Brief: Goldman Sachs Group Inc. and Citigroup Inc. are among the firms asking London staff to return to their desks, as finance firms start to push workers to return after the U.K. dropped its work-from-home guidance. Goldman employees are being asked to return in line with the government’s announcement on Wednesday, according to a person familiar with the matter. Citigroup has emailed its London staff telling them to come into the office at least three days a week. We are now free to gather in our offices, without restriction, where we are better able to generate the energy and collaborative spirit on which Citi thrives,” EMEA Chief Executive Officer David Livingstone and U.K. head James Bardrick said in an email to staff sent late Wednesday and seen by Bloomberg. Fidelity International CEO Anne Richards and Standard Chartered Plc Chairman Jose Vinals both said on Bloomberg Television Thursday that their firms are encouraging U.K. staff to return to its offices.
Brief: Evidence is piling up that traders are betting the coronavirus’s grip on the global economy is loosening for good — even as the spreading omicron variant ignites fresh supply-chain chaos and worries over the effectiveness of existing vaccines. A Wells Fargo basket of stocks that win in the great economic reopening has stormed back toward pre-pandemic levels versus a gauge of rate-sensitive tech companies. A rally in commodities has added to evidence that the investment and consumption cycle is rebounding. Meanwhile German bund yields have just turned positive as central banks around the world pare pandemic stimulus. “There’s growing optimism that we are nearing the end and we are seeing that reflected across the markets,” said Craig Erlam, senior market analyst at Oanda Corp. “Each market you look at there is a common theme of the recovery and the belief that it’s here to stay.”
Brief: More jobseekers in Britain are looking to work remotely, a survey showed, indicating that the shift away from office work may outlast the pandemic. Indeed, a job search website, said 10% of its advertisements now offer remote work as an option and about 2.4% of all searches by potential candidates, up 10-fold from 2019. Britain had one of the biggest increases in remote working during the pandemic and in the share of vacancies offering it as an option, Indeed said, citing its own research and work by the OECD. Those posts were disproportionately concentrated in higher-paying, non-client facing roles. “We are settling into seemingly permanent ways of working,” Pawel Adrjan, head of EMEA research at Indeed. “Firms face intense competition when trying to hire staff. So offering remote working makes sense. It can be a powerful way to grab the attention of the sizable number of candidates.”
Brief: Carlyle Group Inc. is preparing to raise its biggest-ever European buyout fund, taking advantage of a rush of capital into private equity firms, people with knowledge of the matter said.The U.S. investment firm could aim to raise around 7.5 billion euros ($8.5 billion) for its Carlyle Europe Partners VI fund, one of the people said. It plans to start fundraising efforts later this year, the people said, asking not to be identified because the information is private.
Brief: Renaissance Technologies double-digit returns in 2021 weren't enough to prevent the nearly $15 billion in outflows it experienced over the past 14 months, according to a Bloomberg report. The quant-focused hedge fund, founded by Jim Simons and Howard Morgan in 1982, has turned into a more than $100 billion behemoth over the years thanks to the consistently jaw-dropping performance of its Medallion fund, which is only open to current and former employees of the company. The allure of Renaissance's Medallion fund has helped drive investors to the three hedge fund strategies it makes available to the public. But the diverging returns between the private and public funds has led to consistent outflows over the past year.
Brief: Financial firms need to take more cues from Silicon Valley, according to Charles Schwab Corp. Chief Executive Officer Walt Bettinger. Consumers want their banks and brokerages to offer technology with the same level of personalization they get from ride-hailing and food-delivery apps, Bettinger said in a wide-ranging interview after Schwab reported fourth-quarter results this week. “The expectations for clients of the experience they have at their financial-services company is formed by the experiences they have at Uber, DoorDash or Amazon,” Bettinger said. Schwab, a 50-year-old firm with more than $8 trillion of client assets, upended the brokerage industry by eliminating commissions and announcing the $26 billion acquisition of rival TD Ameritrade just months before the pandemic turbocharged trading by individual investors.
Brief: Global foreign-direct investment flows surpassed their pre-pandemic levels in 2021, jumping 77% to an estimated $1.65 trillion, according to the United Nations Conference on Trade and Development. The U.S. and other developed economies saw the largest increase in foreign investment flows, which tripled to $777 billion in 2021 from the previous year, according to a report published Wednesday. Inward investment in the U.S. grew 114% to $323 billion, due to a surge in cross-border mergers and acquisitions. Foreign-direct investment in developing economies grew by 30% to nearly $870 billion, led by a 20% jump in East and Southeast Asia and a recovery to near pre-pandemic levels in Latin America and the Caribbean.
Brief: Philanthropist Bill Gates and Jeremy Farrar, director of the U.K.’s Wellcome foundation, called for caution in predicting the path of the coronavirus as their organizations committed a combined $300 million to help prepare for emerging variants and future pandemic threats. “Talk of the pandemic coming to an end or waking up one Tuesday morning and it’s finished, that is premature,” Farrar said. “We’ve got to prepare for other scenarios which may not be quite as rosy.” While the U.K. and some other countries have probably turned the corner in the fight against omicron thanks to vaccines, much of the world remains unprotected, and new variants continue to pose a risk, Farrar told reporters Tuesday on a call. Rising levels of immunity could reduce the impact of omicron and future variants, but forecasting the course of the pandemic remains perilous, Gates said.
Brief: As the coronavirus pandemic stretches into 2022, BlackRock CEO Larry Fink is predicting that some of the workplace changes spurred by the crisis – including flexible schedules and a renewed focus on employee mental health – will be permanent. “No relationship has been changed more by the pandemic than the one between employers and employees,” Fink writes in his annual letter to CEOs, published on Tuesday. He points to the historic quit rates and the wage growth we’re seeing in the United States as positive signs of “workers seizing new opportunities” as well as “their confidence in a growing economy.” Workers aren’t just looking for new opportunities now either – they’re demanding more from their employers in benefits and work-life balance, especially flexible work arrangements and work that aligns with their values.
