Strategically placed in the heart of Europe, Berlin is a major political, business and cultural centre, with an undeniable cosmopolitan energy. This increasingly ambitious global city may have gained a reputation for its vibrant nightlife scene but an array of high-tech firms and international companies are showing that Berlin is a genuine business destination, too.
The conference industry in Berlin is going from strength to strength. According to statistics from Berlin’s tourist board visitBerlin, 2015 saw a record 7.7 million overnight stays from conference delegates and a total of 27,500 international events were held in the same year. The great diversity of distinctive meeting venues is helping drive interest in the city’s MICE scene, which saw the International Congress & Convention Association’s meeting city rankings place Berlin at number one in 2015.
Messe Berlin is among the world’s leading trade fair organisers and has its own exhibition grounds. From the immense scale of the 170,000sqm Messe Berlin exhibition centre, made up of 26 halls and home to countless international trade fairs, to the newer CityCube, Messe Berlin can host events on almost any scale. Opened in May 2014 and covering two levels, each of 6,015sqm, CityCube is symbolic of Berlin’s emergence as a new capital on Europe’s conference and events scene.
Then there’s the iconic Fernsehturm television tower, which gives visitors a panoramic view of Berlin and is hugely popular for events. Many other conference halls can of course be found throughout the city, but new inspiring spaces are attracting startups and creative companies.
Hotels like the 25hours Hotel Bikini, named after its distinctive shape, lets guests enjoy a better work-life balance by creating a relaxed and informal atmosphere. For example, up to 100 people can be accommodated in the Freiraum function room in the 1920s radio tower, which offers views over Berlin Zoo and the city, as well as a wall of plants to brighten up the space.
Getting to Berlin by air is hassle-free, with direct flights originating from London City, Heathrow and Gatwick all taking under two hours. The city is served by two main airports, centrally located Tegel and Schönefeld. Landing in Tegel, the busiest of the two – and only 8km away from the city centre of Berlin – is usually the best option for business travellers, due to the compact design making it easy for passengers to move quickly through the airport and onto their flight.
Schönefeld is positioned on Berlin’s southern border, and while slightly further out than Tegel, the airport is just a few minutes walk from a S-Bahn rail station, which offers a direct connection to central Berlin in under 40 minutes. The public transport system in Berlin is very efficient and offers a relatively quiet experience when compared to the underground in London, especially during the rush hours – just remember to validate your rail ticket before boarding.
Finding one of the over 50,000 cream-coloured German taxis is generally easy and thanks to strong regulation it’s unlikely you’ll be taken for a ride in terms of the fare.
In my experience, Berlin feels very safe at all hours and air pollution levels are lower than other European cities, partially due to strict rules on diesel vehicles and low rates of car use.
Where to stay?
Hotel prices across the city are notably lower than most other major European capital cities, meaning visitors can get a luxury five-star hotel in Berlin for the price of a solid four-star hotel in central London. However, during the frequent conferences, trade fairs and major corporate celebrations prices can creep up.
Western Berlin, especially around the famous Kurfürstendamm avenue, houses a large number of modern hotels catering for all budgets. Although several high-end hotels can be found in the eastern part of the city, namely the Hilton, Sofitel and Adlon Kempinski, the transport infrastructure and visitor facilities are lacking compared to the west.
It’s hard to miss the Waldorf Astoria Berlin as you exit the Garten U-Bahn station opposite the hotel. Set in the Zoofenster skyscraper at the heart of West Berlin, the famed Waldorf Service starts as soon as you enter, with guests greeted by relaxing music played live by the pianist in the lobby. The lobby itself is decked out in lavish materials, with black Portoro marble columns adorning the area and an elegant staircase above a decorative pond leading to the mezzanine level.
The Waldorf Astoria Berlin has worked hard to offer spaces to suit all type of meetings and events. Bathed in natural light, the 332sqm ballroom is ideal for grand banquets and major conferences or for smaller events select one of the four conference rooms ranging from 70sqm to 139sqm. The on-site ROCA all-day dining restaurant, offering seasonal and Mediterranean cuisine, is the perfect place for an informal business lunch or after conference get together.
As you would expect at a hotel of this level, even the standard King Guest room is furnished with a king-size bed, dressing table, large dining table, spacious wardrobes, Nespresso machine and marble-clad bathroom. The little touches of Salvatore Ferragamo toiletries, faultless concierge and, of course, full length windows providing city views, make the Waldorf Astoria one of the best hotels in the city for travellers.
The massive transformation the city has undergone over the past almost 40 years can be seen most strikingly in Potsdamer Platz. Major development projects have turned this once barren area into a sprawling urban plaza, housing Daimler, the Sony Centre and the Beisheim Center. The Ritz-Carlton Berlin can be found in the latter of these developments, south of the Reichstag, Germany’s parliament building.
From museums, shops and attractions, the Ritz-Carlton is perfectly placed to explore the city and encounter the Holocaust Memorial and Brandenburg Gate. The 303-room hotel is a short taxi ride from Tegel airport or a 35-minute rail journey from Schönefeld and employs arguably the best concierge in the city, Thomas Munko, president of the German International Concierge Association. No request is too big or too small with a simple phone call unlocking the most exclusive restaurants and hard-to-find tickets for corporate entertainment.
The Club Lounge on the 10th floor, accessible to guests of the 25 Club rooms and seven suites on the adjacent floors, offers a complimentary food selection and cocktails, as well as a dedicated Club concierge on hand to arrange private shopping trips and many other excursions. Club guests can enjoy these benefits in a private and discrete setting, away from the hotel’s public areas, making this lounge ideal for finishing up last minute work in a quiet environment.
The in-room decor is decidedly traditional and features classic, well-appointed furniture, alongside modern technology, like the bedside control panels, and high-spec bathrooms replete with Asprey toiletries. The Brasserie Desbrosses restaurant located on the ground-floor offers European cuisine served in a laid-back setting, with part of an original 1875 French brasserie in southern Burgundy having been tastefully incorporated into the interior.
A total of 1,800sqm of meeting space in available at the hotel, with an impressive 910sqm ballroom taking centre stage. Few hotels in Berlin can match the state-of-the-art technology employed by the Ritz-Carlton’s meeting rooms, as well as their extensive meeting rooms that can accommodate up to 1,500 delegates.
Also great for business is the super-stylish Ellington Hotel Berlin, which has extensive conference facilities backed up by state-of-the-art technology.
Out of hours
Upscale restaurant ULA Berlin, a contemporary Japanese restaurant and bar, provides the perfect setting for after work get-togethers. Located in the Mitte district, hidden away from the tourist hotspots down Anklamer street, ULA Berlin has created an exclusive and private environment. Diners can sample from traditional dishes like Japanese radish salad with boiled prawn and sea bream sashimi and Monkfish tempura with seasonal vegetable tempura, alongside indulging in the extensive sake selection.
In between meetings, be sure to make a stop at the unique galleries and museums found on Museum Island on the Mitte district’s Spree river. This museum complex, made a UNESCO World Heritage Site in 1999, contains objects from almost 6,000 years of civilisation. Restaurant Quarré at the Adlon Kempinski Hotel is also a great place for a quick business lunch or for an evening entertaining colleagues. While the light international cuisine is more than enough to warrant a visit to Quarré, prospective clients will be impressed by the grand terrace with views of the Brandenburg Gate.
Berlin is often characterised as gritty and full of concrete, but close to one-third of the city is comprised of green spaces, rivers and lakes. The Grunewald forest is an ideal place to decompress after a day of meetings or to visit the abandoned US spy station on Teufelsberg hill. The 3,000-hectare forest also contains the small, but perfectly formed, Haus am Waldsee, home to a perfectly curated showcase of contemporary art.
From emerging eastern Berlin to buzzing City West, this international powerhouse is easily accessible from European countries, with regular flights and rail services opening up this once closed capital. The long-delayed $6bn Berlin Brandenburg Willy Brandt airport, which is expected to open within the next few years, will soon replace Tegel airport and make it even easier to reach Berlin.
They’re known as the ghost desks – workstations that sit silently in the corner of your office, vacant, gathering dust and draining your business of money. And businesses have every right to be spooked. Under-utilised office space is costing billions of euros each year; a punishing legacy of an outdated working culture geared towards fixed hours at a fixed location.
Happily, times are changing. Today’s business owners are recognising the need to think flexibly, re-imagining the world of work to save, but also developing new practices that bring out the very best in their employees.
The way in which office space is consumed is developing fast. Taking space on an as-needed basis makes sense for businesses that no longer want to be locked into long-term fixed and inflexible leases. After all, why pay for an office with 30 desks when only 15 are ever occupied?
