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Brief : The theater where Tony Bennett and Steely Dan once performed is still dark. Players at the blackjack tables are separated by plastic partitions. The gondoliers offering rides along faux canals wear face masks and aren’t allowed to sing. The Venetian Las Vegas isn’t the resort it was a year ago. But that didn’t stop Apollo Global Management Inc. and its real estate partner, Vici Properties Inc., from plunking down $6.25 billion to purchase the property, the neighboring Palazzo and the adjacent Sands Expo Convention Center from Las Vegas Sands Corp. last week. The deal surprised observers such as Stephen Miller, director of the Center for Business and Economic Research at the University of Las Vegas, Nevada. “Are they off their nut or are they on to something?” he asked. Despite a long list of problems, Apollo partner Alex van Hoek sees opportunity -- for soaring tourism and a return of convention travel that made the city one of the top destinations for business groups. “We are very bullish on the recovery of Las Vegas,” said van Hoek, who led the investment firm’s purchase. It’s no sure thing. A year after the coronavirus shut down its famous casinos, America’s gambling capital is trying to crawl back from one of its deepest slumps ever. The glittering palaces along the Strip began reopening last June, but business is still slow. Unemployment, at 10%, is the highest among big U.S. cities. Tourist traffic in January slumped almost two-thirds from last year. Gambling revenue on the Strip was off 44% and the convention business nonexistent.
Brief: Deutsche Bank paid Chief Executive Christian Sewing 7.4 million euros ($8.8 million) in 2020, up 46% from a year earlier, prompting criticism from unions and politicians. The bank’s bonus pool was up 29% as it rewarded staff for a pandemic-related trading boom, which helped the German lender to eke out a profit after years of losses. The disclosure in the bank’s annual report on Friday came as Deutsche said revenue would be “marginally lower” this year. In Germany, which is facing an election year and where the public disapproves of high pay, the Verdi labour union called the payouts “grossly disproportionate” and politicians were critical. “It doesn’t fit with the times that Deutsche Bank, which has also indirectly benefited from bailouts time and again, is having a coronavirus party,” Fabio De Masi, a member of Germany’s parliament, said in a statement to Reuters. Last year marked a turnaround for Deutsche and Sewing, who took up his post in 2018, after the bank had faced a series of costly regulatory failings, including over money laundering. The bank has lost 8.2 billion euros over the last decade.
Brief: The European Union’s pandemic recovery fund has run into early trouble, with the bloc’s executive arm judging that most of the national spending plans submitted so far still need work to get approved, raising the risk of delays in disbursements to some of the region’s battered economies. Germany’s submission is among those deemed to fall short of expectations, with southern European nations including Greece and Spain having the strongest plans, according to officials familiar with the discussions who asked not to be identified. Some countries haven’t made proposals at all yet, and others are way behind, they said. The German government is in talks with the Commission to reduce some of the hurdles to investment in its plan, one official said. A commission spokeswoman said that staff are in “intensive dialogue” with member states with the aim of making disbursements starting from mid-2021, but that “it is also essential” that these plans meet the key objectives of the fund. A spokesperson for the Greek government also declined to comment, and spokespeople for the German finance ministry and Spanish government didn’t immediately respond to a request for comment.
Brief: A growing number of Americans want to get the coronavirus vaccine, and a majority also support workplace, lifestyle and travel restrictions for those not inoculated against COVID-19, according to a Reuters/Ipsos poll released on Friday. Altogether, 54% of respondents said they were “very interested” in getting vaccinated. That was up from a January survey, when 41% expressed the same level of interest, and 38% in a May 2020 poll before a coronavirus vaccine was developed. Interest in the vaccine increased over the past year among whites and racial minorities, with about six in 10 whites and five in 10 members of minority groups now expressing a high level of interest. Twenty-seven percent of Americans said they were not interested in getting vaccinated, which was relatively unchanged from a similar poll that ran in May. But foreshadowing the social challenges that may emerge as the United States begins to pull out of the yearlong pandemic, the latest poll showed a majority of Americans want to limit the ways in which unvaccinated people can mix in public.
