Presented by - Financial Partners

Transcription

Global Deleveraging + Fine Art
Presented by
Glyn Owen
“Investor Implications for Global Deleveraging”
Momemtum Global Investment Management
FP Core Investment Solutions Strategic Partner
Mike Donnan
“Fine Art as an Alternative”
Collins & Kent International Fine Art
A FP Premiere Presentation
20th September 2012
Investor Implications for
Global Deleveraging
Presented by
Glyn Owen
Momentum Global Investment Management
2
Central government debt burden 1900 to 2011 advanced and emerging economies
%
Source: Reinhart (2010), Reinhart and Rogoff (2009 and 2011), sources cited therein and the authors
3
global investment management
Total debt to GDP for developed economies 1990 - 2012
Source: Deutsche Bank, Haver. September 2012.
4
Debt composition varies widely
Canada
91
Australia
53
105
Germany
60
87
South Korea
81
45
France
48
Spain
72
82
40
80
93
76
111
33
111
97
134
90
76
109
67
100
71
219
99
0
Households
21
83
107
98
Japan
91
87
82
United
Kingdom
69
59
49
United States
Italy
63
120
200
Nonf inancial corporations
81
226
300
400
Financial institutions
500
600
Government
Source: Bloomberg, September 2012.
5
US fiscal deficit as % of GDP 1791 -2011
Source : Deutsche bank, GFD. September 2012.
6
Budget deficits larger in the US than in peripheral
Europe
Budget deficit as a % of GDP
%
Greece, Ireland, Italy, Portugal and
Spain: GDP- weighted fiscal balance
US
Source: Deutsche bank. September 2012.
7
Deleveraging: where are we in the cycle?
Note: Debt refers to external marketable debt and excludes internal debts, e.g. interbank debts
Source: FRB, Haver Analytics, DB Global Markets Research
8
US real GDP post-war experience: not a normal cycle...
Source: Nedgroup Capital. September 2012.
9
The UK recovery is weaker than in the great depression
%
Source: Deutsche Bank. September 2012.
10
Short term interest rates over past 10 years
US, UK, Japan and Europe
8.0
7.0
6.0
%
5.0
4.0
3.0
2.0
1.0
0.0
Sep 02
Sep 03
Sep 04
Sep 05
USD 1 Month LIBOR
Sep 06
Sep 07
GBP 1 Month LIBOR
Sep 08
Sep 09
JPY 1 Month LIBOR
Sep 10
Sep 11
Sep 12
EUR 1 Month LIBOR
Source: MGIM, Bloomberg. September 2012
11
The world is not normal:
UK base rate 1694 to today
Source: Deutsche Bank, GFD. September 2012.
12
Swiss government bond yields
1.2%
1.0%
0.8%
yield (%)
0.6%
0.4%
0.2%
0.0%
-0.2%
-0.4%
-0.6%
0
5
10
15
20
25
30
years to maturity
Swiss government bond yield
Source: Bloomberg, MGIM. September 2012.
13
10 year government bond yields
8.0%
7.0%
6.0%
Yield
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%
Jan 00
Jan 01
Jan 02
Jan 03
Jan 04
Jan 05
US
Jan 06
Jan 07
Germany
Jan 08
Jan 09
Jan 10
Jan 11
Jan 12
UK
Source: Bloomberg, MGIM. September 2012.
14
US 10 year yield since 1790
Source: Deutsche Bank, GFD, Bloomberg Finance LLp. September 2012.
15
Quantitative easing:
Bank of England balance sheet as a % of GDP
Source: Deutsche bank. September 2012.,
16
Tail risk of extreme events are not insignificant
• US fiscal cliff
• Chinese ‘recession’
• Eurozone disintegration
• Journey into the unknown – monetary easing
17
Fiscal cliff: will need to be tackled after November
US budget deficits
4
% of GDP
2
0
Mar 92
Mar 95
Mar 98
Mar 01
Mar 04
Mar 07
Mar 10
Mar 13
-2
-4
-6
-8
-10
-12
US Budget Balance (% GDP)
Source: Bloomberg, September 2012
18
US economic momentum is reasonable – but
unemployment remains high
US labour market
800
12.0
700
10.0
600
400
6.0
(%)
Number of claims (thousands)
8.0
500
300
4.0
200
2.0
100
0
0.0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul
80 81 82 83 84 85 86 87 88 89 90 91 93 94 95 96 97 98 99 00 01 02 03 04 06 07 08 09 10 11 12
US Initial Jobless Claims SA
US Unemployment Rate (%)
19
US construction: the only way is up?
