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Our briefing for Friday June 4, 2021:
Jun 4, 2021 4:06:00 PM
- In the United States, the latest job numbers were released on Friday and President Joe Biden touted the country was “on the move again” as unemployment rates dipped to a pandemic low. America added 559,000 jobs in May, closer to what economists anticipated after April’s disappointing jobs report. The unemployment rate fell to 5.8%, but the country is still down about 7.6 million jobs from pre-pandemic levels, which displays how much the pandemic has hindered the ability to potentially work. President Biden said while he still expects bumps along the way, he was “extremely optimistic” and noted the United States was the only major country where projections of economic growth are better now than they were before the pandemic.
- In a joint letter to Canadian Prime Minister Justin Trudeau, the airline industry in Canada, along with the United States called on the Liberal government to allow more flights. According to the letter from the National Airlines Council of Canada and Airlines for America, the Canadian government should “clearly spell out how and when we will restart air travel between Canada and the U.S., with the objective of releasing the plan prior to June 21.” The letter also cited vaccination rates increasing exponentially in both countries and provincial governments releasing their reopening plans as other reasons to deliver a clear roadmap from the federal government. Despite this, Prime Minister Trudeau has yet to outline a timeline for reopening, other than to say it will depend on cases and vaccination levels.
- The United Kingdom’s Office for National Statistics (ONS) released their latest data regarding the coronavirus on Friday. Data published by the ONS noted 376,000 people in private households can be considered COVID long haulers where they have reported having symptoms of COVID-19 for at least one year. Those symptoms include those that have been reported previously such as fatigue, muscle pain and “brain fog”. The ONS stated self-reported long COVID cases were greatest in people aged 35-69, females, those living in the poorest areas, those working in health or social care, and those with another activity-limiting health condition or disability.
- France has introduced a new colour-coded system designed for international travel that will be begin on June 9th. In a document published on Friday, the colour-coding scheme will be green, orange and red depending on the country that traveller is arriving from and their vaccination status. Those on the “green” list will be anyone coming from the European Union, Australia, Israel and Japan, just to name a few, and they will be permitted to travel throughout France without any restrictions. Currently on the “red” list will be residents coming from India, South Africa, as well as others from countries in South America. According to the government update, those arriving from the red list of countries whether they have been vaccinated or not, will only be permitted to enter France for urgent reasons.
- Philippines President Rodrigo Duterte has appealed to the public to get vaccinated against COVID-19 after recent data has shown the country is far behind the immunization targets it has set out. Speaking earlier in the week, Presidents Duterte said: “I invite all our countrymen to be vaccinated at the earliest possible opportunity because this is the most, if not the only way, effective way, to defeat the COVID-19 pandemic.” A data analyst from the government’s coronavirus task force said that in the three months since COVID-19 inoculations started, just 14% of senior citizens and 8% of people with health conditions had received first doses of a vaccine, short of the 21% target.
- In an effort to fast track their coronavirus vaccine campaign, India has given the green light to a domestic made inoculation, even though it is still going through Phase III clinical trials. The news comes as the Supreme Court has criticized the vaccine rollout from the government that has left millions of people still vulnerable. Only 4.7% of the 950 million adult population have been given two vaccine doses. The latest wave of the coronavirus in India killed around 170,000 people in April and May alone. The government has said they will purchase 300 million vaccine doses from local firm Biological-E and has put down an advance of $205.6 million.
Covid-19 – Due Diligence And Asset Management
Carlyle, Warburg to Require Covid-19 Shots for Return to Offices
Brief : Carlyle Group Inc. and Warburg Pincus told employees they’ll require Covid-19 vaccinations to return to the office in September. Carlyle, a private-equity firm that oversees $260 billion of assets, and Warburg, with $60 billion, told U.S. employees of the policy in recent days, according to people familiar with the plans. They’re among the first financial-services companies to demand that employees get vaccinated in order to work in the office. A Carlyle spokeswoman confirmed the information, announced last week at a town hall meeting, and Warburg declined to comment. Warburg has told employees that accommodations can be made for those who don’t get the shots, said a person familiar with internal communications. Carlyle said at its town hall that getting the vaccine was not a condition for remaining employed. Employers may demand vaccines and request proof under federal law, according to guidance provided last week by the Equal Employment Opportunity Commission. Workers can ask for exceptions for religious or medical reasons. Most companies have opted to encourage rather than demand that staff get vaccines, offering to lift mask or testing requirements. About 20% of employers are mandating them in order to return to the office, according to a Morning Consult poll of 1,070 working adults conducted for Bloomberg News at the end of May.
