Brief : KKR & Co. expects to raise more than $100 billion by 2022, building on last year’s record and an abundance of growth opportunities. “We have many more strategies coming to market now than we did at the beginning of 2020,” Scott Nuttall, KKR’s co-president, said Tuesday at the New York-based firm’s virtual investor day. “Our fundraising pipeline is very large.” KKR took in a record $44 billion last year as investors sought higher-yielding assets. The firm, which oversees $252 billion, has been among the most active dealmakers during the Covid-19 pandemic, investing through the downturn to avoid mistakes it made in the aftermath of the 2008 financial crisis. The firm expects to reach its goal by raising $40 billion to $50 billion in private equity, $15 billion to $20 billion in infrastructure, $10 billion to $15 billion in real estate and $20 billion to $25 billion in credit. KKR is either already in the market with or planning to raise capital for more than 20 strategies this year and next, including its flagship Americas and Europe private equity funds as well as its global impact and opportunistic real estate funds, according to the presentation.
Brief: The nation’s largest banks are expected to report big profits for the first quarter amid renewed confidence that pandemic-battered consumers and businesses can repay their debts and start borrowing again. The brighter outlook allows banks to move billions of dollars worth of “bad” loans back to the “good” pile, in what are known as loan loss releases. The pandemic forced banks such as JPMorgan Chase and Bank of America to put aside billions of dollars to cover potentially bad loans. The sum of money put into these pools is nothing small. Across the entire banking industry — large and small banks alike — a collective $120 billion is set aside to cover these loans, according to data from the Federal Deposit Insurance Corporation. And a significant chunk of it — around $40 billion — was set aside by the nation’s largest financial institutions. These funds, once released, are added to a bank’s bottom line when they report their quarterly profits. Most banks are expected to report significantly improved results compared to the first quarter of 2020.
Brief: European Union governments will seek to hammer out an agreement Wednesday on technical specifications for so-called coronavirus passports aimed at salvaging the region’s summer tourist season. The “Digital Green Certificates” will offer proof that holders have had a Covid-19 jab or recently returned a negative test, while people who contract the disease should be recognized as immune from day 11 for about six months, according to a draft of the rules due to be discussed at a meeting in Brussels. EU states have been at loggerheads over the passes and the privileges they should convey, and envoys must reach a common position before negotiations with EU lawmakers can begin. The talks come after Johnson & Johnson delayed the European rollout of its vaccine Tuesday pending a review of rare blood clots, dealing a blow to hopes that widespread travel could resume by June. “While the pace of European vaccination has doubled so far in April, compared with that in March, it will have to triple to save part of the summer tourist season and meet the official targets.” Bank of America Corp. strategist Athanasios Vamvakidis said in a note to clients on Tuesday.
Brief: As the pandemic slammed the Black community and amplified the conversation around racism in America, the economics profession grappled with an uncomfortable truth: that its historical roots and practices today are mired in systemic racial bias. Last summer, the shock of George Floyd’s death and other instances of police brutality ignited a national debate about inequality. Topics like the racial wealth gap became part of everyday discourse. But at the heart of the problem is not just the prosperity separating White Americans from minorities -- often the Black Americans whose ancestors helped build the economy through enslaved labor -- but also that the very discipline that is a key conduit for improvement remains rife with racial bias. “My view of how economics has to inherently address structural racism starts with economics recognizing the role of institutions and power and politics in shaping economic outcomes,” said Joelle Gamble, special assistant to President Joe Biden for economic policy. “We are trying to practice this differently and say ‘how are we actually driving towards economic growth in a way that is helping more and more people who have been permanently left out?’”
Brief: Raytheon Applied sciences Corp. took authorized motion towards Allianz International Traders, alleging mismanagement of an enhanced return technique, the corporate managed for one of many Waltham, Massachusetts-based firm pension funds. The lawsuit, filed April 9 by the corporate’s Pension Administration and Funding Committee within the U.S. District Court docket in New York, alleges that Allianz International Traders breached its fiduciary duties in managing its Construction Alpha methods, leading to losses in February and March 2020 totaling $ 280 million. for the Raytheon Grasp Pension Belief, in keeping with the court docket report. The losses had been incurred previous to the shut of the merger of Raytheon Co. and United Applied sciences Corp. in April 2020. The pension belief was invested within the Supervisor’s Structured Alpha US Fairness 500 technique. Numeric values in technique names correspond to the quantity of alpha in foundation factors above a corresponding index that the technique is predicted to realize.
Brief: Liquidity pumped into the credit markets during the pandemic could stave off a spike in defaults for several years, Ares Management Corp. Chief Executive Officer Michael Arougheti said. “There’s underlying stress that will find its way into the markets but I don’t think that’s anytime soon,” Arougheti said at a virtual Bloomberg News event this week. Default rates are “artificially low” and asset prices are buoyant because “there’s so much liquidity masking that default rate that we’ve all grown accustomed to seeing at this point in the cycle that we’re probably two to three years out before we start seeing a traditional default cycle play out.” Progress against Covid-19 and a strengthening economy are providing support for small businesses, helped by the Federal Reserve’s easy monetary policy and the Biden administration’s focus on growth, according to Arougheti, whose alternative-investment firm oversees about $197 billion in assets. While the forecast is improving, large swaths of the economy including retail, hospitality and travel have a long road to recovery. “The outlook for small business is probably better than I would have predicted as recently as six months ago, but we’re not quite out of the woods yet,” he said.