Ellyn A. McColgan Named President and Chief Operating Officer of Morgan Stanley Global Wealth Management Group
Dec 17 2007 | New York
Morgan Stanley today announced that Ellyn A. McColgan has been named President and Chief Operating Officer of the Global Wealth Management Group (GWMG), effective in April, 2008. Ms. McColgan will be a member of Morgan Stanley’s Management Committee and will report to Co-President James P. Gorman, whom she succeeds in the GWMG leadership role.
Ms. McColgan, 53, joins Morgan Stanley after a 17-year career at Fidelity Investments, where she served most recently as President of Distribution and Operations. In this position, she was responsible for the firm’s retail and institutional distribution channels as well as core processing operations in the U.S. and India, representing 21,000 employees and more than $1.5 trillion in client assets under administration. Prior to this, she served as President of Fidelity Brokerage Company, the largest such company in the U.S. based on client assets and accounts.
“Breadth and Depth of Experience Unmatched in Our Industry”
John J. Mack, Chairman and CEO, said, “Ellyn McColgan is the ideal executive to carry forward the tremendous progress that James Gorman and his team have made in transforming our Global Wealth Management business into an industry leader. She will bring to our management committee a breadth and depth of experience that is unmatched in our industry. As the leader over a number of years of one of the largest wealth management businesses in the U.S., Ellyn has a proven ability to grow revenues and profits, deliver a superior operating platform to Financial Advisors and create a client experience that is second-to-none. Her leadership will enable us to build on the momentum we have achieved over the past two years in this important business for Morgan Stanley.”
Mr. Gorman said, “I have known Ellyn for many years, having first met her when we served together on the board of the Securities Industry and Financial Markets Association. She is one of the most talented executives in the wealth management industry and brings great insight, expertise and a fresh perspective to our business. We will draw upon her vast experience with wealth management products, retirement services and best-in-class operations and technology platforms to advance GWMG’s leadership position. I am looking forward to working closely with her to realize the full potential of this business and its incredibly talented team of Financial Advisors.”
Ms. McColgan joined Fidelity Investments in 1990, where she held a succession of executive positions across virtually all aspects of the firm’s distribution businesses. These included fund accounting and custody services, institutional retirement services and institutional investment services. In her most recent role as head of the brokerage company, she led the retail brokerage, mutual fund, correspondent clearing, registered investment advisor, capital markets and family office businesses.
Ms. McColgan received a B.A. from Montclair State College in 1975 and an M.B.A. from Harvard Business School in 1983. She served as Co-Chair of the Securities Industry and Financial Markets Association from 2006-2007, is a trustee of the Museum of Fine Arts, Boston, and a former trustee of Babson College. In 2005 and 2006, she was recognized by Fortune magazine as one of the “50 Most Powerful Women in Business.”
Over the past two years, Morgan Stanley has made significant progress in reinvigorating its Global Wealth Management business. GWMG has delivered six consecutive quarters of improved performance. In the third quarter, this business achieved its highest revenue since the second quarter of 2000 and a margin of 17 percent, compared with a margin of 1 percent in 2005. GWMG also delivered record annualized revenue per Financial Advisor of $817,000 in the third quarter, versus $502,000 in 2005, as Morgan Stanley continued to attract and retain high-quality advisors. Client inflows of nearly $15 billion reached all-time highs during the third quarter, and the amount of client assets in $1 million-plus households is up by $107 billion, or 28 percent, from the first quarter of 2006.
One of the largest businesses of its kind in the world, GWMG provides a range of wealth management products and services to individuals, businesses and institutions. These include brokerage and investment advisory services, financial and wealth planning, credit and lending, banking and cash management, annuities and insurance, retirement and trust.
Friday, March 7, 2008
Morgan Stanley Announces Chief Executive Officer for Asia
Morgan Stanley Announces Chief Executive Officer for Asia
Feb 12 2008 | Hong Kong
Morgan Stanley (NYSE:MS) today announced the appointment of Owen Thomas as Chief Executive Officer of Morgan Stanley Asia. Mr. Thomas has been serving as President of Morgan Stanley Investment Management (MSIM) since December 2005. He takes up his new role at the end of the month, at which time he will relocate from New York to Hong Kong. Stephen Roach will continue in his role as Chairman, Morgan Stanley Asia.
A 20-year Morgan Stanley veteran, Owen Thomas ran the Firm’s real estate investing business from 1994 and was Head of Morgan Stanley Real Estate from 2000 to 2005. Mr. Thomas will remain on the Firm’s Global Management Committee.
John J. Mack, Chairman and CEO of Morgan Stanley, said, “Owen has demonstrated the strategic vision and leadership skills necessary to manage and grow complex, multi-regional businesses. He helped build and run our world-class real estate franchise and, since 2005, contributed greatly to the improved performance of our asset management division, which has seen increasing revenues and assets under management.”