Brief:Canada's two biggest airlines have cut thousands more flights as COVID-19 continues to surge, miring the sector in uncertainty nearly two years after the pandemic began. WestJet Airlines Inc. said Tuesday it will cancel 20 per cent of its February flights, less than three weeks after announcing flight reductions of 15 per cent for January. The move marks a response to "government barriers" amid the Omicron variant, which has also affected staffing levels, the Calgary-based airline said. "We continue to advocate for the elimination of cumbersome travel rules that are unnecessarily impacting Canadians and prolonging the recovery of the travel and tourism sector,” chief executive Harry Taylor said in a release.
Brief: The 2022 bfinance Insurer Investment Survey has revealed major shifts in asset allocation, investment risk exposures and ESG practices during the pandemic, driven by long-term pressures and the effects of Covid-19. The survey found most insurers are set to further cut their fixed income allocations in the next 18 months. A further 61% of insurers are planning to enter unfamiliar asset classes, including Emerging Market Debt, Private Equity, and Infrastructure Equity and 74% are expected to increase portfolio liquidity. Insurers are also planning to increase their risk exposure with 73% saying there was the possibility to add more risk to their portfolios. The survey highlighted greater efforts towards ESG, including a 120% rise in the proportion of insurers integrating ESG factors since before the pandemic. It also found more insurers were taking part in exclusions/negative screening, carbon reporting and impact investment. bfinance stated the proportion of net-zero investment commitments is set to rise from 24% to 64%.
Brief: While 2022 may not surpass or even match the extraordinary €5.5 billion invested in Irish real estate in 2021, the ongoing emergence of society from the Covid-19 pandemic should mean another strong year for the commercial property market, according to CBRE. Outside of the continued appetite of investors for traditional office, residential, retail and industrial sectors, the growth in demand for alternative investments such as data centres, life sciences and senior housing is expected to see the momentum built up in the last 12 months continue. Speaking at the virtual launch of the 33rd edition of the commercial real estate agency’s annual Outlook report, CBRE Ireland managing director Myles Clarkesaid: “The landscape for commercial real estate is dramatically different from the last decade, yet long-term financial trends and the growth trajectory of the Irish economy remains intact. This presents immense opportunity. Indeed, the central theme of this year’s report is Identifying Opportunity”.
Brief: Never again”—that’s the feeling among high-net-worth individuals after 18 months in which global travel has been limited by the Covid-19 pandemic, said Jean Francois Harvey, global managing partner of Harvey Law Group, an international law firm based in Montreal that helps clients immigrate to new countries. As international borders begin to reopen and the globe confronts a new, more contagious coronavirus variant, those who can are making plans to ensure they’ll never be so limited in their movement again. High-net-worth individuals are seeking real estate investments in historically safe real estate markets across Europe, the United Kingdom and the U.S., adding even more demand for prime properties in markets that are already seeing frenzied price growth. “During COVID, the only way to get into another country was to be a resident or a citizen,” Mr. Harvey said. “Suddenly, people realize that to have only one residence or one passport is not the best.”
Brief: In the wake of the Covid-19 emergency, US ETF managers are launching funds that tap into the working-from-home phenomenon. The question is, will these ETFs outlive the pandemic? Peter Taberner reports. In June last year, New York-based Direxion launched the first ETF linked to the working-from-home (WFH) theme. It is designed to provide investors with exposure to companies at the forefront of the transition towards flexible work patterns. Three months later, BlackRock unveiled its own Virtual Work and Life ETF, where the investment objective is to track the investment results of companies that design products and services centred on employees working from home. Similarly, asset manager Emles, another New York-based company, designed its own @Home ETF, also identifying companies that will benefit from the new culture of increased home-based working.
Brief: Government spending at a time of economic crisis, as well as the heightened sense of ‘green’ investing, are both drivers for non-listed infrastructure investing. Another is the return of inflation. What are Europe’s infrastructure needs, to what extent is there government support for infrastructure development, and how would infrastructure investment make our societies better? Tania Tsoneva, CBRE Investment Management – We have relatively high-quality infrastructure in the UK as well as in Europe. However, infrastructure investment has diminished over time, probably due to sovereign balance sheets being under pressure. We went through the financial crisis, then the sovereign debt crisis, so we saw a declining trend and there is going to be a need for catch-up. The drivers of infrastructure investments going forward are going to be decarbonisation and digitalisation. Europe is the role model when it comes to the energy transition and the greening of the power generation fleet.
Brief: Antonio Horta-Osório, chairman of Credit Suisse, the global banking giant, has resigned with immediate effect after breaking Covid rules.cAn internal investigation found that Horta-Osório had broken Covid quarantine rules twice. In one incident he reportedly attended the Wimbledon tennis finals when restrictions would have required him to quarantine. This weekend Horta-Osório held discussions with the bank's board about his decision to quit, the Financial Times has reported. Horta-Osório has only been in the role for eight months and was previously chief executive of Lloyds Banking Group. He joined Credit Suisse after a series of scandals at the bank, including those involving Greensill Capital and revelations the company had spied on its senior employees."I regret that a number of my personal actions have led to difficulties for the bank and compromised my ability to represent the bank internally and externally," Horta-Osório said in a statement on Sunday night (16 January).
Brief: A new study from independent investment consultancy bfinance has revealed a major shift in insurers’ investment portfolios, driven by a combination of long-term pressures and the effects of the Covid-19 pandemic. The 2022 bfinance Insurer Investment Survey highlights substantial changes in asset class exposures, risk profiles, resourcing/headcount and ESG approaches, drawing on data from nearly 90 insurers in 20 countries, whose combined investment portfolios exceed USD5 trillion. Insurance firms have found it increasingly challenging to deliver appropriate investment outcomes to support the needs of their businesses – a task which, before the era of rock-bottom interest rates, could often be achieved through relatively low-risk core holdings. This pressure has driven widespread innovation, which is now reinforced by the ongoing macroeconomic fallout of the pandemic.