AIMA Policy Paper Envisages Key Role for Alternatives in UK Recovery
Brief: The hedge fund and alternative investment sectors now have a vital role to play in boosting UK growth and innovation as the country recovers from the economic impact from Covid-19 and readjusts to life outside the EU, the Alternative Investment Management Association and Alternative Credit Council have said. AIMA, the global hedge fund industry trade body, and its private credit affiliate the ACC, have published a new policy paper setting out how, in practical terms, the industry can support the UK government’s goals in increasing economic growth, boosting productivity and levelling up across the UK. The policy objectives, which cover regulation, tax, pensions and real economy financing, are aimed at freeing up capital and creating new jobs, AIMA said. The industry trade group believes that maintaining the UK’s attractiveness for investment managers and their investors in a post-Brexit and Covid-19 landscape would support the UK’s economic prosperity.
Federal Court Orders Florida Man to Pay More than $500,000 for Attempting to Fraudulently Profit From COVID-19
Brief: The Commodity Futures Trading Commission today announced that the U.S. District Court for the Western District of Texas entered an order granting the CFTC’s motion for default judgment against defendant James Frederick Walsh of Boca Raton, Florida. The order finds that Walsh failed to answer the CFTC’s complaint charging him with fraud and failure to register with the CFTC. Walsh’s fraudulent solicitations include falsely claiming to generate increased forex trading profits as a result of the COVID-19 pandemic. This was the first enforcement action brought by the CFTC alleging misconduct tied directly to the COVID-19 pandemic. The order requires Walsh to pay a civil monetary penalty of $555,726 and permanently enjoins him from engaging in conduct that violates the Commodity Exchange Act, from registering with the CFTC, and from trading in any CFTC-regulated markets. The complaint alleged that from at least September 2019 to the July 2020, Walsh fraudulently solicited members of the public for the purported purpose of trading retail foreign currency (forex) on their behalves.
Venture Capital’s New Favorite Industry
Brief: The Covid-19 pandemic brought digital health and wellness into the mainstream — and it’s made the retail health and wellness tech industry an increasingly attractive target for venture capitalists. Digitized health and wellness investment activity hit a peak in 2020, generating $7.3 billion in venture capital deal value across 449 deals, according to PitchBook. The industry started off the new year strong, as well: In the first quarter of 2021, industry deal value hit a quarterly record of $4.2 billion across 153 deals, PitchBook said in a first quarter report on emerging technology investments. PitchBook researchers attributed the strong 2020 dealmaking to the pandemic and the increased development and usage of telemedicine products. By 2025, the research firm expects the mobile and digital segment of the health and wellness tech market to reach between $350 billion and $400 billion, a meteoric projection from a less than $50 billion market size in 2019. “Virtual health companies benefited from the pandemic as rules hindering the use of telemedicine were repealed, payers increased telehealth coverage, and laws preventing ‘noncritical’ in-person appointments forced providers to conduct appointments remotely,” PitchBook said in the report.
Advisers Predict Business Boom in Next 12 Months
Brief: Most advisers are positive about business prospects over the next 12 months with the majority (81%) predicting their level of net assets under management will increase over the coming year, according to a survey from Quilter Financial Planning. Almost two-thirds of those surveyed (62%) said they expected their gross turnover to increase during the next 12 months compared to the year just gone, and the research found 5% were fearful it would decrease "significantly". Advisers were also bullish on new client business with 63% predicting a rise in new fee-paying clients and a further quarter (23%) saying they expect client numbers to remain stable. In addition, advisers were fairly confident on the outlook for the British economy with a weighted average score of 7.0 out of 10, Quilter FP said, with those surveyed believing it would encourage clients to seek advice and make investments. Quilter FP managing director Gemma Harle said: "After a difficult year and a half the outlook is looking much brighter for the UK and the economy, so it's pleasing to see this now being reflected in advisers' predictions for the future. "Although the threat of variants still looms, the successful vaccine programme has revealed a future we had not dared to dream about just a few months ago."
Alternative Asset Managers Found Their ‘Sweet Spot’ in the First Quarter
Brief: As the global economy recovers from the pandemic, alternative asset managers are seeing strong growth across key metrics — including fundraising, assets, and fee-related earnings — with the trend expected to continue. According to Moody’s first quarter report on U.S. alternative asset managers, released this week, total fundraising for the four largest publicly traded managers — Apollo, Blackstone, Carlyle, and KKR — during the quarter rose to $67.3 billion, a 22 percent increase from the same time a year ago, while total assets under management climbed 36 percent over the same period. Of these, KKR had the strongest growth, more than doubling its capital raising to $14.6 billion, followed by Apollo, which saw a jump of 84 percent, raising $13.4 billion. It also added $73 billion in assets due to acquisitions by its insurance partners Athene and Athora. Net performance revenues increased by about 82 percent for the four firms, due to strong financial markets and improved economic conditions. A large part of the revenue growth is linked to the industry gravitating more toward a recurring fee structure, including partnerships with insurance companies, as opposed to realized performance fees, which are less predictable.