“Asia is a key growth opportunity for the Firm,” said Walid Chammah, Morgan Stanley’s Co- President. “We are confident that under Owen’s leadership our Asian franchise will continue to be a standout performer in the region.”
With Owen Thomas’s new appointment, Morgan Stanley announced that the Firm’s global MSIM business will be co-led by Stuart Bohart, Jay Mantz and Stephen Trevor. Mr. Mantz and Mr. Trevor will continue to co-head the Merchant Banking Group, which is comprised of Real Estate Investing, Private Equity and Infrastructure. Stuart Bohart will head all MSIM business outside of Merchant Banking.
Prior to his new role as Chief Executive Officer of Morgan Stanley Asia, Owen Thomas served as President of Morgan Stanley Investment Management (MSIM) from December 2005. Under his leadership (third quarter 2005 to fourth quarter 2007), global assets under management grew from US$428 billion to US$597 billion and MSIM net revenues grew from US$679 million to US$1.288 billion.
From 2000 to 2005 Mr. Thomas was Head of Morgan Stanley Real Estate, the Firm’s industryleading real estate investing and financial services franchise.
Mr. Thomas first joined Morgan Stanley in 1987. He began managing the real estate investing business in 1994, was named Managing Director in 1995 and was appointed Head of Morgan Stanley Real Estate in 2000. He is a Trustee of the Urban Land Institute, Vice Chairman of the Pension Real Estate Association and a member of the Real Estate Roundtable. He received a bachelor’s degree from the University of Virginia and an MBA from Harvard Business School.
Feb 12 2008 | Hong Kong
Morgan Stanley (NYSE:MS) today announced the appointment of Owen Thomas as Chief Executive Officer of Morgan Stanley Asia. Mr. Thomas has been serving as President of Morgan Stanley Investment Management (MSIM) since December 2005. He takes up his new role at the end of the month, at which time he will relocate from New York to Hong Kong. Stephen Roach will continue in his role as Chairman, Morgan Stanley Asia.
A 20-year Morgan Stanley veteran, Owen Thomas ran the Firm’s real estate investing business from 1994 and was Head of Morgan Stanley Real Estate from 2000 to 2005. Mr. Thomas will remain on the Firm’s Global Management Committee.
John J. Mack, Chairman and CEO of Morgan Stanley, said, “Owen has demonstrated the strategic vision and leadership skills necessary to manage and grow complex, multi-regional businesses. He helped build and run our world-class real estate franchise and, since 2005, contributed greatly to the improved performance of our asset management division, which has seen increasing revenues and assets under management.”
“Asia is a key growth opportunity for the Firm,” said Walid Chammah, Morgan Stanley’s Co- President. “We are confident that under Owen’s leadership our Asian franchise will continue to be a standout performer in the region.”
With Owen Thomas’s new appointment, Morgan Stanley announced that the Firm’s global MSIM business will be co-led by Stuart Bohart, Jay Mantz and Stephen Trevor. Mr. Mantz and Mr. Trevor will continue to co-head the Merchant Banking Group, which is comprised of Real Estate Investing, Private Equity and Infrastructure. Stuart Bohart will head all MSIM business outside of Merchant Banking.
Prior to his new role as Chief Executive Officer of Morgan Stanley Asia, Owen Thomas served as President of Morgan Stanley Investment Management (MSIM) from December 2005. Under his leadership (third quarter 2005 to fourth quarter 2007), global assets under management grew from US$428 billion to US$597 billion and MSIM net revenues grew from US$679 million to US$1.288 billion.
From 2000 to 2005 Mr. Thomas was Head of Morgan Stanley Real Estate, the Firm’s industryleading real estate investing and financial services franchise.
Mr. Thomas first joined Morgan Stanley in 1987. He began managing the real estate investing business in 1994, was named Managing Director in 1995 and was appointed Head of Morgan Stanley Real Estate in 2000. He is a Trustee of the Urban Land Institute, Vice Chairman of the Pension Real Estate Association and a member of the Real Estate Roundtable. He received a bachelor’s degree from the University of Virginia and an MBA from Harvard Business School.
Thursday, March 6, 2008
Statement from Peter Lynch
March 06, 2008 10:32
Statement from Peter Lynch
BOSTON--(BUSINESS WIRE)--The following is a statement from Peter Lynch: “Today I settled an administrative proceeding with the SEC. In asking the Fidelity equity trading desk for occasional help locating tickets, I never intended to do anything inappropriate, and I regret having made those requests. I want the public to know that I have never worked on the trading desk, and, since retiring from investment management at Fidelity over 17 years ago, I have not placed any trades on behalf of Fidelity with any brokerage firm. As many people know, over the past 17 years, I have spent most of my time on community service.”
Statement from Peter Lynch
BOSTON--(BUSINESS WIRE)--The following is a statement from Peter Lynch: “Today I settled an administrative proceeding with the SEC. In asking the Fidelity equity trading desk for occasional help locating tickets, I never intended to do anything inappropriate, and I regret having made those requests. I want the public to know that I have never worked on the trading desk, and, since retiring from investment management at Fidelity over 17 years ago, I have not placed any trades on behalf of Fidelity with any brokerage firm. As many people know, over the past 17 years, I have spent most of my time on community service.”
