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Our briefing for Tuesday February 2, 2021:
Feb 2, 2021 3:45:16 PM
- In the United States, President Joe Biden’s administration announced during their daily coronavirus briefing on Tuesday that they will soon begin direct shipments of coronavirus vaccines to retail pharmacies, expanding access points for Americans to receive COVID-19 inoculations. White House COVID response coordinator Jeffrey Zients said next week that one million doses will be allocated to 6,500 pharmacies. These shipments are in addition to the more than 10 million doses that are already set to be shipped to states, tribes and territories around the US, said Zients.
- Canadian Prime Minister Justin Trudeau announced Tuesday the country’s plan to start securing a domestic supply of vaccines as the global market has proved difficult recently. Prime Minister Trudeau said the National Research Council-owned Royalmount facility in Montreal will start to churn out doses of the COVID-19 vaccine produced by Maryland-based Novavax later in the year. Novavax submitted its vaccine for Health Canada regulatory approval last week. “This is a major step forward to get vaccines made in Canada, for Canadians… We need as much domestic capacity for vaccine production as possible. We won’t rest until every Canadian who wants a vaccine has received one,” said Trudeau.
- In the United Kingdom, Captain Tom Moore has passed away at the age of 100 after he contracted COVID-19. Mr. Moore’s family released a statement on Tuesday announcing their father’s passing. His charitable endeavor struck a chord with the UK and the rest of the world last year during the initial lockdown when his walk around his garden raised $53 million USD for the National Health Service. Elsewhere in the country, a COVID-19 mutation similar to the South African variant has been discovered in the Kent strain of the virus, according to a leading UK scientist.
- The Lancet International medical journal gave Russia’s Sputnik V vaccine the green light after peer-reviewed late-stage trial results said it was 92% effective in fighting COVID-19. Russia was criticized by the western world by their decision last August to roll out the vaccine before the final phase III trials results had been conducted. Scientific experts said the results meant the world had another effective vaccine against the pandemic. “Russia was right all along,” said Kirill Dmitriev, head of the Russian Direct Investment Fund.
- In the United Arab Emirates (UAE), Dubai has authorized the UK’s AstraZeneca vaccine for its fight against COVID-19. The first shipment arrived via India on Tuesday and marks the third vaccine in use in Dubai joining the Pfizer/BioNTech and Sinopharm jabs. Government authorities say the AstraZeneca shot will only be available in this stage to Emiratis, those over the age of 60, frontline/vital workers and people with disabilities.
- Japanese Prime Minister Yoshihide Suga has extended a state of emergency covering Tokyo and other regions until March 7th. Prime Minister Suga added another month as the latest state of emergency was set to expire February 7th and while the daily coronavirus cases are coming down, they were still high enough to be a concern. The current emergency measures have been in effect since January 11th and include Tokyo and Osaka, which account for 60% of the Japanese economy’s total output.
Covid-19 – Due Diligence And Asset Management
Brookfield Property Partners Loses $2 Billion in Pandemic Year
Brief : Brookfield Property Partners LP posted a $2 billion loss as the fallout from the Covid-19 pandemic caused it to reassess the value of its real estate. The loss last year compares with $3.2 billion in net income for 2019, a decline the company attributed primarily to “unrealized reductions of values of certain assets within the portfolio,” according to a statement on Tuesday. Funds from operations, a measure of cash flow for real estate companies, were down about 18% to $540 million for the company’s portfolio of office buildings, while FFO from retail properties fell 29% last year to $550 million, according to the statement. The pandemic kept many offices and malls around the world empty for large portions of last year, while also accelerating changes to how people work and shop. The success of remote working during the pandemic has many companies examining how much office space they need, while stay-at-home orders have pushed broader adoption of e-commerce at the expense of brick-and-mortar retail. Amid this pressure, Brookfield Property Partners’ corporate parent, Brookfield Asset Management Inc., has proposed taking the company private by acquiring the shares it doesn’t already own for $5.9 billion, or $16.50 a share. The company’s shares have gained 18% this year, closing Monday at $17.08.
Steve Cohen’s Point72 Raises $1.5 Billion After Melvin Capital Infusion
Brief: Steve Cohen’s Point72 Asset Management has opened to new cash and raised more than $1.5 billion in commitments in a matter of days, according to people familiar with the matter. The move comes after the hedge fund provided $750 million in emergency cash to Gabe Plotkin’s Melvin Capital, which was struggling with GameStop Corp. and other short bets gone sour. Citadel’s hedge funds, along with founder Ken Griffin and his firm’s partners, put $2 billion into Melvin. By the end of last month, Melvin sunk 53% after retail investors banded together online to push up the prices of GameStop and other popular targets of short-sellers. Point72 is raising the fresh cash because it sees investment opportunities in the market, one of the people said, asking not to be identified because the information isn’t public. The firm had about $18.9 billion in assets as of October. The hedge fund fell about 9% in January, the people said. Before its recent cash injection, Point72 had about $1 billion invested in Melvin. A spokeswoman for the Stamford, Connecticut-based firm declined to comment.
