.png?width=200&height=78&name=CH%20Diligence%20(thicker%20line).png "CH Diligence (thicker line).png")
Brief: A key signal of recession flashed in the bond market this week, but SkyBridge Capital’s Anthony Scaramucci told CNBC that he would be cautious on predicting there would be a downturn. On Monday, the U.S. 5-year and 30-year Treasury yields inverted for the first time since 2006. On Tuesday, the yield spread between the 2-year and the 10-year rate came close to inverting but stayed positive. Historically, the yield curve has inverted prior to recessions, indicating investors’ concern about the health of the economy. “So historically it would signal that we’re heading into a recession 12 to 18 months from now, but I will be cautious on that data,” Scaramucci said on CNBC’s “Capital Connection” on Wednesday. When the bond market is healthy, yields are higher for bonds with a longer time to maturity, and lower for short-term yields. Investors expect a bigger reward for lending their money for a longer time. But when the opposite occurs — meaning an inverted yield curve — short-term bonds pay a higher yield than long-term ones. That represents a distortion in the market and suggests bond investors are worried about the economy’s long-term prospects.
Brief: Mithril Capital Management, co-founded by Peter Thiel, intends to nominate candidates to the board of COVID-19 drug developer Adagio Therapeutics, according to a regulatory filing from the venture capital firm. Mithril Capital Management’s unit, Mithril II LP, owns a 10.1% stake in Adagio as of March 28 and has reached an agreement with some other shareholders to vote all of their respective shares in favor of the election of the nominees at the 2022 annual meeting. The battle for the board comes as the company announced on Wednesday plans to apply for U.S. emergency use authorization for its COVID-19 antibody, adintrevimab. Adagio’s shares jumped 54% to $5.94 before the bell. The company did not respond to a request for comment on Mithril’s filing.
Brief: The U.K. economy grew stronger than expected at the end of last year, displaying resilience as the omicron variant of the coronavirus spread. Gross domestic product expanded 1.3% in the fourth quarter, the Office for National Statistics said Thursday. That’s more than the 1% figure previously reported. Service industries expanded more quickly than the ONS had previously estimated, and exports also enjoyed a bigger jump. The figures also showed the collapse in the economy at the height of the pandemic was not quite as bad as previously thought. In 2020, GDP shrank 9.3% rather than the 9.4% previously estimated. The rebound in 2021 was correspondingly shallower, with growth of 7.4%, down from the earlier estimate of 7.5%. That’s still the largest increase in GDP in a single year since World War II.
Brief: China’s Covid lockdowns are putting the economy under strain and threatening to disrupt global supply chains, prompting Beijing to call for more contingency plans to deal with the risks. Purchasing managers’ indexes for March showed lockdowns in the technology and trade center Shenzhen and automotive city Changchun cut factory activity in the month. Services have also been hit hard as restaurants and retail shops close because of renewed restrictions and tightened social distancing measures. Supply chain scares are intensifying as Shanghai -- home to the world’s largest container port -- battles mounting infections. Covid controls in the city are impacting operations and reducing efficiency at the port, while shipping giant AP Moller-Maersk has already shut some facilities in the city. “Beijing’s determination in maintaining its Zero Covid strategy for fighting the infectious omicron variant will very likely deal a severe blow to China’s economy and will also have a global impact,” economists at Nomura Holdings Inc. led by Lu Ting wrote in a note.
Brief: Air Canada plans to more than double its capacity this year compared with 2021, but says that is still below its pre-pandemic level. In its outlook for this year the airline says its capacity, measured by available seat miles, for 2022 will be up about 150 per cent compared with last year. However, Air Canada says its capacity will still only be about 75 per cent of where it was in 2019 as it continues to account for passenger demand, public health guidelines and travel restrictions. The airline says it expects its adjusted cost per available seat mile for 2022 to increase about 13 to 15 per cent when compared with 2019. Looking further into the future, Air Canada says it expects its capacity for 2024 to be about 95 per cent of its 2019 level.
Brief: China’s banks and investment firms are calling on essential staff to live at the office this week to avoid any trading disruption during Shanghai’s massive Covid lockdown. A person familiar with the matter told CNN Business that traders and fund managers were being offered between 500 and 2,000 yuan ($78 to $314) per night to camp out at work, with some companies placing folding beds under workers’ desks. Other firms have also provided staff with sleeping bags, food and toiletries to get by. Much of Pudong “is doing it,” the source added, referring to Shanghai’s financial district, which is home to more than 1,000 financial institutions, and China’s leading stock exchange — which is continuing to operate as normal.Zhong Ou Asset Management, a Chinese firm that says it has $98 billion in assets under management, said that several of its investment directors and fund managers had begun staying overnight earlier this month to ensure operations continued as the pandemic “began to escalate” in Shanghai.
