Brief : Private equity is making a comeback from its pandemic lows — and firms have big plans to capitalize on the booming exit environment. In the second quarter of 2020, private equity exit activity dropped to decade lows, according to the 2021 global private equity divestment study from Ernst & Young. Then, it sprung back, as private equity leaders saw opportunities to produce stronger valuations. From March 2020 to March 2021, PE exits jumped nearly 40 percent to $600 billion, higher than it had been since before 2010. Firms hope to ride this wave of increased capital access and maximize deal valuations along the way. In the next 18 to 24 months, about half of surveyed PE executives said they are planning exits to public markets through initial public offerings or special-purpose acquisition companies. “I think there are a few dynamics here,” said Pete Witte, EY’s lead analyst for global private equity. “You’ve still got your traditional trade buyers; you’ve got secondaries where PE firms have all this dry powder that they’re looking to put to work. Those buyers are still out there, and they’re still very active. The IPO markets have clearly rebounded, and now you’ve got SPAC buyers in the mix as well.”
Brief: Many fund managers are to recruit chief data officers after the Covid-19 pandemic caused firms to focus on fixing data problems, research suggests. According to a study by Alpha FMC, a consultancy, 19% of firms surveyed will make the chief data appointments and the research also found that just over half will adopt enterprise data models. Alpha’s report, ‘2021 Data Strategy & Operating Models’, found that the majority of firms are focused on implementing firm-wide data initiatives in recognition of a lack of enterprise-wide data management in many firms. As many as 68% of respondents said that data governance remained siloed by function within their companies. But the focus on firm-wide data projects is likely to come as the expense of experimenting with alternative data. The study found that alternative data usage had fallen since last year with social media and the web being the only sources still commonly used. The survey also revealed some familiar frustrations among asset managers about data capture from third-party sources. The rising cost of market data was one, and the lack of consistency among ESG data providers was cited by 80% of respondents.
Brief: When the Gherkin tower opened 17 years ago, its skyline-defining silhouette heralded a new era in the low-rise City of London. Now, a spate of new planned skyscrapers threaten to erase it from view and from relevance. As one of the Gherkin’s main residents weighs a move, even iconic buildings risk struggling to keep or replace tenants in London’s premier financial district. While the pandemic is emptying City offices at the fastest pace in more than a decade, it hasn’t slowed the coming wave of towers. That carries a warning for landlords: if there is a return to the office, it won’t be to drab buildings that only feature endless rows of desks. It all augurs another period of change for the City, a geographical area of just over one square mile with a 2,000-year track record of reinvention. For property firms that have seen the district as a cash cow for decades, the challenge is daunting: how to refill, revamp or sell hundreds of aging offices vulnerable to the twin blows of Brexit and the pandemic. In a financial hub that draws more international capital than any other, the fate of the older buildings could hit the fortunes of some of the world’s biggest real-estate investors, from China Investment Corp. to Norway’s sovereign wealth fund and Malaysia’s biggest pension fund.
Brief: Mizuho Financial Group Inc. is requiring that staff who choose to return to its U.S. offices are vaccinated, according to a spokesman for the Japanese lender. Employees can return to the office through August on a voluntary basis and those who do must have had shots, subject to some limited exceptions, spokesman Jim Gorman said in an emailed statement. Protocols after August are still under evaluation, according to Gorman. Wall Street is seeking to bring staff back as vaccines help the U.S. recover from a pandemic that forced most employees to work from home. JPMorgan Chase & Co., which mandated a return to office for its entire U.S. workforce by early July on a rotational schedule, said in April that it wouldn’t require returning staff be vaccinated, though it strongly encouraged employees to get the shots. Blackstone Group Inc. earlier this month asked U.S. investment professionals to return to the office full-time on June 7 provided they are fully vaccinated. Mizuho’s U.S. offices include locations in New York, Los Angeles, Houston, Dallas, Chicago, Boston and Atlanta, according to its website.
Brief: Aviva Investors has decided to shut down its UK Property fund after a near 15-month suspension period. The £367m fund was forced to close its doors last March along with all the major UK property funds after the Covid crisis made it impossible to determine the value of their underlying holdings. Following the re-opening of the M&G Property Portfolio earlier this month, Aviva Investors UK Property and Aegon Property Income were the last funds in the sector to remain shuttered. Aviva Investors explained since the fund’s suspension it had become “increasingly challenging to generate positive returns while also providing the necessary liquidity to re-open the fund” and had made the decision to close the fund and two feeder funds. In its second assessment of value report published in January the fund board recommended the three funds be placed under review to “ensure investors’ long-term interests could continue to be served”. But after taking the review and projected levels of redemptions upon re-opening into account, the asset manager concluded UK Property’s “ability to fully benefit from the economies of scale and diversification of investments that collective investment schemes normally bring would soon be limited”.
Brief: Most workers in Canada want to return to the office, but about three quarters prefer a “hybrid” model that allows some flexibility to work remotely, according to a survey of about 2,000 people done for KPMG. Half of respondents said they’re more productive and effective in a virtual work environment. That was a drop from 59 per cent in a similar survey a year ago, suggesting that 14 months of work-from-home arrangements are taking a toll on some employees. Canadian office workers in finance, government and other sectors haven’t returned to their places of work as quickly as their U.S. counterparts, in part because the country’s COVID-19 vaccination campaign got off to a slow start. Less than 4 per cent of the population is fully vaccinated, according to the Bloomberg Vaccine Tracker. But Canada’s vaccine supply is improving and Prime Minister Justin Trudeau has pledged that all Canadians who want a vaccine will be able to get two shots by September, providing companies with an impetus to solidify their back-to-the-office plans. Some firms including Manulife Financial Corp. have already committed to retaining some form of flexible work policy when the pandemic is over.