Brief : Federal Reserve Chairman Jerome Powell compared the actions taken by the central bank early in the pandemic as the economy barrelled toward a recession to British efforts in World War II to evacuate troops at Dunkirk. Asked Thursday in an NPR interview whether he would have anything different back in March 2020 if given the chance, Powell said, “We almost certainly didn't do everything right but we knew at the very beginning that we should use all of our tools and use them as aggressively and extensively as we needed to.” The Fed slashed its key benchmark lending rate to a record low of 0% to 0.25%, created a number of emergency lending programs to shore up a financial system in crisis and began buying billions of dollars in bonds to keep long-term interest rates low. “We knew that we would never be able to explain in such an emergency situation why we hadn't used our tools in that way," Powell said. "So we did.” In that environment, with the U.S. economy facing peril on multiple fronts, Powell compared the urgency with which the Fed acted to the way the British deployed an impromptu regatta to evacuate thousands of its troops from Dunkirk in France that were surrounded by German forces.
Brief: The U.S. securities regulator has opened an inquiry into Wall Street’s blank check acquisition frenzy and is seeking information on how underwriters are managing the risks involved, said four people with direct knowledge of the matter. The U.S. Securities and Exchange Commission (SEC) in recent days sent letters to Wall Street banks seeking information on their special purpose acquisition company, or SPAC, dealings, the four people said. SPACs are shell companies that raise funds via a listing to acquire a private company with the purpose of taking it public, allowing such targets to sidestep a traditional initial public offering. The SEC, which declined to comment for this story, has previously said it was monitoring the SPAC boom, but the letters are the strongest sign yet that it is stepping up scrutiny of such deals and the Wall Street banks that underwrite them… Wall Street’s biggest gold rush of recent years, SPACs have surged globally to a record $170 billion this year, outstripping last year’s total of $157 billion, Refinitiv data showed. The boom has been fueled in part by easy monetary conditions as central banks have pumped cash into pandemic-hit economies, while the SPAC structure provides startups with an easier path to go public with less regulatory scrutiny than the traditional IPO route.
Brief: During 2020, as the pandemic took hold across Europe, private equity funds based in Luxembourg continued to raise funds from institutional investors, asset managers, family offices and HNWIs across the world. Some of this money has already been put to work in support of companies that are hurt by the pandemic, protecting jobs and past investment, and smoothing the way to recovery. But by far the greater part of new funds raised will be invested in the high growth companies that are going to pull Europe out of the lockdown-induced recession. These two roles, shoring up good companies with temporary troubles and accelerating the growth of those that innovate and modernise, are central to private equity. The first group includes companies in hospitality, entertainment, travel and tourism, and the latter includes fast growing companies in technology, e-commerce and healthcare. Following the last major recession in 2010-11, companies owned by private equity emerged stronger and grew faster than others. This story is likely to repeat itself in 2021-22. Private equity’s strong focus on investment in growth and performance will make sure of that.
Brief: BC Partners is considering a sale of German pharmaceutical contract manufacturer Aenova, according to people familiar with the matter. The private equity firm plans to seek a valuation of more than 1.5 billion euros ($1.8 billion) for the business, one of the people said. BC Partners is working with Rothschild & Co. to gauge interest in Aenova, which could draw interest from buyout firms and other strategic bidders, the people said. Deliberations are ongoing and there’s no certainty they’ll lead to a sale, according to the people, who asked not to be identified discussing confidential information. Representatives for BC Partners and Rothschild declined to comment. Aenova provides product development and manufacturing services to pharmaceutical and consumer health care companies in 15 countries including Germany, Switzerland and Italy. It reported revenue of 726 million euros and a net loss of 53 million euros in 2019, according to its website. BC Partners acquired the business in 2012 in a 480 million-euro deal.
Brief: Many businesses around the world expect employees to continue to work from home beyond the pandemic, according to a new report commissioned by Zoom Video Communications Inc. The study, conducted by Boston Consulting Group, found that a majority of businesses in five countries are considering a flexible remote-work model because of the successful use of video conferencing during the pandemic, and many expect a significant chunk of their workforce to continue to work remotely. In the U.S., 39% of businesses anticipate more than a third of their employees will work remotely after Covid-19 infections wane, which was the lowest response of any of the six countries surveyed. Companies surveyed in India were the most keen to keep work-from-home setups, with 47% saying the same. Responses in the U.K., France, Germany, and Japan were all above 40%. As vaccines are administered across the country, and pandemic restrictions loosen, companies are trying to chart a path forward. Last week, Ford Motor Co. told more than 30,000 employees that they can continue to work from home and use the office only when needed. Many firms in the financial industry are signaling they prefer a full return to the office.
Brief: The International Stock Exchange Group Limited (TISEG/the Company) has released its latest Annual Report which shows record revenues of GBP8.4 million, a 4.2 per cent increase in post-tax profit to GBP3.6 million and an increase in earnings per share to 128.4p during the year ended 31 December 2020. As previously announced, during 2020 there were 831 newly listed securities on TISE, which is the second highest annual total of new listings since the inception of the Exchange. This took the total number of listed securities on TISE’s Official List to 3,162 at 31 December 2020. Charlie Geffen, Chair of TISEG, says: “It is pleasing that we have continued to make successful progress both organisationally and with increased profitability against the backdrop of the pandemic. At the 2020 AGM we announced a revised growth strategy which is an important step in the diversification of our products, geographies and markets. Our strong financial position gives us the ability and time to execute on our plans and Cees Vermaas’ experience from several major international exchange groups is already proving invaluable in achieving our goals.”