Brief: A key signal of recession flashed in the bond market this week, but SkyBridge Capital’s Anthony Scaramucci told CNBC that he would be cautious on predicting there would be a downturn. On Monday, the U.S. 5-year and 30-year Treasury yields inverted for the first time since 2006. On Tuesday, the yield spread between the 2-year and the 10-year rate came close to inverting but stayed positive. Historically, the yield curve has inverted prior to recessions, indicating investors’ concern about the health of the economy. “So historically it would signal that we’re heading into a recession 12 to 18 months from now, but I will be cautious on that data,” Scaramucci said on CNBC’s “Capital Connection” on Wednesday. When the bond market is healthy, yields are higher for bonds with a longer time to maturity, and lower for short-term yields.
Brief: Goldman Sachs Group Inc. plans a full return to its offices in Hong Kong starting in the middle of next month as the Asian financial hub begins to ease Covid measures amid declining virus cases. The New York-based bank on Wednesday started with a split-team arrangement and outlined a plan for a full return starting on April 19, according to a memo sent to staff that was seen by Bloomberg News. A spokesman for Goldman Sachs declined to comment. The lender will “welcome” all staff to return “in anticipated alignment with the government’s relaxation of social distancing measures and resumption of in-person school classes,” according to the memo. It added that if circumstances change, it will amend its approach accordingly. Hong Kong last week moved to scrap some travel curbs and laid out a road map for easing internal pandemic restrictions, acknowledging the damage its absolutist approach to Covid-19 has had on the city’s status as a financial hub. The moves were spurred by frustration in the banking community and wider population, which has endured more than two years of strict border controls.
Brief: Canadian insurer Manulife Financial Corp said on Tuesday that employees can return to its offices across Canada from April 25 regardless of vaccination status, amid a fall in COVID-19 infections. The country's biggest life insurer has asked staffers to return under a hybrid model with certain days of the week designated for remote work, according to an internal memo seen by Reuters. Guidelines on mask mandates and physical distancing will be set in line with local regulations, the memo said. Several financial firms across Canada and the United States that had postponed their back-to-office plans late last year are now looking to reopen offices and bring back employees with fresh coronavirus guidelines.Earlier this month, Manulife had opened select office locations as a part of its return-to-office plans in Canada after COVID-19 cases in the country declined.
Brief: BlackRock Inc. President Rob Kapito warned that inflation is having dramatic effects on the economy, with an entire generation now learning what it means to suffer from shortages. “For the first time, this generation is going to go into a store and not be able to get what they want,” Kapito said at conference held in Austin by the Texas Independent Producers and Royalty Owners Association. “And we have a very entitled generation that has never had to sacrifice.” The economy is reckoning with what he dubbed “scarcity inflation,” or the fallout from a shortage of workers, agricultural supplies and housing, and of oil in some regions. “I would put on your seat belts because this is something that we haven’t seen,” Kapito said.
Brief: Global investors’ confidence in China is at the lowest since the start of 2021. The bearish mood can be clearly seen in the data about redemptions from Chinese stock and bond funds. In the third week of March, global investors pulled out more than $3 billion from Chinese equities, the highest since the first week of 2021, according to the latest report from Emerging Portfolio Fund Research, which is owned by Informa and tracks fund flows and allocations. China bond funds saw a weekly outflow of more than $1 billion for the first time, EPFR data showed. The sizable capital outflow is in sharp contrast to the bullish consensus assessment of Chinese securities not long ago. From September to the first week of March, over $50 billion was pumped into EPFR-tracked China equity funds and $11 billion into Greater China fund groups, the report said.
Brief: 2022 will be the year the level of in-person and online meetings rebalance to create a new fundraising ‘normal’ for years to come. The private market fundraising process underwent a historic transformation through the various stages of Covid-19, but many of the adjustments made during 2020 and 2021 are now being reviewed by GPs and LPs as travel restrictions and lockdowns ease in the UK, Europe and the US. In 2020 fund managers relied mainly on existing relationships to raise and close funds virtually. Last year saw a shift back to engaging with new clients. “In 2021, the situation largely didn’t change, but we had to meet new managers and find new ideas,” says Kevin O’Donnell, global head of investment relations, Adams Street Partners. “And by doing so online, we raised double what we had in 2020, and it was a record year for the firm.” Over the past two years, LPs have been under pressure to allocate to existing GPs that have performed very well. There has been skepticism around investing in new managers virtually.
Brief: The Securities and Exchange Commission on Monday proposed two rules that would force more trading firms to register as dealers and open their books to far greater regulatory oversight. The move, applauded by SEC Chair Gary Gensler, would require many firms that execute algorithm-based, high-frequency trades to come under the regulator’s scrutiny as it looks to ensure liquidity across U.S. financial markets. “I was pleased to support this proposal because I believe it reflects Congress’s statutory intent that firms engaging in important liquidity-providing roles in the securities markets, including in the U.S. Treasury market, be registered with the Commission,” Gensler said in a statement. The SEC’s new rules would require firms or persons to register as a dealer if they regularly make comparable purchases and sales of the same securities in the same day or turn profits primarily through bid-ask spreads. Those who have at least $25 billion of trading volume in U.S. debt in at least four of the prior six months would also be compelled to register. People or firms that manage less than $50 million would not be subject to the new rules.
