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Canaccord Genuity acquires UK advisory firm McCarthy Taylor

Canaccord Genuity Wealth Management, the UK and Europe wealth management arm of Canada’s Canaccord Genuity Group, has bolstered its national presence by taking over Worcester-based financial advisory business McCarthy Taylor.

McCarthy, set up in 1998, offers bespoke financial planning and discretionary investment management services. The firm services clients across the Midlands.

Canaccord Genuity Wealth Management CEO David Esfandi said: “The acquisition of McCarthy Taylor represents an opportunity to expand our Midlands presence and creates a regional financial planning centre of excellence, which will be fully supported by our broader UK team.

“Together we share an unwavering commitment to expanding our offering of best-in-class fully integrated investment management and wealth planning services to discerning investors across the UK.”

The acquisition, whose financial terms were not disclosed, adds around £171m to Canaccord’s books.

McCarthy CEO Paul Taylor said: “Today marks an exciting chapter in the evolution of our business, and I am confident that joining Canaccord Genuity Wealth Management will bring significant benefits for our clients and our employees as we expand our services and opportunities.”

Paul Taylor will remain actively involved in the business to ensure a smooth transition.

In 2017, Canaccord Genuity Wealth Management snapped up British wealth manager Hargreave Hale.

For more information about Canaccord Genuity Wealth Management, please visit https://www.canaccordgenuity.com/wealth-management-uk/

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The case for regulatory-driven diversification in Ship Finance

A decade ago, we all knew of at least one shipping company that felt safe receiving its debt financing from a single source (a behaviour that was, unfortunately, encouraged by some bankers), and eventually experienced immense pain when some key-lenders abruptly withdrew from ship financing.

Back at that time, sourcing finance from a handful of different – typically European – banks (as opposed to, from a single one), was considered a sound approach to funding diversification, since the key driver for a Bank’s approach to lending was its own business policies and individual circumstances.

That was then. Next, the banking crisis happened. And then the shipping one followed… Both led to (a) an increased regulatory attention to bank-lending towards the shipping industry; and (b) the regulatory framework being the dominant parameter shaping each Bank’s business activity.

One unsurprising consequence of the above was that (European) bank lending, when it came to shipping, became much less abundant. A second, and initially less anticipated, change was that the approach of lenders, regulated by the same regulator, became significantly more homogeneous. A shipowner friend recently confided to me – half-seriously, half-jokingly – that “if I remove the bank logos from the term sheets I receive, I cannot really tell which-one sent me which.” This is mostly the result of the tighter regulatory framework under which European banks are operating and, jokes aside, highlights the need for regulatory diversification.

Given the importance that debt capital has for an industry as capital-intensive as shipping is, no shipping company can afford all of its lenders to operate under the same regulatory framework. Were it to do so, the result might be that next time something important happened, its lenders would be highly likely to change their views about their shipping exposure at the same time and in the same way. It is like operating a VLCC in high-seas, with no internal bulkheads limiting cargo shifting around: you don’t want to be on it when the wind starts blowing hard…

Thankfully, the alternative financiers, who flocked-in during the last few years, are a crowd made-up by highly different animals. We can hence observe “blocks” of lenders, each defined by the main regulator they operate under, with their respective members behaving in a correlated way. European banks are such a block, with a couple of sub-blocks, defined by the risk-rating model each bank uses to rate its obligors.

Another block are the Chinese financial institutions, another are the Japanese, each having different local regulatory frameworks and/or adopting global ones (like Basel IV) at a different speed than their European counterparts. An additional regulatory diversification bonus comes from the different local central banks’ monetary policies and the impact these have on respective lenders’ balance sheets and capacity to lend.

There is, of course, the block of lenders that are completely untouched by lending regulatory frameworks, such as the various credit funds: their activity is, of course, also contingent on market realities, views, models and limitations but – and this is the key issue here – these are different from the ones traditional financiers have.

The optimal mix of funding sources is a moving target, given the constantly changing finance scene, and also it differs from company to company, depending on parameters such as fleet size, corporate structure, or employment profile (but also some more nuanced ones like specific industrial relationships). A ship-finance specialist, whether internal or external to the company, can be the key for keeping this mix as-close-as-possible to optimal at all times.

Some might argue that the above approach is an expensive one: “I have a financier who provides me with a very competitively priced product, and I feel comfortable with him” or “Why start a new relationship with a geographically/culturally distant and/or more expensive lender?” are comments sometimes made.

In a nutshell, the answer is that diversification, even at some cost, works like an insurance policy. For an industry that has grown up having insurance at its heart (who can imagine shipping without it…) the concept of paying what could appear to be a ‘premium’ to hedge against a known and accepted risk (that of lack of financing), but which could pay-off in multiples later on, should not be that strange.

The ship financing scene is trying to find again its balance, while overall volatility in the finance world is increasing. Seeking regulatory diversification of funding sources might prove to be an efficient way to avoid “déjà vu all over again” as dear old Yogi Berra would have put it…

Dimitri G. Vassilacos is a Partner at Ship Finance Solutions (SFS), a boutique financial consulting firm specializing in the shipping sector. Prior to that he had assumed a variety of positions during a 20-year-long career in the banking sector, including Head of Greek Shipping at Citibank and Manager of the Shipping Division at National Bank of Greece.

