources: Edelman Trust Barometer, CFA & Edelman Trust Study
  • Current Landscape for Institutional Business Cyprus PENSION & PROVIDENT FUNDS • Only 12% of Total Pension & Provident Fund assets are under professional management • Just 150m (5% of total) under management by local asset managers • Linked to investment strategies dominated by cash... • ... lack of trust in the industry... • … lack of suitable skills and/or solutions offered INSURANCE COMPANIES (LIFE BUSINESS) • Individual savings products exist but no group pension policies yet • Around 60% of Unit-Linked assets are under professional management (€1 bn of UL funds plus c. 0.4bn own funds) • Mandates typically handed over to pooled funds of global managers • A very small proportion is under management by local asset managers… • ... which mainly relates to local assets... which are being unwound • Lack of suitable skills and/or solutions offered on global markets • A significant proportion is still managed in-house €3bn €350m €1bn (U-L) €600m
  • Current Landscape for Institutional Business Greece PENSION FUNDS • The establishment of IORPs (“TEA”) has just started and is expected to take off • Currently around 15 TEA’s (vs. Cyprus 1.300…!!!) • Main form or supplementary retirement provision going forward… • Industrial sector funds popular (e.g. insurance employees, F&B, oil & gas, economists), international companies (e.g. Johnson & Johnson) and local associations (e.g. casino workers, tax employees) • Significant pool of assets (e.g. TEA Insurance companies 500m) • First beauty parades already conducted INSURANCE COMPANIES (LIFE BUSINESS) • Significant market size – both individual savings and group pension policies exist • A significant proportion of that is under professional management • Local managers are typically employed in mandates • Variety of solutions offered... • … but mostly restricted to asset managers within the same group • “Interest-bearing”: “bond-like” and in-house • Solvency II will force a shift from “interest-bearing” to unit-linked €6-8bn (U-L) €3-4bn TEA
  • More Opportunities Demographics, policy and fiscal conditions POOR COVERAGE CURRENTLY FROM SUPPLEMENTARY PENSION PLANS 1/3 of working population in Cyprus, expect less in Greece after auxiliary sector reform AGEING POPULATION Social Security Systems cannot provide adequate replacement ratios and face sustainability pressures – 2nd and 3rd pillars are critical LONGER ACCUMULATION PHASE Longer contribution periods, increased demand for growth assets LONGER LIFE EXPECTANCY IN RETIREMENT More demand for asset management whilst in retirement REVIEW OF IORP DIRECTIVE Emphasis on sound systems of governance, risk management and investments LOCAL LEGISLATION Consideration of mandatory 2nd pillar provision (e.g. NEST in the UK), operation of industry pension plans (e.g. TEA in Greece) LOCAL REGULATIONS Framework for Group Pension Policies (e.g. Class 7 in Cyprus) Orders from Pensions Regulators on the management of pension plans GOVERNMENTS CANNOT PICK UP THE BILL OF PENSION PROVISION Pay As You Go becomes Debt As You Go under the current economic conditions of debts and deficits CROSS GENERATIONAL SUBSIDIES Not a great place to be for a current 20-40 year-old! STABILITY OF PUBLIC FINANCES IS CRUCIAL TO ALL COUNTRIES Avoid Defined Benefit pension promises Shift burden to private sector, corporate and individuals PEOPLE CANNOT AFFORD TO SAVE Truth is, they cannot afford not to!!! DEMOGRAPHICS POLICY FISCAL CONDITIONS Make your OWN savings, save MORE, save for LONGER and invest WISELY
  • Grab the Opportunity with both hands Step 1: Avoid the sins of the past • Long period of asset destruction • Clients’ needs were not properly addressed • Worked in competition to rather than in harmony with the clients’ consultants • Blurred lines between strategy, advice, asset management, brokerage and custody • Conflicts of interest not properly addressed • No focus on specialization – jack of all trades • Lack of separation between different implementation strategies • Lack of innovative solutions “Those who do not remember the past are condemned to repeat it” Benjamin Graham – The Intelligent Investor
  • Grab the Opportunity with both hands Step 2: Meeting client needs and building trust What are the current needs of institutional investors in Cyprus & Greece: • Implementation of approved investment strategy given to manager • Access to global markets – traditional and alternative asset classes • Construction of a well-diversified, balanced portfolio subject to their risk budget • Advice in transitioning from current portfolio and managing illiquid exposures • Appropriate solutions – simple is beautiful, avoid unnecessary complexity • Regular and clear reporting • Smooth cooperation with consultants • Building a relationship based on trust
  • Grab the Opportunity with both hands Step 3: Modus operandi Pension/Provident Funds (Cyprus Law based on IORP Directive, expect similar for TEA) • Every pension/provident fund MUST appoint: 1. A Consultant for General Investment Matters (strategy, support, monitoring) 2. A Consultant for Specific Investment Matters (investment advice, implementation) Although some exemptions may apply, prudent management and international best- practice require the appointment of professionals for these functions • Clear distinction of roles and responsibilities is desirable Insurance companies • Adopt similar structure to above with due regard to size, skills and expertise of in-house investment team/committee • Set up clear processes and terms of reference for each of the parties involved Establish a modus operandi which is beneficial for the people it is supposed to serve!
  • Back to basics Investment Control Cycle Monitoring Strategy Implementation Objectives Risk and return Asset allocation Asset class strategy Investment guidelines Performance Manager evaluation Adherence to guidelines Fund selection Security selection Investment advice Tactical allocation Keep your eyes on the ball!!!