Morgan Stanley conference on microfinance
March 06, 2008
Morgan Stanley Builds Upon Leadership Role in Microfinance
Morgan Stanley and Women’s World Banking host conference, drawing participants from nearly 50 microfinance institutions
NEW YORK--(BUSINESS WIRE)--Morgan Stanley and Women’s World Banking teamed together to host a ground-breaking conference on microfinance and the capital markets on February 20-21. Nearly 300 people attended including socially responsible investors, Morgan Stanley employees and 78 members of 45 microfinance institutions (MFI’s) to discuss how MFI’s can take advantage of the increasing presence of the capital markets in the microfinance sector.
“This conference provided the opportunity for MFI’s, members of academia, investors and the financial community to discuss the growing demand for innovative financial solutions for the microlender,” said Ellen Brunsberg, Managing Director at Morgan Stanley. “Morgan Stanley leads the market in recognizing the connection between this sector and the capital markets. We provide access to capital, financial advice and global markets execution with the intent of helping this industry access sustainable banking services.”
“The evolution of microfinance from a community-centered, non-profit activity based primarily on charitable impulses to an asset class that global investors are vying to get into is indeed an extraordinary phenomenon,” said Mary Ellen Iskenderian, President and CEO of Women’s World Banking. “As we celebrate the potential that these changes bring for the future of microfinance, we must also be mindful of not losing sight of our social mission of empowering women and alleviating poverty. Morgan Stanley is playing a vital role in educating the financial industry and facilitating the capital markets needs of MFI’s.”
The conference also featured a Microfinance Case Study Competition where nine teams of Morgan Stanley employees worked with participating microfinance institutions over a four-week period prior to the conference to develop high-level, strategic case studies on topics such as optimal capital structure and ideal equity investors to present on the first day of the conference. The competition culminated on the second day when three finalist teams presented on stage to nearly 300 conference attendees. First place was awarded to the team working with Findesa, the largest MFI in Nicaragua. The team built an innovative and impactful framework for assessing Findesa’s search for an optimal equity investor, and also provided creative recommendations for new capital markets instruments Findesa should consider.
“These Morgan Stanley teams represented outstanding performers at the Firm who wanted to apply their commercial skills to a strategic challenge with a social mission,” said Linda Riefler, Morgan Stanley’s Chief Talent Officer. “In addition to providing capital markets insights into their microfinance institution partners, our employees gained valuable experience working on cross-divisional teams, managing a client relationship and learning first hand about emerging market dynamics.”
Findesa will receive three months of pro-bono advisory services from Morgan Stanley’s Microfinance Institutions Group as a result of the win.
“We felt we were a winner before the results of the contest were revealed because Morgan Stanley’s team provided us with so many innovative financial solutions to meet our business needs,” said Gabriel Solorzano, Chairman, Findesa.
Ian Callaghan, Head of the Microfinance Institutions Group at Morgan Stanley said, “Given widespread concerns about management strength at a time of great changes in the microfinance industry, the conference has been our contribution to capacity building in terms of capital markets awareness among MFI’s. At the same time, we have been able to significantly scale up awareness of microfinance internally at Morgan Stanley.”
Other conference highlights included MFI capital markets workshops that addressed topics such as optimal capital structures, credit due diligence and investment readiness and navigating risk. James E. Austin, Emeritus Professor, Harvard Business School, moderated discussion sessions and the Case Study Competition.
Morgan Stanley has arranged $250 million of funding for microfinance institutions, providing medium-term funding for on-lending to approximately 300,000 micro-entrepreneurs in 20 developing countries.
About Morgan Stanley
Morgan Stanley’s dedicated microfinance team, the Microfinance Institutions Group, operates globally to leverage local and market expertise throughout the Firm. The group seeks to originate microfinance-related transactions for the capital markets and to manage Morgan Stanley’s direct and indirect equity involvement in microfinance.
Morgan Stanley (NYSE: MS) is a leading global financial services firm providing a wide range of investment banking, securities, investment management and wealth management services. The Firm's employees serve clients worldwide including corporations, governments, institutions and individuals from more than 600 offices in 33 countries. For further information about Morgan Stanley, please visit www.morganstanley.com.
About Women’s World Banking
Women’s World Banking is a global network of 54 microfinance providers and banks, working in 30 countries to bring financial services and information to poor entrepreneurs. The network serves 9 million microentrepreneurs directly, and another 14 million indirectly through its bank partners and others. The network is supported by a global team based in New York which delivers expertise in product design and distribution, access to capital markets, and customer and insight. For more information about WWB, visit www.womensworldbanking.org.