Brief: In the first part of the year, the vaccine rollout is supporting a robust economic recovery and global central banks continue to operate very loose monetary policy. This scenario favours the emerging markets (EM) asset class, which is relatively well placed to benefit from the global 'reflation' trade. We are, however, mindful of the impact of higher US Treasury yields (and especially a rapid rise) on EM fixed income, especially some of the higher quality parts of EM. This is because the credit spread in this EM sector is insufficient to absorb the total return drag implied by a sell-off of US Treasuries. Today, higher yielding EM is better placed to navigate these challenges, although even in this asset class it is important to differentiate between the high yield EM sovereigns with positive credit stories and those with impaired balance sheets and a weakening outlook Another positive driver for EMs is the new US President. The Biden administration is, on balance, supportive for EM as it implies more international co-operation and less isolationism. Yet, the stance towards China is unlikely to change very much and remains a source of risk while attitudes to Russia may also become harsher.
Brief: The number of private equity buy and build transactions in the UK rose by 35 per cent during 2020, as private equity houses looked to bolster their portfolio during the Covid-19 pandemic, according to research by Rickitt Mitchell. Analysis by the corporate finance boutique, in partnership with Experian Market iQ, reveals that a total of 370 bolt-on transactions were completed in 2020 – up from the 276 seen over the course of the previous year. The bounce back following the Covid-19 pandemic is highlighted by the active second half of 2020, with 232 transactions completed during that period. In contrast, just 46 deals were completed during the second quarter, at the height of the national lockdown. Despite the rise in volumes, the total value of transactions fell by a small portion over the last year. GBP1.2 billion of deals were completed in 2020, just lower than the GBP1.3 billion seen in 2019, which further highlights the trend of bolt-on deals during this period, which typically have smaller average values than other deal types.
Brief : Buyout firm KKR & Co Inc is seeking to raise $12 billion for its flagship global fund that will invest in infrastructure assets such as oil and gas pipelines and renewable energy projects, according to people familiar with the matter. The fundraising comes as President Joe Biden has been pushing U.S. lawmakers to back a plan for trillions of dollars in new spending on projects to restore America’s crumbling infrastructure. KKR began raising the fund, KKR Global Infrastructure Investors IV, late last year alongside its other flagship funds, including the North America private equity fund, which is aiming to attract more than $15 billion. A KKR spokeswoman declined to comment. Private equity firms tend to raise successor funds that are 10% to 20% larger than their predecessors. But KKR’s latest global infrastructure fund would be significantly bigger than KKR Global Infrastructure Investors III, which amassed $7.4 billion from investors in 2018.
Brief: Most European Central Bank policy makers have no intention of expanding their 1.85 trillion-euro ($2.2 trillion) emergency stimulus program despite their pledge on Thursday to step up the pace of bond buying to keep yields in check, according to officials familiar with the matter. The Governing Council’s decision to make purchases at a “significantly higher pace” over the next three months means buying debt at a faster rate than the program’s timeline suggests, the officials said, asking not to be identified. Buying would then be slowed if the economic outlook allows. The pandemic purchase program is due to run until at least the end of March 2022, and has almost 1 trillion euros of firepower left. The ECB says it can be “recalibrated” -- ie increased -- if needed.