Brief: FCA actions in 2021 resulted in financial organisations in the UK being fined GBP568 million in the course of the year. This total is made up by fines against major banks and action against individuals for insider dealing, non-financial misconduct and carrying out regulated activities without authorisation. This data was contained in a new press release published to the FCA’s website, and analysed by a Parliament Street think tank. Experts concluded that the high quantity of financial penalties is in response to the new forms of financial crime buoyed by the Covid-19 pandemic.
Brief: Anti-poverty organization Oxfam called Monday for governments to impose a one-time 99% tax on the world's billionaires and use the money to fund expanded production of vaccines for the poor — part of an effort to combat global inequality widened by the coronavirus pandemic. The ranks of the super-rich have swelled during the pandemic thanks to ample financial stimulus that pumped up stocks, the group said. Meanwhile, poor countries have suffered more than their share from COVID-19 because of unequal access to vaccines, which have mostly gone to rich nations, Oxfam said in a report aimed at informing discussions at the World Economic Forum’s online gathering of political and business leaders this week. "The pandemic has been a billionaire bonanza," Oxfam International Executive Director Gabriela Bucher said in an interview.
Brief: Supply chain disruptions are being prolonged driven largely by China’s strict zero-Covid policy, according to an economist from Moody’s Analytics. The bottlenecks have lasted for about a year now but are expected to “materially ease in the early months of this year,” said Katrina Ell, a senior economist for Asia-Pacific at Moody’s Analytics. “So we would start to see material downward pressure on things like producer prices, input prices that kind of thing. But given China’s zero-Covid policy and how they tend to shut down important ports and factories — that really increases disruption,” she told CNBC’s “Squawk Box Asia” on Friday, adding it amplifies ongoing supply chain pressures. Beijing has imposed a strict zero-Covid policy since the pandemic began in early 2020. It entails strict quarantines and travel restrictions — whether within a city or with other countries — to control outbreaks.
Brief: For two years, employees have been waiting for ‘the day’ when everyone goes back to the office. But it’s probably never coming. Workers were meant to have returned to the office by now. Our expectation, back in early 2020, was that once the pandemic had ended, we’d all collectively resume our pre-Covid patterns of office-based working. Yet that’s not how things have turned out. Two years on, employees around the world continue to face ongoing uncertainty as to when – and if – they’ll be expected back at the workplace in person. The emergence of different Covid-19 variants has exacerbated matters; Omicron has triggered record cases globally, forcing employees who were slowly adapting to a partial, hybrid return to the office to reverse course and work remotely again. Today, the idea that we’ll all return to the office together again seems highly unrealistic.
Brief: Alternative assets fund managers, who are currently holding more than USD13 trillion in assets under management (AUM) — continuing the year-on-year growth since 2010 — are expected to hold USD23.21 trillion by the end of 2026, according to Preqin’s 2022 Global Alternatives Reports. Private equity & venture capital (PEVC) is by far the largest asset class, with AUM estimated to be in excess of USD11 trillion as of December 2026, accounting for almost half (49 per cent) of alternative assets AUM. Private debt is expected to be the fastest-growing alternative asset class over the next five years – with a compound annual growth rate (CAGR) of 17.4 per cent, taking AUM to an estimated USD2.69 trillion by the end of 2026 – as institutional investors continue to look for reliable income streams. Environmental, social, and governance (ESG) factors have become increasingly important among alternative assets, in particular for infrastructure and natural resources.
Brief: Britain's economy grew strongly in November to finally surpass its size just before the country went into its first COVID-19 lockdown, official data showed on Friday. The world's fifth-biggest economy expanded by a much faster than expected 0.9% in November - before the latest wave of COVID-19 infections and restrictions for many firms - leaving it 0.7% bigger than it was in February 2020, the ONS said.Economists polled by Reuters had forecast monthly gross domestic product growth of 0.4% for November."It's amazing to see the size of the economy back to pre-pandemic levels in November – a testament to the grit and determination of the British people," finance minister Rishi Sunak said. Other economies have already recovered their pre-COVID size, chief among them the United States.
Brief: U.S. markets have largely shaken off Omicron fears, witnessed by the pop in cruise line stocks Thursday despite a general market sell-off. But surging COVID-19 infections in China, beyond the early pandemic peak, are leading one strategist to warn of an underpriced risk to inflation that could weigh on stocks. At a recent Yahoo Finance Plus webinar, Bianco Research President Jim Bianco argued that China's zero tolerance COVID policy could lead to a nationwide shutdown — causing economic reverberations around the world. "What I'm most worried about here is as this Omicron variant mushrooms, and we get millions of cases a day, it's not necessarily a health risk. But what it is is that anybody who tests positive can't go to work for 10 days, and we've got huge absenteeism. And that's really coming home in China in a big way, because China has a zero COVID policy. They lock everybody down, and lock you in your house for weeks on end until COVID goes away," said Bianco.
Brief: Regulation is one of the most underrated and important risks for investors to consider this year. This is the view of M&G chief investment officer, equities Fabiana Fedeli who was speaking at a roundtable hosted by the fund manager this morning (13 January 2022). While Covid-19, inflation, and policy errors are concerns, Fedeli warned that risks around regulation should not be neglected. She said: “Covid, inflation and policy errors are clear risks, but regulation is a huge structural risk. “Governments are looking more and more into companies. They’re looking at the consumer from a different perspective. “In the US, there might be regulation at some point in the IT sector. It comes from a complete shift in the way the regulator thinks about how the consumer benefits.
