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Our briefing for Tuesday, February 15, 2022:
Feb 15, 2022 3:42:21 PM
- The rate at which people in the United States are getting Covid-19 booster shots is at an all-time low according to data from the Centers for Disease Control and Prevention. As of Monday, only 28 per cent of the American population has received a third dose of an approved vaccine. People who have received the Johnson and Johnson vaccine are appearing less likely to get a third dose compared to other vaccinated groups. Among those eligible for a booster, only one-third of those who initially took the Johnson & Johnson vaccine have received a third injection, compared to 52 per cent who received the Moderna vaccine, and 47 per cent who received Pfizer. Only 4 in 10 people who are vaccinated but not boosted said that they would like to get a booster shot as soon as they become available and another 4 in 10 said they would definitely not get a booster or will do so only if it is mandated. The data suggests that booster uptake is divided among party lines, with 58 per cent of Democrats suggesting they would get a booster versus only 18 per cent of Republicans.
- Canadian Health Minister, Jean-Yves Duclos, is expected to announce sweeping changes to border mandates aimed at stopping the spread of Covid-19 on Tuesday. The federal government currently advises against all non-essential foreign travel due to the rise in the Omicron variant. Travelers entering the country must be fully vaccinated and are subject to testing before and after they cross the border, or travel throughout the country via plane. Travelers are also required to quarantine as they await a negative test result. The changes expected may come as a surprise after the recent backlash from the federal government surrounding the weeks long protests in Ottawa. Although the worst of the Omicron variant seems to be over, there are still approximately 130 deaths associated with the virus daily and hospitals in the country continue to be stretched thin. Some Canadian provinces are nonetheless reconsidering stringent Covid-19 measures, including the province of Ontario, which has decided to remove the vaccine passport requirements for indoor activities as of March 1.
- Two judges in the United Kingdom have decided that former health secretary, Matt Hancock, did not comply with public sector regulations when appointing fellow conservatives, Baroness Dido Harding and Mike Coupe, to posts in 2020. Independent think tank, Runnymede Trust joined by an organization called the Good Law Project, also contested in a High Court proceeding on Tuesday that the government did not adopt an “open” process when making appointments “critical to the pandemic response” but the claim was dismissed. The judges’ decision states that Hancock had not complied with “the public sector equality duty” when he appointed Baroness Harding as the interim executive chair of the National Institute for Health Protection (NIHP) and Coupe as director of testing for NHS Test and Trace (NHSTT). Jason Coppel QC, who led the two organizations’ legal teams, said that the government had a “policy or practice” of making appointments without a “fair or open competitive processes,” and that those “less likely to be known or connected to decision-makers” were put at a disadvantage.
- The World Health Organization (WHO) has warned that a rise in Covid-19 infections caused by the Omicron variant is soon to hit Eastern Europe. The WHO’s European office claimed that a “tidal wave” of new infections is approaching the region and pleaded with officials to ramp up vaccination efforts. Hans Kluge, Director for WHO Europe, said that new daily Covid-19 cases had doubled in six countries within the region over the past two weeks. The 53-country region has seen over 165 million cases of the virus and just over 25,000 new deaths in the last week. The 6 countries most affected are Armenia, Azerbaijan, Belarus, Georgia, the Russian Federation, and Ukraine. Tensions in the region are already running high with the possible invasion of Russian forces into Ukraine and the new wave of Covid-19 cases has further added to the instability. Less than 40 per cent of people over age 60 have been fully vaccinated in the region, with Russia being an outlier, having a slightly higher vaccine uptake. “I call on governments, health authorities and relevant partners to closely examine the local reasons influencing lower vaccine demand and acceptance, and devise tailored interventions to increase vaccination rates urgently, based on the context-specific evidence,” Kluge said.
- Authorities in China have officially authorized the use of the Pfizer anti-viral pill Paxlovid in what could be a signal of a departure from the strict Covid Zero policy it has held thus far in the pandemic. Paxlovid is now under conditional approval in the country and is the first foreign pharmaceutical that has been authorized for use. Until now, only domestically manufactured vaccines and other Covid-19 treatments were allowed, most notable was the exclusion of the Pfizer-BioNTech vaccine which has been widely distributed across most of the world and been proven extremely effective. Zeng Guang, a former chief scientist at the Chinese Center for Disease Control and Prevention, said that the adoption of Paxlovid may lay the groundwork for an eventual reopening of the country and a change to the current containment methods. “China won’t self-isolate from the rest of world [forever] and has various measures at its disposal to change tack,” Zeng said. “Strategizing precedes action.” Several experts have suggested that due to China’s own vaccines having a lesser efficacy than those from other countries, it is becoming increasingly difficult to control the spread of infections caused by the Delta and Omicron variants.
