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.
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.
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.
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.
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.
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.