  • Thank you! Marios Yiannas FIA Cronje & Yiannas Actuaries and Consultants Ltd 18 Spyrou Kyprianou Avenue 1075 Nicosia, Cyprus Tel: +357 22 456006 Fax: +357 22 456007 Email: marios.yiannas@cyactuaries.com www.cyactuaries.com
  • #CYconf2014
  • Clear and independent institutional investment analysis The Evolution of Institutional Manager Research & Analytics Steve Butler Managing Director, CAMRADATA
  • Clear and independent institutional investment analysis Typical Consultant Research Process
  • CAPS Pooled Fund Survey - 1984 to 2012
  • Growth in structured data - 2014 Geography Coverage Asset Managers Investment Strategies Mercer GIMD Global All Asset Classes 2,300 26,000 CAMRADATA Live European Traditional Asset Classes 750 5,000 CAPS 2002 CAMRADATA 2014 Balanced / Multi Asset 30 Products 363 Products UK Equity 45 Products 166 Products Global Equity 685 Products
  • Clear and independent institutional investment analysis Research Process
  • Clear and independent institutional investment analysis Quant Screen
  • Clear and independent institutional investment analysis Floating Bar Charts
  • Clear and independent institutional investment analysis Cumulative Relative Returns
  • Clear and independent institutional investment analysis Risk/Return Chart
  • Clear and independent institutional investment analysis Relative rolling 36 risk adjusted against peer group
  • Clear and independent institutional investment analysis Dependency Analysis
  • Clear and independent institutional investment analysis ESG Integration Analysis Viewing Companies with a rating: CC & CCC TOYOTA MOTOR CORP APPLE INC HEWLETT-PACKA RD CO ENEL SPA EDF NESTLE SA UNILEV ER PLC THYSSENKRUPP AG ARCELORMITTAL ROYAL DUTCH SHELL PLC SAMSUNG ELECTRONICS CO., LTD INTEL CORP
  • Clear and independent institutional investment analysis
  • #CYconf2014
  • UCITS DO NOT HAVE A GUARANTEED RETURN AND PREVIOUS PERFORMANCE DOES NOT GUARANTEE FUTURE RETURNS May 2014 The Benefits of a Structured Approach to Fund Selection The Future of Asset Management in Cyprus and Greece
  • Agenda Mutual Fund Investing Gaining Importance1 Agenda Passive vs Active Investing2 A Structured Approach to Fund Selection3
  •  Professional Management  Diversification  Low cost  Liquidity  Regulation & Transparency  Counterparty and Country Risk eliminated Mutual Fund Investing Gaining Importance In the aftermath of the crises in Greece and Cyprus, Institutional Investors increased their allocation in Mutual Funds in order to benefit from: More than 5000 distinct strategies available in Europe
  • Passive vs Active Investing To be Active or not to be? Passive Investing advocates argue that active managers cannot beat their benchmarks. This is on average true. Investing is a zero sum game: In order for an investor to outperform its benchmark one or more investors must underperform. On average:  Passive Investors will underperform their benchmark by the fees of the average Fund.  Active Investors will underperform their benchmark by the fees of the average Fund. Since Passive Funds have lower fees then on average outperform Active Funds. The magic word here is “on average”. What about the variation of outcomes?
  • Passive vs Active Investing To be Active or not to be? Since Passive Funds replicate an Index, they have low variation of outcomes. They usually underperform their benchmark by the management fee. With Passive Investing, an Investor knows he/she can be close and below its benchmark 90 100 110 120 130 140 150 160 170 21/5/2009 21/8/2009 21/11/2009 21/2/2010 21/5/2010 21/8/2010 21/11/2010 21/2/2011 21/5/2011 21/8/2011 21/11/2011 21/2/2012 21/5/2012 21/8/2012 21/11/2012 21/2/2013 21/5/2013 21/8/2013 21/11/2013 21/2/2014 21/5/2014 ETF MSCI EUROPE
  • Passive vs Active Investing To be Active or not to be? Active Investing has a big variation of outcomes. Whether someone can outperform its benchmark is a direct function of how good your Fund Selector is: With Active Investing, an Investor can outperform its benchmark 60 80 100 120 140 160 180 200 Best Performing Fund MSCI EUROPE Worst Performing Fund
  • Passive vs Active Investing To be Active or not to be? Example 1: Global Equities With Active Investing, an Investor can outperform its benchmark 80 180 280 380 480 580 680 19/8/1996 19/3/1997 19/10/1997 19/5/1998 19/12/1998 19/7/1999 19/2/2000 19/9/2000 19/4/2001 19/11/2001 19/6/2002 19/1/2003 19/8/2003 19/3/2004 19/10/2004 19/5/2005 19/12/2005 19/7/2006 19/2/2007 19/9/2007 19/4/2008 19/11/2008 19/6/2009 19/1/2010 19/8/2010 19/3/2011 19/10/2011 19/5/2012 19/12/2012 19/7/2013 19/2/2014 Global Equities Advised Fund MSCI WORLD
  • Passive vs Active Investing To be Active or not to be? Example 2: European Equities With Active Investing, an Investor can outperform its benchmark 30 50 70 90 110 130 150 29/12/2000 29/8/2001 29/4/2002 29/12/2002 29/8/2003 29/4/2004 29/12/2004 29/8/2005 29/4/2006 29/12/2006 29/8/2007 29/4/2008 29/12/2008 29/8/2009 29/4/2010 29/12/2010 29/8/2011 29/4/2012 29/12/2012 29/8/2013 29/4/2014 European Equities Advised Fund MSCI EUROPE
  • Passive vs Active Investing To be Active or not to be? Yes, but only if you have a quality Fund Selection process in place. Most Fund Selectors rely on ratings made by Databases like:  Morningstar  Lipper  Citywire Using the rating databases could be an input, but a Fund Selector could not rely to them. A structured qualitative skewed approach should be in place to ensure proper Fund Selection, to ensure a higher probability to outperform the benchmark. To be Active or not to be? YES
  • Categorization & Initial Screening Quantitative Scoring Qualitative Analysis Final Decision Steps of a structured Fund Selection process Fund Selection conducted quarterly on a tabula rasa basis Fund Selection Process
  • Filters imposed for limiting universe :  Liquidity Screening by AuM ≥ € 50 million  Track record availability (at least 3 years of track record is necessary) Categorization & Initial Screening A Structured Fund Selection methodology Categorization & Initial Screening Categorization & Initial Screening  All mutual funds are categorized under 90 categories  Systematic execution guarantees the validity of comparison and selection  Comparing “like with like” is ensured by correct assignment to peer groups