Brief: Goldman Sachs Group Inc. delayed its return to office for staff in the U.S. by another two weeks as it looks to wait out the Covid-19 surge nationwide. Goldman’s employees were told they could delay returning to Feb. 1, according to a person familiar with the matter. The bank’s management, aggressive champions of having its offices filled, had to check their desire after an about turn last month amid a deluge of Omicron cases sweeping across New York and beyond. Anyone entering the bank’s offices must get a booster by Feb. 1 if they’re eligible for the injections by that date, Goldman had previously told its workforce. A spokesperson for the bank declined to comment.
Brief: Institutional investors plan to invest at least EUR68.2 billion in global real estate this year, according to the 2022 Investment Intentions Survey by ANREV, INREV and PREA. The majority of this new capital comes from European investors (52 per cent), whilst their counterparts from North America and Asia Pacific account for 26 per cent and 21 per cent respectively. Funds of funds expect to commit a further EUR8.5 billion, taking the total to at least EUR76.7 billion. Of this total, EUR31.5 billion is expected to be invested in European real estate over the next two years. At a global level, 62 per cent of the surveyed investors said the Covid-19 pandemic would not impact their investment plans for 2022. With a gap of 120 basis points between current (8.9 per cent) and target (10.1 per cent) allocations to real estate, institutional capital looks set to continue to flow into the asset class during the coming year and 61 per cent of all surveyed investors expect their allocation to real estate to increase over the next two years.
Brief: The future looks bright for London’s tech sector, according to a new report from London & Partners and Dealroom.co, showing that 2021 was another record year for venture capital investment into London’s tech firms. 2021 marks the year London tech came of age, with a large increase in megarounds (USD100 million-plus rounds), an unprecedented number of exits and more new unicorns than any previous year. The UK capital’s tech firms raised an all-time high of USD25.5 billion in VC funding, 2.3x investment levels in 2020, against a backdrop of record global (USD675 billion) and European (USD115 billion) VC investment. Despite the challenges posed by Brexit and coronavirus, the strong performance and rapid growth of London’s tech sector in 2021 suggests the city is competing strongly on the world stage with other leading global tech hubs like the Bay Area, New York and Shanghai. London ranked fourth globally for VC investment in 2021, behind the Bay Area (USD100.9 billion), New York (USD47.5 billion) and Greater Boston (USD29.9 billion).
Brief: Workers grew more uncomfortable about heading back to the office in the first week of the year and were much more likely to consider quitting if their employer demanded they return, a sign that companies’ efforts to get people back amid rising COVID caseloads face stiff resistance. The share of remote workers who would consider leaving their job if they were asked back to the office before they felt safe rose to 55 per cent as of Jan. 6, up from 45 per cent just a week earlier, according to pollster Morning Consult. More than four in 10 workers felt unsure about returning to the office, compared with 35 per cent who said so on Dec. 30. People were also less likely to want to attend indoor sporting events, go to the movies and dine out, Morning Consult’s weekly U.S. survey found. The findings come as Robinhood Markets Inc. said it would allow most employees to work remotely on a permanent basis, while companies including Facebook parent Meta Platforms Inc. and Wells Fargo & Co. once again delay plans to bring employees back to their desks as the omicron variant sweeps through the U.S.
Brief: Foreign investment in emerging market stocks and bonds outside China has come to an "abrupt standstill" due to fears that many economies will not recover from the pandemic this year, according to a report by the Institute of International Finance. In its latest capital flows tracker, the organisation estimates that emerging market securities attracted around $16.8bn in December 2021, but IIF believes the outlook is worsened by the Omicron variant and expectations of a stronger dollar and higher US interest rates. Jonathan Fortun, economist at the IIF, said: "On the other hand, we see flows into China sustaining the overall picture. The last quarter of the year has seen investors pumping money, particularly into China equities. This China and non-China EM split is rooted on the growth outlook. "Markets see China rebounding more quickly than other EMs. Moreover, inflation is forcing the hand of policy makers across the EM landscape. Consequently, our tracker shows bond flows diminishing, as 15 of 20 major EM central banks have tightened monetary policy since May." Non-China emerging market debt suffered an outflow of $9.6bn, while Chinese debt attracted $10.1bn in December, the data shows.
Brief:After a surprisingly resilient 2020, private equity deal flow came roaring out of the gates in 2021, as fund managers looked to deploy record amounts of investor capital, while also taking advantage of buoyant listed equity markets to exit existing positions. Around 8,000 deals are expected to have been completed, conservatively annualising data to October 2021, with a combined value of more than USD800 billion, breaking the 2007 record of USD712 billion. That's according to the 2022 Global Private Equity Report published by Preqin, whilst also finds that private equity returns continue to outperform public markets, with the global private equity funds tracked by the company having achieved a net initial rate of return (IRR) of 18.8 per cent over the five years to March 2021. The surge in private equity investment activity has been supported by a virtuous circle driving the asset class to new heights.
Brief: The Chinese city of Xi’an has been on lockdown for almost three weeks. Apart from the 14 million residents, the city is also home to several memory chip manufacturing facilities, including those of Samsung Electronics and Micron Technology. Although China’s strict zero-Covid policy implemented at the start of the pandemic was effective early on, the approach has disrupted global supply chains, worrying investors who have bet on a globalized economy, according to the latest report from the Investment Strategy Group at Goldman Sachs. The China findings are just one part of Goldman’s outlook published Wednesday. The report includes the firm’s investment recommendations and its 2022 outlook for global economies and financial markets.
Brief: Seventeen partners at hedge fund Brevan Howard have shared a bumper GBP120 million payout after profits surged following a series of successful bets during the first year of the coronavirus pandemic, according to reports in The Times and The Daily Telegraph. Founder Alan Howard took the lion's share earning over GBP55 million in the year to end March 2021, up from GBP29.9 million in the previous twelve months. In total the firm's partners received GBP43.4 million in remuneration and shared profits of GBP79 million, up from GBP18.3 million the previous year.