Think fast, work smart
Flexible workspace is giving businesses of every size the freedom to act fast and make better decisions. A firm wanting to open a new division or department can do so immediately, secure in the knowledge that essential IT and front-of-house administrative matters are taken care of by the workspace provider. New teams can simply turn-up, plug-in and focus immediately on core tasks, with no wait for leasing negotiations or re-location logistics.
A recent Regus survey of business professionals outlines the importance placed on flexibility. When faced with two similar jobs, nine in ten professionals would select the one offering flexible working and half of respondents agreed they would ‘actively change job’ if one with more flexible working was offered.
Unlike previous generations, workplace flexibility is no longer regarded as a perk – rather, it is expected. By positioning themselves in a more agile fashion, businesses can cast their recruitment net wider – location no longer being a handicap to securing the best employees.
Catch the co-working buzz
Working flexibly does not mean working in isolation. The same Regus survey identified that nearly nine out of ten professionals believe co-working “helps curb loneliness for home-workers”. Co-working is one of the biggest workplace trends of the moment, describing a workspace that is occupied by individuals from a number of different companies and that encourages networking and collaboration.
These environments are specifically created to foster innovation and drive productivity, with employee wellbeing firmly to the fore when it comes to the design of communal areas such as cafes, bars and activity-led breakout areas.
Regus is at the forefront of this trend, with a growing network of over 3,000 locations in 120 countries worldwide. Today, conversations between Regus and business leaders cover the financial benefits of a more flexible workplace approach. But the conversation moves beyond the financial – namely, how to provide the best environment for workers, so that they in turn might provide their best work for you.
BLOM BANK of Lebanon has been consistently recognised as the country’s best performer by a range of leading regional and international industry voices. Its business operations are based on a universal banking model that spans a range of divisions including: commercial banking, investment and private banking, asset management, insurance, retail and Islamic banking. It’s this breadth of expertise that has seen the bank continue to expand and progress in challenging circumstances. BLOM BANK is looking to strengthen its regional presence in the medium-to long-term through a balanced growth strategy that adheres to its conservative but rewarding business model.
The European caught up with Chairman and General Manager, Saad Azhari, to discuss the bank’s strategy and the market in the Middle East.
Please tell us how BLOM BANK came to be established.
Saad Azhari: BLOM BANK was established in 1951, primarily as a commercial bank. True to its name as Bank of Lebanon and Overseas (Banques Liban et O’uter Mer), it branched out to Saudi Arabia in 1953. In the 1970s, as a result of the Lebanese civil war, it expanded to Europe and the UAE to serve Lebanese and Arab expatriates.
In the 2000s it prospered as a full-service, universal bank, specialising in corporate, retail, private, investment and Islamic banking, in addition to asset management, capital markets, and insurance services. It also expanded into new countries in the region: Jordan, Egypt, Qatar and Iraq. It is currently present in 12 countries in Europe and the Middle East. It serves niche markets for Arab clients in Europe and operates as a full-fledged local bank in countries of the Middle East.
Technology has changed the banking landscape over the last decade, what’s been the key for BLOM BANK to ensure you remain at the forefront of innovation?
SA: BLOM BANK is reputed to be a conservative bank, but it is also highly innovative and constantly creates products and services that are world-class and at the cutting-edge in terms of digital technology. This arises from our belief that although banking is basic and fundamental, its modes of delivery must change to meet the changing needs of our customers and to ease the channels of communicating with them. That is why we were the first in Lebanon to initiate e-banking, to develop e-Cash, and to launch the NEXT programme for youth, to name just a few. We are capable of doing this because we devote enough resources to strengthening our IT capabilities and because of our talented and dedicated staff.
There is also the additional factor that emanates from the tough competition in the domestic market, as well as in foreign markets, which always acts as an incentive to work harder and to rise above and beyond the competition.
Why do you think BLOM BANK has become the banking partner of choice in Lebanon?
SA: BLOM BANK’s motto is ‘Peace of Mind’ and it is a motto that the bank adheres to by word and deed. This translates to the bank making sure that its products and services are not only innovative and remunerative but also safe. We spend a lot of time designing services that meet our clients’ return profiles but with the minimum risk possible; and we also work hard that these services abide all regulatory and compliance standards.
Besides the quality of our products, there is also their diversity that spreads over the entire banking spectrum. And combined with our regional spread, BLOM BANK is able to offer its clients the opportunity to engage in banking and financial activities across different countries and across different services, maximising synergies and the benefits from cross transactions.
Despite fluctuating economic conditions in the Middle East, BLOM BANK has achieved an increase in its net profit. Please highlight how.
SA: BLOM BANK’s net profit in 2016 increased to $463.3m, higher by 14.61% on 2015. This implied a return on average common equity of 17.43%, and a return on average assets of 1.58%, both the highest among listed Lebanese banks. And as noted, this was accomplished in difficult circumstances amid a politically unstable domestic environment, at least up until the fall of 2016.
The bank was able to achieve this performance mainly due to three reasons. First is its ability to diversify over products and countries such that its profits arose from different banking activities and from foreign as well as domestic markets. Second are its conservative credit and investment policies and its priority to control banking risks and cost. This is reflected in the bank achieving a capital adequacy ratio of 19% (against a required ratio of 14%), a primary liquidity ratio of more than 70%, and a cost-to-income ratio of 35.81% (the lowest among listed banks). Third is its capable and stable management structure and its efficient and experienced staff members, who always give their best to keep BLOM BANK as the best bank in Lebanon and the one with the most industry recognition.
BLOM BANK serves a niche market of Lebanese and Arab expatriates in Europe. How does this set you apart from your competition?
SA: As mentioned earlier, the bank moved to Europe in the 1970s to cater for the banking and financial needs of Lebanese and Arab expatriates. What sets BLOM BANK apart from the competition in this niche market are several things. First is that we have a first-mover advantage since we were among the very first Middle Eastern banks to expand to Europe. Second is the diversity of our products, which covers all bases across corporate and private banking services and trade finance. Third is the fact that we are present in more countries: France, Switzerland, England, Cyprus and Romania. Last, but not least, is the quality of our products and services and the opportunities that they represent to all our clients for cross transactions with countries in the Middle East region and beyond.
Is there a particular highlight over the last 12 months for BLOM BANK?
SA: I think the most notable event is the conclusion of a sale and purchase agreement for the Lebanese operations of HSBC. The agreement became effective on 16 November 2016, following many months of negotiations. We competed for the deal with no less than eight Lebanese banks. HSBC has three branches in Lebanon; employs around 200 people; and generates around $20m in net profit annually on deposits of some $820m and loans of $520m equally divided between retail and corporate. It is also highly active in trade finance. As part of the agreement, we will retain all employees.
We are currently working on getting all the final approvals and expect the operation to be fully merged by end of June 2017.
Please outline the benefits of flying to Sion Airport rather than Geneva?
Aline Bovier: Sion Airport offers many significant advantages to both business and leisure travellers. Time is the most important commodity our passengers have these days and flying to and from Sion can offer a huge save in time. Geneva Airport operates almost at capacity; currently there are no flight slots available and business jet traffic has saturated the airport. Consequently, passengers departing on private, charter or scheduled flights must allow much more time just to clear security at the airport, in addition to time spent in the departure lounge, at the gate and on the aircraft while taxiing to the runway. For many travellers, this has become frustrating and unacceptable.
At Sion Airport we offer our outbound passengers the opportunity to save time on their journey in several ways. Parking and vehicle drop-off areas are immediately outside the airport. Check-in desks and passport control are located in the main terminal, just a short distance from an aircraft waiting on the apron. Departing passengers spend minimal time in the terminal and the short taxi distance means they’re airborne very quickly.
Our inbound leisure passengers can be on the ski slopes of Verbier less than one hour after landing. Our business travellers are just 45-60 minutes from the headquarters of various multinational organisations based in Montreux, Vevey and Lausanne. Our private jet clients enjoy hangar facilities and VIP handling. All of these conveniences create the efficient, personal and friendly service that Sion Airport is renowned for.
Which facilities and services differentiate you from your competitors?
AB: It’s often assumed that a smaller airport such as Sion lacks the services or facilities of a large airport. On the contrary, we’re able to offer our size as an advantage to passengers. We’re small and flexible, which enables us to be entirely service-orientated and offer a highly personalised experience. This is evident in the loyalty of our business aviation users, many of whom have used Sion Airport for years.
How has Sion adapted to an increased demand for air travel, especially in the business jet sector?
AB: Business aviation has been our development focus in recent years. The Valais region is home to many of the best mountain resorts in Europe, all of which are popular with wealthy property owners and travellers. This has fuelled demand for private jet facilities and we’ve responded to this with dedicated hangars and tarmac for private and business aviation. Additionally, we’ve created a private customs and immigration facility to offer our passengers maximum privacy as they arrive and depart from Sion Airport.