  • For testing performance consistency and persistency qualified funds are scored based on an in-house model Major metric pillars Metrics ScorecardRisk Returns Manager Tenure Metrics vs Benchmark Risk/Return Fund Size (AUM) Quantitative Scoring A Structured Fund Selection methodology Quantitative Scoring Qualitative Analysis
  • Risk Returns Metrics vs Benchmark Risk/Return • Total returns (YTD, 3y, 5y) • Annual returns • Annual returns rank % category • Morningstar return • Morningstar return rank % category • Sharpe (1y, 3y, 5y, 10y, 15y) • Sortino (1y, 3y, 5y, 10y, 15y) • Standard deviation (1y, 3y, 5y, 10y, 15y) • R squared • Beta • Tracking Error ReturnRisk Risk/Return • Upside/Downside capture ratio • Batting average • Alpha • Treynor • Information Ratio A Structured Fund Selection methodology Quantitative Scoring: Scorecard metrics Metrics Scorecard
  •  Primary focus is on the Strategy of the fund  PARENT, PEOPLE, PROCESSES (PPP) are studied in detail  Information gathering means: − Meetings with Fund Managers − Conference Calls − Holdings look through − Investment Conferences  SWOT (quality) cards for top scoring funds Qualitative Analysis A Structured Fund Selection methodology Qualitative Analysis We could characterize the selection methodology as “qualitative skewed” More than 300 meetings and calls per annum
  • Final Decision • In depth qualitative analysis and internal focus group final steps Focus on top 2-3 funds with highest quant score Continuous monitoring & feedback Detailed presentation of Metrics Scorecards In depth discussion on Fund Strategy, PPP DEBATE & DECISION A Structured Fund Selection methodology Final Decision per category
  • Step 1: Funds categorization A Structured Fund Selection methodology The full cycle of the fund selection process is run quarterly on a “tabula rasa” basis Universe of over 1,300 funds from 15 global Fund Managers; 90 categories Step 2: Initial screening 20-40 % reduction of initial Funds list List screened by:  Exclusion of funds with low Morningstar rating and/or low fund size Step 3: Quantitative Final ranking based on:  Fund Strategy  Performance consistency  Investment mgt team  Investment mgt process Information gathered on regular interviews with Asset Managers Ranking based on:  Performance  Volatility  Risk/return ratios  Alpha/beta Methodology reviewed bi-annually to optimize assessment criteria Final decision Top 3 Funds per category Top 3 Funds per category Mutual Funds’ organized by:  Asset classes (equities, FI, etc.)  Geographies (US, EU, Asia, etc.)  Style (Small–Medium–Large cap)  High yield–investment grade– government–corporate  Industry Sectors & Themes Geographies Step 4: Qualitative  Debate  Decision per category Top 1 Fund per category Strategy Parent People Process
  • Summary  Mutual Fund Investing Gains Importance  It pays out to be Active – But only when proper Fund Selection methodology is in place  A Structured Fund Selection Methodology can significantly increase the probability for an Investor beating its benchmark Choose your Fund Selector carefully
  • Thank you! The Benefits of a Structured Approach to Fund Selection
  • #CYconf2014
  • May 2014 ALPHA TRUST MUTUAL FUND MANAGEMENT S.A. 21, Tatoiou str., 145 61 Kifissia, Greece, Tel.: +30. 210 6289300, Fax: +30. 210 8089150 url : www.alphatrust.gr, email: info@alphatrust.gr , General Electronic Commercial Registry: 882401000, Tax Registration Number 094317734 Athens Tax Office, Hellenic Capital Market Commission’s License 24/669/23.12.2013 UCITS OFFER NO GUARANTEED RETURN AND PAST PERFORMANCE DOES NOT GUARANTEE THE FUTURE ONE. " An Outline of Distinct Pension Fund and Unit-Linked Investment Strategies”
  • Alpha Trust Group Who we are  Alpha Trust is today the oldest and largest independent asset manager domiciled in Greece.  55 employees of which 18 Investment Professionals located in Athens.  Alpha Trust Hellenic Equity Fund is the only overall five-star Morningstar rated fund with long track record in the Morningstar category of Greece Equity.  Supervised by the Hellenic Capital Market Commission.
  • Mutual Fund Management Institutional Mandates - 2008-2013 Alpha Trust Mutual Fund Management S.A. was awarded the mandate for the establishment and the investment management of The Economists’ Occupational Pension Fund Domestic Balanced Fund. The mandate was awarded following an RFP process in which the top 10 local mutual fund management companies participated. Alpha Trust Mutual Fund Management S.A. was awarded the mandate for the management of two Domestic Mutual Funds: the Interlife Equity Fund and Interlife Balanced Fund. The management of Interamerican Life Insurance Co., Part of Achmea and the 2nd largest Life insurer in the Greek market, announced its decision to include Alpha Trust Mutual Fund Management S.A. products in its unit linked offerings to individual and corporate customers. Interlife General Insurance Company The Economists’ Occupational Pension Fund
  • ΤΕΑ INTERAMERIΚAN S&B Industrial Minerals S.A. and Interamerican Life Insurance S.A. awarded the mandate for the management of the new M/F S&B PENSION Global Equity Fund of Funds to Alpha Trust Mutual Fund Management S.A.. On 13, September 2013, Alpha Trust AE Mutual Funds Management was awarded the mandate for the management of part of the Occupational Fund “ΤΕΑ ΕΑPΑΕ”’s portfolio, following an RFP process, in which the largest Greek banks participated. Alpha Trust Mutual Fund Management S.A. was awarded the mandate for the establishment and the investment management of the TEA Interamerican Global Balanced Fund of Funds. The mandate was awarded following an RFP process in which selected foreign and local asset managers participated. S&B Industrial Minerals S.A. Occupational Pension Fund of Interamerican Mutual Fund Management Institutional Mandates ΤΕΑ ΕΑPΑΕ Occupational Fund
  • Pension Plan Management Policies Integrated Decision Process Funding Policy Benefits Policy Investment Policy In the wake of the recent financial crisis, fund trustees, plan sponsors, and administrators are reconsidering traditional Pension Plan Management policies.