Morgan Stanley Builds Upon Leadership Role in Microfinance
Morgan Stanley and Women’s World Banking host conference, drawing participants from nearly 50 microfinance institutions
NEW YORK--(BUSINESS WIRE)--Morgan Stanley and Women’s World Banking teamed together to host a ground-breaking conference on microfinance and the capital markets on February 20-21. Nearly 300 people attended including socially responsible investors, Morgan Stanley employees and 78 members of 45 microfinance institutions (MFI’s) to discuss how MFI’s can take advantage of the increasing presence of the capital markets in the microfinance sector.
“This conference provided the opportunity for MFI’s, members of academia, investors and the financial community to discuss the growing demand for innovative financial solutions for the microlender,” said Ellen Brunsberg, Managing Director at Morgan Stanley. “Morgan Stanley leads the market in recognizing the connection between this sector and the capital markets. We provide access to capital, financial advice and global markets execution with the intent of helping this industry access sustainable banking services.”
“The evolution of microfinance from a community-centered, non-profit activity based primarily on charitable impulses to an asset class that global investors are vying to get into is indeed an extraordinary phenomenon,” said Mary Ellen Iskenderian, President and CEO of Women’s World Banking. “As we celebrate the potential that these changes bring for the future of microfinance, we must also be mindful of not losing sight of our social mission of empowering women and alleviating poverty. Morgan Stanley is playing a vital role in educating the financial industry and facilitating the capital markets needs of MFI’s.”
The conference also featured a Microfinance Case Study Competition where nine teams of Morgan Stanley employees worked with participating microfinance institutions over a four-week period prior to the conference to develop high-level, strategic case studies on topics such as optimal capital structure and ideal equity investors to present on the first day of the conference. The competition culminated on the second day when three finalist teams presented on stage to nearly 300 conference attendees. First place was awarded to the team working with Findesa, the largest MFI in Nicaragua. The team built an innovative and impactful framework for assessing Findesa’s search for an optimal equity investor, and also provided creative recommendations for new capital markets instruments Findesa should consider.
“These Morgan Stanley teams represented outstanding performers at the Firm who wanted to apply their commercial skills to a strategic challenge with a social mission,” said Linda Riefler, Morgan Stanley’s Chief Talent Officer. “In addition to providing capital markets insights into their microfinance institution partners, our employees gained valuable experience working on cross-divisional teams, managing a client relationship and learning first hand about emerging market dynamics.”
Findesa will receive three months of pro-bono advisory services from Morgan Stanley’s Microfinance Institutions Group as a result of the win.
“We felt we were a winner before the results of the contest were revealed because Morgan Stanley’s team provided us with so many innovative financial solutions to meet our business needs,” said Gabriel Solorzano, Chairman, Findesa.
Ian Callaghan, Head of the Microfinance Institutions Group at Morgan Stanley said, “Given widespread concerns about management strength at a time of great changes in the microfinance industry, the conference has been our contribution to capacity building in terms of capital markets awareness among MFI’s. At the same time, we have been able to significantly scale up awareness of microfinance internally at Morgan Stanley.”
Other conference highlights included MFI capital markets workshops that addressed topics such as optimal capital structures, credit due diligence and investment readiness and navigating risk. James E. Austin, Emeritus Professor, Harvard Business School, moderated discussion sessions and the Case Study Competition.
Morgan Stanley has arranged $250 million of funding for microfinance institutions, providing medium-term funding for on-lending to approximately 300,000 micro-entrepreneurs in 20 developing countries.
About Morgan Stanley
Morgan Stanley’s dedicated microfinance team, the Microfinance Institutions Group, operates globally to leverage local and market expertise throughout the Firm. The group seeks to originate microfinance-related transactions for the capital markets and to manage Morgan Stanley’s direct and indirect equity involvement in microfinance.
Morgan Stanley (NYSE: MS) is a leading global financial services firm providing a wide range of investment banking, securities, investment management and wealth management services. The Firm's employees serve clients worldwide including corporations, governments, institutions and individuals from more than 600 offices in 33 countries. For further information about Morgan Stanley, please visit www.morganstanley.com.
About Women’s World Banking
Women’s World Banking is a global network of 54 microfinance providers and banks, working in 30 countries to bring financial services and information to poor entrepreneurs. The network serves 9 million microentrepreneurs directly, and another 14 million indirectly through its bank partners and others. The network is supported by a global team based in New York which delivers expertise in product design and distribution, access to capital markets, and customer and insight. For more information about WWB, visit www.womensworldbanking.org.
6 March 2008
Citi Strengthens U.S. Residential Mortgage Business
Residential Mortgage Assets to Be Reduced by $45 Billion
Operational Efficiencies Expected to Produce $200 Million in Annual Expense Savings
Strengthening Origination Quality and Underwriting Criteria to Mitigate Losses
Changes Spurred by Business Review Process Underway across Citi
NEW YORK--(BUSINESS WIRE)
Citi today announced it intends to reduce residential mortgage assets in its U.S. mortgage business by approximately $45 billion over the next 12 months, a 20 percent decrease from December 2007 levels, and will cut the amount of new loans to be held in portfolio by more than 50 percent in the next year. In addition, the company will integrate middle office and support areas to serve both first and second mortgage operations, organize sales channels around customer segments, and strengthen ties with Citi Markets & Banking, which will be the primary provider of capital markets services to its U.S. mortgage business going forward. Citi expects these changes to reduce expenses by approximately $200 million on a run rate basis within 12 months.