What plans for expansion does the airport have over the next five years?
AB: Business aviation continues to be our top priority at Sion Airport and we’re looking forward to building new relationships with new partners in the future. A further focus is to take advantage of the airport’s unique location. The appetite for year-round activity holidays is growing across Europe, particularly in the UK. Sion Airport offers very short transfer times to some of the best winter and summer mountain destinations in Europe.
Currently we’re working on a project with a new airline, which will hopefully see Sion Airport become its base from December 2017. This new airline will open up routes into the Valais from several regional airports in the UK, as well as Brussels and Rotterdam.
In the heart of the city, on the banks of the river Limmat, you’ll find the stylish Zurich Marriott Hotel. Just a short journey from Zurich Airport or an easy stroll from the main train station, the Zurich Marriott Hotel has everything you need to ensure a relaxing stay. Whether you’re visiting for business or exploring the city, the Zurich Marriott Hotel offers extensive services, comprehensive amenities and the elegance of a first-class business hotel.
The 266 comfortable rooms, including 40 Executive rooms and nine suites all feature air-conditioning, telephone, flat-screen TV, radio, minibar, safe and hair dryer. The guests have access to free Wi-Fi and high-speed internet access in all public areas and rooms. Room service is available 24-hours a day. Guests staying on the Executive level are welcome to take time out in the Executive Lounge, which is open 24/7, and features complimentary food, including hors d’oeuvres and dessert, along with free non-alcoholic beverages. Business services are also available. Total luxury can be found on the top floor at the Panorama Suite, which has a large balcony that allows a 270-degree view of the city.
The Motion Fitness Center is handy for either a high energy work-out or complete relaxation. It offers a sauna, solarium, latest gym equipment from Technogym and a massage service. The gym area is also open 24-hours a day.
Spice up your visit
The hotel’s White Elephant restaurant is one of the best known Thai restaurants in Zurich. Ever since 1991, it’s offered an authentic culinary experience based on a tantalising array of spices. The team originates from Thailand and welcomes you with warm smiles.
As an alternative, the eCHo restaurant wholeheartedly commits to traditional Swiss cuisine. Everything is prepared according to original recipes and presented with flair and creativity.
The Bar & Lounge 42 offers the finest whiskey, outstanding Martini cocktails, such as Apple Martini or Raspberry Martini, delicious American snacks, home-made gin and an elegant smokers’ lounge with a selection of over 100 cigars.
Inspiration for a great event
Those looking for a cool, contemporary venue for a business or social event in Zurich won’t be disappointed by the hotel’s 16 extensively renovated, flexible event studios. All feature state-of-the-art technology and first-class catering. At the Zurich Marriott Hotel business guests can be inspired by Marriott’s meeting strategy ‘Meetings Imagined’ where are all the tools are available for a great event.
The newly renovated meeting studios offer flexible space depending on the size and purpose of the event. Depending on the requirements, one studio can be used independently or multiple studios can be combined. Projector facilities, writable walls, smart boards and app or web enabled technology, are all available to suit any occasion.
The hotel expertly hosts social occasions, such as weddings, birthdays or anniversaries and turns celebrations of any kind into a unique experience. There are no limits – with tailored assistance, professional planning and implementation, flexible banquet spaces and creative catering.
Beyond the hotel, Mangosteen Catering can be hired to take care of business or private events. As a full-service caterer Mangosteen oversees event planning including design, location as well as full catering. Events with Mangosteen Catering are anything but ordinary – an extraordinary wedding, a colourful summer party, a dazzling birthday celebration or an unforgettable housewarming party, you name it, they can organise it.
All on your doorstep
The Zurich Marriott Hotel is the perfect place to experience the city’s vibrant city centre. Zurich Airport is located just 10 minutes from the city centre with the main train station being one of Europe’s central railway hubs. The city has won awards for offering the highest quality of life in the world and boasts a wide variety of cultural delights. Zurich is renowned for its ‘shopper’s mile’, with the famous Bahnhofstrasse and its elegant designer boutiques attracting people from all over the world.
The Opera House is recognised as one of Europe’s leading theatres. A broad palette of artistic and cultural experiences is offered by the city’s 50 museums and more than 100 art galleries. There are hundreds of bars and clubs and restaurants, whether in the Old Town, by the lake and in various cosmopolitan districts, there is something for everyone and when it’s time to relax again, there’s the Zurich Marriott Hotel.
The core functions of a retirement fund are good governance, achieving clean audits, efficient administration, superior benefits and providing healthy investment returns. Only once you’ve ticked those boxes, proving your proficiency in the core functions of a retirement fund, can you turn your hand to innovation. The Natal Joint Municipal Pension / KwaZulu-Natal Joint Municipal Provident Funds (NJMPF) have proved, through its numerous awards both nationally and internationally, that it’s at the leading-edge of proficiency, and is in a strong position to innovate.
“Our list of awards across all these disciplines shows that we have managed to master the fundamentals,” says Chief Executive and Principal Officer at the NJMPF, Sam Camilleri. “Sometimes the work of a retirement fund goes unnoticed because it is done behind the scenes – under the radar so to say – but with the introduction of a phase of innovation, this is when your members and pensioners should start to feel the magic.”
According to Proven Strategies for Success from the World’s Smartest Executives, which reflects how great leaders achieve success through their progressive leadership styles, Camilleri has proven that innovation and continuing momentum drives growth and helps gain a competitive advantage over peers. Experts say in today’s fiercely competitive business landscape, “innovate or disappear”. According to Camilleri: “Innovation from a retirement administration viewpoint goes beyond products and technologies. It is particularly significant to systems, methods and approaches used to enhance performance for members and pensioners who are beneficiaries of retirement funds”.
The retirement industry in South Africa, similar to other countries in the world, is highly regulated through statutory obligations. Due to this highly regulated environment, some funds tend to only focus on just achieving the standard requirements and fail to view systems and stakeholders in their holistic makeup. NJMPF strive to go beyond the norm.
Following are some of the ideas and initiatives which showcase this innovation:
An ongoing commitment to financial literacy
Members of a retirement fund are part of a community. It is well documented that many communities in South Africa have low financial literacy levels, so if you educate members of a retirement fund appropriately on financial literacy topics, you are able to build members who are not only aware of retirement fund matters but also understand basic financial literacy themes which can help them, their families and communities at large.
As part of the NJMPF’s Financial Literacy Programme, a dedicated Client Relationship Officer visits members at 55 municipalities throughout the year, explaining the benefits of the NJMPF funds and presenting educational financial literacy subject topics.
Some of the programme’s topics include budgeting, inflation, compound interest, saving enough and from an early stage and the importance of drafting a will. Workshops are held twice a year at the Fund’s offices for Human Resource and Payroll staff from the municipalities to attend training, refresher training and launches of new services.
Using IT to drive innovation
During 2016, the NJMPF began developing an interactive website to meet the needs of its members and pensioners. The website allows members to login and access content in English and Zulu, which are the languages of the majority of members. The site also features training videos, financial literacy articles and tools, net replacement ratio explanation, loan repayment calculators, instant access to pension certificates and benefit statements, allowing stakeholders to have instant access anywhere and anytime.
Soon, the NJMPF will debut a cross-platform mobile application that will allow its members to have easy and direct access to information and benefits using their smart phones. Research conducted on smartphone usage reports that access in South Africa is growing rapidly and this is becoming a significant communication medium.
According to Camilleri: “Through its smartphone application, NJMPF aims to influence and motivate members to improve their financial provision for retirement and also encourage members to think about retirement planning daily.” The new mobile phone app will also allow members to be alerted of important notices by the Fund.
A new election process is being introduced at the NJMPF. All members now need to vote directly for members onto the Board of Trustees. This provides an opportunity for the NJMPF to think outside the box and introduce innovative processes.
Each candidate will be allocated a unique identifiable barcode, which will assist in automating the scanning and counting process. In addition, a unique barcode will be generated for each member’s election form.
The voting method has also been enhanced to include voting via the NJMPF webpage. Members can sign into the web portal and click the voting tabs. The election data is then filtered back to the NJMPF for counting. The unique barcoding system will assist in preventing any duplicate ballots and assist in verifying each ballot. The system will generate validation reports and flag any potential inconsistencies.
SMS communication has been prioritised of late with great success. Notifications are sent for all important announcements and recently systems have been enhanced to send automated acknowledgements on receipt of declaration forms and reminders where necessary.
Insourcing to improve benefits
Ever mindful of containing costs, the NJMPF is using its own balance sheet to create reserves to meet death and disability benefits for its members. Instead of an outflow of premiums to an outside insurance company, the NJMPF retains such amounts in a self-insured fund, which has proved to be most successful.
