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Our briefing for Tuesday May 4, 2021:
May 4, 2021 3:51:13 PM
- The United States’ Food and Drug Administration (FDA) is preparing to authorize the use of the Pfizer COVID-19 vaccine for adolescents between the ages of 12 to 15. The news was first reported by the New York Times on Monday, citing officials familiar with the FDA’s plans. Pfizer noted in March that the vaccine proved to be safe, effective, and produced robust antibody responses to those aged 12-15 in a clinical trial. The Pfizer vaccine has already been cleared in America for people aged 16 and above. Staying on the vaccine front, the White House administration has stated they need to add more flexibility to their current system and informed states on Tuesday they can no longer carry over unordered doses to their weekly COVID-19 vaccine allocations, and that unused doses will instead be shifted to states with greater demand.
- In Canada, Prime Minister Justin Trudeau and his chief public health officer were kept busy during their Tuesday news briefing trying to defend/explain the National Advisory Committee on Immunization (NACI) latest recommendations. On Monday afternoon, NACI said vaccines such as the AstraZeneca and Johnson & Johnson were not the “preferred” products due to their efficacy and safety concerns compared to Moderna and Pfizer vaccines. NACI also said people might want to wait for the Moderna and Pfizer vaccines, when faced with a choice. Prime Minister Trudeau tried to get the vaccine train back on the tracks by noting “make sure you get your shot, when it’s your turn. We are continuing to recommend to everyone get vaccinated as quickly as possible so we can get through this.” The prime minister also noted he had no regrets taking the AstraZeneca COVID-19 vaccine a number of weeks ago to protect his family and those that work around him.
- In the United Kingdom, a leading epidemiologist has stated recent data and rates of infection are “very encouraging” and though a third wave of infections is possible in late summer/early autumn, it is unlikely to overwhelm the healthcare system. Speaking on BBC radio, Professor Neil Ferguson, of Imperial College London, and who advised the government during the beginning of the pandemic, said the concerns he and his team had about a late summer or early autumn COVID-19 wave were “diminishing”. Dr. Ferguson also noted it was essential the UK rolls out booster doses once they have finished vaccinating the entire adult population (expected to be finished late in the summer) to protect against variants of concern.
- In Germany, the government agreed on Tuesday to ease restrictions on people who are either fully vaccinated or have recovered from COVID-19. Under the new rules, those who are fully vaccinated or have recovered from COVID-19 will no longer have to have a negative test to go shopping, get a haircut or visit tourist attractions. They will also be exempt from a night-time curfew and be able to meet in private without restrictions. The decree must now be approved in the lower and upper houses of parliament and could be in effect as early as this weekend. The proposed law is risky with people believing giving special freedoms to some will lead to social tensions when not everyone has received the opportunity to be vaccinated. As of Tuesday, only 8% of Germany’s population has received two doses of the vaccine with around 28% receiving their first.
- Hong Kong authorities have paused their plans to make COVID-19 vaccines mandatory for foreign domestic workers after human rights groups criticized the move as being discriminatory. After a domestic worker from the Philippines tested positive for a COVID-19 variant last week, Hong Kong authorities made the move that all 370,000+ foreign domestic workers in the city would have to be tested before May 9th and that all workers would need to get vaccinated before renewing their employee contracts. Hong Kong leader Carrie Lam said the following on Tuesday: “I have asked the secretary for labour to review the whole policy, and to consult advisers and consulates for the countries where domestic workers primarily come from as to whether compulsory vaccinations can be done.” The government still plans to move forward with the mandatory testing by May 9th.
- The Association of South East Asian Nations (ASEAN), along with China, Japan and South Korea vowed to strengthen regional and financial cooperation while providing continued support for countries hit hard by the COVID-19 pandemic. In a joint statement after a virtual meeting on Monday of finance ministers and central bank governors, the ministers pledged to achieve inclusive recovery, preserve long-term fiscal sustainability and maintain financial stability. “We expect a rebound in 2021 as the recovery gathers momentum and vaccine rollouts allow a gradual opening up of our economies,” a statement read. ASEAN nations include Thailand, Malaysia, Singapore and the Philippines, among others.
Covid-19 – Due Diligence And Asset Management
Citadel Sees Most U.S. Staff Returning to the Office by June 1
Brief : Ken Griffin’s Citadel expects to have most of its U.S. employees back in its offices in New York, Chicago and Greenwich, Connecticut, by June 1, according to a person familiar with the matter. The $38 billion hedge fund, Citadel, and market-maker Citadel Securities anticipate that regular in-office operations in those locales will resume by that date, said the person, who asked not to be identified. Operations in Texas, meanwhile, will get back to normal in mid-May. Citadel’s expectation for workers’ return is earlier than some of its hedge fund peers, with many employees expressing an eagerness to get back to their desks. Bridgewater Associates and Two Sigma Investments plan to have employees back in offices in September while still allowing them to work remotely a few days a week. Major financial firms are stepping up efforts to bring workers back as Covid-19 vaccines become more broadly available and in-person schooling resumes. Goldman Sachs Group Inc. plans to tell staff they should be prepared to work from offices by mid-June, and JPMorgan Chase & Co. told employees to expect a return in early July.