Brief: Investors and policymakers alike will have to come to grips with a radically different macro environment over the secular horizon as the post-financial-crisis, pre-pandemic New Normal decade of subpar-but-stable growth, below-target inflation, subdued volatility, and juicy asset returns is rapidly fading in the rear-view mirror. What lies ahead is a more uncertain and uneven growth and inflation environment with plenty of pitfalls for policymakers. Amid disruption, division, and divergence, overall capital market returns will likely be lower and more volatile. But active investors capable of navigating the difficult terrain should find good alpha opportunities.
Brief: Josh Wolfe, co-founder of venture-capital firm Lux Capital, is not a person one might expect to pen a dystopian vision for 2022. After all, the Covid-19 pandemic has put a torrent of cash in the wallets of investors and has pushed scientific breakthroughs to the forefront of their brains, leading to an incredible run at Lux, a relatively small player in the world of venture capital. In the past two years, its assets have doubled to $4 billion, with 25 of its portfolio companies creating almost $30 billion in value through mergers, acquisitions, or IPOs — including deals with 11 special-purpose acquisition companies. But the extraordinary run has clearly brought out the dark side of the quirky financier. “Failure comes from a failure to imagine failure,” he wrote in a recent ten-page letter to investors, proceeding to envision what he might be saying a year from now: “2022 has been a punch in the face.”
Brief: Federal Reserve Vice Chairman Richard Clarida said Monday he will be leaving his post with just a few weeks left on his term and amid revelations regarding his trading of stock funds. In an announcement released Monday afternoon, Clarida said he will be stepping down from his post this Friday. His term expires on Jan. 31. The move comes following additional disclosures regarding trades Clarida made in February 2020, around the time when the Fed was getting ready to roll out what eventually would become its most aggressive policy tools ever, in an effort to combat the Covid crisis. “Rich’s contributions to our monetary policy deliberations, and his leadership of the Fed’s first-ever public review of our monetary policy framework, will leave a lasting impact in the field of central banking,” Fed Chairman Jerome H. Powell said in a statement. “I will miss his wise counsel and vital insights.” Clarida’s exit comes amid heightened scrutiny over what he had described as pre-planned portfolio rebalancing on Feb. 27, 2020. However, recent disclosures, first reported by the New York Times, showed that three days earlier, Clarida sold shares in three stock funds that he would repurchase on the 27th.
Brief: VC-backed exits and healthcare funding/investment both set new records yet again in 2021, according to Silicon Valley Bank’s (SVB) annual Healthcare Investments and Exits report. New venture funds allocated to healthcare in 2021 almost doubled 2020’s record with investment into companies exceeding USD86 billion in the US & EU (30 per cent increase from 2020) leading every sector to hit record highs. While the venture backed healthcare industry saw record IPO activity across the board the average post-IPO performance for 2021 was muted (-21 per cent average) and similarly while SPAC mergers were also up this year it was a poor year for de-SPAC performance (-44 per cent average). Healthtech experienced the greatest increase in investment of 162 per cent. Part of this growth is due to the device market, which saw a four-times increase in European investment specifically. Healthtech also saw the number of financials with USD1 billion-plus valuations explode and the creation 42 new unicorns (four-times more than 2020). Biopharma saw increased funding in platform, neurology and anti-infective while orphan/rare activity continued to slow.
Brief: Unvaccinated New York-based staff at JPMorgan Chase risk losing their jobs, Chief Executive Officer Jamie Dimon said on Monday in a further indication that banks are getting tougher on employees as they return to work. “If you aren’t going to get vaxxed, you won’t be able to work in that office. We’re not going to pay you not to work in the office,” Dimon said. “We want people to get vaccinated.” Last week, Citigroup Inc said staff in the United States who had not been vaccinated against COVID-19 by Jan. 14 would be placed on unpaid leave and fired at the end of the month unless granted an exemption. Asked about a possible hybrid work policy in the future by which employees split their time between home and the office, Dimon said: “We don’t have to answer this right away.”
Brief: Consolidation in the insurance brokerage space is expected to continue at a rapid pace through 2022, following a trend from the last 12 months where brokerage transactions drove the majority of announced insurance merger and acquisition (M&A) activity worldwide. PwC’s ‘Insurance Deals Insights: 2022 Outlook’ projects “continuing consolidation in the insurance brokerage space,” especially from private equity-backed firms. This has resulted in “high multiples for insurance brokerage targets [which] shows no signs of stopping” in 2022, according to PwC. Over the past few years, as the world has grappled with the COVID-19 pandemic and related economic challenges, the insurance brokerage space has proven to be very profitable, lucrative, and resilient, according to Mark Friedman, a partner in PwC’s Financial Services Deals practice where he supports private equity and corporate clients with transactions in the insurance sector.
Brief: The COVID-19 pandemic has accelerated the transformation of business models in the life sciences industry, with digital initiatives coming to the forefront. The combination of rapid technological innovation and disruption of traditional models of care has expedited the integration of medtech—digital health, wearables, AI-driven offerings, diagnostics, telemedicine, and other health IT solutions—in healthcare. Here are ten global medtech themes we are tracking in the coming year: Focus on digital and data assets in life sciences/healthcare M&A. Globally, life sciences technology companies, private equity and other financial investors are focussing on the value of digital and data assets as they evaluate potential targets. We expect to see both the continued consolidation of digital health players along the lines of the Ginger-Headspace merger as well as additional acquisitions by Big Tech and Big Pharma such as Oracle’s acquisition of Cerner to bring complementary datasets, expertise and capabilities from different segments, regions, and specialties in-house to enhance product and service offerings.