Brief: More women than men have left British banks during the pandemic, undermining the sector’s pledges to become more diverse. The number of women at the U.K.’s five biggest lenders shrank by 3% during 2020, according to data compiled by Bloomberg News, while men saw a decline of about 2.1% as the banks pushed ahead with long-planned cost cuts and adapted to Covid-19. At NatWest Group Plc, roles filled by women dropped by 9% compared to a 5.2% fall for men. Standard Chartered Plc kept roughly the same number of men but its female staff declined by 2.2%. The banks -- along with Barclays Plc, Lloyds Banking Group Plc and HSBC Holdings Plc -- employ about half a million people globally, broadly even between genders. The stark split has a variety of causes. British lenders have spent years closing branches -- which are staffed more by women -- as they see customers shifting to online banking. This trend accelerated during lockdown. Some women are also withdrawing from the workforce, rather than being cut. At Standard Chartered, the gap between male and female job losses “probably relates to the fact that children were home being home-schooled and that burden within the family fell disproportionately to women,” Chief Executive Officer Bill Winters said on a call with reporters after recent earnings.
Brief: Equity investment into private smaller companies reached new heights in 2020, rising by 9 per cent on 2019 levels to GBP8.8 billion, according to the British Business Bank’s Small Business Finance Markets Report. Average deal size continues to increase, primarily driven by a small number of very large deals. Equity deal sizes increased by 3 per cent in 2020 and the number of deals greater than GBP10 million increased from 173 in 2019 to 176 in 2020. The time taken for some companies to achieve unicorn status reduced in 2020. Beauhurst estimates the average age of all companies gaining unicorn status was seven years, but Hopin gained unicorn status only after one year and Cazoo after two years. Of the six UK companies to achieve unicorn status in 2019, five were backed by venture capital. Judith Hartley, CEO of British Patient Capital, says: "The British Business Bank’s Small Business Finance Markets report was published today and it reveals that, despite the global pandemic, equity investors continue to find smaller private UK companies highly attractive.
Brief: Investors will keep reaching for riskier assets to get returns in a U.S. economy poised for growth this year, according to Natixis Investment Managers. The “dash for trash” will continue, Jack Janasiewicz, portfolio manager and strategist at Natixis Investment Managers, predicted Tuesday during the firm’s web event discussing markets amid the easing Covid-19 crisis. Financial conditions are “highly accommodative,” he said, adding that “it’s tough to see anything but a continued stretch for risk assets.” At the same time, some investors worry that massive fiscal stimulus and easy monetary policy could stoke high inflation, according to Janasiewicz. The Natixis portfolio manager said the concern often comes up in client conversations, particularly with the recent jump in Treasury yields, but that he isn’t expecting a meaningful rise anytime soon.
Brief: Pension fund investors must be watchful this AGM season as to how company responses to the pandemic have impacted governance and workforce practices, the Pensions and Lifetime Savings Association (PLSA) has warned in its updated annual Stewardship and Voting Guidelines. Published to coincide with the PLSA’s annual Investment Conference, the Stewardship and Voting Guidelines 2021 are an important resource for pension trustees, providing practical guidance for schemes considering how to exercise their vote at annual general meetings. Having undertaken a substantial review of the guidelines in 2020, the PLSA has this year focused on ensuring they remain relevant amid the challenges posed by Covid-19 and a fast moving regulatory environment. Since the UK entered the first period of lockdown in March 2020, virtual AGMs have become the "new normal", enabled in law by the Corporate Insolvency and Governance Act on 26 June. The PLSA supports the provisions introduced by the Government and companies to ensure that AGMs can happen virtually during these unprecedented times.
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.
Brief : The environmental, social and governance-based investment market is set to double in 2021 as investors plan to move funds to support companies with a positive ESG rating or impact, a new report shows. The study by OnePlanetCapital, a new sustainability driven investment house focused on climate change, revealed that a tenth of (9 per cent) investors currently hold ESG investments. The market is set to double this year as over one in 10 (12 per cent) investors who do not currently invest in ESG plan to move investments to ESG related funds in 2021. Furthermore, an additional 17 per cent of investors are planning to move to ESG in 2022 or later, showing the potential the market has to grow in the coming years. Even of those who do not plan on moving investments to ESG this year or next, two fifths (40 per cent) are still considering moving them in the future, which is a higher proportion than those who are not considering moving them at all (30 per cent). ESG is now a key factor for investors when making decisions about their portfolio, with the research suggesting investors are becoming increasingly concerned about global environmental issues such as climate change… As the UK economy plots a course to economic recovery post-Covid 19, it is clear that there is a very real opportunity for this recovery to be built upon investment in green business and technology.