Vanguard Moves to Hybrid Work Setup for Most of its Employees
Brief: Vanguard Group is adopting a hybrid work model for the majority of its staff, making it the latest company to rethink the primacy of offices in the aftermath of the pandemic. The world’s second-biggest asset manager plans to allow many employees to work remotely on Mondays and Fridays. With a staff of 17,300, Vanguard’s move represents a middle ground that other financial firms are seeking. “The pandemic has affected so many aspects of our lives, and how we work is one of them,” the company said in an emailed statement. “Vanguard will pursue a working model that will blend increased flexibility with the known benefits of in-person collaboration.” As Covid-19 vaccines become more readily available and cities reopen, U.S. companies are grappling with whether to bring employees back to offices full-time or embrace remote arrangements for the long haul. Vanguard, based in Valley Forge, Pennsylvania, joins money managers Two Sigma Investments and Bridgewater Associates in planning to allow employees to continue to work remotely at least part-time.
Hedge Funds Can Combat Inflation Surge as Economies Begin to Unlock says K2 Advisors
Brief: As global economies prepare to unlock, potentially driving up inflation and interest rates, hedge funds’ low sensitivity to rate moves can help bolster investors’ portfolio performance, says K2 Advisors, the hedge fund investing unit of Franklin Templeton. With economic growth tipped to trend higher, fuelling inflation, hedge fund strategies can deliver a diversifier to certain fixed income assets that may face a squeeze during inflationary or rising rate environments, said Brooks Ritchey, K2’s co-head of investment research and management. Hedge funds and other alternative investment strategies have traditionally been seen to thrive against equities and fixed income in low interest rate environments. But falling Covid cases and an accelerating vaccine roll-out across developed markets may now send consumer and industrial demand soaring, pushing global inflation trends and interest rates higher – carrying a knock-on effect for bonds and equities. As a result, hedge funds now look “particularly interesting” as a fixed income diversifier, Ritchey explained. “These strategies help to diversify one’s portfolio in a rising rate environment given the resultant increase in performance dispersion across regions, sectors and asset classes,” Ritchey wrote in a note on Tuesday.
Biggest Economies Bet Vaccine Passports Can Save Tourism
Brief: The world’s most powerful economies agreed to back plans for so-called vaccine passports in a bid to pull the travel and tourism industry out of a pandemic-fueled slump. Tourism ministers from the Group of 20 threw their weight behind the new certificates, stressing that a resumption of normal activity for the sector is crucial to global economic recovery, according to Italian Tourism Minister Massimo Garavaglia. A virtual gathering on Tuesday, the first such meeting under the Italian presidency of the forum, backed efforts for safe mobility, coordinating with initiatives including the European Union’s Digital Green Certificate. That document will show the bearer has been fully vaccinated, has immunity via recovery, or recently tested negative. Garavaglia told a press conference in Rome that he had requested, and obtained from European Union Commissioner Thierry Breton, a commitment to accelerate introduction of the EU green certificate as much as possible. “Tourism will be the key to recovery once the pandemic is defeated,” Garavaglia said. Travel and tourism has been one of the industries hit hardest by restrictions on activity to contain the coronavirus.
G7 Foreign Ministers Meet Face-to-Face After Pandemic Pause
Brief: Foreign ministers from the Group of Seven wealthy industrialized nations gathered Tuesday in London for their first face-to-face meeting in more than two years, to grapple with how to respond to the military coup in Myanmar and whether to challenge or coax a surging China. Host nation Britain was keen to show that the rich countries' club still has clout in a fast-changing world, and has warned that the increasingly aggressive stances of Russia, China and Iran pose a challenge to democratic societies and the international rule of law. U.K. Foreign Secretary Dominic Raab said the meeting “demonstrates diplomacy is back.” The two days of talks involving top diplomats from the U.K., the United States, Canada, France, Germany, Italy and Japan also were to discuss the humanitarian crisis in Syria, the Tigray crisis in Ethiopia and the precarious situation in Afghanistan, where U.S. troops and their NATO allies are winding down a two-decade deployment. The U.K. Foreign Office said the group would also discuss “Russia’s ongoing malign activity,” including Moscow's earlier troop buildup on the border with Ukraine and the imprisonment of opposition politician Alexei Navalny.
Value of Private Equity Deals by HNWs Jumps Six-Fold, From GBP132m to GBP958m During the Pandemic
Brief: The value of UK buyout deals by high-net worth investors (HNWs) shot up by 626 per cent in 2020, rising from GBP132 million in 2019 to GBP958 million, says Boodle Hatfield, the leading private wealth law firm. The increasing number of buyout deals led or co-funded by HNWs goes against the overall decline in deal value across the wider private equity market over the same period. Whilst many trade buyers and to a lesser extent PE firms have stepped back from making acquisitions during the worst of the Covid crisis, HNW investors have used the crisis to buy distressed businesses at a substantial discount. Private equity deals by HNWs increased from 26 deals in 2019 to 27 deals in 2020. In contrast, last year there was a 26 per cent decline in combined deal value for UK private equity deals, according to research from a KPMG report. Overall UK private equity deal volume hit its lowest level since the 2008 economic crisis, falling from 1,200 deals in 2019 to 899 in 2020. Boodle Hatfield explains that HNWs have been increasingly interested in leading PE transactions themselves as a way to get access to the asset class without having to pay the management and performance fees that investing through a private equity fund would involve.