  • Defined Benefit (DB) & Defined Contribution (DC) Pension Plans Pension Plans Generally Come In One Of Two Varieties: Defined Benefit (DB) & Defined Contribution (DC) Retirement plans are based on the formula: C + I = B (contributions + investment earnings = benefits) DB plans: A promise for the future { C + I = B } DC plans: The employee is taking the investment risk {C+ I = B}
  • Strategy Description Comment CPPI Assets are rebalanced between bonds and the “Risky part” Low perceived cost, but administratively complex and potential for “cash lock” Target Volatility Allocations between growth and conservative assets is determined based on volatility Theoretically attractive approach that is beginning to gain traction in the market Target Date Allocations between growth and conservative assets is determined based on age Consistent with existing approaches, but can be ineffective through periods of sustained volatility The recent financial crisis forced many DC plan administrators to reassess their investment strategies DC Investment Strategies
  • Constant Proportion Portfolio Insurance DC Investment Strategies
  • Target Volatility Funds DC Investment Strategies
  • DC Investment Strategies Target Date Funds
  • DB Investment Strategies Strategy Description Comment Strategic Asset Allocation Allocation between asset classes is based on historic risk/return data Depend on past data / Not necessarily consistent with short term constrains Traditional LDI It involves the construction of a Liability hedging portfolio Removes financial risk – suitable for 100% funded funds De risking Systematic switching from risky assets to Liability hedging assets Combines Strategic Asset Allocation & LHP strategies Dynamic Asset Allocation Dynamic allocation between a Liability hedging portfolio & a Performance Seeking Portfolio Combination of de-risking and re-risking processes in relation to the funding status of the Pension As funding levels decline, the need for investment strategies that focus on Asset – Liability matching increases
  • The liability hedging portfolio DC Investment Strategies Source: AEGON
  • The Importance of Active Asset Allocation: An example Source: Alpha Trust -90% -80% -70% -60% -50% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50% 04/09 10/09 04/10 10/10 04/11 10/11 04/12 10/12 04/13 10/13 04/14 ALPHA TRUST HELLENIC EQUITY FUND Athens Compo Sh Pr Index Alpha Trust Hellenic Equity Fund 5Y Performance (30/04/2009-30/04/2014)
  • The Importance of Active Asset Allocation: An example -50% -40% -30% -20% -10% 0% 10% 20% 30% 15% 20% 25% 30% 35% 40% cumulativereturn volatility ALPHA TRUST HELLENIC EQUITY FUND GREECE EQUITY Category Average Athens Compo Share Price Index Source: Alpha Trust Alpha Trust Hellenic Equity Fund 5Y Risk Return Analysis (30/04/2009-30/04/2014)
  • The Importance of Active Asset Allocation: An example -100% -80% -60% -40% -20% 0% 20% 40% 60% 80% 04/09 10/09 04/10 10/10 04/11 10/11 04/12 10/12 04/13 10/13 04/14 GENIKI BOND DOMESTIC Barclays Greece Govt All Bonds Source: Alpha Trust Geniki Domestic Bond Fund 5Y Performance (30/04/2009-30/04/2014)
  • The Importance of Active Asset Allocation: An example -20% 0% 20% 40% 60% 80% 10% 15% 20% 25% 30% 35% cumulativereturn volatility Geniki Domestic Bond Fund BOND GREECE Category Average Barclays Greece Govt All Bonds Source: Alpha Trust Geniki Domestic Bond Fund 5Y Risk Return Analysis (30/04/2009-30/04/2014)
  • The Importance of Active Asset Allocation: An example -2% -1% 0% 1% 2% 3% 4% 5% 6% 04/09 10/09 04/10 10/10 04/11 10/11 04/12 10/12 04/13 10/13 04/14 GENIKI EURO MONEY MARKET FUND - SHORT TERM Citigroup EUR 1 Month EUR Depo Source: Alpha Trust Geniki Euro Money Market Fund – Short Term 5Y Performance (30/04/2009-30/04/2014)
  • The Importance of Active Asset Allocation: An example -90% -80% -70% -60% -50% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50% 60% 04/09 10/09 04/10 10/10 04/11 10/11 04/12 10/12 04/13 10/13 04/14 The Economists Occupational Pension Fund BENCHMARK * Source: Alpha Trust The Economists Occupational Pension Fund 5Y Performance (30/04/2009-30/04/2014)
  • The Importance of Active Asset Allocation: An example -60% -40% -20% 0% 20% 40% 60% 5% 10% 15% 20% 25% 30% 35% 40% cumulativereturn volatility The Economists Occupational Pension Fund Athens Compo Sh Pr Index Barclays Greece Govt All Bonds BALANCED (GREECE) Category Average ETAO BENCHMARK * * benchmark: 30%Athens Compo Sh Pr Index+40%Citigroup EUR 1 Month EUR Depo+30% Bond Index, which as of 01/01/2013 Barclays EuroAgg Total Return, SBGRL as of 01/04/2010 to 31/12/2012, SBEB before 01/04/2010 Source: Alpha Trust The Economists Occupational Pension Fund 5Y Risk Return Analysis (30/04/2009-30/04/2014)
  • The Importance of Active Asset Allocation: An example -50% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50% 60% 04/09 10/09 04/10 10/10 04/11 10/11 04/12 10/12 04/13 10/13 04/14 The Economists Occupational Pension Fund PORTFOLIO Source: Alpha Trust The Economists Occupational Pension Fund vs Alpha Trust Stable Weights Portfolio 5Y Performance (30/04/2009-30/04/2014) Alpha Trust Stable Weights Portfolio
  • The Importance of Active Asset Allocation: An example Source: Alpha Trust -10% 0% 10% 20% 30% 40% 50% 60% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% cumulativereturn volatility Alpha Trust Stable Weights Portfolio The Economists Occupational Pension Fund The Economists Occupational Pension Fund vs Alpha Trust Stable Weights Portfolio 5Y Risk Return Analysis (30/04/2009-30/04/2014)
  • • There is No Such Thing as “One Size Fits All”. • Different Investment Strategies can help Pension Funds to control Risk. • Implementation of clear and well defined Investment strategies is vital for a viable and realistic Pension System. • Active Asset Allocation improves significantly the Risk-adjusted Returns. Concluding Remarks Thank you
  • #CYconf2014
  • Managing Exposures in Illiquid Instruments 28 May 2014 C∙Y Actuaries Conference: “The future of Asset Management in Cyprus and Greece”
  • OVERVIEW  Definitions – What are illiquid instruments  The link between Liquidity and Quality  Examples of Illiquid Instruments  Valuation Methods – Marking to Market  Case Study – Cyprus Government Bonds  Trading Illiquid Instruments  Other Options for Managing Exposures  Summary of key points - Questions
  • Illiquid instruments: Definition ILLIQUID means: The state of a security or other asset that cannot easily be sold or exchanged for cash without a substantial loss in value. The lack of ready buyers also leads to larger discrepancies between the asking price (from the seller) and the bidding price (from a buyer) that would be found in an orderly market with daily trading activity. Illiquid assets also cannot be sold quickly because of a lack of ready and willing investors or speculators to purchase the asset.