In January, Citi announced the creation of an end-to-end U.S. residential mortgage business that includes origination, servicing and capital markets securitization execution headed by Bill Beckmann.
As part of that change, Citi will consolidate operations, policies and procedures in its U.S. mortgage business to achieve greater operational efficiency, appropriate alignment of incentives and ensure in-depth, timely understanding of mortgage exposure. In addition, Citi will integrate all residential mortgage operations under the CitiMortgage name, including CitiMortgage, Citi Home Equity and Citi Residential Lending.
“Consistent with the key priorities of Citi Chief Executive Vikram Pandit, this end-to-end realignment will create a simplified and streamlined organization that is more sharply focused on clients and able to direct resources to the business lines and customer segments with the highest growth potential,” said Bill Beckmann, President of CitiMortgage Inc. “At the same time, these changes will enable us to manage the business unit’s capital for enhanced returns.”
With these changes, CitiMortgage will remain a leader in origination and servicing and will be well positioned to leverage Citi’s capital markets expertise in pricing and distribution. Specifically, CitiMortgage is taking the following actions to strengthen its business:
Focusing the business on higher returns, reducing the amount of portfolio lending and reducing capital and credit exposure. CitiMortgage intends to increase the level of loans sold to Agencies (e.g., Fannie Mae, Freddie Mac) or securitized to approximately 90% of production by Q3, up from 65% in 2007, and focus on originating and selling the majority of its production for higher returns, further reducing capital and credit exposure and forcing discipline in sales origination.
Combining all U.S. mortgage businesses into one organization under the CitiMortgage banner. The new CitiMortgage will have a single set of product offerings with coordinated pricing and business practices; a common sales organization with a single leader for each customer segment (e.g., correspondent, wholesale and retail); a consolidated middle office support structure with a common CFO, Credit head and Human Resources lead; and staffing levels that reflect market and economic realities.
Coordinating non-Agency capital markets activity through Citi Markets & Banking and instituting a joint reporting structure to Global Consumer Group and Citi Markets & Banking to strengthen ties between origination and capital markets. Going forward, Citi Markets & Banking will have a significant role in shaping CitiMortgage’s products, as well as its pricing and distribution activities. Citi Markets & Banking will be the primary provider of these services to the consolidated U.S. mortgage business.
Improving the quality of origination, tightening underwriting criteria and making changes to policy and process to mitigate losses. CitiMortgage already has reduced the volume of second mortgage origination in general and reduced third party second lien loans by over 90% from a year ago, maintaining relationships with only those brokers who produce strong, high-quality and profitable volume. The company has tightened documentation and verification requirements across product mix and strengthened LTV (loan-to-value) requirements in declining markets. These shifts have resulted in higher FICO scores and lower LTVs for newer originations.
Eliminating a number of higher risk product offerings. CitiMortgage no longer offers mortgage loans for investment properties on three- and four-family homes and has curtailed bulk loan purchases. In addition, the company has eliminated 2/28 and 3/27 ARMS as well as home equity loans behind lower FICO score first mortgages.
Citi, the leading global financial services company, has some 200 million customer accounts and does business in more than 100 countries, providing consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, and wealth management. Citi’s major brand names include Citibank, CitiFinancial, Primerica, Smith Barney, Banamex, and Nikko. Additional information may be found at www.citigroup.com or www.citi.com.
Citi Strengthens U.S. Residential Mortgage Business
Residential Mortgage Assets to Be Reduced by $45 Billion
Operational Efficiencies Expected to Produce $200 Million in Annual Expense Savings
Strengthening Origination Quality and Underwriting Criteria to Mitigate Losses
Changes Spurred by Business Review Process Underway across Citi
NEW YORK--(BUSINESS WIRE)
Citi today announced it intends to reduce residential mortgage assets in its U.S. mortgage business by approximately $45 billion over the next 12 months, a 20 percent decrease from December 2007 levels, and will cut the amount of new loans to be held in portfolio by more than 50 percent in the next year. In addition, the company will integrate middle office and support areas to serve both first and second mortgage operations, organize sales channels around customer segments, and strengthen ties with Citi Markets & Banking, which will be the primary provider of capital markets services to its U.S. mortgage business going forward. Citi expects these changes to reduce expenses by approximately $200 million on a run rate basis within 12 months.
In January, Citi announced the creation of an end-to-end U.S. residential mortgage business that includes origination, servicing and capital markets securitization execution headed by Bill Beckmann.