Brief: CVC Capital Partners is nearing a deal to acquire European over-the-counter drugmaker Cooper for about 2.2 billion euros ($2.6 billion), people familiar with the matter said. The private equity firm is negotiating detailed terms of an agreement with Cooper’s owner, Charterhouse Capital Partners, according to the people. CVC beat out rival suitors including a consortium led by PAI Partners, the people said, asking not to be identified because the information is private. No final agreements have been signed yet, and talks could still fall apart, the people said. Representatives for Charterhouse, CVC and PAI declined to comment. A deal would add to almost $11 billion of health-care acquisitions by private equity firms in Europe so far in 2021, a figure that’s up more than 700% year-on-year, according to data compiled by Bloomberg. Charterhouse bought Cooper in 2015.
Brief: Thanks to the pandemic, U.S. banks won a long-sought regulatory break that let them expand their balance sheets by as much as $600 billion without adhering to profit-denting safeguards. Now, firms are frantically lobbying to extend that relief before it expires at month’s end. The reprieve from what’s known as the supplementary leverage ratio -- granted a year ago as Covid-19 rocked markets and the economy -- gave lenders free rein to load up on Treasuries and deposits, while avoiding a requirement that they hold more capital as a buffer against losses. The Federal Reserve and other agencies eased the rules because they said they wanted excess capital deployed to struggling businesses and households. As watchdogs mull letting the relief continue, Wall Street isn’t shying away from offering arguments and even warnings. Executives point out that the pain from coronavirus is far from over, and JPMorgan Chase & Co. has cautioned that it might have to shun customer deposits if tougher rules are reinstated. Analysts have also said recent bouts of wild trading in the $21 trillion Treasury market could be tied to concerns that banks will be forced to hold less government debt, even selling some of their holdings.
Brief: In March 2020, companies across the US abruptly shuttered their offices and instructed employees to work from home indefinitely as a result of the pandemic. At first, many thought the shutdowns would last a couple months. But one year later, millions of workers are still working remotely. The pandemic has forced a large segment of the global workforce to go through a remote-work experiment on a scale never seen before -- and a lot has changed in the last 12 months. The boundary between our work and our personal lives has become blurred. Working at the kitchen table has become common and, for parents, juggling virtual school while trying to hit work deadlines has become a daily challenge. Employers have also been forced to become more nimble. They've had to loosen restrictions on where employees can work, equip them with the tools do so and support them both professionally and personally. We've learned many lessons as a result: meetings aren't always necessary, working a standard eight-hour shift may not be the best schedule for everyone, sitting at a desk doesn't always mean you're being productive and perhaps, you miss your coworkers more than you thought you would.
Brief: Ireland saw a bumper year in fund sales last year, which was reflected in higher funds under administration. At the end of December 2020, net sales for the year had reached €245 billion – the highest across all European fund jurisdictions, according to Irish Funds, the country’s industry body. This included a strong December, when €72.2 billion worth of fund sales were recorded. Net assets closed the year at €3.32 trillion - the highest level ever reached in Ireland and a 9% year-on-year increase. Irish Funds also said it had seen 27 financial firms entering or expanding their presence in Ireland in January, bringing the total to 137 new entries or expanded offers since January last year. Membership is also up 30% over the past four years. The trade body said the primary driver of the expansion over the past year was alternative investment fund managers. Sales for Ucits funds during December 2020 were of €64.8 billion, while alternative investment funds had sales of €7.3 billion.