  • Illiquid instruments: The Bid-Offer Spread A common measure to assess the liquidity of an instrument is its BID-OFFER SPREAD. This can vary from a few basis points to several percentage points:
  • Illiquid instruments: Typical characteristics Uncertainty about Fair Value Lack of a market where active trading takes place Very few (if any) dealers/brokers providing quotes Small issue sizes – typically under $200 million Investors – Hedge Funds, Distressed Investors, Speculators Credit Quality - Non-Investment Grade
  • The link between liquidity & quality As instruments deteriorate in quality the nature of investors changes from long only real money accounts to hedge funds. As the latter investors demand big discounts for holding risky assets we often see big gaps in this process of investor profile change. E.g. Cyprus Government Bond 2020:
  • The link between Liquidity & Quality CYPRUS:  KOXA Cyprus Government Bonds issued under Cyprus Law and traded on the Cyprus Stock Exchange (CSE)  Bonds of Local Banks Senior, Subordinated & convertible securities  Unlisted Shares  Corporate Bonds  Asset Backed Securities (ABS)  Structured Credit Products e.g. CDOs, CLNs  Bonds rated CCC and below  Shares of Small Cap Companies GLOBAL:
  • Marking to Market: Valuation Methods  Reliable valuation of assets for which markets become illiquid is a big challenge but also, arguably, the most important step in the process of managing portfolios of illiquid instruments.  There are several valuation methods that can be used but it is always important to consult the market since, especially for illiquid bonds, a price derived by a model will rarely be found in the market.  There is no “one size fits all” approach.  In each case one should look for the best possible benchmark and assess the results based on the relevance to that benchmark.
  • Marking to Market: Case Study KOXA  One of the most common instruments found in investment portfolios of local institutional accounts are Cyprus Government Bonds which are listed on the Cyprus Stock Exchange and are under Cyprus Law.  While the International Bonds (Euro Medium Term Notes – EMTNs) of Cyprus have become very liquid, trading with a bid-offer spread of 50 basis points, the domestic government bonds market is at the early stages of its development hence it still is relatively illiquid. So Why do the bonds of the same issuer (Republic of Cyprus) trade so differently and how can we price KOXAs given that they are so illiquid ?
  • Marking to Market: Case Study KOXA MAIN DIFFERENCES between KOXAs & EMTNs: EMTNs KOXAs Average Issue Size (EUR) 719,666,667 58,993,446 Number of Issues 6 37 Average Coupon 4.25% 5.27% Nature of Investors Majority foreign Majority local Legal Framework English Law Cyprus Law Trading Venue OTC Stock Exchange + OTC
  • Marking to Market: Case Study KOXA Plotting the Yield Curve: Using the 3 points provided by the EMTN market and the 10-year GGB as a benchmark for our 10- year yield we interpolate a hypothetical EMTN yield curve: STEP 1
  • Marking to Market: Case Study KOXA Deciding the premium: Investors interested in the KOXAs would typically demand a premium for holding these instruments instead of the EMTNS. STEP 2 This premium is a factor of:  Liquidity: An investor demands a premium for holding an illiquid asset instead of holding a liquid one.  Law: The recent example of the Greek PSI has made many investors more comfortable with debt instruments that are governed by English Law versus debt which is governed by the Law domestic to the country of exposure of the issue (in our example, Cyprus).
  • Marking to Market: Case Study KOXA Adding the premium and reverse engineering the implied cash prices:STEP 3
  • Marking to Market: Case Study KOXA An ALTERNATIVE SOLUTION is to load our page on Bloomberg (FBME<GO>) where we price all of the Cyprus Government bonds (both EMTN and KOXA): !
  • Trading Illiquid Instruments  Accurate valuation of the instruments will obviously result in a better informed BUY / SELL / HOLD DECISION by the portfolio manager or investment committee.  However, given that we are discussing illiquid instruments it has to be highlighted that it is not always possible to achieve the price that results from the valuation, unless the valuation is based on a firm price provided by a reliable market maker in the securities. How can you achieve the best price?
  • Trading Illiquid Instruments PARAMETERS to consider for best price achievement: How big is the position relative to the issue size? How are related markets performing at the time of your decision? Are there more buyers or sellers at the time of execution? Are you getting pricing from enough sources? Size Timing Market Dynamics Pricing Sources
  • Trading Illiquid Instruments  Over the past year we have seen local accounts both selling (either because of funds breaking up or implementing diversification strategies) and buying (optimizing cash positions in banks).  The demand of hedge funds and other international investors for Cyprus risk has led to the creation of a fairly efficient OTC market.  Most government bonds can settle on Euroclear and international custodians can facilitate OTC transactions in the issues of banks and corporates.
  • Trading Illiquid Instruments  This means that although it might appear on the Cyprus Stock Exchange (CSE) that there is no liquidity for the locally issued bonds, there is an OTC market which is developing and through which investors can potentially execute their investment decisions.  Using our case study as example, a local investor can sell or buy KOXAs via Euroclear if their counterparty either cannot hold the securities on the CSE directly or simply because this is their preferred settlement method.
  • Alternative risk management solutions  Selling the position is not the only way to manage an exposure.  Illiquid markets often create the need for alternative solutions to reduce the exposure to a market/issuer.  For bonds an alternative solution is to buy protection against the default of the issuer via a Credit Default Swap (CDS).  Interest Rate Swaps (IRSs) can be used in the event that the main concern for the exposure is hikes in interest rates rather than a default of the issuer.  For equities, if the stock is illiquid it is unlikely that a liquid derivative will exist. However, one can use proxy hedges e.g. chose the index with the highest positive correlation and open a position in the opposite direction either via the index or a derivative of the index.