Brief: China's most extensive COVID-related lockdown in two years is underway in Shanghai, as the city of 26 million people undergoes a series of phased shutdowns to test a growing outbreak of the coronavirus. China's financial capital and largest city has implemented a two-phase partial lockdown for the next 10 days, starting with the Pudong financial district and nearby areas from Monday to Friday. This will allow mass testing to get underway after 3,500 new cases of COVID-19 were reported Sunday. In the second phase of the lockdown, the vast downtown area west of the Huangpu River that divides the city will start its own five-day lockdown. Residents will be required to stay home and deliveries will be left at checkpoints to ensure there is no contact with the outside world. Offices and all businesses not considered essential will be closed and public transport suspended. Bridges and tunnels in and out of the area are being strictly monitored.
Brief: Manulife's 2021 Wellness Report highlights how the pandemic is affecting employee health, and underscores that two years into the pandemic, Canadian workers continue to struggle to take care of their health and wellbeing. "Employee mental health patterns could be K-shaped as we move through the next phase of the pandemic," said Dr. Georgia Pomaki, Director, Mental Health Best Practices, Manulife. "One arm of the K represents employees who are excited about reopening and returning to the office—the other represents a group of employees who are facing mental health challenges and significant fatigue: for this group, a return to office may feel overwhelming. Organizations need to consider both groups to design effective and supportive return to office programs." The Report highlights that 16% of working hours (41 days) were lost in 2021 due to absences and presenteeism, and close to half (48%) of employees are experiencing at least one work-related mental health risk factor. These findings suggest employers should consider placing significantly more focus on culture and wellness programs in 2022 and beyond, particularly as large employee populations return to Canadian offices in the near future.
Brief: The PivotalPath Composite Index, a broad measure of overall hedge fund performance, was up 0.3 per cent in February, outperforming most major indices, according to data released by hedge fund research and intelligence specialist PivotalPath. The firm's Dispersion Indicator meanwhile, decreased during the month to 3.8 per cent. The firm writes in its Pivotal Point of Viuerw for March 2022, that strategies able to capitalise on the 'flattening yield curve rally in the energy complex and other factor trends', include Global Macro, Managed Futures, and Equity Quant. Multi-strategy, Managed Futures, Global Macro and Credit were also positive for the month, while commodities, especially oil, reached fresh highs not seen in a decade which, in turn, benefited Global Macro and Managed Futures funds.
Brief: A downgrade on that scale “in any ordinary year” would have left the economy in recession, David Miles, head of macroeconomic forecasting at the OBR, told U.K. lawmakers. That would be the third recession in 14 years. Rocketing energy prices are expected to drive the consumer prices index of inflation to a 40-year high of 8.7% later this year and trigger the worst household living standards crisis in over half a century. The economy is still rebounding from the pandemic, having only just recovered the output lost in 2020. That tailwind prevents a downturn. Normally, “if you’d seen the forecast of growth fall by around 2.5%, we would be in recession,” Miles said. Miles said the squeeze “hits consumption and that’s the biggest part of the downgrade in growth … it’s a hit to the standard of living of this country, it is a terms of trade shock. We are spending more on stuff we import and less on stuff we produce in the U.K.”
Brief: Smaller investors in Istanbul Airport, set to be the world’s highest-capacity hub when completed, have agreed to exit the project after the coronavirus pandemic slowed travel and delayed expected profits. Limak Yatirim Holding AS and Mapa Insaat AS are each selling their 20% stakes in the operating company IGA Havalimani Isletmeleri AS, according to people with direct knowledge of the matter. The two remaining partners Kalyon Insaat AS and Cengiz Insaat AS will raise their holdings to 55% and 45%, respectively, after the transaction, the people said, asking not to be identified because the talks are confidential. Limak, Kalyon and Cengiz declined to comment. Mapa Insaat, owned by Istanbul-based MNG Group, didn’t immediately respond to requests for comment. When signed, the deal will mark the second exit by the original builders that won the rights to build and operate the airport in a joint venture with equal stakes in 2013. Kolin was the first to sell its stake in 2019.
Brief: Household incomes in the U.K. continued to grow on average in the first full year of the coronavirus pandemic but the poor fared worse than others, official figures show. Adjusted for inflation, the median after-tax income rose by 2% in the year through March 2021 to 31,385 pounds ($41,270), the Office for National Statistics said Monday. It followed a 4.1% gain the previous year. However, the pandemic had a disproportionate impact, with the poorest fifth of the population experiencing a 2% fall in income. Many found themselves furloughed on reduced wages when businesses were shuttered to fight the spread of Covid-19, and an increase in welfare benefits only partially made up for the hit, the ONS said.The richest fifth also lost income, although not to the same extent, and the gap with the lowest-income households remained at almost 50,000 pounds.
