Wealthy Hesitant On Emerging Market Investments
"Emerging Markets Sexy, Sexy, Sexy" the headlines trumpet. It appears, however, that the wealthy's high interest in emerging and international markets is matched only by their relative lack of knowledge about these investment categories.

A recent HSBC Bank USA N.A. survey of America's mass affluent (defined as those with a minimum of $250,000 in investable assets) revealed that while the rich see opportunity in global markets-66% surveyed say investing in global markets is "the future of investing," 82% say emerging markets present "a great investment opportunity," and 79% are optimistic about the growth potential of the countries involved-they acknowledge the need for more information, guidance and confidence. Sixty-seven percent admit to not knowing enough about these markets to allocate their investments there.

The survey, issued by HSBC Securities (USA) Inc., HSBC's banking and wealth management service division, revealed that 41% of respondents are hesitant to invest in emerging markets compared to 20% with developed markets. Additionally, while 80% believe having an experienced advisor is necessary to successfully invest globally, 38% are currently relying on themselves to make investment decisions.

Optimism may outweigh knowledge on the part of wealthy investors, but the data reflect a very positive trend, according to Andrew Ireland, head of the wealth management division of HSBC Securities (USA) Inc. The survey shows that compared to two years ago, 54% of respondents report they are paying more attention to international current events and their impact on global markets; 85% agree that current world events influence their investment approach, and 34% say that learning about investing outside the U.S. is more important to them than it was two years ago.

That said, there continues to be a gap between interest and actual global investing, with almost a third of this investor class still having a domestic-only portfolio, Ireland noted. "[This] leaves out many of the world's high growth, emerging economies: the markets that are expected to grow faster than most developed ones over the next few years," he said. Some 75% of the investors surveyed say the ability to make the right investments globally comes from having local expertise in each market.

Also according to the survey: 68% say investing in emerging markets is a viable consideration as a long-term equity investment; 88% want to ensure that a global market is politically stable when considering an investment in that market; and 75% want the potential investment market to have a strong infrastructure in place, along with a strong currency (77%) and high economic growth (75%). Go to www.us.hsbc.com for further information.

In other news ...

Bank of America has instituted a multi-year strategic agreement with Ian Bremmer's Eurasia Group Ltd., a political consulting firm, to provide political risk analysis to the bank's Global Wealth and Investment Management clients. As part of the agreement, BofA will jointly look to develop investment solutions using Eurasia Group analyses, with an eye towards evaluating how political risk affects the markets and investing strategies. Eurasia Group (www.eurasiagroup.net) will provide wealth management advisors with regular commentary on the world's top political developments, and will offer event-driven analysis in response to breaking news.

A new Dow Jones Credit Suisse Hedge Fund Index (released February 24) showed hedge funds, as measured by the index, up 0.69%, with six out of ten strategies in the index posting positive performance for the month. Convertible Arbitrage, Equity Market Neutral, and Event Driven were among January's sector leaders, with increases of 2.16%, 1.79%, and 1.80% respectively. Go to www.djindexes.com for further information.

Adhesion Wealth Advisor Solutions, based in Charlotte, N.C., recently announced that its growth in assets under management has made the firm the 10th largest unified managed account platform in the U.S. The company (www.adhesionwealth.com) currently has $13 billion in assets under administration and $1.4 billion in assets under management.

Citi has expanded its OpenWealth platform to include a complete package of trust accounting, operations outsourcing, and custody services. According to the company, OpenWealth's new offerings deliver trust accounting on a highly scalable, customizable Web-based platform with real-time processing and reporting that supports all phases of the account administration lifecycle. The platform aggregates household level data across wealth management platforms, investment managers and third-party custodians, and offers unified household capabilities. Go to www.citigroup.com for further information.

Research and Markets, headquartered in Dublin, Ireland has released a new report, "Wealth Management Technology Spending Through 2015: Source Segmentation." According to the report, the total wealth management technology market is set for significant growth during the next five years, with packed software expected to grow the fastest. High-net-worth banking and financial planning-related businesses will be the highest growing segments of technology spending during this period. Go to www.researchandmarkets.com for further information.

Morgan Stanley Smith Barney has released its latest issue of "Perspectives in Philanthropy," a quarterly journal. "Medical Philanthropy and Global Healthcare" illustrates, through the stories of families with members who have faced various life-threatening diseases, how for many wealthy donors helping them takes precedence over the tax incentives they may receive. Go to www.morganstanleysmithbarney.com for further information.

Simple Alternatives LLC, an institutional alternative investment manager, has completed the launch of its S1 Fund (SONEX), a multi-manager, hedged-equity alternative mutual fund. Simple Alternatives allocates the fund's assets to sub-advisors who employ various hedged strategies aimed at realizing long-term capital appreciation with an emphasis on absolute (positive) returns and low correlation to equity markets, according to James Dilworth, the firm's CEO and president. Go to www.simplealternatives.com for further information.