  • Summary: Key Points  Many local institutional accounts have been locked in instruments which are considered to be illiquid  The recent improvement in the Cyprus bond market has created a spill over of demand to the illiquid securities.  There are valuation methodologies for these securities and marking the portfolio to market is crucial.  An OTC market is developing and the majority of listed fixed income securities now trade outside of the exchange.  There are alternative solutions for managing risk if selling is either not desirable or not possible.
  • THANK YOU FOR YOUR ATTENTION! IOANNIS PETRI Head of Investment Services T: +357 22 888 416 ioannis.petri@fbme.com www.fbme.com
  • #CYconf2014
  • Global Equities Adding value to performance
  • Globalization - we live in a global world  Abolition of import tariffs / controls has benefited global trade  Global trade (merchandise and services) now accounts for over 30% of the world’s GDP  Cross border FDI’s are also at record highs Global Equities World exports of merchandise and services to world GDP Source: IMF for world GDP, WTO Secretariat for merchandise trade, WTO Secretariat and UNCTAD for commercial services Inward and outward FDI ($bill current prices) $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800 $2,000 1970 1975 1980 1985 1990 1995 2000 2005 2010Source: UNCTAD Stat
  • Globalization - economic balance is shifting  Globalization has also changed the economic landscape  Developed economies now contribute much less to the world’s GDP vs emerging economies  Whilst emerging market equities are also gaining in importance Global Equities Share of World’s GDP by region Source: IMF /World Bank Weights in MSCI All country Index 2102 Japan Canada US UK Pacific Emerging Markets Europe ex UK Source: MSCI US & Can Japan BRIC EU top 5 Rest of World 0% 5% 10% 15% 20% 25% 30% 35% 40% 01/01/1990 01/01/1994 01/01/1998 01/01/2002 01/01/2006 01/01/2010
  • Globalization - corporate revenues are geographically diverse  Based on latest data 46% of the revenue of S&P 500 US companies is derived from international operations vs 30% 15 years ago  Revenues generated by emerging economies now surpass that of the US  This has shifted the importance into global from local investing Global Equities S&P 500 companies’ non US sales as % of total Source: IMF /World Bank MSCI All country World Index sales vs market cap 30% 21% 11% 3% 32% 2% 51% 25% 8% 5% 11% 0% 0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% North America Europe ex UK Japan Pacific ex Japan Emerging markets Other Market Cap in MSCI Revenue derived from region Source: MSCI / Capital Group 38% 39% 40% 41% 42% 43% 44% 45% 46% 47% 48% 49% 2003 2007 2011
  • Globalization - technological breakthrough  High speed internet and communications have changed the investment landscape  Barriers to global / international investing have been minimized  Access to financial information is instant and shared across the world  No disadvantage from remote investing  Globalization of financial powerhouses also allows for easy access to quality primary research at minimum cost  Online trading enables efficient execution  Mobile access allows for 24h monitoring and eliminates time zone issues Global Equities
  • Global Equities- what do we mean by global equity investing?  Global equity investing is therefore the selection and investment in equities not on a localized but on a global basis  It is the investment in the 43,512 globally listed companies  The total capitalization of global equities is $57.527 trillion ( as of Jan ’14) Global Equities Number of listed companies Source: World Federation of Exchanges members Stock Market Capitalization $26,980,552 $17,945,574 $3,003,475 $9,863,206 - 10,000,000.00 20,000,000.00 30,000,000.00 Americas Asia - Pacific Africa - Middle East Europe Source: World Federation of Exchanges members 10,219 23,759 1,824 7,710 0 5 000 10 000 15 000 20 000 25 000 Americas Asia - Pacific Africa - Middle East Europe
  • Global Equities- why global equities make sense  Global equities offer the following distinct advantages  Diversification (geographical / segmental / currency)  Ability to select ‘best of class’ global stocks rather than confined localized investments  Opportunity for Alpha generation (additional return)  Optimization of risk adjusted returns  Better risk / return profiles  Better downside protection  Ability to capture true globalized economic reality  Liquidity Global Equities
  • Global Equities- why global equities make sense: smartphone industry  The global smartphone industry represents a simple yet real example of the benefits of global equity investing  The market exploded with units sold rising almost 10x from 173.5m in ‘09 to 1billion in ’13 for revenues of >$350bl p.a.  This represented a great opportunity for investment but with local only mandates such an opportunity would go missing  Market in 2009 represented mainly by 5 companies listed in 5 different stock markets across 3 different continents Global Equities Smartphone vendors shipments (units in millions) Source: IMF /World Bank Smartphone total market (units in millions) - 200.00 400.00 600.00 800.00 1,000.00 1,200.00 2009 2010 2011 2012 2013 Source: IDC Nokia RIM (blackberry) Apple Samsung HTC Others 0 50 100 150 200 250 300 350 400 450 2009 2010 2011 2012 2013