Brief: As the world enters a new phase in the global Covid-19 pandemic, the majority of CEOs are ready to accelerate plans for investment and mergers and acquisitions (M&A) in their pursuit for growth. These findings come from the inaugural EY 2022 CEO Outlook Survey, which recorded the views of more than 2,000 CEOs across the globe on their prospects, challenges and opportunities. More than half of respondents (54 per cent) will prioritise investment in existing businesses, digital transformation and sustainability, according to the survey. In addition, more than three-quarters (79 per cent) of respondents have adjusted, or are planning to adjust, their supply chain to help reduce costs and minimise risks to prepare for future disruption. Following a record year that saw USD5 trillion worth of M&A, transactions will remain a critical tool for CEOs in 2022 complementing other areas of investment.
Brief: Commodities trader Pierre Andurand capped another strong showing in 2021, with one of his hedge funds returning 87%, according to two people with knowledge of the matter. The advance by the Andurand Commodities Discretionary Enhanced Fund followed a gain of 154% in 2020. His older Andurand Commodities Fund closed 2021 up 36%. The Andurand Climate and Energy Transition Fund, formed in July, returned 28%, the people said. A spokesman for Andurand Capital Management LLP, which has offices in London and Malta and manages about $950 million, declined to comment. Andurand, 44, has pocketed big gains from a surge in energy prices. Last year, he said the world was entering a bull market for commodities, supported by a global shift toward decarbonization. His firm has benefited from exposure to emissions and has previously been bullish on natural gas, European power prices and oil.
Brief: European stock markets had a downbeat session on Monday amid a burst of new reported coronavirus cases and the impact of earlier than expected rate hikes in the US.In London, the FTSE 100 (^FTSE) fell 0.4% on the day, while the French CAC (^FCHI) tumbled 1.3% and the DAX (^GDAXI) was 1.1% lower in Germany. Oil and gas stocks managed to outperform while household goods remained under pressure as well as a slump for housebuilders. The UK government is reportedly looking for property developers to take on a greater share of the costs of repairing dangerous apartment blocks in the wake of the Grenfell tragedy of 2017. "Many flat owners have been left with onerous costs for replacing flammable cladding and the latest reports on who will foot the bill should come as no surprise to the sector in that context," AJ Bell investment director Russ Mould said.
Brief: Moderna Inc. said it has signed vaccine purchase agreements worth US$18.5 billion for this year, along with options for another US$3.5 billion, including booster shots. In a statement on Monday, the company also said 2021 product sales would be US$17.5 billion, slightly higher than the average analyst estimate of US$17 billion, according to data compiled by Bloomberg. Additionally, the company said that it shipped 807 million vaccine doses in 2021. Previously, it had said it would deliver between 700 milion and 800 million doses. The advance purchase agreements for 2022 are up from US$17 billion worth of commitments it had announced last year. Analysts were expecting US$19.3 billion in Moderna COVID vaccine sales for 2022, according to a Bloomberg survey of analyst estimates. In premarket trading in New York, Moderna shares were up 0.2 per cent. Moderna announced the advance orders on the first day of the JPMorgan Healthcare Conference, where it is scheduled to present Monday morning.
Brief: Citigroup will be the first major Wall Street institution to enforce a vaccine mandate by terminating noncompliant workers by the end of this month. The bank reminded employees in a memo sent Friday about its policy, first disclosed in October, that they must be “fully vaccinated as a condition of employment.” At the time, the bank said that employees had to submit proof of vaccination by Jan. 14. Those who haven’t complied by next week will be put on unpaid leave, with their last day of employment being Jan. 31, according to the memo, which was first reported by Bloomberg. A spokeswoman for the New York-based bank declined to comment. Citigroup, the third biggest U.S. bank by assets and a major player in fixed income markets, has had the most aggressive vaccine policy among Wall Street firms. Rival banks including JPMorgan Chase and Goldman Sachs have so far stopped short of terminating unvaccinated employees.
Brief: Crypto investors have cashed out over $135 billion from the asset class so far in 2022, according to Coinmarketcap market cap data, and bitcoin (BTC-USD) is down around 7% year-to-date and hovering around $43,000 as of Thursday at 10 AM ET. "There are no signs of a decisive reversal in sight," Mikkel Morch, executive director at digital assets hedge fund Ark36, told Yahoo Finance when asked about the largest cryptocurrency's recent price action relative to its drawdown over the past two months. Bitcoin and other cryptocurrencies began tumbling after the publication of notes from the Federal Reserve's December meeting. Following the broader stock market down, especially technology growth stocks captured on the Nasdaq-100 (NDX). Morch added that similarities between the current price movement and those witnessed in mid-May and August suggest reasons for "cautious optimism in the medium term."
Brief: Royal Bank of Canada has advised all employees in regions including Ontario and Quebec to work remotely if their jobs allow, following advice from these provincial governments, a spokesperson said in a statement late on Wednesday. Royal Bank, unlike some rivals, did not provide a firm return-to-office date, and leaders had encouraged employees to work from home in December, according to the emailed statement. In the past week, both Ontario and Quebec announced renewed restrictions amid a surge in COVID-19 cases due to the Omicron variant. Royal Bank, Canada’s biggest bank by market value, joins all its major rivals in keeping employees at home. In December, Toronto-Dominion Bank, Bank of Nova Scotia, Bank of Montreal, Canadian Imperial Bank of Commerce and National Bank of Canada, as well as insurer Manulife Financial Corp, all halted plans to bring employees back to their work locations in early 2022.
Brief: Cloud software has been one of the best bets for investors over the past half decade. But that trade has rapidly unwound of late. The slump, which started in November and deepened this week, is part market rotation, part economy reopening from the pandemic, and part concern that the Federal Reserve’s expected interest rate hikes will have an outsized impact on this particular sector. For years, cloud computing services were some of the top gainers in technology, which itself outperformed the broader market. Since Bessemer Venture Partners created the BVP Cloud Index of publicly traded companies in August 2013, the basket is up 909%, almost triple the gains in the Nasdaq and five times better than the performance of the S&P 500. Covid-19 proved to be a massive boon, as companies, schools and government agencies sped their transition to the cloud so they could access remote communications, collaboration and storage tools.
