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Our briefing for Thursday February 18, 2021:
Feb 18, 2021 3:50:55 PM
- In the United States, according to government data released on Thursday, life expectancy in the country fell by a full year during the first half of 2020, a decline reflecting the toll the coronavirus pandemic took on America. The last time life expectancy at birth dropped more dramatically was during World War II. Racial disparities also were reflected in the data. Black and Latino Americans lost 2.7 and 1.9 years of life expectancy while White life expectancy fell 0.8 years. According to the report, the only good news is that life expectancy typically bounces back quickly because of the way it is calculated. Once the United States controls the pandemic, experts predict this will occur.
- Canada’s federal government released an updated COVID-19 vaccination timeline, showing at least 14.5 million Canadians will be immunized with the Pfizer or Moderna vaccines by June 30th. The number could increase to 24.5 million Canadians inoculated in that same time period if other vaccine companies such as AstraZeneca, Johnson & Johnson and Novavax receive Health Canada approval. This means under the new updated timeline, between 38 and 64 percent of Canada’s population could be immunized as it heads into the summer season.
- In the United Kingdom, Care Minister Helen Whately says the lockdown will be lifted step-by-step over a period of several months. Whately said the UK was in a “better place” now after a significant fall in COVID-19 cases and around 16 million Britons having obtained a first dose of a COVID-19 vaccine. The UK government is waiting for the delivery of key data, expected on Friday, on how much vaccines can reduce transmission rates before making decisions for instance, on when restaurants and pubs can reopen.
- Italy’s new Prime Minister Mario Draghi presented his government’s priorities with a pledge to speed up the country’s coronavirus vaccination programme near the top of the list. “The virus is everyone’s enemy. It is in the memory of those who are no longer here that our commitment grows,” said Draghi. As of Wednesday, Italy had administered three million inoculations, but progress has been hampered by delayed vaccine deliveries. Prime Minister Draghi, the former European Central Bank chief’s other dilemma is lifting Italy out of its worst recession since World War II.
- Brazil’s Butantan Institute kicked off a campaign earlier this week to vaccinate all of the adult population of a city to see if it’s possible to reduce the number of cases. The city chosen was Serrana in the southeastern state of Sao Paulo. The entire adult population of Serrana is estimated to be 30,000 and are expected to be immunized over a three-month span, said the Butantan Institute via social media. Brazil has been hit hard by the coronavirus pandemic – ranking third in the world in total cases nearing 10 million and has over 242,000 deaths – trailing only the United States.
- Australia will begin its first coronavirus vaccinations on Monday, starting with 240 nursing homes across more than 190 locations around the country. Australia’s federal health minister Greg Hunt said Phase 1a of the vaccine rollout would include three priority groups – included aged care and disability residents and staff, quarantine and border workers, and frontline health workers. The rollout will begin with the Pfizer/BioNTech vaccine with the AstraZeneca vaccine joining the rollout in early March. “This is a really, really exciting time. We are about to start the single biggest, and most complex, vaccination task in the history of this nation,” said Australia’s Chief Medical Officer, Professor Brendan Murphy. “We know there will be bumps in the road as we commence this task, unanticipated problems which we will solve together with our partners.”
Covid-19 – Due Diligence And Asset Management
Hedge Funds, Robinhood Face Grilling by Congress Over GameStop Reddit Rally
Brief : Wall Street hedge fund managers, the chief executives of Robinhood and Reddit, and a YouTube streamer known as Roaring Kitty were grilled on Thursday by U.S. lawmakers about the Reddit rally in shares of GameStop Corp. Some of Wall Street’s most powerful players, including billionaire Republican mega-donor and Citadel CEO Ken Griffin, made rare public defenses of their business practices as lawmakers probed how Reddit users trading on retail platforms squeezed hedge funds that had bet against shares of the video game retailer and other companies. Griffin appeared before the Democratic-led House finance panel alongside Robinhood CEO Vlad Tenev, Melvin Capital CEO Gabriel Plotkin, Reddit CEO Steve Huffman, and Keith Gill, a Reddit user and YouTube streamer known as Roaring Kitty who promoted his investment in GameStop. The five men have been at the center of the saga, which roiled Wall Street in January prompting probes by several federal and state agencies.
