Brief: BNP Paribas Personal Finance has announced that it will use Experian’s Open Banking technology and Aryza’s Debtsense digital platform to provide online account reviews to customers who have been affected by the Covid-19 pandemic. Debtsense from Aryza uses Experian’s Open Banking service to allow people to share their account and transaction data, giving a clear and detailed picture of affordability, financial circumstances and commitments. The insights will enable BNP Paribas Personal Finance to assess people whose finances have been affected by the pandemic and who may now be vulnerable. They can then be offered a payment break or an affordable payment plan based on their specific circumstances. The app uses the lender’s credit decision policy rules to create a personalised payment plan. More than 200 organisations are currently using Experian’s Open Banking service, many to help resolve financial hardship as a result of Covid-19 pandemic. Charities including Citizens Advice Liverpool and Mental Health & Money Advice are using the service to support clients through the pandemic, tailoring advice based on the individual’s situation.
Brief: Macquarie Group chief executive Shemara Wikramanayake says the turmoil unleashed by the coronavirus will make it tougher for the company to reap the benefits of asset sales, as profits dipped and it warned of extreme uncertainty. The financial group on Thursday highlighted challenging conditions across all of its businesses, with the banking division hit by rising provisions for bad loans and the global recession hampering deal-making. As the company faced shareholders for a virtual annual meeting, chairman Peter Warne also said there was a possibility it would resume dividend payments to the group from the banking division, which had been paused, but this was not certain. Macquarie is a major investor in infrastructure projects and part of its business model involves selling assets to realise the gains from these investments.
Brief: The evolution of media has led to a “disconnect” between the reality of coronavirus and public perception of the pandemic, according to Enrique Abeyta of Empire Financial Research. The reality: The coronavirus crisis is in the “seventh inning,” Abeyta said on the Contrarian Investor Podcast. In six weeks, or by mid-September, there will be “maybe less than 50” daily fatalities from COVID-19, corresponding to about one 10th current levels, he says. “I think the war on COVID is almost over.” This clashes with the perception reported by media, that the U.S. doesn’t have COVID-19 under control. Cases and deaths are growing, states are forced to shut down, and the situation is spiraling out of control. So goes the narrative. This narrative misses several key facts, according to Abeyta. In the U.S., the virus has hit different regions at different times: first New York, where mortality rates were “awful,” and more recently states like Florida, Arizona, California, and Texas (the FACT states).
Brief: Bitcoin is doing that thing again. After a 50% slump in the cryptocurrency’s price to about $4,000 in mid-March, when Covid-19 panic was gripping the financial markets, it has bounced back to trade at about $11,200. Veteran crypto-watchers have seen this rapid shift from fear to greed many times before, and know it can have painful consequences. The first time Bitcoin’s price went past five figures in 2017, it fueled a speculative frenzy that ended almost as soon as it began, leading to an 80% slump over 12 months. And when Bitcoin rose above $10,000 in February this year, any hope for a rally was snuffed out by Covid. The subsequent mad rush to trade digital coins for cash was made worse by the fact that many people were using large amounts of debt to back their trading. Several crypto hedge funds closed. Is anything different this time? Bitcoin’s wild price swings undermine its case as a reliable store of value or safe haven. It’s still 43% below its high of almost $20,000. But as a “store of fear” — Warren Buffett’s description of the short-term pessimism that pushes investors into cryptocurrency — it has its fans.
Brief: Private Equity Advisor, BluWave, Finds 71% of Private Equity Resources Devoted to Portfolio Companies Was Spent on Value Creation Initiatives During the Second Quarter of 2020 BluWave, a private equity-focused advisory firm, today released new data on how private equity funds are allocating resources. The results demonstrate that in the immediate aftermath of the COVID-19 pandemic, the private equity industry was far more focused on investing in portfolio companies than slashing jobs or cutting costs. Among the most common investments at portfolio companies were human capital and digitization. “We’ve seen a clear trend toward value creation over the past two years,” says Sean Mooney, CEO of BluWave. “That trend has accelerated following the outbreak of the COVID-19 pandemic. Although many assumed the pandemic would force private equity funds to focus on operational efficiency, cost cutting and layoffs, what we’ve actually seen is agility and a focus on valuation creation that has spurred new investment in human capital, IT and software strategy, and data-driven decision making.”
Brief: Man Group has seen its funds under management tumble 8 per cent this year, as investment performance took a hit and investor redemptions spiked during the coronavirus crisis - but CEO Luke Ellis says the London-headquartered publicly-traded hedge fund group remains well-positioned despite 2020’s ongoing challenges. Man’s funds under management fell to USD108.3 billion in the first six months of the year, down from USD117.7 billion at the start of January. The drop stemmed from investment performance losses of USD5.4 billion, together with USD1.2 billion of investor outflows. Negative FX translations and other movements wiped off another USD2.8 billion. Man CEO Luke Ellis conceded the first half of 2020 was a “challenging time” for the group. Man, which runs a wide assortment of discretionary and systematic investment funds across hedge fund and long-only strategies, is often considered a barometer for the UK’s broader alternative asset management industry.