  • Idea Generation Criteria evaluation Investment committee approval Global Equities- why global equities make sense: investment process Global Equities Global analysis and research Analysis team Asset management team Quantitative Models Qualitative Models Primary / Secondary research Sector Analysis Information Gathering Implementation / reevaluation Macroeconomic Analysis Sector Analysis Corporate Analysis 10,000 Companies Observation Management Updates Company Visits Participation in Analyst Meetings and Conference Calls
  • Idea Generation Criteria evaluation Investment committee approval Global Equities- why global equities make sense: investment process Global Equities Quantitative criteria Qualitative criteria Implementation / reevaluation Fair Value >15% from current price Profitability: P/E, P/E/G, Div Yield% Value: ROE, ROIC,EBITDA Margin Prospects: EPS Gr, Rev Growth Balance Sheet: BS Strength, P/B Liquidity: EV/Ebitda, EBITDA/Net Debt Valuation: P/E, P/B< of average Risk Comparative valuation with sector Management Evaluation Corporate Governance Evaluation Valuation of Information Sector Prospects Strategy Evaluation Competitiveness evaluation Possible Merger/Acquisition scenarios Minority Interest observations
  • Global Equities- why global equities make sense: smartphone industry  Stock picking and investing in the market and in specific stocks was highly rewarding.  Local only focus would pass / miss such opportunities  The list also of companies that have also benefited from the growth in smartphone sales is limitless (Application software developers, chip producers) Global Equities Smartphone vendors stock performance (% from 2009) Source: Bloomberg Smartphone vendors cumulative stock performance (% from 2009) -200% -100% 0% 100% 200% 300% 400% 500% 600% 700% APPLE NOKIA BLACKBERRY SAMSUNGSource: Bloomberg APPLE NOKIA BLACKBERRY SAMSUNG 0% 100% 200% 300% 400% 500% 600% 700% 800% 01/01/2009 01/01/2010 01/01/2011 01/01/2012 01/01/2013 01/01/2014
  • Global Equities- historical global equity returns vs local markets  Diversification and breadth means that historically global equities have had superior risk adjusted returns  The MSCI AC World index and the S&P 500 index in EUR (the most diversified in terms of revenue) display these characteristics  This has huge implications for optimizing expected portfolio returns Global Equities Stock market returns -20 years Source: Bloomberg Stock market returns -20 years Source: Bloomberg * FTSE / CSE 20 from 2000 onwards S&P 500 MSCI AC World index ASE CSE/FTSE 0% 100% 200% 300% 400% 500% 600% 700% 01/12/1994 01/12/1998 01/12/2002 01/12/2006 01/12/2010 S&P 500 (EUR) MSCI AC World (EUR) Athens Stock Exchange (ASE) Cyprus Stock Exchange (CSE) * Total Return 262.69% 135.31% 41.8% -94.89% Return Annualised 5.17% 4.5% 1.8% -19.43% Volat Monthly 4.78% 4.21% 9.2% 12.9% Volat Annualised 16.56% 14.58% 31.85% 44.74%
  • Global Equities- global equities as part of portfolio of assets  Adding global equities in portfolios has historically been positive for returns  Risk assumed is also much less compared to adding only locals stocks in portfolia Global Equities Indicative Portfolio returns -20 years Source: Bloomberg Indicative Portfolio returns -20 years Source: Bloomberg * 1m Euribor CASH 50 % MSCI AC World index + 50% Cash 50% 70% 90% 110% 130% 150% 170% 190% 210% 01/12/1994 01/12/1998 01/12/2002 01/12/2006 01/12/2010 50% MSCI AC & 50% Cash * Cash* Total Return 108.4% 63.7% Return Annualised 4.16% 2.55% Volat Annualised 7.35% 0.6%
  • Global Equities- implementing global equity strategies  Primarily either through managed portfolios or funds  Managed portfolio and funds can be passive or active  Tracker strategies are also there for consideration  Manager / fund selection as important as strategy selection  Advantage of manager selection is that it can be more flexible / tailor-made  Implementation method may depend on the portfolio size Global Equities
  • Strategy implementation options What will the strategy be? How will it be implemented Global Equities- implementing global equity strategies Global Equities Self investing Discretionary asset manager mandate Funds Active management Passive management strategies Direct stock selection Managed portfolio/ account Funds / ETFs etc
  • Strategy implementation options Manager / custodian selection Implementation Global Equities- implementing global equity strategies Global Equities Self investing Discretionary asset manager mandate Funds Choice of managers Fund / ETF selection by advisor / manager Direct investments / safekeeping Subscription / purchase units Monitoring Rebalancing/ appraisal Rebalancing/ appraisal
  • Contact Global Equities Name Christos Akkelides Head of Asset Management ARGUS Stockbrokers Ltd Address 25 Demostheni Severi Ave.,Metropolis Tower, 1st & 2nd Floor,1080, Nicosia, Cyprus P.O. Box 24863, 1304, Nicosia, Cyprus Email cakkelides@argus.com.cy www.argus.com.cy Telephone (357) 22 717000 (357) 22 717076 THANK YOU FOR YOUR ATTENTION!
  • #CYconf2014
  • Building Trust Investment Governance and Responsibilities to Investors Stephan Cronje & Alexis Yiannas 28 May 2014 The information in this presentation is confidential and should not be distributed to third parties without the prior approval of Cronje & Yiannas Actuaries and Consultants Ltd.