Brief: China’s economy faces its worst downward pressure since the spring of 2020 when it was hit by the first wave of Covid-19, according to Nomura Holdings Inc. The slowdown in China’s growth worsened in the first quarter and markets should be concerned about a further slide in the second, Nomura Holdings Inc. economists including Lu Ting wrote in a note Saturday. Economic activities “may notably deteriorate across the board” in March, weighed down by increasing mobility restrictions across the country and a continued property sector slump, they said. With the outbreaks suppressing a wide range of sectors, including in-person services, construction and some manufacturing activity, “it’s getting harder for Beijing to achieve its ‘around 5.5%’ GDP growth target for 2022,” the economists said.
Brief: Nearly a year after COVID vaccines became freely available in the U.S., one fourth of American adults remain unvaccinated, and a picture of the economic cost of vaccine hesitancy is emerging. It points to financial risk for individuals, companies and publicly funded programs. Vaccine hesitancy likely already accounts for tens of billions of dollars in preventable U.S. hospitalization costs and up to hundreds of thousands of preventable deaths, say public health experts. For individuals forgoing vaccination, the risks can include layoffs and ineligibility to collect unemployment, higher insurance premiums, growing out-of-pocket medical costs or loss of academic scholarships. For employers, vaccine hesitancy can contribute to short-staffed workplaces. For taxpayers, it could mean a financial drain on programs such as Medicare, which provides healthcare for seniors.
Brief: Chances are roughly one in five that new Covid-19 variants will arise that are more dangerous than the current versions, Moderna Inc.’s chief executive officer said. The more likely scenario is that vulnerable people, such as the elderly and immunocompromised, will need annual boosters for protection against strains that are similar in virulence to omicron, Moderna CEO Stephane Bancel said Thursday in an interview with Bloomberg TV. The CEO spoke on the day of a company event detailing its research and progress with messenger RNA vaccines. Moderna is working to reassure investors about its longer-term growth prospects as the new cases decline following the winter spread of highly transmissible omicron. However, omicron’s BA.2 subvariant continues to circulate, leading to concerns about a resurgence and the emergence of new strains of the virus with greater power to infect and sicken.
Brief: Larry Fink, CEO and chairman of the world’s biggest asset manager, BlackRock, said Russia’s invasion of Ukraine has upended the world order that had been in place since the end of the Cold War. “The Russian invasion of Ukraine has put an end to the globalization we have experienced over the last three decades,” Fink said in his 2022 letter to shareholders. “It has left many communities and people feeling isolated and looking inward. I believe this has exacerbated the polarization and extremist behavior we are seeing across society today.” Fink’s letter came a month into Russia’s invasion of Ukraine with Moscow’s forces bombarding cities across the country and killing civilians unable to escape. The U.S. and its allies have imposed unprecedented sanctions on Russia and provided military assistance to Ukraine.
Brief: Singapore announced Thursday significant easing in its Covid-19 curbs, with a plan to lift most restrictions for fully vaccinated visitors and a requirement to wear masks outdoors as part of its shift toward living with the virus. The loosened domestic social measures come into effect on March 29, while easier travel rules apply from April 1. Here’s how the city-state’s regulations will compare with some global financial centers.
Brief: Private Markets Rally to New Heights, a comprehensive analysis of the dynamics and performance of the private investing industry, encompassing private equity, real estate, debt, and infrastructure and natural resources, shows that fundraising was up by nearly 20 per cent year over year to reach a record of almost USD1.2 trillion. In addition, dealmakers were busier than ever, deploying more than USD3.5 trillion across asset classes, while assets under management (AUM) grew to an all-time high of USD9.8 trillion as of July 2021, up from USD7.4 trillion the year before. Private equity continued to drive global growth in private markets. Fundraising rebounded across regions, and global totals fell just short of the pre-pandemic peak established in 2019.
Brief: Hong Kong, in the midst of an exodus of residents as it grapples with its largest ever outbreak of Covid-19, held its third place ranking among the world’s financial centers, trailing New York and London, according to a survey. In the main areas of competitiveness, Hong Kong ranked in the top four for business environment, human capital, infrastructure and general reputation, but out of the top 10 in financial sector development. Its overall hold on the third spot came as financial centers in Asia “generally recovered losses” experienced in the previous study, suggesting restored confidence in the region’s economic strength, according to the Global Financial Centres Index published by Z/Yen and the China Development Institute. Shanghai and Shenzhen moved up to fourth and 10th place, respectively. Hong Kong’s strict pursuit of Covid zero, coupled with a brain drain over the past years amid a political crackdown on media and civil society groups, has prompted warnings over the city’s status as a financial hub.
