Brief : The European Union’s huge post-pandemic recovery fund could become a more permanent feature if it is successful in firing up growth and fostering a greener and more digital economy, the European Commission’s top economic officials said on Monday. The 27 EU nations made an unprecedented agreement last year to jointly borrow 750 billion euros for a fund to help fight the economic slump caused by COVID-19 and address the challenges of climate change. To overcome the opposition of the EU’s frugal northern states, which have long opposed joint borrowing for fear of financing less strict fiscal policy in the south, the scheme was clearly described as an extraordinary, one-off measure. But many economists seen it as a foot in the door for more regular joint debt issuance by the AAA-rated EU in future and top Commission officials echoed that view before the European Parliament’s economic and monetary affairs committee. “The more successful we are in the implementation of this facility the more scope there will be for discussions on having a permanent instrument, probably of a similar nature,” Commission Vice President Valdis Dombrovskis said.
Brief: Hedge funds are on a roll this year, with the industry recording its best January-to-April performance in more than 20 years, as managers profited from tech gains, commodities moves, strong earnings, and renewed optimism over the reopening US economy.Overall, hedge funds added 2.74 per cent in April, and have returned 8.68 per cent in the four months since the start of 2021, as measured by Hedge Fund Research’s Fund Weighted Composite Index, a global equal-weighted benchmark of some 1400 single-manager hedge funds. That was strongest year-to-date return through April since 1999, when it rose 8.56 per cent. April’s gain was also the index’s seventh consecutive monthly advance, with all but one hedge fund sub-strategy finishing the month in positive territory. Technology, quantitative directional equities, and commodities-focused macro funds were among the strategies that posted the biggest gains. HFR president Kenneth Heinz said: “Through the seven consecutive months of gains, hedge funds have navigated multiple market cycles (both positive and negative), including a new US political administration, unprecedented fiscal stimulus initiatives, additional virus mutations/variants, and a sharp increase in heavily-shorted, deep value equities driven by retail trading platforms.” The industry is now in its longest period of consecutive monthly gains since the HFR’s FWC index produced 15 consecutive months up to January 2018.
Brief: Hospitals acquired by PE firms tend to have higher operating margins than those that are not acquired — and that gap widens over time, a new study shows. But it is too early to say whether these glowing financial figures equate to better support for clinical care. Hospitals that were acquired by private equity companies had operating margins that were 5.6 percentage points higher than nonacquired hospitals in 2003, and that gap widened to 8.6 percentage points by 2017, according to the study published in Health Affairs. However, it is unclear whether private equity firms’ varied promises, like improved efficiency, have resulted in better support for clinical care. The study — which aims to describe the hospitals acquired by private equity firms and their finances — compared facilities that had been acquired to those that were never acquired between 2003 and 2017, said Dr. Marcelo Cerullo, a study author and general surgery resident at Duke University Medical Center, in an email. In total, researchers examined 42 private equity deals, involving 282 hospitals across 36 states. Of the 282 hospitals studied, data for 233 was available from the Healthcare Cost Report Information System and American Hospital Association. In general, the researchers found that hospitals acquired by private equity firms tended to be better off and larger than average across several measures than those that were not, Cerullo said. Acquired hospitals were significantly larger than nonacquired hospitals in terms of number of beds and discharges in both 2003 and 2007.
Brief: The Sydney Covid-19 patient dubbed "BBQ Man" after he visited an extensive list of BBQ stores while infectious has been named, finally providing an explanation for his curious shopping spree. Investment company Apollo Global Management managing director Tom Pizzey has been identified by the Australian Financial Review as the man linked to Sydney's latest Covid-19 scare. Pizzey contracted the virus earlier this month, with his wife later testing positive for Covid-19 as well. AFR understands Pizzey is still suffering coronavirus symptoms, with Apollo confirming it is assisting NSW Health in relation to a positive virus case. "The employee has not travelled outside Australia this year," an Apollo spokesperson told the publication. Pizzey, who is one of Apollo's only two full-time employees in Australia, is understood to be the mystery Covid-19 case who visited multiple venues on May 1 while unknowingly infectious, including several BBQ stores. Two of those trips were to different Barbeques Galore stores in Casula and Annandale. The chain is in its early stages of auction and, while Pizzey was searching for a new BBQ, AFR reports he was also checking out the stores for Apollo, with reports the company is considering acquiring the chain. In the same day, Pizzey also visited Joe's Barbeques & Heating in Silverwater, Tucker Barbecues in Silverwater and The Meat Store in Bondi Junction.
Brief: The popularity of passive strategies hasn’t died down during the pandemic — meaning European asset managers, like their U.S. counterparts, will need to brace for more pressure on their operating margins this year. According to a new report from Fitch in London, the asset managers that the group rates, including Amundi, Azimut Holding, Man Group, and Schroders, among others, are in a position to weather the challenges, in part because they have strong brands, enough assets under management to be able to continue to invest in the business, and have used only a moderate amount of leverage. Still, Fitch said they and other traditional managers around the world face pressure on margins “in 2021 and beyond due to fee compression driven by fierce competition.” Fitch expects investors to continue to prefer low-cost index funds over active strategies. In aggregate, active managers have failed to prove their worth to investors by outperforming common benchmarks in 2020. For years, active managers have argued they would shine when volatility spiked, as their passive peers simply reflected the market’s fluctuations. But that didn’t happen last year, in part because the downturn was short-lived. The markets fell dramatically in March and early April, but then roared back when governments and central banks stepped in with trillions of dollars in stimulus.