As part of that change, Citi will consolidate operations, policies and procedures in its U.S. mortgage business to achieve greater operational efficiency, appropriate alignment of incentives and ensure in-depth, timely understanding of mortgage exposure. In addition, Citi will integrate all residential mortgage operations under the CitiMortgage name, including CitiMortgage, Citi Home Equity and Citi Residential Lending.
“Consistent with the key priorities of Citi Chief Executive Vikram Pandit, this end-to-end realignment will create a simplified and streamlined organization that is more sharply focused on clients and able to direct resources to the business lines and customer segments with the highest growth potential,” said Bill Beckmann, President of CitiMortgage Inc. “At the same time, these changes will enable us to manage the business unit’s capital for enhanced returns.”
With these changes, CitiMortgage will remain a leader in origination and servicing and will be well positioned to leverage Citi’s capital markets expertise in pricing and distribution. Specifically, CitiMortgage is taking the following actions to strengthen its business:
Focusing the business on higher returns, reducing the amount of portfolio lending and reducing capital and credit exposure. CitiMortgage intends to increase the level of loans sold to Agencies (e.g., Fannie Mae, Freddie Mac) or securitized to approximately 90% of production by Q3, up from 65% in 2007, and focus on originating and selling the majority of its production for higher returns, further reducing capital and credit exposure and forcing discipline in sales origination.
Combining all U.S. mortgage businesses into one organization under the CitiMortgage banner. The new CitiMortgage will have a single set of product offerings with coordinated pricing and business practices; a common sales organization with a single leader for each customer segment (e.g., correspondent, wholesale and retail); a consolidated middle office support structure with a common CFO, Credit head and Human Resources lead; and staffing levels that reflect market and economic realities.
Coordinating non-Agency capital markets activity through Citi Markets & Banking and instituting a joint reporting structure to Global Consumer Group and Citi Markets & Banking to strengthen ties between origination and capital markets. Going forward, Citi Markets & Banking will have a significant role in shaping CitiMortgage’s products, as well as its pricing and distribution activities. Citi Markets & Banking will be the primary provider of these services to the consolidated U.S. mortgage business.
Improving the quality of origination, tightening underwriting criteria and making changes to policy and process to mitigate losses. CitiMortgage already has reduced the volume of second mortgage origination in general and reduced third party second lien loans by over 90% from a year ago, maintaining relationships with only those brokers who produce strong, high-quality and profitable volume. The company has tightened documentation and verification requirements across product mix and strengthened LTV (loan-to-value) requirements in declining markets. These shifts have resulted in higher FICO scores and lower LTVs for newer originations.
Eliminating a number of higher risk product offerings. CitiMortgage no longer offers mortgage loans for investment properties on three- and four-family homes and has curtailed bulk loan purchases. In addition, the company has eliminated 2/28 and 3/27 ARMS as well as home equity loans behind lower FICO score first mortgages.
Citi, the leading global financial services company, has some 200 million customer accounts and does business in more than 100 countries, providing consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, and wealth management. Citi’s major brand names include Citibank, CitiFinancial, Primerica, Smith Barney, Banamex, and Nikko. Additional information may be found at www.citigroup.com or www.citi.com.
BGC Closes Acquisition of Radix Energy
BGC Closes Acquisition of Radix Energy
Leading inter-dealer brokerage firm closes previously announced acquisition of Radix Energy
March 06, 2008
LONDON--(BUSINESS WIRE)
BGC, a leading inter-dealer brokerage firm providing integrated voice and electronic services to wholesale fixed income, interest rate, foreign exchange and derivatives markets worldwide, today announced the completion of its acquisition of the business of Radix Energy, through its new subsidiary BGC Radix Energy L.P. Singapore Branch.
The acquisition marks an important step in BGC’s expansion through its ability to offer clients voice and electronic brokerage services in the world’s energy markets for the first time, with products including crude oil, naptha, middle distillates, fuel oil and freight swap derivatives. Although based in Singapore, BGC Radix Energy will serve clients on a global basis.
Commenting on the transaction, Shaun Lynn, President of BGC, said, “We consider world energy markets and the Asian region as important factors in the next stage of BGC’s growth and development and are delighted to have completed this acquisition. Radix Energy is the latest in a series of acquisitions and we will continue to look at opportunities and invest where we feel a business will complement our existing lines.”
Richard Tan, Managing Director of BGC Radix Energy said, “This acquisition will enable Radix Energy to become a global operation through BGC’s investment, support and the application of its platform to the energy markets. It means that we will be able to broaden and expand services to existing clients and source new opportunities in Europe and the United States.”
Since its creation in October 2004, having been separated out from Cantor Fitzgerald, BGC has expanded through organic growth and selected acquisitions in Europe, Asia and the U.S. In 2004, BGC employed over 650 people; total employees now exceed 1,700 in 14 offices around the world. The acquisition of Radix Energy follows the previous acquisitions of Euro Brokers, ETC Pollak, Aurel Leven Securities, the equity derivatives business of Marex Financial and the announcement that BGC is to merge with eSpeed Inc., subject to the relevant regulatory and other approvals.