BTIG to Maintain Remote Working Until September 2021
Brief: BTIG employees will not be required to return to any of the firm’s US offices prior to Labor Day of 2021.In March 2020, BTIG was one of the first financial services firms to send all of its employees home to work remotely in response to the Covid-19 pandemic. BTIG will continue to evaluate the data on the global health crisis, and make all future reopening and other logistical decisions based upon the latest information available from the medical community and local government officials. BTIG believes that remote work will continue to offer the best protection to its employees, their families, clients and its business operations. The firm does not anticipate a return to its offices until vaccines are widely available, and when it is confirmed that the newly discovered Covid-19 mutations do not pose any additional risks to employees. Once the firm’s offices fully reopen, BTIG expects approximately 30-50 per cent of its employees will choose to incorporate remote work into their regular schedules. “As a firm, we are very fortunate to find ourselves in a position where we can choose when to safely reopen our offices for staff. The positive feedback we’ve received from our clients, as well as the high levels of employee engagement thus far, enabled us to extend the period of remote work longer than we anticipated in the summer,” says Jennifer Mermel, Chief Operating Officer of BTIG.
GameStop Saga Expected to Revive Scrutiny of Hedge Fund Industry
Brief: With hedge funds at the center of market drama for the second time in less than 12 months, the GameStop saga is likely to expedite a regulatory review of the ever-larger role non-bank firms play in the financial markets, regulatory experts said. Scrutiny of the non-bank financial sector was already expected to be high on newly appointed Treasury Secretary Janet Yellen’s agenda after hedge fund de-leveraging contributed towards turmoil in the U.S. treasury market in March 2020. But the sector is likely to garner much closer attention after a retail buying frenzy in GameStop and other stocks burnt several hedge funds that had bet against the companies, and led retail brokerages to restrict trading in the affected stocks. The incident appeared to spark market-wide volatility, as hedge funds scrambled to meet their obligations and close out bad bets, trading the highest volume of shares since 2009, according to an analysis from Goldman Sachs Group Inc. It has shone a spotlight on the huge footprint of non-bank equity trading firms, particularly that of Citadel Securities, which accounts for over 20% of all U.S. equities volumes and roughly 39% of all U.S.-listed retail volume, according to its website. Its heft has raised questions over the company’s market power.
Digital Health Funding Hit USD $21.6 bn in 2020
Brief: Investments into the online healthcare sector soared in 2020, supercharged by Covid-19. According to the research data analysed and published by Finaria, the total digital health funding in 2020 amounted to USD21.6 billion. VC funding led with a total of USD14.8 billion across 637 deals, a 66 per cent year-over-year (YoY) uptick. Based on a Silicon Valley Bank (SVB) report, investments in the healthcare sector as a whole amounted to USD51 billion during the year. Biopharma led in deal value, with investments worth USD24.5 billion across 570 deals. The total VC funding in the digital health sector set a new record. It also drove its total investment value since 2010 to USD59 billion across more than 5,000 deals. Around 77 per cent of all funding in 2020 went to US companies, USD11.5 billion across 429 deals. Comparatively, China received USD1.1 billion in eight deals. Consumer-centric companies received USD9.6 billion (+81 per cent YoY) while practice-centric ones got USD5.3 billion (+47 per cent YoY). Telemedicine was the highest ranked category, receiving USD4.3 billion, up by 139 per cent YoY. It was almost equivalent to the next three categories combined. Data Analytics raised USD1.8 billion, mHealth Apps got USD1.4 billion and Clinical Decision Support gained USD1.2 billion.
Ares, KKR Veterans Leave for Upstart Healthcare Investment Firm
Brief: Executives from Ares Management and KKR have joined Patient Square Capital, a new healthcare investment firm, as founding partners. Patient Square announced on Monday that Alex Albert, who was most recently the co-head of healthcare private equity at Ares, and Neel Varshney, previously a managing director at KKR’s Americas healthcare private equity team, have joined the firm. Patient Square was launched in August by Jim Momtazee, who spent more than 20 years at KKR. Soon after its launch, the firm sponsored a special-purpose acquisition vehicle called Montes Archimedes Acquisition Corp. Albert spent six years at Ares before leaving for Patient Square, according to the announcement. Prior to joining Ares, he worked as a vice president at FFL Partners. He previously was an associate at KKR, where he was on the healthcare team with Momtazee. Before joining KKR, Albert was an analyst in the investment banking division at Goldman Sachs. Meanwhile, Varshney spent roughly four years at KKR, where he also worked with Momtazee on healthcare deals. Before joining the firm, he worked as a vice president at Linden Capital Partners, focusing on healthcare. He also worked as an engagement manager in healthcare, private equity and corporate finance at Mckinsey and Co., and worked in business development at Medtronic. Varshney is a doctor who trained in internal medicine at Massachusetts General Hospital, the announcement said.
