Exclusive: Advent readies new $2.2 billion Latam private equity fund – sources

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SAO PAULO (Reuters) – U.S. private equity firm Advent International Corp is preparing to launch a $2.2 billion fund to invest in Latin American companies, two people with knowledge of the matter told Reuters.

The fund launched in coming days will be Advent’s seventh for Latin America and its largest for the region. Advent’s last Latin American fund reached $2.1 billion in commitments in 2014.

Advent declined to comment on the matter.

Advent has invested in companies in Brazil, Colombia, Argentina, Chile, Mexico and Peru. The firm intends to close the fund-raising by September, according to one of the sources, who asked for anonymity because discussions are still private.

Advent’s move underscores how long-term investors have not soured on Latin America despite weaker growth and political risks, betting on rebounding growth in coming years as the International Monetary Fund forecasts.

One of Advent’s largest bets in Latin America was the acquisition of an 80 percent stake in the Brazilian operations of Walmart Inc in June.

The world’s biggest retailer did not receive payment for the unit and took a non-cash charge of roughly $4.5 billion. Advent agreed to invest 1.9 billion reais ($483 million) to turn around the geographically sprawling and poorly integrated operations.

Advent, which had $36 billion in assets under management in December, has raised more than $6 billion in private equity funds for Latin America since 1996.

Its portfolio in Latin America also includes Argentine card processor Prisma Medios de Pagos SA, Brazilian education company Estácio Participações SA and Peruvian IT outsourcer Canvia.

Reporting by Carolina Mandl; editing by Brad Haynes and Leslie Adler

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UBS Wealth closes U.S. equity overweight, favors emerging stocks

UBS Wealth closes U.S. equity overweight, favors emerging stocks

FILE PHOTO: Mark Haefele, Global Chief Investment Officer of UBS Wealth Management attends the Reuters Investment Summit, London, Britain, November 16, 2017. REUTERS/Paul Hackett

(Reuters) – UBS Global Wealth Management has closed its overweight position in U.S. equities and shifted to an overweight in emerging market and Japanese stocks, it said on Thursday.

UBS Global Wealth Management chief investment officer Mark Haefele said also that the firm preferred the euro over the Swiss franc and Norwegian crown versus the Canadian dollar.

Reporting by Sujata Rao and Tom Arnold

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Equity funds see biggest weekly inflows in a year: BAML

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LONDON (Reuters) – Investors plowed $14.2 billion into global equity funds this week, the largest amount in a year as investors jumped on to 2019’s stock market rally, Bank of America Merrill Lynch said on Friday, citing flow data provider EPFR.

An index of global stocks is up more than 16 percent since the end of 2018 as falling market volatility and a renewed dovishness from global central banks, led by the U.S. Federal Reserve has boosted risk appetite across the board.

BAML said most of the inflows went into exchange traded funds while mutual funds saw net outflows.

U.S. equity funds were the biggest beneficiaries with net inflows of $25.5 billion while emerging markets saw net outflows.

European funds also saw $4.6 billion of outflows after the European Central Bank slashed its growth forecasts and signaled a cautious economic outlook at its latest policy meeting.

The appetite for risk spilled over into bond markets as well with investment grade debt notching up the eighth consecutive week of inflows.

Reporting by Saikat Chatterjee; Editing by Tommy Wilkes

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Worst start to year for equity flows since 2008: BAML

Worst start to year for equity flows since 2008: BAML

LONDON (Reuters) – A $10 billion wipeout over the last week has compounded the worst start to a year for equity flows since 2008, Bank of America Merrill Lynch strategists said on Friday.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., March 7, 2019. REUTERS/Brendan McDermid

Citing data from flow-tracker EPFR, BAML’s analysts calculated that just over $60 billion has now been yanked out of equities this year. Almost $80 billion has been pulled from developed markets, while $18.5 billion has gone into emerging markets.

They added that last week also saw the fourth-biggest inflow on record into ‘investment grade’ bonds at $9.5 billion and that “Europe = Japan” – a reference to long-term aneamic growth and low interest rates – was now the most consensus trade in the world by their calculations.

“Europe = Japan is correct and consensus,” they said, though they also reckon European assets will outperform in the second quarter now that the European Central Bank has shifted back towards stimulus and there are signs of renewed growth emerging from China.

For many, the monster outflows from stocks will appear at odds with what has been a red-hot start to the year for equity markets.

Despite a wobble this week, MSCI’s main world share index has seen one of its best ever starts to a year thanks to surges of 20 percent or more for the likes of Wall Street’s S&P 500 and China’s main indexes.

The apparent disconnect could be explained by the fact that EPFR data captures only a portion of investment funds but also that firms themselves have been buying up their own shares this year after they became much cheaper last year.

Recent data from Biryinyi associates showed that U.S. companies had already announced plans to buy back nearly a quarter of a trillion dollars of their own stock by the end of February, which was up 7 percent on the same time a year ago.

BAML’s analysts noted separately meanwhile that this weekend marks 10 years since the post-financial crisis global equity bull run started.

During that time the value, or market capitalization, of U.S. stocks has surged by $21.3 trillion which is three times the $6.5 trillion overall rise in annual economic output of the U.S. economy.

The top three performers in the Dow Jones index have been plane maker Boeing, iPhone giant Apple and Unitedhealth Group, while the worst performers have been Walgreen, oil firm Exxon, and IT firm IBM.

Annualized total return since the March 2009 low have been 17.5 percent for the S&P 500, versus 13.8 percent by Japan’s Nikkei 225 and 9.3 percent for Europe’s STOXX 600.

“Ten years after Global Financial Crisis, Eurozone trapped in deflationary “Japanification” of growth & interest rates; EU rates unlikely to rise, EU equities in ‘value trap’” BAML’s analysts said.

Reporting by Marc Jones; editing by Helen Reid

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