Brief: Private equity firms invested nearly $70 billion in the life sciences and medical device industries last year — a sign that the pandemic's disruptions didn't cool interest in the sectors, according to a new report by the American Investment Council. Why it matters: The influx of capital could help bring more lifesaving drugs and medical technologies to market. But private equity's growing presence in health care isn't always viewed positively, particularly when it's associated with price increases or reduced access to care. By the numbers: Private equity deals in the life sciences sector were worth nearly $26 billion in 2021, the highest amount in a decade. Medical devices and supplies deals were worth nearly $44 billion last year, which was also the highest value over the last decade — by far. Private equity has invested more than $280 billion into the sectors over the last decade, according to the report. What they're saying: "What COVID brought was probably a bigger focus on health care gaps and needs in the country, and I think you saw more money going into this sector as a result of a new focus on exposing some of the challenges we have in the health care system," American Investment Council CEO Drew Maloney said in an interview.
Brief: When pandemic-induced lockdowns started to spread in March 2020, partners at some venture capital firms became concerned about an overdue correction. Instead, the opposite happened, and the pandemic pushed the market into one of the strongest bull periods on record. Now, amid a geopolitical crisis and a downward-trending stock market, some in the industry say the overheated venture capital climate is finally beginning to cool down. Investors tell Forbes that late-stage deal activity — which set records for both deal count and investment volume in 2021 — has slowed considerably over the past few weeks. They say that crossover investors who helped drive the breakneck pace in 2021 may have overindulged at the late stages. The broader venture ecosystem is realizing the swollen price tags they were willing to buy into to get into the hottest deals of 2021 were inflated, these investors say.
Brief: Nearly half of the European companies in Hong Kong plan to fully or partially relocate operations and staff out of the city, a new survey suggests, in the latest sign that the world's toughest Covid-19 travel and quarantine restrictions are eroding the appeal of Asia's main finance hub. Around 25 per cent of responding companies said they planned to fully relocate out of Hong Kong in the next year, according to a new survey from the European Chamber of Commerce in Hong Kong, while another 24 per cent said they are planning to partially move out of the city. Roughly 34 per cent of firms said they were uncertain about their plans, while just 17 per cent said they had no desire to relocate over the next 12 months. The negative results, which come amid a surprisingly chaotic coronavirus outbreak, are the latest measure of declining business confidence in a once-freewheeling city that has been increasingly isolated from the world over more than 2 years.
Brief: Today’s high inflation is being compared to the 1970s. However, robust consumer spending, fuelled by pandemic savings, makes for a different set of circumstances. Memories of the 1970s were evoked as the price of Brent crude oil temporarily climbed above $139 a barrel in the wake of Russia’s invasion of Ukraine. That was a period when very high oil prices and elevated rates of consumer inflation plunged some of the world’s major economies into recession. Using the definition of recessions from the National Bureau of Economic Research (NBER), there have been seven such downturns in the US since the 1970s. The first four were all preceded by a pick-up in inflation and interest rates (see chart, below). The decision by the US Federal Reserve (Fed) to raise interest rates amid signs of inflationary pressures broadening out in the US – as they did in the 1970s – has further put parallels with the past back into focus. Could this “economic cycle” play out like those from the 1970s, 80s and 90s, when economic conditions were seemingly more akin than to those seen over the past two decades? The economic cycle, which is sometimes referred as the business cycle, is the period in which an economy moves from a state of expansion to one of contraction, before expanding again.
Brief: Amid ongoing uncertainty in Europe – from war in Ukraine to Covid – investors turned away from European mutual funds en masse in February, but ETFs managed to attract inflows, the latest data from Refinitiv shows. Bucking tradition, money market funds led the redemptions. European mutual funds lost net €67.6bn during the second month of the year, while ETFs took in €9.2bn. Overall flows for mutual funds and ETFs were negative at €58.4bn.Detlef Glow, head of EMEA research at Refinitiv Lipper, said: "It was not surprising that February 2022 was in general a negative month for the European fund industry given the geopolitical situation in Europe, the still ongoing Covid-19 pandemic, and the sluggish market environment." What did come as a surprise, however, was the fact that investors sold out of money market funds, which are usually seen as a safe haven in times of uncertainty.
Brief: Global mid-market M&A activity has continued robustly in the first quarter of 2022, says audit, tax and consulting network RSM, as it announces it worked on 614 completed deals in Europe last year. However, the war in Ukraine – which in addition to its dire humanitarian impact is causing inflation in the cost of raw materials and commodities – could impact deal activity and broader economic confidence in the months ahead. RSM’s advisers supported unprecedented levels of global deal activity in 2021. Among the 614 transactions completed by RSM Firms in Europe last year, the technology, media, and telecom (TMT) sector was the driving force, with 152 deals, followed by 90 completed in the engineering and manufacturing sector.
Brief: Today, UBS announced the launch of its Virtual Worker Framework, a new industry-leading approach to flexible working that will provide US employees in eligible roles with the opportunity to work 100% remotely. UBS will begin a phased implementation of the framework over the coming months to select current and prospective employees across the country. The Virtual Worker Framework represents a natural extension and evolution of UBS’s current hybrid work model. In a global survey, 86 percent of UBS employees stated that they value greater flexibility, including the ability to maintain a remote or hybrid work arrangement. With continued technology enhancements and positive adoption of virtual work, the firm is finding new ways to engage with clients and build trusted relationships. “Hybrid working has positively reshaped the future of our workplace,” said Tom Naratil, President of UBS Americas.