The NJMPF is well positioned to capitalise on the South African government’s proposal for contributing members to the Provident Fund to invest in in-house annuities. It has readied itself for this imminent new legislation and will cater for a seamless transfer of a member from active membership, to becoming an in-house annuitant at a much reduced cost to the member.
The communications strategy, treating customers fairly policy and the Financial Literacy Programme adopted at the NJMPF drive the management and staff to continually find new ways to enhance value to all stakeholders. The NJMPF is continually finding new ways to communicate.
Besides the traditional methods of communicating, the member roadshow team make over 80 visits to municipalities a year, employer workshops provide enhanced training, forums for guardians and care-givers provide a connection to the Fund and pensioner roadshows in key cities and towns across the Province of KwaZulu-Natal, South Africa keep these stakeholders well informed and in close contact with the Fund.
“Reach for another star”
Sam Camilleri’s philosophy is simple: “Look at what constitutes best practice and then try and surpass that. It is in the Fund’s DNA that staff members are constantly improving the way they do things. Success leads to success so each award we win, each clean audit reported, each financial literacy session completed, each new communication channel opened inspires us to reach for another star.”
Scottish economist and philosopher Adam Smith once said: “It is not by augmenting the capital of the country, but by rendering a greater part of that capital active and productive than would otherwise be so, that the most judicious operations of banking can increase the industry of the country.”
It’s a lesson that BCS Bank has learnt well and its sustained progress demonstrates the efficiency of its strategic positioning. Specialising in both the private and corporate sectors, BCS Bank is symbolic of the very best in Angolan banking. It is also proof that banks must be proactive when confronted with a crisis by reconciling the challenges with the need to achieve efficient economic integration.
BCS Bank is founded on a model of excellence and adherence to strict compliance rules and governance. It is also built around a highly efficient team, whose twin objectives are to deliver the very best to its clients and to fulfill client expectations inline with international standards.
BCS provides a benchmark for innovative banking solutions and promotes a culture of customer service characterised by exclusivity, trust and responsibility. The BCS motto translates to “excellence before quantity”, which captures an ethos the bank works tirelessly to fulfill.
By servicing both private individuals and large corporates, BCS has become a focal point for those with a strategy for investment in Angola and seek a secure and prosperous path. The bank’s strong track record since its foundation has demonstrated that its strategy is working, yet through a continual system of training and evaluation the bank is always improving its service.
A wealth of natural resources
The kwanza is more than just a currency, it is the backbone of Angola and carries the hopes of the country. The government has laid out plans to diversify the economy and the reassess its national priorities. As well as the revenue derived from new strategic areas – as defined by the government –there is also greater investment in existing industries and services nationwide.
The Angolan economy is underpinned by natural resources and there has been a rapid development of the oil sector and agricultural production. Angola’s favourable demographic, economic growth prospects and political stability have led to an increase in investments in these areas. Significant foreign investment is already being attracted and more is set to follow. Against this backdrop, private banking plays a crucial role in boosting the national economy and its in this area that BCS Bank can help secure a better future for Angola.
Angola’s economy has experienced rapid growth over the last decade, driven mostly by the exploitation of its vast natural resources. Today, the country ranks as the third largest economy in sub-Saharan Africa. Since 2002, Angola has relied on its natural resources as its main source of revenue. Diamonds account for a sizeable share – Angola is Africa’s third-largest diamond producer by quantity and value. Mining has attracted foreign investment and boosted exploration for precious stones and other minerals.
Investment in Angola’s oil industry grew consistently over the previous decade, dwarfing other sectors of the economy. Angola’s position as the third-largest GDP in sub-Saharan Africa is testimony to its wealth of natural resources.
New investment laws in Angola have created an attractive framework for investors. These guidelines protect the investors’ interests, but without affecting the state’s welfare – while also recognising the need to employ a local working force in the process of building the economy. This local working force is integral to the country’s development.
Angola’s agricultural sector accounts for only 11% of the country’s GDP but it has the necessary young and skilled workforce, good climate and arable land for expansion. Cash crops such as sugar and coffee, once major Angolan exports, are now being produced again. The fishing industry in Angola also shows huge potential. Its active fisheries also include rivers, freshwater lakes and reservoirs. The country’s coast is 1,600km long and its exclusive economic zone at sea covers 330,000 sqkm.
The need to diversify the economy is recognised, therefore the country has implemented expenditure measures to reduced certain deficits, which include ending fuel subsidies and freezing public sector hiring. The move towards diversification is taking place rapidly and agriculture is expected to play a key role in boosting the country’s exports and generating foreign currency earnings.
BCS Bank make the Angolan business environment clearer for investors. Led by CEO, Maria do Céu Figueira – who has 12 years experience in the Angolan banking sector – BCS is set to continue with playing a key role in the nation’s growth, both on the African and international stage.
Supporting the allocation of resources across time and space, the financial industry is the lifeblood of the global economy; its fast-paced, cosmopolitan and intellectually stimulating atmosphere attracts some of the best, and most ambitious, minds in science and business. Yet, the global financial crisis has underlined the acute need for professionals who can combine critical thinking, field expertise and research skills to harness the power of financial innovation. Since technical degrees, professional experience and an MBA may develop this set of competencies only partially, those who aspire to build a stronger and more resilient financial system should consider pursuing the foremost academic and professional qualification, the Doctorate of Philosophy (PhD).
Training a new breed of financial leaders
Since 2008, the PhD in Finance offered by EDHEC Business School has been training participants to serve as the architects of the financial industry. The programme is designed to prepare talented and hard-working individuals for challenges requiring an integrated view of the inner workings of financial markets and institutions, a thorough understanding of financial decision-making and its modelling, and the ability to identify, analyse, and research questions to propose and implement original solutions. A defining feature of the programme is to offer seasoned industry professionals the opportunity to become autonomous researchers by following a rigorous curriculum while remaining in their jobs. Its differentiating ambition is to train a new breed of practitioners who will advance the frontiers of knowledge and practices within the financial industry.
To date, EDHEC is proud of its 37 PhD graduates who have gone on to author over 20 publications in top academic journals and leading professional reviews.
An exceptional research and learning platform
Programme faculty consists of world-class specialists in finance, risk and investment management, and economic and financial modelling; it brings together EDHEC Business School’s senior scholars and affiliate professors from top research institutions around the world. Faculty members do not only hold prestigious qualifications, distinctions, and appointments but, more importantly, have also made significant contributions to the field of economics, furthering theory and impacting practices through research, consulting and executive education.
The programme also enjoys the research expertise and exceptional industry reputation of the EDHEC centres of excellence. These combine to create the best opportunities for participants to hone their research expertise and prepare to shape the future of the financial industry.
The PhD in Finance is offered in Europe, in London and Nice.
About the author
Dr Abraham Lioui is Professor of Finance, Director of the PhD in Finance programme and Head of Faculty at EDHEC Business School.
At the end of 2016, when US government activity typically would have slowed, the Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) vaulted Foreign Corrupt Practices Act (FCPA) enforcement to an unprecedented level. In the final two weeks of December, DOJ and SEC announced a series of new actions including massive FCPA cases against the Brazilian company Odebrecht S.A., involving up to $4.5bn in penalties, and the Israeli company Teva Pharmaceutical Industries Ltd., Involving $519m in penalties. These matters are notable not just for the alarming penalties imposed on non-US companies for activities almost entirely outside the US, but also for what they might signal regarding US FCPA enforcement moving forward. Companies based outside the US that do business in the US should examine their anti-bribery compliance programmes to ensure that they are preventing violations of their own country’s laws and the FCPA as effectively as they can.
The FCPA is the primary US federal law prohibiting bribery of non-US public officials. Its provisions generally fall into two categories: provisions prohibiting bribery of non-US officials; and accounting provisions.
The anti-bribery provisions generally prohibit making, offering, promising or authorising the transfer of anything of value, directly or indirectly, to a non-US government official or employee, including employees of state-owned companies, or a political party or candidate for political office, with the intent to get or maintain business. The US government interprets the anti-bribery provisions very broadly, as demonstrated by recent actions against companies that allegedly ‘bribed’ public officials by hiring officials’ relatives as interns, reportedly to influence officials’ decisions in allocating business.
The anti-bribery provisions can apply to a variety of companies and individuals, including when any aspect of a scheme occurs in the US. US jurisdiction arguably could be based merely on emails or funds travelling electronically within the US, such as a payment of a bribe in funds that traveled through a US account.
The second group of FCPA provisions generally requires companies with stock traded on a US stock exchange, or that otherwise have to file certain reports with the SEC, to maintain accurate accounting books and records and to maintain internal accounting controls sufficient to provide reasonable assurances that transactions are executed properly. This includes non-US companies with American Depositary Receipts (ADRs) traded on a US exchange.