Covid-19 – Due Diligence And Asset Management
Investors are moving away from biotech stocks as COVID wanes
Brief: The first year of the COVID-19 pandemic fueled a frenzy for biotechnology stocks. Now, with vaccines in millions of arms and the Omicron variant on the wane, there are signs investors are ready to move on. After cresting at nearly $5 billion a month in early 2020, inflows into health care funds have slowed to a more modest $800 million a month, according to data compiled by Bloomberg Intelligence. While that suggests that a healthy appetite for the shares of vaccine makers and other drug companies remains, the excitement—and fear—stoked by the early days of the pandemic has subsided. What's more, those who embraced the shares of riskier drug makers have taken their lumps of late. The Nasdaq Biotechnology Index, the most widely watched gauge of the sector's performance, has lost 26% since hitting a 52-week high on Aug. 9 including a decline of 1% as of Monday at 9:55 a.m. The SPDR S&P Biotech, or XBI, an exchange-traded fund that specialists use to track the industry’s performance, has plummeted about 42% over the past year.
Top Hedge Fund Managers Made $15.8 Billion in 2021 Riding Volatile Markets
Brief: Karthik Sarma outearned Steve Cohen last year. The little-known hedge fund manager made an estimated $2 billion in 2021, mostly thanks to an 11-year-old wager on Avis Budget Group Inc., a bet that paid off handsomely as the stock soared 456%. Sarma, it’s safe to say, isn’t your stereotypical, fleece-vested Manhattan hedge fund manager. When the pandemic struck, he didn’t flee to the Hamptons, Palm Beach or Aspen like many other Wall Street elites. Instead, he moved in with his sister and her family, living in their modest home in a middle-class New Jersey suburb, where the houses sit side by side -- and there’s only room for two cars in the driveway. Sarma, 47, runs his firm differently, too. At SRS Investment Management, he avoids the hefty leverage many other funds embrace, and runs a much more robust short book. Moreover, he isn’t afraid to go big on a single investment — and hang on for as long as it takes.
Hedge Funds Are Starting to Win Over Allocators Once Again
Brief: There’s nothing like a good dose of volatility to get allocators once again thinking about hedge funds. Investors had hedge funds on their minds well before the market rout this year. About half of U.S. allocators plan to increase their investments in hedge funds in 2022, according to the latest report by the Alternative Investment Management Association. In December, the group surveyed 224 allocators across the country, with 49 percent working at foundations and endowments, 15 percent at public pensions, and 11 percent at family offices. While private equity remains the top choice of investors, hedge funds have begun to attract some attention again, according to the AIMA report. “Three years ago, many institutions were indeed adjusting their alternatives portfolios away from hedge funds. And often doing so vocally. They were making space for larger allocations to the likes of private credit and real assets,” the report said. “While the trend toward illiquid opportunities remains, we anticipate some positive changes with a renewed focus on hedge funds this year.”
Private Equity Investment Rebounds “Spectacularly” - KPMG
Brief: Mid-market private equity investment rebounded "spectacularly" in the Midlands during 2021, according to the latest figures from KPMG. The findings, which track deal flow and sentiment, show 2021 generated an upturn in both deal volume and value when compared to 2020. The region experienced an increase of 54 per cent in volumes with a total of 86 deals completed, up from 56 in 2020. Additionally, the Midlands leapfrogged the North West to become the second largest region by deal value at £5.3bn, up from £3.5bn. The number of private equity exits completed in the Midlands also increased from 17 to 25, further surpassing 2019 levels of activity and ranking the region second only to London. Alongside this, the value of Midlands-based exit deals also accelerated to £2.5bn, a 133 per cent increase from £1.1bn. Khush Purewal, partner and head of deals for KPMG in the Midlands, said: "Mid-market private equity deal activity rebounded spectacularly in the Midlands during 2021, as confidence to complete transactions returned and pent-up demand was released.
Pandemic and ‘revenge travel’ helps power Heygo to a $20M Series A funding round
Brief: During the worst throes of the COVID-19 pandemic, very few people could travel. Meanwhile, both 2021 and 2022 were predicted to be the years of “revenge travel” where people would do a great deal more. Or at least plan more. In the background was a site that allowed people to travel virtually, either out of sheer interest, or to plan their own travel. Heygo’s live tours are live-streamed by, it says, tour guides in more than 90 countries and counting. Think “Twitch, but for travel”. It’s clear that plenty of people cottoned-on to the site and its usefulness during the pandemic, because Heygo has now raised a $20 million Series A funding round, led by Northzone. Also Participating was Lightspeed Venture Partners, Point 9 Capital, TQ Ventures and Ascension. Heygo is tapping into a different kind of creator economy. Their guides can share the places and subjects they love on their own live channels with a global audience while earning money via tips. It’s managed to hit a 300% growth in bookings this January over last year, and recently hit the 2 million bookings mark, claims the company.