Brief: Institutions aren’t just worried about the effect of inflation, the pandemic, and what they fear are outdated asset allocation rules. They’re potentially moving a vast amount of money that will create opportunities and challenges for asset managers — and move markets. Those are some of the findings from Nuveen as part of its 2022 global institutional investor study, which is expected to be published on Wednesday. Sixty-four percent of investors told the asset manager that the current market environment is pushing them to entirely rethink their portfolio construction strategies.In the survey of 800 institutions, each of which had a minimum of $500 million in assets, Nuveen found that the overhaul is being prompted by multiple head-shaking developments — including inflation rates that haven’t been seen in 40 years, the pandemic, and climate change — that are affecting the value of assets not just in the future, but today.
Brief: After reporting strong results for 2021, the investment firm is raising its dividend in line with its assets under management growth. Zug-based Partners Groups posted a profit increase of 82 percent amounting to 1.46 billion Swiss francs ($1.60 billion) in 2021, it said in a statement Tuesday, after signaling the upward trend in January. The private equity company's assets under management (AuM) swelled to 17 percent totaling $127 billion, while performance fees increased by 46 percent of total revenues driven by «record exit activity and strong portfolio performance post COVID-19,» it said. The company will propose a dividend increase of 20 percent to 33 francs per share, in line with its AuM growth. Partners Group reconfirmed its guidance of gross client demand in the range of $22-26 billion in 2022. Its investment exposure to Russia and Ukraine was below 0.2 percent of AuM, it said.
Brief: Jason Dorsey, Gen Z Researcher and Author, joins Yahoo Finance Live to discuss how Gen Z and millennials are approaching retirement savings and finances emerging from the shocks of the pandemic. Video Transcript. DAVE BRIGGS: Is there a generational gap when it comes to saving for the future? Well, study after study has, indeed, shown that, but it might not be exactly what you think. Let's talk about it with Jason Dorsey. He is a Gen Z researcher and the author of "Z Economy." Jason, good to have you on, my friend. So tell me- JASON DORSEY: Thank you for having me. DAVE BRIGGS: --how are Gen Zers preparing for the future? Are they, indeed, putting away money for retirement? JASON DORSEY: They are, and it's pretty shocking. When we talk about Gen Z, the oldest members are about 25 years old. And what our research shows in multiple studies is that Gen Z is actually saving money. They're trying to hold on to the money that they were going to spend. They'll even have a birthday party. Keep the money, and then ask their parents for money to go spend, which is pretty funny. The Gen Z, right now, 70% of them say that they need to be saving money today in order to be able to retire one day.
Brief: India's MSME sectors were highly affected by the wrath of Covid-19. According to CII, MSME sectors employ about 12 crore people and about half of the Indian exports. According to experts the root problem from the domestic MSME sector is failure to attract the private capital into their business, leading to constant starvation for funds. “MSME owners and entrepreneurs should thrive to rope in professional money. Without any predetermined rate of interest, private investments are the most expensive form of capital for a business. One should use this capital in areas where the return on investments is higher than the cost of capital. Investing this capital judiciously in the needed business areas can fetch much higher returns than the actual cost. Lenders are not active participants of your business, whereas PE funds or VCs participate in the growth actively and give a professional structure to the business.
Brief: As China’s major financial centers confront their worst Covid outbreaks to date, many fund managers are rolling out sleeping bags on trading floors across Shanghai and Shenzhen. Traders are volunteering to take turns camping out in their offices to avoid restrictions sweeping through the cities at a time when Chinese capital markets are experiencing the biggest bout of volatility since mid-2020. With Shanghai becoming one of the nation’s epicenters for new coronavirus infections, employers are preparing for the possibility of sudden lockdowns that could forcibly quarantine traders at homes or work for days or even weeks. That means making sure workers have enough provisions on hand in case they get stuck in the office. At AXA SPDB Investment Managers Co., for example, staff is being supplied with airbeds, instant noodles and emergency kits.
Brief: Former White House biodefense adviser Rajeev Venkayya is taking the reins at a new venture-backed company that aims to fill a gap in treatments to combat Covid-19 and future pandemic threats. Venkayya, who stepped down as head of Takeda Pharmaceutical Co.’s vaccines unit last month, is now the chief executive officer at Aerium Therapeutics, a biotech company backed by Omega Funds. The company launched Tuesday with an initial focus on developing new monoclonal antibodies against Covid. The drugmaker is advancing with two such antibodies that have shown promise against the delta variant as well as omicron and its offshoots in animal tests, according to Aerium. The data will be submitted to a medical journal, meaning it hasn’t yet been peer-reviewed. Aerium sees an opportunity to expand in the field and a need for new tools to help patients, especially vulnerable people who haven’t been able to benefit from vaccines, after omicron overpowered some antibody treatments and raised questions about the efficacy of others. “The virus evolved very quickly around vaccines and therapeutics,” Venkayya said in an interview. “We increasingly will be trying to get away from the variant-chasing game and into the space of broadly protective therapeutics.”