3000
900
800
2500
700
600
Billion (USD)
Volume (thousands)
2000
1500
1000
500
400
300
200
500
100
0
Jan 59 Jan 62 Jan 65 Jan 68 Jan 71 Jan 74 Jan 77 Jan 80 Jan 83 Jan 86 Jan 89 Jan 92 Jan 95 Jan 98 Jan 01 Jan 04 Jan 07 Jan 10 Jan 13
US New Privately Owned Housing Starts
0
Jan 59 Jan 62 Jan 65 Jan 68 Jan 71 Jan 74 Jan 77 Jan 80 Jan 83 Jan 86 Jan 89 Jan 92 Jan 95 Jan 98 Jan 01 Jan 04 Jan 07 Jan 10 Jan 13
US Gross Private Domestic Investment
20
China is landing
GDP and industrial production
14%
25%
12%
20%
10%
15%
8%
6%
10%
4%
5%
2%
0%
Dec 02
0%
Dec 03
Dec 04
Dec 05
Dec 06
China GDP (LHS)
Dec 07
Dec 08
Dec 09
Dec 10
Dec 11
Dec 12
Chinese Industrial Production (RHS)
21
Major macro indicators continue to disappoint
Chinese money supply (% yoy)
65
45
60
40
55
35
50
30
Money Supply Growth %
Level
Chinese PMI: new orders
45
40
35
30
25
20
15
10
5
25
0
20
Dec-05 Jun-06 Dec-06 Jun-07 Dec-07 Jun-08 Dec-08 Jun-09 Dec-09 Jun-10 Dec-10 Jun-11 Dec-11 Jun-12
China New Orders PMI SA
China New Export Orders PMI SA
Jan Aug Mar Oct May Dec Jul Feb Sep Apr Nov Jun Jan Aug Mar Oct May Dec Jul Feb Sep Apr Nov Jun Jan Aug
98 98 99 99 00 00 01 02 02 03 03 04 05 05 06 06 07 07 08 09 09 10 10 11 12 12
M1 YoY
M2 YoY
Source: Bloomberg, September 2012.
22
China’s slowing growth: structural or cyclical?
China Real GDP y/y % change
16
14
12
10
8
6
4
2
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
0
2000
%
Source: Factset. September 2012.
23
The European crisis is not simply debt
1.0%
-8.0%
Current account
balance
-8.5%
Budget deficit to
GDP
5.2%
-1.7%
-4.6%
-0.8%
-7.2%
-4.5%
-6.0%
-1.9%
-2.4%
-4.2%
-2.1%
-2.2%
-7.4%
Source: IMF, 2012 estimates.
24
Unit labour costs since the launch of the euro
140
Spain
Italy
Index level rebased to 100
130
Greece
Portugal
France
Ireland
120
Germany
110
100
90
80
Dec Jul Feb Sep Apr Nov Jun Jan Aug Mar Oct May Dec Jul Feb Sep Apr Nov Jun Jan
99 00 01 01 02 02 03 04 04 05 05 06 06 07 08 08 09 09 10 11
25
Currencies vs. the Deutschemark
0
0
20
200
400
60
80
600
100
800
120
140
ITL per DEM
GRD, ESP, PTE per DEM
40
1,000
160
1,200
180
200
1,400
73
75
77
79
81
Spanish peseta
83
85
87
89
91
93
Greek drachma
95
97
99
01
03
05
07
Italian lira
26
German Labour reform accelerated growth- can Italy?