The potential penalties for companies’ FCPA violations are substantial, including enormous fines, disgorgement of proceeds of unlawful activity, and prison for individuals. FCPA convictions could also lead to companies being barred from contracting with the US government.
Companies rarely fight FCPA charges in court because a loss after trial could be devastating. Companies instead typically seek leniency. Even with ‘leniency,’ however, penalties are severe. In addition, to receive leniency, the US government requires companies to provide evidence against their own employees who participated in the misconduct.
Odebrecht S.A. and Braskem S.A.
According to DOJ, Odebrecht, a Brazil-based construction conglomerate, paid over $700m in bribes since 2001 to government officials and political parties to obtain business in Brazil and a number of other countries, but not in the US. Odebrecht’s affiliate Braskem, a Brazil-based petrochemical company, reportedly paid approximately $250m in bribes in Brazil between 2006 and 2014.
DOJ described the joint resolutions as “the largest-ever global foreign bribery resolution.” In agreements with DOJ and SEC, as well as agreements with authorities in Brazil and Switzerland, Odebrecht agreed that an appropriate fine is $4.5bn, although Odebrecht reportedly can pay only $2.6bn. The US stands to receive 10% of the total payments Odebrecht makes, Switzerland will receive 10%, and Brazil will receive 80%. Braskem separately agreed to a total penalty of $632m, with the US to receive 15%, Switzerland to receive 15% and Brazil to receive 70%.
The division of Odebrecht’s and Braskem’s payments, with the US positioned to take a significant share, is particularly remarkable considering that the alleged misconduct involved public officials and contracts outside the US Connections to the US are very limited. DOJ alleged that Odebrecht’s schemes included meetings in the US and the movement of funds through US accounts. Braskem has ADRs listed on the New York Stock Exchange but otherwise is not accused of engaging in unlawful activity in the US.
Teva Pharmaceutical Industries Ltd.
On 22 December 2016, a day after announcing the Odebrecht and Braskem resolutions, DOJ and SEC announced resolutions with Israeli company Teva, the world’s largest manufacturer of generic pharmaceutical products and Teva’s wholly-owned Russian subsidiary. According to DOJ, Teva paid bribes to government officials in Russia, Ukraine and Mexico. Teva agreed to pay a criminal fine of $283m and to disgorge $236m of proceeds, for a total penalty of $519m.
Again, the government’s allegations describe very limited conduct in the US. The allegations include that emails were sent through a server located in the US and that some funds used in the scheme moved through US bank accounts. However, like Braskem, Teva has ADRs that are traded on the New York Stock Exchange.
These cases highlight the high costs for non-US companies subject to US jurisdiction that violate the FCPA. Additional examples are not difficult to find. Of the ten FCPA actions with the largest penalties, only three were brought against US-based companies.[i]
Robust FCPA enforcement will continue in the current US administration. Even if the administration takes a friendlier approach to corporations, as some are predicting, nothing suggests that US authorities would now resist the opportunity to collect the nearly $1bn the US is netting at year-end in its cases against Odebrecht, Braskem and Teva. A new administration could easily defend such actions as ‘favourable’ to US companies. Considering that Brazil and Switzerland stand to recover over $1bn in penalties in these cases, we expect to see greater collaboration among authorities in anti-bribery enforcement moving forward.
Recommendations for non-US companies
It is critical for companies doing business in the US or listed on US exchanges to examine their anti-corruption compliance programmes. An effective programme begins with a strong Code of Conduct and sound policies. Policies should be supplemented with clear and consistent communication from management, along with training for employees and contractors who expose the company to risk. Companies should assess internal accounting controls and make improvements where necessary.
Anti-corruption due diligence should be performed before acquiring other companies or entering into joint ventures; acquisition and joint venture contracts should include anti-bribery representations and warranties. Companies should conduct similar diligence, and insist on similar provisions, with sales agents, distributors, and others who represent the company to public officials and other third-parties.
No compliance programme is guaranteed to prevent unlawful conduct. Companies with robust compliance programmes, however, are in the best position to assert that any unlawful conduct was entirely unauthorised and does not reflect the company’s values. As importantly, a robust compliance programme can demonstrate to US authorities that the company is in fact determined to comply with the FCPA and compete lawfully, bolstering arguments for leniency.
About the author
John C. Kocoras is a Partner at McDermott Will & Emery LLP. He leads sensitive internal investigations, assists clients with global Foreign Corrupt Practices Act (FCPA) compliance, defends companies and individuals in criminal and regulatory investigations, and represents parties in complex commercial litigation.
UNIFIN Financiera, S.A.B. de C.V. was founded in 1993 by Rodrigo Lebois and today leads the way in Mexico’s operational leasing sector. The entrepreneur started the company with just five employees but it’s grown to become the largest independent financial corporation in Latin America with assets of $2.1bn and a debt of $1.8bn.
The company now has 500 employees and 7,000 sqm of office space in 12 cities throughout Mexico, offering operational leasing, factoring, auto loans and insurance solutions.
Operational leasing remains UNIFIN’s core market covering a wide rage of areas, from cars, trucks and helicopters to heavy machinery and medical equipment, ensuring diversity throughout the operation.
The success of the company has been driven by its philosophy of offering custom made financial solutions, providing all its clients with the highest quality of financial services backed by a team of specialists, who ensure the company remains in sound financial health.
In the 1990s, more than 160 companies were in competition with UNIFIN; Lebois’ strategic decision was to focus on offering the highest quality service, knowing that his company’s edge was in its attention to detail and tailored client approach.
The idea is for UNIFIN to do everything in its power to help its clients achieve their goals. This means that, if necessary, the company will shift strategies. In essence, UNIFIN acts like a partner to its clients’ interests and ambitions.
The European has awarded Rodrigo Lebois, Founder, Chairman and CEO of UNIFIN ‘Chairman of The Year, Mexico 2017’ in its Global Banking and Finance Awards 2017, while UNIFIN Financiera has also received the awards for ‘Best Finance and Leasing Company, LATAM 2017’ and ‘Best Corporate Governance, Mexico 2017.’
Against the odds
To understand this philosophy and the success of UNIFIN, we look to the resilient spirit of its founder.
Rodrigo Lebois Mateos was born in Mexico City and graduated from the Universidad Anáhuac México in Business Administration. At 30, he left the car sales company he worked for, and with his savings founded UNIFIN, a financial institution that began operating solely in the vehicle-leasing sector.
Then came the financial crisis of December 1994, when the Mexican peso suffered a devaluation of 100% – going from 3.50 to 7.00 pesos against the dollar overnight. As a result, on 1 January 1995, Lebois awoke to a $17m dollar debt. He devoted his energy to negotiating his debt, and by 2001 he had managed to pay it off completely. This was an exceptional feat; the vast majority of Mexican debtors either declared bankruptcy, declared themselves unable to meet their liabilities or simply disappeared. In 2001, he started over again, hired banking experts and managed to avoid being hit by the financial crisis of 2008.
Lebois strongly believes that a good businessman is not merely an executive officer or president of a company, but that special talent is required. This belief is reflected in the company’s commitment to innovation. UNIFIN is a company that attracts young talent. Internal politics are absent, and while there are supervisors, everyone works towards the same goal.
UNIFIN endeavours to hire young people. Lebois believes that it is the talent in the lower positions that drives the company from the bottom up, giving new talent the opportunity to grow and be able to make a lifelong career within the company. With this in mind, in December 2015, UNIFIN turned all of its employees, including maintenance personnel with over five years of employment, into partners; needless to say, this has had a galvanising effect on the company.
In addition to his UNIFIN interests, Lebois sits on a total of 10 boards – including Banco Mexicano S.A. and is a Director of Maxcom Telecomunicaciones S.A.B. de C.V., a telecommunications company. An entrepreneur who loves his country, he believes a large part of success lies in the ability to build and develop a talented team of professionals. As such, he is an active member of The Duke of Edinburgh’s World Fellowship scheme, as well as the government’s Strategic Committee between Mexico and France.
Structured products are investment vehicles, which aim at matching the risk-reward appetite of an investor. A structured product is a combination of two components: a bond component, issued by a guarantor and an optional component allowing the bearer, according to its investment needs, to design any parameter such as maturity or capital protection. These instruments are then tailor-made to serve clients who are looking to alternative opportunities to standard financial instruments, which do not meet their investment expectations such as equities, bonds or money market.