Brief: The left-for-dead value trade has roared back to life to wipe out all its pandemic losses, with its revival reshaping the US$2 trillion world of factor investing. The strategy that bets on low-priced stocks and against expensive counterparts has surged back to levels last seen before the onset of the once-in-a-century outbreak, a long-short index from Bloomberg shows. As the market braces for US$1.9 trillion in fresh U.S. stimulus and an economic rebound spurred by falling virus cases, a deluge of cash has rushed back into cyclical shares whose valuations were flattened by the 2020 doom and gloom. “Value crushed it for the right reasons,” Evercore ISI strategists led by Dennis DeBusschere wrote in a note. Exchange-traded funds following the systematic investing style have drawn new money for 10 straight weeks, with inflows and the market rally fueling a US$100 billion jump in assets since the start of November. These products are on course for their best-ever quarter for new cash and are just US$5 billion away from overtaking their nemesis -- the growth factor -- in assets. Put another way: A famously misfiring trade for the last decade now looks set to overtake one of the hottest strategies of the bull market.
Brief : Apollo Global Management Inc said on Monday it will merge with Athene Holding Ltd in an $11 billion all-stock deal, bringing in-house an annuities provider that helped turn it into one of the world’s largest corporate credit investors. Apollo has been getting paid lucrative fees by Athene, in which it controls a 35% stake, for more than a decade, providing asset allocation services and directly managing a portion of Athene’s assets across its investment platform, primarily in its ever-expanding credit business. Yet Athene’s shares underperformed the insurance sector following its stock market debut in 2016, prompting a bid from Apollo for its assets. Apollo estimated the tax-free combination could result in its earnings more than doubling from 2020. Its existing stake in Athene did not contribute to earnings under accounting rules, despite representing 40% of Apollo’s assets under management and 30% of its fee-related income. A merger would allow Athene’s business and assets to be integrated into Apollo’s, providing both sides with enhanced earnings potential and a simpler ownership structure going forward, Marc Rowan, Apollo’s incoming chief executive officer, told an analysts call.
Brief: The number of takeovers by UK acquirers of continental European businesses fell 30 per cent from 488 in 2019 to 342 in 2020 as Brexit and Covid-19 hampered deal activity, shows new research from Accuracy, the global independent financial and strategic consulting firm. In comparison, the overall number of deals targeting continental European companies fell by 27 per cent from 6,665 to 4,843 over the same period. The number of acquisitions by US businesses in continental Europe declined by 25 per cent in the same period. Accuracy says concerns over the potential impact of a no-deal Brexit deterred UK corporates from making purchases of European businesses last year. The shock to the economy caused by the Covid-19 lockdown reduced the number of deals across Europe. However, deals from UK businesses targeting European companies fell even more rapidly than overall deal numbers across all countries. Covid-19 travel restrictions between the UK and continental Europe also made it harder for UK based executives to meet face-to-face with possible bid targets on mainland Europe.
Brief: A year into the coronavirus crisis, there's broad consensus among asset owners that vaccination programs will give risk assets a further lease on life this year but less agreement about the pandemic's longer-term effects on portfolio construction. The short-term picture appears bright. Continued momentum on vaccines should help the global economy rebound strongly midyear as households in the U.S. and Europe emerge from lockdown, predicted Rupert Watson, London-based head of asset allocation with Mercer Investments. "Everybody I know wants to go and do stuff, whether it's go on holiday, go to a bar, catch up with friends, see relatives. And with the massive buildup in savings over the past year, "people have the cash to do it," Mr. Watson said. That's not to say the horizon lacks clouds — such as a potential sustained uptick in inflationary pressures — but for now they remain distant.