Brief: Gold’s comeback amid Russia’s war in Ukraine and monetary policy uncertainty, the role of gold exchange-traded commodities (ETC) in a multi-asset portfolio and combining precious metals with ESG were the topics discussed at ETF Stream’s recent webinar in partnership with HANetf. The webinar, titled Inflation protection: Is gold still the best hedge?, started by looking at the dramatic return of gold ETCs to favour after a subdued COVID-19 recovery period in 2021. Anthony Bamber, head of business development at The Royal Mint, which co-created the Royal Mint Physical Gold Securities ETC (RMAU), said: “Towards the end of February, we saw gold jump around 6% which was the largest monthly gain since May 2021. “As everything in Russia and Ukraine began to escalate further in March, it got up to its record highs again. It was these escalations plus other underlying issues such as inflation and the energy crisis that caused this.
Brief: KKR & Co. warned that investing will require more risk given the market turmoil driven by Russia’s invasion of Ukraine. There may be opportunities in beaten-down growth stocks, liquid credit and inflation-hedging proxies including real estate and infrastructure, KKR’s Henry McVey and Racim Allouani said in a March 9 report to clients. Tightened financial conditions are also creating the prospect of partnering with companies facing temporary business disruptions or that have weak capital structures, they said. Low rates and government stimulus have boosted markets in recent years, with investors enjoying outsized returns even with relative safe portfolios. The war has created turmoil across asset classes from stocks and bonds to commodities and “tremendous volatility,” they noted.“The current crisis makes forecasting risk parameters such as risk of loss, volatilities, and correlations only more challenging,” said McVey, KKR’s head of global macro, balance sheet and risk, and Allouani, a managing director.
Brief: Markets have rallied nicely off the early March lows that were triggered by the start of Russia's war on Ukraine, but they are still dealing with a bout of depression. The percentage of individual investors who consider themselves bullish has averaged just 23.9% over the past 10 weeks, according to the American Association of Individual Investors (AAII). Truist co-chief investment officer Keith Lerner points out this is the lowest average level of bullishness since the June 2016 Brexit referendum and one of the least optimistic readings since the survey's inception in 1987. So what has this level of depression historically meant for the stock market in the months ahead? You guessed it, a rally! Historically, these low levels on the survey have been followed by consistent and positive returns on a six- to 12-month basis for the S&P 500, Lerner notes. Only in the land of investing does bad equal good (maybe it does in other places, who knows).
Brief: Firms across the globe are ditching fund-raising deals at a quickening pace, as volatility destabilizes credit markets following Russia’s invasion of Ukraine. Electric car giant Tesla Inc. is the latest big name firm to scrap financing plans, as it postponed a $1 billion offering of bonds backed by leases on its vehicles last week. Almost 80 companies, nearly half from the U.S., have put at least $25 billion of deals on hold since the start of the war nearly a month ago. “There has been a severe jolt to investor confidence since the invasion of Ukraine as sanctions have been slapped on Russia and commodity prices roared upwards,” said Susannah Streeter, senior investment and markets analyst with Hargreaves Lansdown Plc. The caution has reached all corners of the globe. India’s Mumbai International Airport Ltd. recently delayed a dollar bond deal, SS&C Technologies Holdings Inc. halted a $1.7 billion buyout loan on Wednesday and Brazil’s Trocafone SA scrapped an initial public offering.
Brief: The Trudeau administration spent so much money during the first year of the pandemic that it was easy to lose track of the profound growth taking place in the size of the federal government’s workforce.Employment across the country jumped more than six per cent year over year to 319,600 for all departments and agencies, according to data compiled by Treasury Board. That’s an increase of nearly 20,000 between the first three months of 2020 and the same period last year. Last year’s increase was more than double the average annual employment gains posted by federal government workers between 2015 and 2020, covering years the Liberals have been in power. The financial impact was significant: The federal government’s total payroll reached nearly $60 billion in fiscal 2021, up $4.4 billion from the previous year, according to the public accounts.
Brief: European fund flow patterns so far this year are emulating historical crisis periods for markets, including the 2008 global financial cash, according to new research from data firm Refinitiv. A sluggish market environment, lingering concerns around the Covid-19 pandemic and the emerging geopolitical tensions in Europe meant the continent’s fund industry saw net outflows in February that took overall flows so far this year to -57.2 billion euros (-$63.2 billion), according to the research. Mutual funds — pools from investors allocated by fund managers into stocks, bonds, money market instruments and other securities — faced 67.6 billion euros of outflows in February alone. Meanwhile exchange-traded funds (ETFs) — baskets of securities that trade on regular stock exchanges — enjoyed inflows of 9.2 billion euros.