They are usually divided into four main categories to assess the risk profile of the products – capital protection, yield enhancement, participation, leveraged products – and can be implemented on underlyings such as equity, bond, commodity, interest rates, currency, indexes or funds. Capital Protected Notes are the most conservative instruments and entitle the holder to benefit a minimum redemption of the nominal and to get a yield or an exposure to an underlying. Hence, they give the opportunity to get a yield or an exposure to an underlying without putting the full capital at risk. Yield enhancement products offer a regular income during the product’s lifetime and are suited for investors expecting a sideway or slightly rising movement of the underlying. The full capital is at risk and the product yield is limited to the coupon or the discount. Although the maximum maturity is fixed for all type of products in this category, Express Certificate can be early redeemed or Reverse Convertible and Barrier Reverse Convertible could have a call feature. Participation products offer an exposure to the increase or decrease in an underlying and a partial capital protection feature could be added. Leverage products are the riskiest instruments and offer the possibility to maximise the exposure with a leverage effect and keep the initial investment to a minimum. Thus, structured products allow the holder to optimise the risk-return profile of his portfolio whatever the term is. Finally, regardless of the category, these investment vehicles are subject to the credit risk of the guarantor.
In the current low volatility environment, structured products can be implemented to play the decorrelation between different underlyings to extract value and a protection against a potential market downturn. For instance, in yield enhancement products, the bearers are selling a put to extract yield, selling volatility. To maximise the yield, a ‘worst of feature’ can be integrated by cumulating several underlyings in the note obtaining higher coupons investing in non-correlated stocks. Furthermore, considering the low interest rate and the difficulty to get yield on the bond market, investors are implementing Credit Linked Notes (CLNs). CLNs are credit derivative financial instruments in which the payment of the coupons and the principal is conditional to the credit risk of a second entity (reference entity) or a basket of entities (basket of reference). The idea is to extract value from a market inefficiency between the liquidity of the CDS and the comparable bond on the same underlying name in order to deliver to the bearer an enhanced return compared to a conventional bond investment: this market opportunity is called ‘positive basis’.
Since its introduction, structured products have been criticised for lack of transparency leading to problems in secondary market making and liquidity. These investment vehicles cannot get rid of the negative image that has stuck to them since the triggering of the subprime financial crisis. Far from being usurped, this reputation often blurs savers’ understanding of their promises of performance, their functioning and their risks.
During the first decade of 2000, each issuer has tried to get the more return out of this business benefiting from the opacity of the structured products market. As these issuers are using their own model, it has become difficult for the client to compare the offer in this niche. Against this backdrop, VOLTYLAB, an independent financial boutique, has emerged to play a significant role in this industry by assessing the dispersion in pricing and controlling closely any possible opaque interference in the pricing of the investment instrument. Being an independent and neutral boutique in front of the issuers, enables VOLTYLAB to protect investors from overpriced instruments, undue fees or possible abusive behaviour in the financial markets. A specialised company in structured products has an undeniable added value as clients can count on a state-of-the-art know-how of financial markets, counterparts, structuring methods and pricing models, which deliver the constant achievement of efficient opportunities and the total avoidance of opaque risks. The investor has then one single interlocutor to get access to an unlimited offer of issuers.
VOLTYLAB is an independent financial firm, which provides optimisation and control services in the structured products industry. Regarding the follow-up of these securities, an in-house platform analyses and scrutinises their parameters, which influence their valuation in the secondary market. With its automated notification services, the platform supports the holders in managing their outstanding positions and in taking decisions thanks to a global overview on the invested universe. The platform is integrated with various providers’ streamer in order to obtain the most reliable market data. Then, the clients are able to control and manage all their investments in these investment vehicles from a highly performing, comfortable and handy cockpit: no details about the lifecycle such as barrier hit, call event, coupon notification or redemption can be missed. The investor has then one single interface to monitor and control all positions trading or expired whatever the issuer. It then enables the bearers to constantly manage the embedded risks of their structured products’ portfolio.
Transparency, excellence, independency, service and innovation are the key guiding principles followed by VOLTYLAB bringing an undeniable added value in the niche of structured products.
Fermaca was established over 50 years ago as a construction and engineering company, developing infrastructure in telecommunications, water, roads, utilities and energy. It was one of the first companies to transport natural gas in Mexico.
The company structure is composed of a large multidisciplinary group of industry professionals, specialising in the development of energy projects, through the engineering, financing, construction and operation stages.
Today, with the support of international partners, Fermaca has become the largest non-listed midstream developer, owner and operator of natural gas transportation in Mexico.
At the end of 2018, Fermaca will own and operate five large-diameter natural gas pipelines with a length over 2,100km in Mexico and the US, becoming one of the 12 largest such systems in the world and transporting highly cost-efficient gas.
Since the mid 1990s, the firm has achieved its success by capitalising on changing market conditions and expertly executing a strategy of partnerships and expansion.
Following Mexico’s reforms of the natural gas sector in 1995, the Calvillo family entered the market, which until then was under the stewardship of Mexico’s state oil company, Pemex. Fermaca was formed and the face of Mexico’s energy infrastructure was set to change.
By the end of 1990s, Fermaca had formed a joint venture with Occidental Petroleum and developed a 16-inch diameter, 127km pipeline – the Tejas Gas de Toluca (TGT) – with the capacity to transport, 96 million cubic feet per day (MMCFD), across the State of Mexico.
Later in 2011, Fermaca won its first major contract with the Comisión Federal de Electricidad (CFE), for the construction and operation of a 36-inch, 383km pipeline in the state of Chihuahua. With an investment of approximately $450m, the Tarahumara Pipeline (TP) carries natural gas from the US to CFE power plants in northern Mexico. The pipeline began commercial operations in July 2013 and has a capacity of 850 MMCFD, with the ability to increase to 1,100 MMCFD with compression.
More followed. Fermaca, in partnership with Enagas, was awarded a contract by CFE to provide natural gas compression services in the city of Soto La Marina, in the state of Tamaulipas. This compression station has a capacity of 30,000 hp.
The El Encino-La Laguna Pipeline, which was awarded to Fermaca by CFE on 16 December 2014, includes a 25-year ‘take or pay full’ contract and will transport up to 1.5 billion cubic feet per day (BCFD) from Chihuahua to La Laguna. It is expected to be fully operational in the last quarter of 2017.
In 2015, along with its partners, One Oak, Fermaca developed the Roadrunner Gas Transmission Pipeline to carry supply from Waha to the connection with the Tahara pipeline. The operation began in 2016.
In March 2016, Fermaca was awarded by CFE, La Laguna-Aguascalientes Pipeline. It is a 48-inch system that will transport natural gas to the center of the country
The Villa de Reyes-Guadalajara gas pipeline was also awarded in March of the same year, which will transport 886 MMCFD and will be completed in 2018.
Reforms and new opportunities
Due to increased demand for low-cost energy, Mexico’s natural gas infrastructure has been developing at a good pace. Combined with the country’s switch in energy policy – substituting coal or oil-burning plants for natural gas-powered plants – has also led to the construction of more and larger pipelines in the country.
Mexico’s energy reform of 2013 brought deeper changes to those enacted as a result of the 1995 natural gas sector reforms. This allowed private participation in the transportation of natural gas and its marketing activities. It also extended the opportunity of private participation in natural gas to liquid gas, involving transport by fuel pipeline and the whole logistics platform concerning fuels under a regulated regime. It permitted the commercialisation of natural gas and fuels according to specific regulations and allowed the opening of gasoline and importing of fuels into the market.
Given the new landscape, Fermaca initiated a multinational natural gas company, Santa Fe Gas, LLC (SFG). Based in Houston, Texas, Santa Fe gas offers an integrated range of energy services in the USA and Mexico.
Throughout its affiliate companies, which have obtained the required regulatory permits from both the US and Mexican Authorities, Santa Fe sells and purchases natural gas and hydrocarbons in US and Mexico.
SFG was formed by a group of experienced professionals with a wide range of expertise in the energy market, capable of delivering high quality services to clients located on both sides of the border. SFG has a long-term commitment to supply gas to the North American market, so it is planning to invest around $4.5bn over 25 years, through firm capacity purchases in the different pipeline networks located both in the US and Mexico. The goal is to have a share between 10 and 20% of the market.
SFG is financed by a group of investors who are betting on the development of the North American energy markets, offering the lowest prices, the highest product quality and a reliable energy supply.
SFG has exclusive access to the most relevant gas pipeline transportation networks on both US and Mexico, covering the most important and high demand regions.
Given Santa Fe’s infrastructure, it can offer to its customers bundled services, making Santa Fe a one-stop solution, materially different from other market participants. Services include gas purchases and sales delivered at the plant, or at pre-agreed locations. Santa Fe also offers other services such as nominations, load management, optimisation, asset management agreements, and hedging products.