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Mid-stream mergers and acquisitions for Q3 of 2018

A combined value of US$91.9 billion in mergers and acquisitions (M&A) was announced in Q3 of 2018. This was an increase of 21% from the US$75.9 billion in M&A deals announced in the previous quarter. The number of M&A deals decreased by 20% from 102 in 2Q18 to 82 in Q3 of 2018, according to GlobalData, a leading data and analytics company.

The company’s latest report: ‘Quarterly Midstream Capital Raising Review – Q3 2018’ states that, of the total M&A deals, 58 deals, with a combined value of US$83.6 billion, were domestic acquisitions and the remaining 24, with a combined value of US$8.2 billion, were cross-border transactions. A quarter-on-quarter comparison shows a 12% decrease in cross-border transaction values in 3Q18, compared to US$9.3 billion in 2Q18. However, domestic transaction values increased by 26% in 3Q18 compared to US$66.5 billion in 2Q18.

Energy Transfer Equity’s (ETE) agreement to acquire the remaining stake in Energy Transfer Partners (ETP) for a purchase consideration of approximately US$60.4 billion was the top deal registered in 3Q18. Another landmark deal that was recorded in 3Q18 was Enbridge’s agreement to acquire all of the outstanding public Class A common units of Enbridge Energy Partners, all of the public outstanding shares of Enbridge Energy Management, and all of the issued and outstanding shares of Enbridge Income Fund Holdings, for a purchase consideration of US$7.1 billion.

Americas remained the frontrunner for M&A registering 33 deals, with a total value of US$82.1 billion in 3Q18. Cross-border activity in the region decreased from 9 in 2Q18 to 6 in 3Q18, while domestic acquisitions decreased by 43% from 47 deals in 2Q18 to 27 in 3Q18.

Europe, Middle East, and Africa accounted for 37% share in 3Q18, comprising 31 acquisitions, of which 10 were cross-border and the remaining 21 were domestic acquisitions. The Asia-Pacific region accounted for 20 global deals, or 24% in 3Q18, of which 10 were cross-border acquisitions and the remaining 10 were domestic acquisitions.

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Oxford and Cambridge top the list of best universities in the world

The UK is still home to the top two universities in the world, according to the 2018 Times Higher Education World University Rankings.

Oxford University is on top for the third consecutive year, while Cambridge keeps its second best position for the second year in a row.

However, UK is no longer the second most-represented nation in the rankings. Despite the UK having 98 institutions in the full list of 1,258, it loses its spot to Japan which claims 103 positions. The UK does however retain its status as second most-represented in the top 200.

The US’s Stanford University completes the top three, maintaining it position from last year. The US still leads the way as most-represented with 172 institutions in the list.

This year’s ranking see the University of Dundee and Royal Holloway slipping out of the global 200.

China’s new top university, Tsinghua, claims 25th spot, and overtakes the UK’s LSE for, which falls one spot to 26, and the University of Edinburgh which drops from joint 27 to 29.

There are a number of climbers in the UK, with University College London rising two spots to number 14, and the University of Warwick scaling 12 places to joint 79th.

The University of Birmingham jumps 25 positions to joint 116, while the University of Aberdeen leaps 27 positions to 158th.

Phil Baty, editorial director of the global rankings, said: ‘We see some individual stars in the UK this year, but the broader national data story is really one of stagnation and modest decline, with the UK taking a minor hit to its research reputation.

‘We can only speculate at this stage as to any connection with Brexit, the risk, however, to the UK’s reputation and research capabilities from its separation with Europe is very real.

‘The ground-breaking work of UK universities mustn’t be undermined by complacency and politicking.

‘To ensure they continue to thrive on the global stage, positive immigration and investment policies are crucial.

They must be free to attract and retain the very best international talent and international students post-Brexit, and they must be protected from cuts, the flow of research funding and academic talent mustn’t be impacted.

French Law

Experiment of new rulings (procédures de rescrit) under French Law

Law dated 10 August 2018 (n°2018-727) creates by way of experiment the possibility for a plaintiff to raise a written question in order to obtain a legal position related to the application of the law. The particularity of such a new regulation is that such a question may be raised before French administration (Article 22 of the law) or before the administrative judge (Article 54 of the law) (depending on the applicable procedure).

Inspired by the historical roman institution (rescrit du préteur), this new legal institution is additional to the already existing ones, such as the question préalable (for administrative law), the question préjudicielle (for EU law), the question prioritaire de constitutionnalité (QPC) (for constitutional law) or the tax ruling (for tax law).

The mechanism underpinning the procedure is the same: raise a question on the application or construction of the law. The addressee is however different: judge for a question préalable, a question préjudicielle or a QPC, administration for the tax ruling and administration or judge for the new rulings. The experiment will last for a period of three years starting the date of publication of a specific decree.

These procedures aim at improving legal safety (even if it can be alleged that the drawback of the multiplication of these rulings may lengthen the process).

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An invitation to MagentoLive Europe

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