Brief: The war in Ukraine is like a powerful earthquake that will have ripple effects throughout the global economy, especially in poor countries, according to the head of the International Monetary Fund. The conflict will lead to lower growth and faster inflation worldwide, Managing Director Kristalina Georgieva said Friday on an IMF panel about the lender’s strategy to support fragile and conflict-affected nations. Countries, businesses and households will face more serious debt problems after a jump in borrowing during the first year of the pandemic, she said. Ukraine and Russia together account for more than a quarter of the global trade in wheat, and a fifth of corn sales. The longer Russian forces remain in Ukraine, the longer tractors and combines to harvest the nation’s crops stay idle, threatening food security far beyond the region, Georgieva said. “We would have some very significant problems that would be particularly difficult for fragile states,” Georgieva said. The world tends to focus on “front-page issues, and not on this second- and third-order-of-impact consequences,” she said.
Brief: Federal Reserve Governor Christopher Waller told CNBC on Friday that the central bank may need to enact one or more 50-basis-point interest rate hikes this year to tame inflation. Though he voted this week for just a 25-basis-point move due to uncertainty from the Russian invasion of Ukraine, Waller said he thinks the Fed may need to be more aggressive soon. “I really favor front-loading our rate hikes, that we need to do more withdrawal of accommodation now if we want to have an impact on inflation later this year and next year,” he told CNBC’s Steve Liesman during a live “Squawk Box” interview. “So in that sense, the way to front-load it is to pull some rate hikes forward, which would imply 50 basis points at one or multiple meetings in the near future.” In addition to the rate hikes, Waller said he thinks the Fed needs to start reducing its bond holdings soon. The central bank balance sheet has ballooned to just over $9 trillion, and officials are preparing the process to start rolling off some of their holdings. Waller said that process should start “in the next meeting or two.” “We’re in a different place than we were before,” he said. “We have a much bigger balance sheet, the economy’s in a much different position. Inflation is raging. So, we’re in a position where we could actually draw down a large amount of liquidity out of the system without really doing much damage.”
Brief: An American private equity firm is weighing a potential takeover bid for Ted Baker, the British fashion chain. Sky News has learnt that Sycamore Partners is working with advisers to examine a potential offer for the London-listed company. Sycamore specialises in investments in the retail sector, having previously owned brands such as the upmarket footwear label Kurt Geiger. This week, it was linked with a $9bn takeover bid for Kohl's, the US department store chain. It was also reported to be among the suitors circling Boots, Britain's biggest chain of high street chemists, although City insiders have expressed scepticism about Sycamore's eventual involvement in the auction.
Brief: After two years of working from home – and seeing return-to-office plans derailed by new Covid-19 variants – a growing number of companies are eager to get employees back to the office. About 50% of leaders say their company already requires or is planning to require employees to return to in-person work full-time in the next year, according to new research fromMicrosoft, which surveyed 31,102 workers around the world between January and February. This number stands in sharp contrast, however, to what employees really want:flexibility. In the same report, 52% of workers said that they are thinking of switching to a full-time remote or hybrid job in 2022. “A lot of business leaders have told me that they don’t believe in hybrid work, that it has no place in their culture,” Elise Freedman, a workforce transformation practice leader at Korn Ferry who is helping companies coordinate their return-to-office plans, tellsCNBC Make It.
Brief: Commodities trader Pierre Andurand sees a path for crude oil to get to $200 by the end of the year as historically tight markets struggle to ramp up production and replace lost supply from Russia. He estimates some 4 million barrels per day have been taken out of circulation as a result of Russia’s invasion of Ukraine and subsequent restrictions on doing business with the Putin government. While releasing oil from strategic petroleum reserves could help boost supply in the short-term, it’s likely that the energy industry won’t be able to increase capacity to fully offset the lost barrels. Russian oil will likely be out of the market even if Putin agrees some sort of imminent ceasefire with Ukraine, the founder of Andurand Capital Management LLP said on the latest episode of the Odd Lots podcast. Meanwhile, shale producers and some OPEC members will also struggle to boost production after years of underinvestment.
Castle Hall helps investors build comprehensive due diligence programs across hedge fund, private equity and long only portfolios More →
Montreal
1080 Côte du Beaver Hall, Suite 904
Montreal, QC
Canada, H2Z 1S8
+1-450-465-8880
Halifax
168 Hobsons Lake Drive Suite 301
Beechville, NS
Canada, B3S 0G4
Tel: +1 902 429 8880
Manila
10th Floor, Two Ecom Center
Mall of Asia Complex
Harbor Dr, Pasay, 1300 Metro Manila
Philippines
Sydney
Level 15 Grosvenor Place
225 George Street, Sydney NSW 2000
Australia
Tel: +61 (2) 8823 3370
Abu Dhabi
Floor No. 15 Al Sarab Tower,
Adgm Square,
Al Maryah Island, Abu Dhabi, UAE
Tel: +971 (2) 694 8510
Copyright © 2021 Entreprise Castle Hall Alternatives, Inc. All Rights Reserved.
Terms of Service and Privacy Policy