With a growth rate averaging between 10% and 20% in the last decade, Islamic finance’s significance has risen markedly, especially in its ability to meet modern economic requirements. Indeed, it is one of the fastest growing segments of the global financial industry, from $200bn in 2003 to an estimated $1.8tn in 2015, with global assets expected to surpass $3tn by 2020. Global financial players in fact have included Islamic finance as part of their growth strategies, denoting greater recognition of its value propositions.
More importantly is that Islamic finance is seen as the embodiment of a socially responsible investment philosophy. Its main tenets are virtues that uphold social justice, equality and inclusive economic growth. In other words, Islamic finance resonates well with the idea of sustainable development.
At Bank Islam, placing importance on its contribution to society and the wider economy are the principles that have driven the bank thus far. Established in 1983, it’s a pioneer among Shariah-based banking institutions in Malaysia and Southeast Asia and plays a leading role in the development of the nation’s Islamic banking industry.
“Bank Islam strives to emulate Islamic principles in every aspect of its operations and intends to continue building a sustainable and responsible financial institution. Our past initiatives for the benefit of the communities in which we operate speak volumes,” says Dato’ Sri Zukri Samat, Managing Director of Bank Islam.
Bank Islam, for example, acknowledges the rising demand for socially responsible investments (SRI). For many investors, SRI is now a guiding principle where investors are guided by an ethical or moral code for environmental, social and governance (ESG) investments. Studies have also shown that SRI and Islamic finance reflect each other in their socially responsible objectives and the exclusion of businesses deemed unethical. Led by a new generation of investors, the concept of sustainability takes centre stage and Bank Islam through its 100% subsidiary, BIMB Invest has been partnering with a global asset-management firm in 2015, to introduce Malaysia’s first multi currency Shariah and ESG-compliant global equity fund. “My view is ethics should be the centre of everything that we do. This can lead to sustainability,” Zukri added.
Another focal point for Bank Islam is promoting financial inclusion. An iconic traditional market in the Kelantan (East Coast state in Malaysia) became the first to accept electronic payments through mobile point-of-sales (mPOS) in 2013. It was Malaysia’s low cost payment terminal initiative that enables Malaysian SMEs and micro enterprises to accept electronic payments. This also brings the bank a step closer towards the government’s objective of making Malaysia a cashless society.
One more initiative of giving back to society is promoting charity and donations. Bank Islam realised that many people are prepared to donate to charity in order to help those in need, but often remain unaware of the channels through which they can give. Hence, there is constantly a need to find new ways of facilitating donations to society’s most in need. Therefore in 2016, Bank Islam launched an innovative product and the first in the country, the ‘e-Donation’ Terminal using Visa PayWave’, which is a platform whereby donations can be made through the contactless electronic method using any debit/credit Card with payWave feature. Several ‘e-Donation’ terminals have been installed at several mosques throughout Malaysia, which can be utilised by the mosques’ congregation, as their donations can be made quickly and easily. Ensuring that the mosques are provided with the terminals for free, with no transactional charges applied to either the mosques or the donors is symbolic of the bank’s corporate responsibility initiatives. It also helps to eliminate cash management processes and reduce the risk of petty thefts at the mosque.
Bank Islam recognises that a distinct brand for its corporate responsibility (CR) is as important as the activities themselves. This has led to the inception of the ‘AMAL’ brand name to expand the social impact of its CR initiatives. Under AMAL (meaning, good deeds or actions in Arabic), the bank’s flagship CR initiative Housing Aid Project for society’s poorest has been ongoing since 2008 and aims to assist impoverished families by providing them with comfortable homes and the basic needs of every human being. Since its inception, more than RM6.3m (approximately $1.37m) has been channeled to this project, making it possible for 237 marginalised families across the country to own a house.
Bank Islam also believes that every child should be given equal opportunity to get the education that he or she deserves, especially those from underprivileged families and communities. In its effort to level the playing field between urban and rural children, Bank Islam has affiliated with Promoting Intelligence, Nurturing Talent & Advocating Responsibility (PINTAR) Foundation in its School Adoption Programme. Since its involvement with the programme in 2008, the bank has adopted 20 schools all across the country, assisting the Foundation to educate and impart useful skills to more than 15,000 primary school students nationwide. This programme is designed to foster academic as well as non-academic excellence in underserved communities and to help bridge the urban-rural divide.
Since 2015, Bank Islam’s collaboration with PetroSains (a subsidiary of Petronas, Malaysia’s oil and gas multinational) represents another path for the bank to drive its commitment to education enhancement initiatives especially among schoolchildren. The primary focus under this initiative is science education, which is vital in advancing the society’s development. The collaboration includes a nationwide school tour via series of workshops conducted at various schools to encourage students’ interest in STEM subjects (Science, Technology, Engineering and Mathematics) and a nationwide annual science competition for secondary school students to nurture students’ creativity and interest in the field of science and technology. In short, these are just some of the initiatives carried out by Bank Islam and it will continue doing so in the future.
To sum up, the economic, social and political transformation globally will cause the environment in which we operate to constantly be unpredictable. Despite adversity, Islamic finance has gained increasing recognition and widespread appreciation across the business world. To fully realise its potential, Islamic finance must continue to have an impact by addressing society’s problems and challenges. Bank Islam knows it can play a vital role. “We believe the continuous contribution by Bank Islam can create opportunities and positive effects for sustainable development that cannot be missed.” Zukri concludes.
Portugal’s Golden Visa is a programme geared towards high-net-worth non-Europeans looking for secure investment opportunities. The advantages of the programme are unique for investors, allowing them and their families to freely travel, work, live and study in all Schengen countries. The Golden Visa allows investors to extend the application to direct family members, with no further investment requirements. The reduced minimum stay within the country, only seven days on average per year, is another great advantage for those not looking to immediately relocate. The programme is also a fast-track to reach citizenship – after six years, investors have the right to apply for a Portuguese passport.
Awarded as the best ‘Residency Program Globally’ 2015 and 2016, by the Global Residence Program Index (GRPI) and aimed at attracting overseas investment to Portugal, the Golden Visa is very straightforward and has clear legal guidelines.
The Golden Visa effect on Portugal’s property market
In Portugal, there is currently low supply and high demand for new construction, creating the perfect conditions for investment in the industry.
The Golden Visa programme has been a key determining factor for the recent boom in real estate, together with the Non-Usual Tax programme directed to European Union citizens and a recent boom in the short-term rental industry.
To apply for a Golden Visa through real estate investment, foreign nationals, either personally or through a company, are required to make an investment that conforms to one of the following conditions: investment in real estate valued at least 500,000 euros; real estate with more than 30 years construction time with a value of at least 350,000 euros; real estate with a value of at least 400,000 euros in areas with less than 100 citizens per sqkm; and real estate, with more than 30 years construction time, in areas with less than 100 citizens per sqkm with a value of at least 280,000 euros.
Alternatively, Golden Visa applicants can obtain access to the scheme through investment in the non-real estate sector, that includes: completing a capital transfer of 1m euros to a bank operating in Portugal; investing 500,000 euros in Portuguese funds; venture capital or leverage capital funds; investment that creates 10 permanent jobs in a new company located in Portugal; or donating 250,000 euros for culture, heritage or arts to a Portuguese institute.
Property has been by far the most attractive investment prospect to users of the Golden Visa programme. Of the total 4,578 permits issued, 4,314 were on the basis of investment in property, 257 related to the transfer of capital and just seven concerned business activity that created 10 or more new jobs. The cumulative total of investment entering the country as a result is 2.8bn euros, of which 2.53bn euros is for investment in property. However, outside the many benefits Portuguese citizenship brings, there are also many benefits to investing in Portugal itself.
The candidates for the Golden Visa programme are applying through investment in Portuguese real estate, primarily due to the great returns investors are getting on the properties in Portugal. Low supply and high demand is generating capital gains for real estate investors of up to 12% every year, especially in the major cities and regions, such as Lisbon, Oporto and the Algarve.
Several factors are able to explain the strong annual returns investors are getting back on Portuguese real estate. Due to the the credit crisis, from 2008 to 2012, many property developers working in Portugal dropped out of the market. In 2013, with the tax benefits programmes launched by the Portuguese government and with recent tourist boom, the demand for property sky-rocketed. There is not enough supply for the huge demand, as the developers are returning to the market with a conservative approach, cautious after many years of deep uncertainty. On the flip side, the success of programmes aimed at attracting overseas investors (Golden Visa) and the fact that Portuguese nationals are not benefiting from the interest rates on bank deposits, is generating a huge demand for property.
A safe investment
Portuguese real estate is a safe haven for domestic and foreign investment and none of the data suggests the existence of a property bubble in Portugal; the real estate sector should therefore be considered a very safe investment. The Portuguese real estate market has not suffered from the exaggerated growth seen in other European countries, and there was no excessive construction in Portugal. In economic terms, over a seven-year period Portugal experienced a nominal variation in prices in the order of 20%, which corresponds to a percentage lower than recorded inflation (25%).