Brief: Bank Of America Corp. is pushing back its return to office another week as it monitors the surge in Covid-19 cases. The company encouraged U.S. employees to work remotely through the week starting Jan. 10 as the bank evaluates its next move, according to an internal memo sent Thursday. The firm had earlier advised workers to stay home through at least this week. In its memo, the bank also continued to encourage staff to get fully vaccinated and receive booster shots, stopping short of implementing a full mandate. Contents of the memo were confirmed by a representative of Charlotte, North Carolina-based Bank of America.
Brief: Shell has overtaken Covid vaccine maker Astrazeneca to become the biggest company on the FTSE 100. The oil giant was worth £132billion last night while the pharmaceuticals titan was valued at £131billion. It marks a return to the top spot for Shell which was for years the biggest company on the Footsie before the pandemic struck. Astrazeneca, which developed a Covid jab with Oxford University, knocked Shell off its perch in May 2020 after strict lockdowns sent oil prices plummeting and plunged the energy company into crisis. Consumer goods giant Unilever – whose brands include Domestos, Hellmann’s and Ben and Jerry’s – also spent some time as the biggest listed company in Britain. But as the oil price bounced back following the rollout of vaccines and reopening of economies, so too have Shell’s fortunes. Shell’s return to the top comes after the company ditched its dual-listed status, abandoning the Netherlands in favour of London.
Brief: Hopes that Omicron’s impact will be less severe than past waves swept a flurry of optimism through UK investors in December. Savers added GBP1.0 billion in new cash to their equity holdings during the month, taking the 2021 net inflow to a record GBP14.2 billion, according to the latest Fund Flow Index from Calastone. In 2015, the last high point, inflows reached GBP11.6 billion. As Omicron fears subsided, investors became much more enthusiastic about the prospects for equities. In December, net inflows doubled compared to November and, at GBP1.0 billion, reached their highest level since August. The biggest change in sentiment was evident in European and North American funds, where heavy selling in October and November was replaced by modest inflows.
Brief: Europe’s private equity industry has continued to rebound following disruption caused by the pandemic, completing 741 buyouts cumulatively valued at EUR141.5 billion in 2021, according to provisional full-year data from CMBOR, the Centre for Private Equity and MBO Research. Deal volume is broadly consistent with previous years, barring the understandable dip in 2020, whilst deal value reached its highest level since 2007, signalling Europe’s upswing as markets began to stabilise. Private equity activity in the UK market in 2021 reached levels not seen since before the global financial crisis. At GBP45.8 billion, the cumulative value of the 235 buyouts of UK-based companies last year represented the biggest headline figure in the 35-year history of CMBOR, surpassed on an inflation-adjusted basis only by the GBP44.1 billion recorded in 2007.
Brief: Despite the financial hardships many have endured because of global lockdowns during the COVID-19 pandemic, AMP has noted its super members have made more voluntary contributions than usual during the period. AMP reported that analysis of its approximately one million super members show they are 27% more likely to be making voluntary contributions to their super than before the pandemic. These additional contributions are also 28% larger than pre-COVID levels. AMP members contributed an extra $296 to their super over the three months to September 2021 on average, compared to the same period in 2019. However, those who withdrew money under the government's early release of super (ERS) program early in the pandemic are still lagging. This group of individuals had voluntary contribution rates 15% behind the wider population.
Brief: A group of institutional investors representing $3.5 trillion in assets under management on Thursday called on pharmaceutical companies to link their executives' pay to making COVID-19 vaccines available around the globe.cWhile the majority of citizens of wealthy nations are vaccinated and many are now receiving booster shots, across the African continent vaccination rates average only around 10%. The World Health Organization has set a target of a 70% vaccination rate in every country by July 2022 in order to end the "acute phase" of the pandemic. The 65 participating asset managers, pension funds and insurance companies signed a letter reviewed by Reuters dated Jan. 4 that was sent to the boards of Pfizer Inc, Johnson & Johnson, Moderna Inc and AstraZeneca PLC asking them to adopt a WHO roadmap for achieving equitable vaccine access and tying it to management pay "in a meaningful, material, measurable and transparent way."
Brief: Banks in Hong Kong including HSBC Holdings Plc and UBS Group AG are taking steps to reduce the number of people at the workplace after having operated at near full capacity for the past few months, as the city faces a spike in COVID-19 cases. HSBC, which is one of the biggest employers in Hong Kong with about 30,000 people, will maintain a maximum of 50% staff occupancy in its offices from Friday, according to an internal memo seen by Reuters. A spokesperson for HSBC confirmed the memo's content. Bank of America has encouraged its staff to work from home from Jan. 7-24, according to the U.S. bank's internal memo seen by Reuters. A bank spokesman confirmed the contents of the memo that was sent on Thursday. Earlier, UBS said in a memo to staff that it would split its 2,500 Hong Kong workforce into two groups, with each returning to the workplace on alternate weeks.
Brief: Whether young or old, evidence suggests the pandemic may increase age discrimination in the workplace. Academic Steve Butler - who is also a financial services chief executive – explains why and asks for your participation in research that could shape policy. Ever since the civil rights legislation in the 1960s and 1970s, workplace “discrimination” has been on the corporate agenda - especially with regard to gender and race. However, by 2000 the corporate language had changed to managing “diversity”, meaning diversity in its widest sense, including age. Diversity has become a part of HR management practice, and to direct this societal shift specifically in relation to age, the UK Government enacted The Employment Equality Age Regulations 2006. This prohibited employers from unreasonably discriminating against employees on grounds of age. Research in the UK around the time of the legislation identified that 18% of workers had received less favourable treatment because of their age. Being considered too old for promotion reduced training opportunities for older people. It fostered negative attitudes, even led to redundancies, and thus reinforced the need for the legislation.