‘New Normal’ Here to Stay, Fund Selectors Say
Brief: Despite a boost in optimism following the approval of Covid-19 vaccines towards the end of 2020, six out of ten fund selectors believe that the ‘new normal’ is here to stay, a survey by Natixis Investment Managers has found. With heightened risk expected for the year ahead, two thirds of the 400 global fund selectors surveyed also predict that the global economy will not recover from Covid in 2021. However, regardless of concerns over Covid-19 and political issues, 80% believe central banks will support the market in the event of a downturn, according to the report. According to respondents, volatility and negative rates were considered the first and second top portfolio risks for global fund buyers in 2021, at 49% and 39% respectively, while a credit crunch was also cause for concern. Against this backdrop, 66% of the fund selectors believe that aggressive portfolios will outperform their defensive counterparts. Matt Shafer, EVP, head of wholesale and retail distribution at Natixis IM, said: “2020 marked a year of extreme challenges for markets that went beyond the health pandemic, including climate events and natural disasters, political tensions and the fastest market correction in history.
Pandemic Stokes Interest in Gates-Backed Public Health Fund
Brief: The coronavirus pandemic has shone a spotlight on underfunded public health issues and infectious diseases. Investors once reluctant to put capital toward niche vaccine candidates, diagnostic tools and other public health solutions are taking notice. A venture capital firm launched by veterans of the Bill & Melinda Gates Foundation-sponsored Global Health Investment Fund has attracted $300 million in an oversubscribed fund to spur development of affordable technologies to address global health issues. Adjuvant Capital drew a $75 million anchor investment from the Gates Foundation’s Strategic Investment Fund, as well as significant investment from large drugmakers Merck & Co. and Novartis AG, and such others as the International Finance Corporation and Dalio Philanthropies. The capital will be deployed across a portfolio of 14 companies, which are focused on a range of health issues including yellow fever, non-hormonal contraception and Covid-19.
WisdomTree Unveils Covid Recovery ETF
Brief: WisdomTree has launched a bond ETF dedicated to EU coronavirus recovery efforts in what has been called a world first. The ETF will invest in bonds issued by the EU to finance initiatives designed to mitigate unemployment risks as well as repair economic and social damage caused by the coronavirus pandemic. The ETF provider highlighted that the bloc is expected to issue €850 billion of bonds focusing on the recovery through the initiatives SURE and NextGeneration EU. SURE is a temporary tool aimed at mitigating unemployment risks, while NextGeneration EU focuses on repairing the immediate socio-economic damage brought on by the virus. The WisdomTree European Union Bond Ucits ETF (EUBO) fund tracks the iBoxx EUR European Union Select Index, which contains bonds issued by the EU to fund these programmes. Together, NextGeneration EU and the EU’s long-term budget form the largest ever stimulus package financed through by the EU totalling €1.8 trillion, WisdomTree said.
Europe’s Most Active Corporate VCs Target Pandemic-Proof Startups
Brief: Corporate venture investors took part in a record-setting year for betting on European startups in 2020 as companies sought to increase their exposure to pandemic-proof sectors, and the trend looks set to continue into 2021. Last year, European startups raised a record $21.4 billion through rounds with CVC participation, a nearly 35% increase over the year before, according to PitchBook data. About 34% of 2020's investment was directed to IT and software startups, with healthcare companies accounting for 23% of the capital raised. "The pandemic has shown that there's never been a better time to be investing in software early-stage tech," said Matthew Goldstein, a London-based partner at Microsoft's venture arm, M12. "It has become very clear that sitting on the sidelines is a losing strategy for corporate investors whether they are strategic or financially driven." In many cases, CVCs back technologies that are relevant to their sector or could even be integrated. Notable examples include ABN AMRO Ventures, which joined an €85 million (around $102.4 million) round for Swedish open banking platform startup Tink in December.
More than Half of PE-Backed Traditional Healthcare Providers Have Yet to Reap Digital Transformation Rewards
Brief: Over 50 per cent of healthcare businesses in the UK have yet to reap the rewards of digital transformation, according to a new report from Equator.The Healthcare industry digital wellness report 20/21 surveyed 20 private equity-backed healthcare businesses to uncover the digital maturity of the sector, with digitisation critical in the post-pandemic landscape. Private equity firms invested over GBP140 billion across 1,227 healthcare deals in 2019, with the sector now accounting for 14 per cent of total deal value. Covid-19 had an impact on deal activity in 2020, but over the last three quarters, healthcare has been the highest demand sector for digital due diligence, advisory and transformation services for Equator. The report includes detailed reviews of twenty healthcare businesses which have seen a PE-backed buyout, or significant growth funding over the last three years. Over a third (40 per cent) of websites reviewed in the report can benefit from using human-centred design principles to accommodate evolving preferences and expectations. Smart tools, such as chatbots and AI, can help businesses operate more efficiently and adapt faster. Out of the 20 businesses surveyed, none currently power their interactions or enhance their overall customer experience in this way.