The history, culture and beauty of the country, the famous Portuguese hospitality, great food and the affordable cost of living are attracting more tourists every year. The country has seen an average increase of 12% in tourism over recent years and is expected to grow even more.
Lisbon (pictured) has witnessed a tourism increase of around 50%, over the last two years. In response to this a new sector has arisen: the short rental market.
The boom of short-term rentals is bringing new life to Lisbon’s older neighbourhoods, where more and more property owners are refurbishing their old properties to rent to tourists through sites like Airbnb or warmrental.com. Investors who are candidates of programmes like Golden Visa and non-habitual residents normally look for this kind of refurbished or central city apartments since they can be short rented to tourists. Generally, a property in one of the city’s historic areas near the city centre can generate an income of around eight to 12% a year, through daily rental basis. The Golden Visa residence permit is just the icing on the cake in a real estate market full of opportunities for investors.
The opportunities are there right across Portugal. Either to develop, renovate or trade in property. Property trading is delivering strong ROI, providing investors with a limited exposure to Portugal’s real estate market, where they can capitalise on investments by at least 10% in every move. These days it is possible to target returns on real estate at over 30% a year. Today Portugal is a both a safe haven and a profitable market for investors.
About the author
Tiago Camara is Co-founder and a Partner at PTGoldenVisa.
Compagnie Monégasque de Banque is proud to receive two prestigious awards from
The European: ‘Customer Service Private Bank of the Year’ and ‘Monaco Banking Ambassador 2017.’
The two awards recognise the bank’s continuous commitment to its clients and to support the local culture and community. The titles complement each other. Having a privileged relationship with international clients, who can rely on readily available, in-house experts to manage their wealth and investments – isn’t that the finest way to promote Monaco across the borders? This dual ambition has been at the heart of CMB since its creation, as well as maintaining the bank’s essential values as a market leader.
A bank focused on its clients
The quality of a private banking service depends to a large extent on knowing the clients, their personal financial goals and issues they are facing. A bank needs to be able to anticipate a client’s needs, offer advice and custom-made accompaniment. No client-bank relationship is the same, this is why it is crucial for a bank to be reactive and personalise their service to build a long-term partnership based on trust. That The European awarded CMB the ‘Customer Service Private Bank of the Year’ for the second year running, offers the bank much encouragement to continue on its path of excellence.
“The key to success is building relationships that go beyond one-time projects and provide value to these clients on a consistent, ongoing basis,” says Werner Peyer, CEO of CMB. “At CMB we use a proactive approach when working closely with individuals, families and companies. Together we try to find the best solution that fits the specific needs of each of our clients.”
This commitment can also be found in several of CMB’s development strategies. First, maintaining the level of expertise. Employees spend many hours in training in order to better assist their clients with all their concerns in an ever-evolving regulatory environment. Second, the bank offers each client group an environment to develop their projects and encourage personal and professional fulfilment. CMB created Investments of Passion, Next Generation and the Women and Finance Academy, which serve this goal of self-actualisation. The Philanthropy Academy is a new addition, aimed at creating synergies between the participants and philanthropic stakeholders in Monaco, a city-state known internationally for its humanitarian actions. It is to nurture this daily relationship that CMB operates in Monaco, near its clients and in the heart of a place that it has embodied for over forty years.
A bank has rarely been this closely connected to its place of birth, Monaco. Over the last four decades the story of CMB and the Principality of Monaco have been intertwined and created for all the players a favourable environment to set-up and roll out innovative projects. CMB was created and has grown within the Principality, possessing its own subsidiary, Compagnie Monégasque de Gestion (CMG), dedicated to fund management, where committed fund analysts and managers work together on a daily basis.
Since its inception, CMB’s development has been in sync with the development of Monaco’s financial centre. On one hand, CMB has put its efforts into the development of private banking services in the Principality and has always been committed to supporting the development of the financial place. On the other hand it allows its clients to benefit from the advantages and characteristics of the Principality and assist with their investment projects. CMB is a leader in funds created under Monegasque law offering investors a highly diversified range of services.
It is this proximity, which guarantees an essential characteristic of a private bank – its reactivity. This allows clients ongoing access to their personal account managers. The local origins, the stability of the management and the desire of the bank to maintain a relatively small size also allows CMB to have rapid decision and approval cycles. This reactivity and the ability to keep a steady dialogue with its clients is one of its founding values and are fully in line with the Monegasque traditions of hospitality and transparency. The diversity of CMB’s clientele is a natural illustration of the diversity of the bank’s employees. More than 20 nationalities coexist within the institution, which takes advantage of this wealth of culture to operate across all the world’s financial centres.
The strength of a relationship lies in the ability of an institution to anticipate its clients’ needs by providing them tailor-made advice and support at every stage of their projects. Because of its structure, independence and size, CMB is naturally committed to this approach working alongside its clients, their families and their advisors.
CMB is an official partner of the Monaco Pavilion at the World Expo 2017 in Astana, Kazakhstan. The Expo is being organised under the theme ‘Future Energy’. This, along with the three sub-themes – ‘Reducing CO2 Emissions’, ‘Living Energy Efficiency’, and ‘Energy for All’ – will allow the Expo to present the state of energy today and to showcase sustainable solutions and innovative technologies.
CMB’s participation in this international event is consistent with Prince Albert II of Monaco’s goals of making the Principality a forerunner of sustainable development, innovation and responsibility.
The majority of managers who aim to develop their business in Europe will consider using a management company platform or otherwise known as a ‘Super ManCo’. As managers do not have to commit to large amounts of capital and resources, the third party platforms continue to expand.
The ever-growing amount of platform providers are used by a remarkably wide range of managers. This includes hedge funds, funds of hedge funds, private equity funds, real estate funds, infrastructure funds and others. Managers from within the EU, and also from the US, are signing on to utilise these entities in order to become compliant with the Alternative Investment Fund Managers Directive (AIFMD) and/or get an Undertakings for the Collective Investment of Transferable Securities (UCITS) stamp for their investment strategies.
But whereas the competition for UCITS platforms has been going on for many years, the picture for AIFM platforms seems blurrier. No provider of third party AIFM has built a dominant role in the market in any particular fund category, market segment or fund jurisdiction so far. Market consolidation still seems far away and one cannot speak about AIFM platforms being a standardised and homogeneous sector of the fund industry. Talk about pricing, some platforms takes into account a fund’s complexity when determining the fees that they quote; while some base their fees in part as percentage of the fund’s assets under management (AUM) whilst for others it is just a flat rate that is charged.
When looking at the UCITS platforms available on the market, it seems that independent or boutique platforms are at the forefront. They have gained more attention and have been more successful in attracting new managers and funds than those platforms operating within an investment bank or prime brokerage environment, or even asset manager-led platforms launching in-house as well as third party funds.
Market drivers in a challenging environment
Managers want to broaden their investor base more easily and for greater value – but regulatory restrictions and business economics make it impossible for any one partner to serve all markets on their own. Allying with like-minded partners enables everyone to provide their clients with global structuring solutions and in some cases, even an extensive distribution network.
Regulatory changes in tax, reporting, depositary and market infrastructure have increased the demand for transparency and security, and as a consequence, also the requirements on regulated vehicles. Creating easy access for investors to multi-disciplinary local and regional investment strategies through a single global platform united under internationally recognised regulatory excellence like AIFMD or UCITS is helping regional and local managers. Managers that wish to diversify their clientele in the global markets are well advised to choose the right structure for their investment strategy to meet investor’s needs.
On the other hand, easy access to secured and regulated investment vehicles throughout the globe is key for investors.
Facing the challenge of successful fund distribution
The question how to engage efficiently and successfully with institutional fund buyers and fund selectors still remains as the value chain of fund distribution is shaken up and down. Increasing pressure from risk and audit departments, cost saving and efficiency requirements as well as shortage of time and centralised decision-making underpins the importance of streamlined operations and easy access to information. Furthermore, digitalisation has finally entered the asset management sphere.
The need for lower operational costs and the changing information flow requires another level of interaction and communication. This will further increase over the years ahead, as easy information access and transparency are essential for fund selectors.
Allying with like-minded partners in a global distribution network adds a special benefit to client service. Together with selected partners, asset management firms can develop and optimise their fund distribution approach in a smart, practice-focused and cost-efficient manner. Platforms for UCITS funds and alternative investment strategies that offer access for independent regional and local managers to a multinational platform of global investors will dominate the markets in the future.
About the author
Manuela Fröhlich is Global Head of Business Development at LRI Group.