Industrial Production (rebased to 100 January 1995)
150
140
130
120
110
100
90
80
Dec Aug Apr Dec Aug Apr Dec Aug Apr Dec Aug Apr Dec Aug Apr Dec Aug Apr Dec Aug Apr Dec Aug Apr Dec Aug Apr Dec
94 95 96 96 97 98 98 99 00 00 01 02 02 03 04 04 05 06 06 07 08 08 09 10 10 11 12 12
US
Germany
Italy
27
The European stress / intervention cycle
• Don’t underestimate the political will to preserve the Eurozone
• Inflate, stagnate or default
• Austerity / growth
• European bail out of banks
• Issue of Eurobonds
• ECB – LTRO / OMT / rate cut
• Fiscal union
28
Clear slowdown in global growth
Source: JPMorgan, September 2012
29
Equity market valuations
Price/Earnings*
Dividend yield
10-year Government
bond yields
United States
13.8
2.1%
1.7%
Eurozone
10.8
4.2%
1.6%
United Kingdom
11.2
4.1%
1.7%
Germany
10.9
3.7%
1.6%
Switzerland
13.4
3.6%
0.5%
Japan
13.8
2.4%
0.8%
Hong Kong
10.2
3.8%
0.7%
Australia
12.6
5.0%
3.1%
*current year estimate
Source: Bloomberg, Statistics to 06/09/2012. September 2012
30
MSCI World P/E ratio since 1995
40
35
P/E Ratios
30
25
20
15
10
5
0
Aug Aug Aug Aug Aug Aug Aug Aug Aug Aug Aug Aug Aug Aug Aug Aug Aug Aug
95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12
MSCI WORLD
31
Investment conclusion
• ‘New normal’ is now the consensus
• Deleveraging and rebalancing set to continue for years
• US – growth risk in 2013
China – structural slowdown underway
Europe – stress / intervention cycle to continue
• Policy risks are high
• Further monetary loosening is certain
• Crisis presents an extraordinary valuation opportunity
32
Implications for portfolio construction
• Subdued growth
low return expectations
• Continued deleveraging and tight credit
• High tail risks
financial strength is critical
high volatility
• Cyclical move down in commodities has further to run
• Deflation protection in safe haven bonds
• Income generating assets important
• safe dividend equities
• corporate bonds
• emerging market bonds
Focus on:
Diversification by asset class
Quality defensive equities
Inflation not today’s problem – but might be the end game
Exploit tactical opportunities
33
Disclaimer
Momentum Global Investment Management is the trading name for Momentum Global Investment Management Limited. This document does not constitute an offer or solicitation to
any person in any jurisdiction in which it is not authorised or permitted, or to anyone who would be an unlawful recipient, and is only intended for use by original recipients and
addressees. The original recipient is solely responsible for any actions in further distributing this document, and should be satisfied in doing so that there is no breach of local
legislation or regulation. The information is intended solely for use by our clients or prospective clients, and should not be reproduced or distributed except via original recipients
acting as professional intermediaries. This document is not for distribution in the United States.
Prospective investors should inform themselves and if need be take appropriate advice regarding applicable legal, taxation and exchange control regulations in countries of their
citizenship, residence or domicile which may be relevant to the acquisition, holding, transfer, redemption or disposal of any investments herein solicited.
Any opinions expressed herein are those at the date this material is issued. Data, models and other statistics are sourced from our own records, unless otherwise stated herein. We
believe that the information contained is from reliable sources, but we do not guarantee the relevance, accuracy or completeness thereof. Unless otherwise provided under UK law,
Momentum Global Investment Management does not accept liability for irrelevant, inaccurate or incomplete information contained, or for the correctness of opinions expressed.
We caution that the value of investments in discretionary accounts, and the income derived, may fluctuate and it is possible that an investor may incur losses, including a loss of the
principal invested. Past performance is not generally indicative of future performance. Investors whose reference currency differs from that in which the underlying assets are
invested may be subject to exchange rate movements that alter the value of their investments.
Our investment mandates in alternative strategies and hedge funds permit us to invest in unregulated funds that may be highly volatile. Although alternative strategies funds will seek
to follow a wide diversification policy, these funds may be subject to sudden and/or large falls in value. The illiquid nature of the underlying funds is such that alternative strategies
funds deal infrequently and require longer notice periods for redemptions. These Investments are therefore not readily realisable. If an alternative strategies fund fails to perform, it
may not be possible to realise the investment without further loss in value. These unregulated funds may engage in the short selling of securities or may use a greater degree of
gearing than is permitted for regulated funds (including the ability to borrow for a leverage strategy). A relatively small price movement may result in a disproportionately large
movement in the investment value. The purpose of gearing is to achieve higher returns associated with larger investment exposures, but has concomitant exposure to loss if positive
performance is not achieved. Reliable information about the value of an investment in an alternative strategies fund may not be available (other than at the fund’s infrequent
valuation points).
Under our multi-management arrangements, we selectively appoint underlying sub-investment managers and funds to actively manage underlying asset holdings in the pursuit of
achieving mandated performance objectives. Annual investment management fees are payable both to the multimanager and the manager of the underlying assets at rates
contained in the offering documents of the relevant portfolios (and may involve performance fees where expressly indicated therein).
Momentum Global Investment Management Limited (Company Registration No. 3733094) registered office at 20 Gracechurch Street, London EC3V 0BG.
Momentum Global Investment Management Limited is authorised and regulated by the Financial Services Authority in the United Kingdom, and is an authorised Financial Services
Provider pursuant to the Financial Advisory and Intermediary Services Act 37 of 2002 in South Africa.