Dynasty Financial Partners (www.dynastyfinancialpartners.com), a New York-based provider of investment and technology platforms for independent financial advisors, has expanded its wealth management platform with the creation of Dynasty Insurance Services to address the asset-protection and wealth-transfer needs of high-net-worth clients. Richard Plesha, former director of private wealth management at The Hartford, has been hired as partner and director of insurance services. As part of the launch of Dynasty Insurance Services, the firm has formed a strategic partnership with Fund Evaluation Group to offer alternative investment-linked wealth transfer planning products to advisors.

Dallas-based Flexjet, which offers fractional jet ownership, jet cards and charter brokerage services, and luxury-travel company Abercrombie & Kent, headquartered in Downers Grove, Ill., have formed an exclusive marketing alliance. Flexjet fractional customers will receive a complimentary three-year membership to the Marco Polo Club (exclusive to Abercrombie's most frequent travelers), along with complimentary access to the company's private travel experts. Flexjet Jet Card customers will receive a complimentary one-year membership to the club. Go to www.flexjet.com or www.abercrombiekent.com for further information.


CleanEquity Monaco 2011, a forum for emerging cleantech companies to present to specialist financial and strategic investors, is being held March 3-4 at the Sporting d'Hiver, located on the Place du Casino in Monaco. Go to www.cleanequitymonaco.com for more information.

CCG Investor Relations will hold its second annual China IPO Boot Camp at the Langham, Xintiandi in Shanghai, China on March 9. This event is designed for CEOs, CFOs, board members, venture capital firms and private equity firms. Go to www.ccgirasia.com for further information.

The Citi 2011 Financial Services Conference will be held in New York City on March 9. Go to www.citigroup.com for information.

Family Office Exchange, a provider of research, education, and networking support to private wealth owners, family office executives, and wealth advisors, on March 9 will be holding a Web conference, "The Cost of Complexity: Understanding U.S. Family Office Cost." For information contact Jennifer Muntz at 321-327-1211 or go to www.foxexchange.com.

The 2nd Annual World Series of ETFs & Indexing will be held March 29 at the Seaport World Trade Center in Boston. Attending will be foundations, endowments, and other investors. Go to www.imn.org for further information.

IMN's 12th Native American Finance Conference, a forum for the sharing of ideas and information related to Native American finance and economic development issues, will be held May 16-17 at the Talking Stick Resort in Scottsdale, Ariz. Go to www.imn.org for further information.

On The Move

Russell Reynolds Associates, a New York-based executive search and assessment firm, has hired Lisa Baird as managing director and Kathy Krone as executive director. Both will focus primarily on senior executive search and assessment for asset and wealth management firms. Prior to her career in executive search, Baird served as director of research at Greenwich Associates. Before joining Russell Krone served as senior vice president, strategy and innovation, for Bank of America Global Wealth and Investment Management.

UBS AG has named Alexander Friedman, former financial head for the Gates Foundation before launching a private investment firm, as chief investment officer at UBS' flagship private bank. Also joining is former White House deputy Chief of Staff Mona Sutphen, who will lead macro analysis, and Mark Haefele, an alternative asset manager who will be in charge of investment analysis.

BAM Advisor Services, based in St. Louis and part of the Buckingham Family of Financial Services, has named Madaline Creehan, Joe Goldberg and Al Sears as principals. Jeff Remming has been named the firm's COO, replacing BAM principal Steve Lourie, who will now serve as principal in charge of human resources. Creehan serves as a wealth advisor for Buckingham Asset Management and is involved in the independent women's initiative; Goldberg serves as director of retirement plan services for BAM, and works with Advisors Access, the retirement plan service offering for BAM Advisor Services; and Sears is the director of fixed income for BAM Advisor Services.

Fieldpoint Private Bank & Trust, headquartered in Greenwich, Conn., has hired Paul C. Guidone as its chief investment officer. Guidone is currently an adjunct professor at Vanderbilt University in Nashville, Tenn., where he teaches investment analysis; he is also the CIO of Linden Point Capital Management LLC, a boutique hedge fund in New Jersey. Before this Guidone was the CIO of Citigroup Global Wealth Management.

Morgan Stanley Smith Barney has hired a team of financial advisors from Bank of America Corp.'s Merrill Lynch Wealth Management unit. Sam Pyle and Shauywn Smith joined the brokerage joint venture's Woodland, Tex., office.

New York Private Trust Company has hired Kevin J. Batterton, former senior director for BNY Mellon Wealth Management in Greenwich, Conn., as managing director of business development and portfolio management.

Alternative Investment Group, an alternative investment management firm headquartered in Southport, Conn., that invests in long/short equity strategies, has promoted Chris Ayton to partner. Ayton was previously director of investments at the company, and before that was head of manager research at Stamford Associates. Ayton, now one of seven equity partners at Alternative, is based in London.

Dominick Carlino was named senior managing director, head of business development, at AlphaOne Capital Partners. Carlino was an executive director at Morgan Stanley Investment Management's Alternative Investment Partners business, with institutional business development and client relationship management responsibilities for North America.

-Cort Smith