About BGC
BGC is a leading inter-dealer broker, providing integrated voice and electronic execution and other brokerage services to banks, brokerage houses and investment banks for a broad range of global financial products including fixed income securities, foreign exchange, equity derivatives, credit derivatives, futures, structured products and other instruments. This is complemented by market data products for selected financial instruments. Named after fixed income trading innovator B. Gerald Cantor, BGC has offices in London, New York, Copenhagen, Istanbul, Nyon, Paris, Mexico City, Toronto, Hong Kong, Seoul, Singapore, Sydney, Tokyo, Beijing (representative office). To learn more, please visit www.bgcpartners.com.
Contacts
Media:
BGC
Timo Kindred, 44-(0)207-894-7292
tkindred@bgcpartners.com
Leading inter-dealer brokerage firm closes previously announced acquisition of Radix Energy
March 06, 2008
LONDON--(BUSINESS WIRE)
BGC, a leading inter-dealer brokerage firm providing integrated voice and electronic services to wholesale fixed income, interest rate, foreign exchange and derivatives markets worldwide, today announced the completion of its acquisition of the business of Radix Energy, through its new subsidiary BGC Radix Energy L.P. Singapore Branch.
The acquisition marks an important step in BGC’s expansion through its ability to offer clients voice and electronic brokerage services in the world’s energy markets for the first time, with products including crude oil, naptha, middle distillates, fuel oil and freight swap derivatives. Although based in Singapore, BGC Radix Energy will serve clients on a global basis.
Commenting on the transaction, Shaun Lynn, President of BGC, said, “We consider world energy markets and the Asian region as important factors in the next stage of BGC’s growth and development and are delighted to have completed this acquisition. Radix Energy is the latest in a series of acquisitions and we will continue to look at opportunities and invest where we feel a business will complement our existing lines.”
Richard Tan, Managing Director of BGC Radix Energy said, “This acquisition will enable Radix Energy to become a global operation through BGC’s investment, support and the application of its platform to the energy markets. It means that we will be able to broaden and expand services to existing clients and source new opportunities in Europe and the United States.”
Since its creation in October 2004, having been separated out from Cantor Fitzgerald, BGC has expanded through organic growth and selected acquisitions in Europe, Asia and the U.S. In 2004, BGC employed over 650 people; total employees now exceed 1,700 in 14 offices around the world. The acquisition of Radix Energy follows the previous acquisitions of Euro Brokers, ETC Pollak, Aurel Leven Securities, the equity derivatives business of Marex Financial and the announcement that BGC is to merge with eSpeed Inc., subject to the relevant regulatory and other approvals.
About BGC
BGC is a leading inter-dealer broker, providing integrated voice and electronic execution and other brokerage services to banks, brokerage houses and investment banks for a broad range of global financial products including fixed income securities, foreign exchange, equity derivatives, credit derivatives, futures, structured products and other instruments. This is complemented by market data products for selected financial instruments. Named after fixed income trading innovator B. Gerald Cantor, BGC has offices in London, New York, Copenhagen, Istanbul, Nyon, Paris, Mexico City, Toronto, Hong Kong, Seoul, Singapore, Sydney, Tokyo, Beijing (representative office). To learn more, please visit www.bgcpartners.com.
Contacts
Media:
BGC
Timo Kindred, 44-(0)207-894-7292
tkindred@bgcpartners.com
Wednesday, March 5, 2008
Merrill Lynch Global Research Introduces Frontier Index
NEW YORK & LONDON--(BUSINESS WIRE)--Merrill Lynch Global Research has introduced a new frontier equity index, which is designed to identify the largest and most liquid stocks in frontier markets. A “frontier market” is a developing economy with an undeveloped equity market.
The Merrill Lynch Frontier Index is composed of 50 stocks in the frontier markets of Europe, the Middle East, Africa and Asia, reflecting 17 countries, including the United Arab Emirates (UAE), Kuwait, Nigeria, Morocco, Pakistan, Kazakhstan, Vietnam and Cyprus.
Michael Hartnett, Merrill Lynch chief global emerging markets equity strategist, said: “The ultimate goal for many investors in 2008 is to find assets which are not closely linked to the fortunes of Wall Street. Frontier market returns are far less correlated to the performance of the S&P 500 than emerging and developed equity markets.”
In frontier markets, during the period of February 2000 to December 2007, the monthly correlation of returns for the S&P 500 was 32 percent, compared to 73 percent for emerging markets and 96 percent for developed markets.
Middle East Plays Leading Role
Stocks listed in the Middle East make up 50.0 percent of the new index, followed by a 22.6 percent share for Asia, 14.1 percent for Europe and 13.3 percent for Africa. The top three countries represented in the index are the UAE (23.1 percent), Kuwait (18.1 percent) and Pakistan (13.6 percent). Banks dominate the index (39.4 percent), followed by financial services companies (25.7 percent) and oil and gas firms (13.6 percent).