Brief: Several airline stocks have seen a major rise in the new year, despite concerns surrounding the surge in Omicron cases. Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said that stocks reliant on international travel are powering ahead. “With yet more indications that Omicron, though highly infectious, does not cause such serious illness, a wave of relief is pushing up companies which have been hit by worries about tighter restrictions,” she said. Firms including British Airways owner, International Consolidated Airlines Group secured the top spot on the FTSE 100 with a 7% rise in early trading, a major contrast to last year’s volatile performance. Rolls Royce, jet engine maintainer, also saw an increase, with shares up 3.4%. The FTSE 250 also saw travel firms in the lead, with Wizz Air and EasyJet seeing surges in share prices, by 9% and 7% respectively. “There is clearly expectation that bookings will have got a rocket boost from hopes that this latest spike of infection will flatten relatively quickly,” said Streeter.
Brief: Manhattan real estate posted its best year ever in 2021, rebounding from the pandemic with $30 billion in sales, according to real estate reports. The 16,000-plus signed contracts were also a record, according to a report from Corcoran. The banner year marks a dramatic turnaround from 2020 when fears of population losses, rising crime and high taxes weighed on sales. Many observers thought at the time the days of bidding wars and falling inventory were over. But sales have now eclipsed pre-pandemic totals and are showing no signs of slowing in 2022. Fourth-quarter sales topped $6.7 billion, a mark not seen since such records were kept, according to a report from Miller Samuel and Douglas Elliman. The average price for an apartment in Manhattan is now $1.95 million. The median price — which many consider to be a more accurate indicator of the market — jumped 11% in the fourth quarter compared to the year-earlier period, close to pre-pandemic levels.
Brief: BlackRock Inc and American Express Co are extending their hybrid work plans as the Omicron COVID-19 variant spreads across the United States. The world's largest asset manager, BlackRock, is providing flexibility through Jan. 28 and allowing U.S. employees to work from wherever they are most comfortable, according to a source familiar with the matter. The new variant has swiftly spread across the country since its detection on Dec. 1, replacing Delta as the dominant strain and sparking a new wave of infections that pushed daily cases near the 1 million mark on Monday. BlackRock had earlier required more than half of its employees to work from office for three days a week on average starting November. AmEx has decided to delay the Jan. 24 launch of "Amex Flex" in the United States, after previously saying it would start bringing its employees in the United States, the UK and Germany back to offices from Jan. 24.
Brief: Portfolio investors have started to rebuild bullish positions in the oil market reassessing earlier fears about the likely impact of the Omicron variant of coronavirus on major economies and passenger aviation in 2022. Hedge funds and other money managers purchased the equivalent of 54 million barrels in the six most important petroleum futures and options contracts in the week to Dec. 28. Funds have purchased a total of 70 million barrels over the two most recent weeks, after selling 327 million over the previous 10 weeks, according to records published by regulators and exchanges. Last week's buying was the fastest since August, and among the most rapid rates for more than a year, signaling a sharp turnaround from previously bearish investor sentiment.
Brief: Morgan Stanley is betting on offices in New York City. The New York-based bank has signed a deal to take over space that houses the headquarters of BlackRock Inc., according to people familiar with the matter. The 15-year deal is for roughly 400,000 square feet (37,000 square meters) at Park Avenue Plaza, at 55 E. 52nd St., one of the people said. BlackRock is leaving the space and moving west to Hudson Yards in 2023. The office market in Manhattan has been battered by the pandemic, though there were positive signs in the final months of 2021 as leasing picked up. The deal comes as a surge in Covid-19 cases pushes Wall Street firms, including Goldman Sachs Group Inc., to adjust their return-to-work plans.
Brief: Macro hedge fund firm Rokos Capital Management made more than GBP900 million in profits during the early days of the coronavirus pandemic, according to a report in the Financial Times. The firm generated returns of 44 per cent in 2020 – its best annual performance to date – generating GBP914 million in profit in the 12 months to 31 March, 2021. According to a filing with Companies House, the income is available to be divided up among the hedge fund's partners with manager Chris Rokos, formerly a co-founder of Brevan Howard, eligible for the largest share of the gain, some GBP509 million.
Brief: Goldman Sachs Group Inc. strategists expect a tourism revival in the second half of 2022, with the Thai baht, New Zealand dollar and Egyptian equities among their top bets. The firm predicts that the manufacturing-led economic recovery will shift to one driven by leisure and tourism as foreign visitors return to beaches and mountains after enduring nearly two grueling years of the coronavirus pandemic. “We think you’re going to see a transition to a recovery driven by services and travel, and leisure would be an important part of that once the latest omicron wave fades,” Kamakshya Trivedi, Goldman’s co-head of global foreign exchange, rates and emerging-market strategy research, said in an interview.
Brief: Wall Street’s push to refill office towers across the country has been derailed again. This time it’s the highly transmissible omicron variant of the Covid-19 virus that’s forced executives to rethink their plans. A record 10 million people were diagnosed with Covid-19 in the seven days through Sunday, almost twice the pandemic’s previous weekly high, though weekly deaths continued to drop. “Realistically, we do not foresee us all having a safe opportunity to be together in our offices until at least Monday January 31,” Jefferies Financial Group Inc. Chief Executive Officer Richard Handler said in a memo on Instagram. “We are encouraging everyone to work remotely unless there is a very good reason to be in our office.”
Brief: U.S. investment bank Jefferies Financial Group has asked staff to work remotely until Jan. 31, according to an Instagram post on Monday from its Chief Executive Officer, in another sign that New York's banking offices looked set for an empty start to the year as the Omicron variant spreads. Banks and financial firms have been grappling with how to react to the latest variant and how to communicate to staff and retain workers amid the uncertainty. A number of other banks have asked staff to work remotely for the beginning of the year due to the latest surge in cases. "Realistically, we do not foresee us all having a safe opportunity to be together in our offices until at least Monday, January 31st," Jefferies CEO Richard Handler said in the message.