Brief : The exuberance of vaccine rollouts in rich countries is masking an ugly reality. Greenhouse gas emissions are already creeping higher than before the pandemic as economies come back to life. That shouldn’t be a total surprise. Even as governments around the world have spent trillions of dollars to aid their nation’s recoveries, only a tiny fraction has gone toward initiatives that would also cut pollution. Many politicians, including U.S. president Joe Biden, have adopted the phrase “build back better.” But they have yet to deliver on the promise. That’s the conclusion of a new report from the University of Oxford and the United Nations Environment Programme (UNEP). Researchers found that, out of the $14.6 trillion in spending announced by the 50 largest economies in 2020, only 2.5% has been for green activities. And that limited stimulus isn’t evenly spread across the globe. “The vast majority of the green spending has been driven by only five countries,” said Brian O’Callaghan, project manager of the economic recovery project at the University of Oxford and a lead author of the report. Much of the initial spending, about $11 trillion, was directed toward rescuing ailing firms, providing loans to small businesses and cash to individuals. Economists mostly agree that was necessary to avoid an even worse outcome. But much of the rest of the stimulus money could have been better spent.
Brief: With its striking facade, Palazzo delle Poste in the heart of Milan is one of the more elegant office spaces in Europe, hosting the likes of JPMorgan and Italy’s first ever Starbucks outlet. Having lain empty for part of 2020 as the COVID-19 pandemic sent office workers home, the early 20th-century building was sold this month to a group of private investors coordinated by Italy’s Mediobanca for 246.7 million euros ($293.3 million), 27 million euros above the original asking price. The 2.8% capitalisation rate - the return the property is expected to generate - was a record for office real estate in Milan. Following a year in which remote working and social distancing have become well entrenched, leaving city-centre offices, retail and hospitality venues deserted, the richness of the deal may seem counterintuitive. But market participants say it illustrates a confidence among investors that the top end of office real estate will withstand the coronavirus shock - even as questions hang over the viability of shabbier and less well-located spaces.
Brief: Companies are reviving plans to move offices in London, in a sign that some executives believe in a return to city centers after the coronavirus pandemic. AllianceBernstein Holding LP is close to signing a lease on new space in the U.K. capital after pausing work on a move last year, people with knowledge of the deal said. The New York-based asset manager is in discussions to rent over 50,000 square feet at 60 London Wall, the people said, asking not to be identified as the plans are private. The company originally entered negotiations on the space before the coronavirus hit, but suspended talks to reassess its office needs, the people said. A spokeswoman for AllianceBernstein declined to comment. Asset manager Mondrian Investment Partners Ltd. is also moving ahead with previously shelved plans to rent space in the same building, two other people familiar with the matter said. It is in discussions to rent about 25,000 square feet in the new development, they added. Neither lease has been signed and there’s still a chance that the deals could fall apart. A spokeswoman for Salle Investment Management, whose clients own the building, declined to comment. A spokesman for Mondrian declined to comment.
Brief: The world is likely to emerge from the coronavirus crisis in an uneven K-shaped recovery that could leave some parts of the economy behind, Legal & General’s CEO said on Wednesday as the British insurer reported a dip in full-year profit. A K-shaped scenario is one in which some sectors, such as manufacturing, bounce back sharply while others, such as tourism, continue to struggle. “The thing that worries us is the K-shaped recovery,” L&G Chief Executive Nigel Wilson told Reuters. “We do need to make sure that levelling up does not mean levelling up for the few.” The life insurer and asset manager, which invests directly in companies as well as investment markets, aims to counter such a scenario with investments including a regeneration project in the northern city of Sheffield, Wilson said.
Brief: A majority of investors now believe hedge funds are best placed to enhance the performance of a traditional 60/40 equities and bonds portfolio, with the prevailing rate environment driving a “sense of urgency” among allocators to tap into new sources of returns, a new Credit Suisse survey has found. The bank’s 2021 Hedge Fund Investor Survey, titled ‘A New Dawn’, quizzed more than 200 institutional investors, collectively representing USD800 of hedge fund investments globally. Survey participants – which included pensions, endowments, foundations, consultants, private banks, family offices, and funds of hedge funds – were probed on strategy preferences, allocation plans, and growth and return forecasts, among other things. The annual study found that more than two-thirds – 70 per cent – of investors plan to amend their portfolios this year due to the lower bond yield environment. Hedge funds are the most favoured asset class to bolster the current 60/40 equities/bond mix and plug the funding gap, followed by high-yield credit, equities, and private credit.
Brief: The “Upper East Side” cocktail at Sant Ambroeus is just the same as in Manhattan, the carpaccio at Cipriani as meaty red as on Wall Street. Here is the private-equity billionaire Stephen Schwarzman, on his way to La Goulue, the clubby French bistro popular with Park Avenue socialites. There is David Solomon, the Goldman Sachs Group Inc. chief, a team of financiers in tow. The names and the money say New York, but the aquamarine pools, the swaying palms and the sultry Atlantic breezes say something else: Florida, the would-be Wall Street South. For months now, A-listers and lesser-lights from the world of high finance have been traveling to the Sunshine State while riding out Covid-19. Hopeful locals see evidence that the area’s long-elusive dream of luring Big Finance for good might be coming true at last. Along Worth Avenue in Palm Beach, real estate agents count commissions from a pandemic-induced real estate boom. Private schools fantasize about attracting the Spence set. The reality is more nuanced -- much more. Only a small percentage of Manhattanites moved permanently to Florida last year. And as vaccinations stir fresh hope that the pandemic’s end is near, ebullient talk of South Florida drawing Wall Streeters en masse is already beginning to fizzle.