The hallmarks of frontier markets include undercapitalization and weaker regulatory frameworks, as well as lower levels of foreign ownership, borrowing and transparency. Frontier markets have outperformed both emerging and developed equity markets since January 2000, with 20 percent annualized returns, compared to 12 percent for emerging markets and 1 percent for developed markets. While market risk is high in frontier markets, they also have strong economic growth potential.
To be included in the index, stocks must have a market capitalization of at least U.S. $500 million, a three-month average daily turnover of at least U.S. $750,000 and a foreign ownership limit above 15 percent. The composition of the index will be reviewed twice a year, in February and August.
Henry Hall, head of Global Emerging Market Equity Linked Sales, Structuring and Financing, EMEA, said, “Frontier equity markets offer investors a unique opportunity to diversify their portfolio as well as to benefit from what we believe will be the markets' significant long-term growth potential. Merrill Lynch is determined to offer both its institutional and individual clients the greatest range of equity products linked to frontier equity markets, including this index.”
Merrill Lynch is one of the world's leading wealth management, capital markets and advisory companies, with offices in 40 countries and territories and total client assets of almost $2 trillion. As an investment bank, it is a leading global trader and underwriter of securities and derivatives across a broad range of asset classes and serves as a strategic advisor to corporations, governments, institutions and individuals worldwide. Merrill Lynch owns approximately half of BlackRock, one of the world’s largest publicly traded investment management companies, with more than $1 trillion in assets under management. For more information on Merrill Lynch, please visit www.ml.com.
Contacts
Merrill Lynch
New York
Susan McCabe Walley, +1 212-449-0389
susan_mccabe@ml.com
Or
London
Tomos Rhys Edwards, +44 20 7995 2763
tomos_edwards@ml.com
or
Sarah-Jane Purvis, +44 20 7995 2289
sarahjane_purvis@ml.com
The Merrill Lynch Frontier Index is composed of 50 stocks in the frontier markets of Europe, the Middle East, Africa and Asia, reflecting 17 countries, including the United Arab Emirates (UAE), Kuwait, Nigeria, Morocco, Pakistan, Kazakhstan, Vietnam and Cyprus.
Michael Hartnett, Merrill Lynch chief global emerging markets equity strategist, said: “The ultimate goal for many investors in 2008 is to find assets which are not closely linked to the fortunes of Wall Street. Frontier market returns are far less correlated to the performance of the S&P 500 than emerging and developed equity markets.”
In frontier markets, during the period of February 2000 to December 2007, the monthly correlation of returns for the S&P 500 was 32 percent, compared to 73 percent for emerging markets and 96 percent for developed markets.
Middle East Plays Leading Role
Stocks listed in the Middle East make up 50.0 percent of the new index, followed by a 22.6 percent share for Asia, 14.1 percent for Europe and 13.3 percent for Africa. The top three countries represented in the index are the UAE (23.1 percent), Kuwait (18.1 percent) and Pakistan (13.6 percent). Banks dominate the index (39.4 percent), followed by financial services companies (25.7 percent) and oil and gas firms (13.6 percent).
The hallmarks of frontier markets include undercapitalization and weaker regulatory frameworks, as well as lower levels of foreign ownership, borrowing and transparency. Frontier markets have outperformed both emerging and developed equity markets since January 2000, with 20 percent annualized returns, compared to 12 percent for emerging markets and 1 percent for developed markets. While market risk is high in frontier markets, they also have strong economic growth potential.
To be included in the index, stocks must have a market capitalization of at least U.S. $500 million, a three-month average daily turnover of at least U.S. $750,000 and a foreign ownership limit above 15 percent. The composition of the index will be reviewed twice a year, in February and August.
Henry Hall, head of Global Emerging Market Equity Linked Sales, Structuring and Financing, EMEA, said, “Frontier equity markets offer investors a unique opportunity to diversify their portfolio as well as to benefit from what we believe will be the markets' significant long-term growth potential. Merrill Lynch is determined to offer both its institutional and individual clients the greatest range of equity products linked to frontier equity markets, including this index.”
Merrill Lynch is one of the world's leading wealth management, capital markets and advisory companies, with offices in 40 countries and territories and total client assets of almost $2 trillion. As an investment bank, it is a leading global trader and underwriter of securities and derivatives across a broad range of asset classes and serves as a strategic advisor to corporations, governments, institutions and individuals worldwide. Merrill Lynch owns approximately half of BlackRock, one of the world’s largest publicly traded investment management companies, with more than $1 trillion in assets under management. For more information on Merrill Lynch, please visit www.ml.com.
Contacts
Merrill Lynch
New York
Susan McCabe Walley, +1 212-449-0389
susan_mccabe@ml.com
Or
London
Tomos Rhys Edwards, +44 20 7995 2763
tomos_edwards@ml.com
or
Sarah-Jane Purvis, +44 20 7995 2289
sarahjane_purvis@ml.com
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