  • Investment Governance Background A TRICKY CONCEPT OECD DEFINITION: “Procedures and processes according to which the <investments> are directed and controlled.” INSTITUTE ON GOVERNANCE DEFINITION: “Governance determines who has power, who makes decisions, how other players make their voice heard and how account is rendered” SO WHAT LEADS TO GOOD GOVERANCE? o The right structures and processes o The right people o The right dynamic WHY IS GOOD GOVERNANCE IMPORTANT? o TRUST! (no trust leads to no risk appetite) o It aligns objectives and implementation and avoids excessive risk o It gives you a much better chance for good outcomes o It necessarily leads to good outcomes o It can be legislated & regulated o Good structures and processes alone lead to good governance SOME MYTHS ABOUT GOOD GOVERNANCE:
  • INVESTMENT COMMITTEE BOARD OF TRUSTEES OR COMMITTEE INVESTMENT CONSULTANT ASSET MANAGER(S) CUSTODIAN FUND MEMBERS INVESTMENT OBJECTIVES ASSET CLASS STRATEGY INVESTMENT CONSULTANT SELECTION ASSET MANAGER(S) SELECTION PERFORMANCE MONITORING STRATEGIC ASSET ALLOCATION INVESTMENT BENCHMARKS / GUIDELINES TRUSTEE TRAINING PORTFOLIO HOLDINGS SAFEKEEPING Investment Governance Structure & Processes Parties and Processes – A Pension Fund Example RISK APPETITE
  • Investment Governance Structure & Processes Parties and Processes – A Pension Fund Example PROCESS / PARTY BOARD OF TRUSTEES INVESTMENT COMMITTEE INVESTMENT CONSULTANT ASSET MANAGER(S) Investment Objectives Decision maker Provides Input Provides Input Strategic Asset Allocation Decision maker Provides Input Provides Input Portfolio Holdings Oversees Oversees Oversees Decision maker Asset Manager Selection Decision maker Provides Input Provides Input Performance Monitoring Oversees Decision maker Provides Input Provides Input Trustee Training Decision maker Provides Input Provides Input STRATEGY Trust Deed and Rules Statement of Investment Principles TOR of Investment Committee Engagement letter with Consultant IMPLEMENTATION Investment Manager Agreements Asset Class Strategies Manager Selection Process / Policy MONITORING Quarterly monitoring reports EDUCATION Trustee Training Policy / Logs
  • Investment Governance – People Structure and process are not enough EUROPEAN DIRECTIVES AND FIT AND PROPER? o IORP II Directive (Article 23) and SOLVENCY II Directive (Article 42) provide fit and proper criteria for people who effectively run the organization and people responsible for key functions. o AT ALL TIMES have adequate:  Professional qualifications (fit)  Knowledge (fit)  Experience (fit)  Of good repute and integrity (proper) o IORP II Directive requires Member States (i.e. pensions regulators) to assess fulfilment of requirements through effective procedures and regular controls o Solvency II Directives requires Member States (i.e. insurance regulators) to ensure companies have proper policies in place ensure fit and proper status. Insurers are required to notify the regulators of any changes. FINDING THE RIGHT FIT IN PRACTICE? QUALIFICATIONS KNOWLEDGDE EXPERIENCE INTEGRITY TIME AVAILABILITY INDEPENDENCE ENGAGEMENT ENTHUSIASM Do I have a person that fits this profile? • Can this be addressed through education? • Should this be outsourced? • Can I manage conflicts through a conflicts of interest policy? COMPLIANCE PRACTICAL DYNAMIC
  • Investment Governance – Conflicts of Interest Policy example Do I have a direct or indirect personal interest which can or may be perceived as influencing me in a matter under discussion by the trustees / board / committee? Remain at the meeting Participate in the discussion Vote on the motion NO YES Might my conflict of interest rise to a financial gain? YES Disclose interest DO NOT participate in the discussion DO NOT vote on the motion If the interest is or can be seen as significant, leave the room for the discussion of the motion NO Is this interest minor, insignificant and unlikely to be seen as influencing me in the execution of my duties? NO Disclose interest DO NOT participate in the discussion DO NOT vote on the motion If the interest is or can be seen as significant, leave the room for the discussion of the motion Disclose interest DO NOT participate in the discussion DO NOT vote on the motion If the interest is or can be seen as significant, leave the room for the discussion of the motion YES Disclose interest DO NOT participate in the discussion DO NOT vote on the motion  Complete an annual declaration of interests and maintain a conflicts of interest log  Notify the chairman of any potential conflicts of interest before the meeting if you are aware  At the start of every meeting the chairman will request confirmation from the meeting that there are no conflicts of interest  Conflicts of interest disclosures are also required from advisors
  • Building Trust – Part II
  • Trust Ethical Standards Comparability Confidentiality Communication Accountability Alignment of Interests Transparency Integrity Building Trust
  • Building Trust – Responsibilities to Investors GAINING INVESTORS’ TRUST IS VITAL TO THE INDUSTRY! • Regulatory frameworks not enough! • Asset Managers need to prove their commitment to client needs • Place investors’ interest FIRST  Investors should, and are beginning to pay more attention to their rights • Significant improvement potential However, this is usually overlooked.....
  • Building Trust – Trust the most important attribute CFA Institute and Edelman partnered to understand the state of trust in the investment industry. The study conducted in July 2013 surveyed 1,604 retail and 500 institutional investors in the United States, United Kingdom, Hong Kong, Canada and Australia. Source: CFA & Edelman Trust Study
  • Building Trust – Where are we now? 46 49 50 57 57 60 62 66 73 Financial Services Banks Media Pharmaceuticals Energy Consumer Packaged… Food & Beverage Automotive Technology 2013 48 51 51 59 59 65 66 70 79 Financial Services Banks Media Pharmaceuticals Energy Consumer Packaged… Food & Beverage Automotive Technology 2014 WHICH INDUSTRIES INVESTORS TRUST THE MOST? Source: Edelman Trust Barometer
  • Building Trust – Cost of Failure FAILING TO BRIDGE THE TRUST DISCONNECT IN THE LOCAL MARKET WILL LIKELY RESULT: • Market / economy impact o Shrinking of the industry o Lack of fund flow to local / regional projects o Domination of global market participants, and o Additional cost and effort to investors • Social Impact o Retirement savings o Employment (particularly financial services sector)
  • Building Trust – Where to focus? Source: CFA & Edelman Investor Trust Study TOP ATTRIBUTES TO BUILDING TRUST – AN INVESTOR SURVEY Transparency • Clear investment processes • Reduce/resolve conflicts of interest • Full disclosure of fees Ethical Standards and Integrity • Adopt widely recognised standards and practices - Asset Manager Code • Disclosure of regulatory infringements in a timely and complete manner Avoid Ambiguity • Fair representation portfolio, risks exposed, returns achieved • Accurate and comparable performance reporting – Global Investment Performance Standards (“GIPS”)
  • Building Trust – Responsibilities to Investors INVESTORS HAVE THE RIGHT TO: • Independent, objective advice • Fair treatment • Disclosure of existing / potential conflicts • Knowledge and understanding of client-specific circumstances • Explanation of ALL fees and costs incurred by the client • Confidentiality Essential to place the investor first – proactive, rather than reactive policies and procedures
  • Building Trust – Pre-requisites A successful asset management house MUST: • Develop solid investment processes • Invest in quality personnel • Adopt a consistent investment philosophy • Manage and present risk properly • Report performance figures in a consistent and reliable manner • Invest in the right systems FOCUS ON WHAT YOU DO BEST!
  • Thank you! Stephan Cronje FFA Alexis Yiannas, CFA Cronje & Yiannas Actuaries and Consultants Ltd 18 Spyrou Kyprianou Avenue 1075 Nicosia, Cyprus Tel: +357 22 456006 Fax: +357 22 456007 Email: stephan.cronje@cyactuaries.com alexis.yiannas@cyactuaries.com www.cyactuaries.com
  • #CYconf2014