© Momentum Global Investment Management Limited 2012
40
Contact: Lucy Richardson
Marketing Manager
Momentum Global Investment Management
[email protected]
T: +44 207 939 1725
www.momentumgim.com
41
Fine Art as an Alternative
Presented by
Mike Donnan
Collins and Kent International Fine Art
Welcome
Collins & Kent International
AUSTRALIA
.
SINGAPORE
.
HONG KONG
Australasia and Asia’s leading art investment business specialising in the European masters
Since 1999
About Collins & Kent International
Founded in 1999 in Sydney, Australia.
Since 1999
Collins & Kent International is one of the world’s leading
retailers and dealers in the finest works on paper of the Masters
Buy to rent art investment
Since 1999
CKI Rentals provides a complete ‘end to end’ art rental
service to public and private sector companies
Since 1999
It has never been easier to invest in the works of the Masters
and make a secure, contracted return of up to 7.5% pa
Since 1999
Histories greatest artists will be the exclusive
building blocks of your CKI art investment portfolio
Since 1999
ANDY WARHOL
Since 1999
PABLO PICASSO
Since 1999
JOAN MIRO
Since 1999
And many more….
Bacon
Calder
Chagall
Dali
Hirst
Matisse
Moore
Munch
Since 1999
A well established rental market
Established in 1975 by the Canadian Government and Canadian Arts Council
A well established rental market
Established in 1980 by the Australian Government
Market Specialisation
CKI Specialise in the most liquid, affordable
and collected market sector
Since 1999
WORKS ON PAPER
Lino cuts
Wood cuts
Lithographs
Screen
Prints
Engravings
Etchings
Since 1999
Published Retail Prices
 Detailed price growth histories
 Proven capital growth
 A window to the potential for future growth
Since 1999
Proven capital growth and recommended retail prices
Georges Bloch 1017
Since 1999
The Art Market – Primary and Secondary markets
Market share – Primary and Secondary Markets
US$ 11.5 billion
US$ 48.5 billion
Secondary Market
Auction Houses
Primary Market
Dealers and Galleries
Since 1999
The Art Market – Primary and Secondary markets
CKI verses Auction
CKI
75% - 80%
•
•
20% - AUCTION
25%
CKI issue a Certificate of Ownership and
Authenticity for each purchase made
from or through CKI.
•
Lots are sold ‘As is’ and with no
guarantees of authenticity.
•
No refunds are offered should a work
prove to be inconsistent with its
description.
Our terms and conditions of sale offer a
full money back guarantee should the
work be proved to be a fake or not as
described in the particulars
Since 1999
How it works
Investment success in 3 easy steps
Select your Masters
income Portfolio
Decide on a
rental period
Since 1999
Receive your Fixed
rental income
Fixed contracted rental returns
Since 1999
Andy Warhol
Marilyn Monroe 31. 1967
Screen Print printed in colours
F&S II.31
Edition size: 250
Hand signed
Numbered with a rubber stamped verso.
Andy Warhol
Marilyn Monroe 31. Price Growth History 1967 - 2010
1967
2006
US$ 350
US$ 96,000
2007
2010
1967: Issue Price
2006: Christie’s London, May
2007: Sotheby’s NY, November
2010: The Printworld Directory Thirteenth edition
US$ 229,000
US$ 400,000
A.R.R
1967-2010 = 17.79%
2007-2010 = 20.43%
Andy Warhol
Mao Tse-Tung 96. 1972
Screen Print printed in colours
F&S II.96
Edition size: 250
Signed in ball point pen and numbered with a
rubber stamp verso.
Andy Warhol
Mao Tse-Tung 96. Price Growth History 1972 - 2010
1972
2006
2008
US$ 350
US$ 24,940
US$ 65,000
2010
1972: Issue Price
2006: Christie’s London, September
2008: The Printworld Directory Twelfth edition
2010: The Printworld Directory Thirteenth edition
US$ 150,000
A.R.R
1972-2010 = 17.29%
2006-2010 = 56.60%
How it works
Summary
 The reliability of a property investment at a fraction of the cost
Since 1999
How it works
Summary
 The safety and security of an unleveraged real asset
Since 1999
How it works
Summary
 Fully insured specialist storage packages available
Since 1999
How it works
Summary
 7.5% per annum in extra rental income – paid monthly or quarterly
Since 1999
Collins & Kent International
AUSTRALIA
.
SINGAPORE
.
HONG KONG
Australasia and Asia’s leading art investment business specialising in the European masters
Since 1999

Presented by - Financial Partners

Transcription

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