Brief: Experts at real estate specialist AEW look at a recent office acquisition in Barcelona and speak about the viability of the sector in a post-Covid world. In November last year, AEW made its third investment in Barcelona’s office market with the acquisition of a development in the city’s trendy @22 area, also known as Barcelona’s ‘innovation district’. Located in the old industrial neighbourhood of Poble Nou, @22 has seen ongoing redevelopment with the aim of creating a technological hub of for the city. At the time of the acquisition, AEW fund manager Carsten Czarnetzki said, regardless of the Covid-19 pandemic, the need to bring people together to interact face-to-face remains. “Ultimately this means that, while the way offices are used will change, they will remain integral to our working lives,” he said. But compared to 2019, office uptake in the Catalan city nearly halved in 2020, the fund manager highlighted, speaking to Funds Europe earlier this year. Despite this, the firm remains confident in the sector. “With occupiers actively assessing their short, medium and long term space requirements in the context of an ongoing pandemic, we see a long term shift towards larger space requirements per employee, offset by a higher home office component,” explains Czarnetzki.
Brief: Barclays Plc is planning job cuts at its corporate and investment bank as part of its cost-saving measures, according to people with knowledge of the matter. The reductions will affect around 60 jobs, including some senior roles in the U.S. and other countries, said one of the people, who asked not to be named discussing private information. A spokeswoman for Barclays declined to comment. The London-based bank’s securities division reported a 45% annual rise in markets revenue last month, beating forecasts as well as rival global investment banks. But Covid-19 has slammed its lending businesses -- an impact Barclays has said will likely endure this year. Like other banks, Barclays paused job losses during the pandemic, but mounting cost pressures have led firms to start resuming these cuts. In London, Societe Generale SA is planning to cut about 80 positions as it scales back securities services to asset managers, banks and brokers.
Brief: The European Central Bank kept up a muted pace of pandemic bond-buying for a second week as maturing debt acted as a brake on officials’ stimulus efforts. The institution settled 11.9 billion euros ($14.2 billion) of net buying under its Pandemic Emergency Purchase Program last week, similar to the 12 billion-euro outcome of the prior week. That’s well below the average purchase pace of 18 billion euros since the tool’s inception. More than 30 billion euros in government bonds matured in the region last week, some of which the ECB would have owned, acting as a weight on the overall total. That was confirmed by a statement from the institution provided by a spokeswoman. “Weekly net purchase data are affected by seasonality factors and in particular redemptions,” the ECB said. “Recently there have been large redemptions which lower the net purchases and temporarily delay the increase in our stock of bonds.” A global bond sell-off has sparked varying levels of concern among euro-area officials, aware that sovereign yields are used by banks as a reference point for lending. The region’s recovery is already expected to be slower than that of many other advanced economies amid stubbornly high rates of infections and slow vaccine roll-outs that forced longer and in some places even harder lockdowns.
Brief : New York’s Financial District is suffering as a glut of office space builds with the pandemic keeping workers home. JPMorgan Chase & Co. is the latest high-profile tenant to look for an exit from the neighborhood, a historic part of lower Manhattan that is home to the New York Stock Exchange and Federal Reserve. S&P Global and Fitch Ratings Inc. are also marketing big blocks of offices, driving an 80% surge in the amount of sublease space available. That’s more than double the rate in Midtown, according to data from CoStar Group Inc. “The sublet spaces currently on offer at deeply discounted rates is a veritable flood of biblical proportions, with more likely to come online soon,” said Ruth Colp-Haber, chief executive officer of brokerage Wharton Property Advisors. Manhattan’s office market has taken a big hit in the past year, with the pandemic emptying out skyscrapers and pushing cost-conscious companies to reconsider how much space they need after months of remote working. In Midtown, where there’s been a 36% increase in sublease space, roughly 18% of office space is currently available, either because it’s empty or a company is trying to unload it. There’s a similar amount space for rent in lower Manhattan. The area had been clawing its way back after being battered by the 9/11 terrorist attacks and the global financial crisis. In 2011, when the magazine publisher Conde Nast announced a move to the rebuilt World Trade Center from Times Square, it was a pivotal moment in the bid to draw companies downtown.
Brief: Most companies in the U.K. will ask employees to return to the office after the pandemic because working from home hurts productivity, a Bank of England policy maker said. Jonathan Haskel, a member of the central bank’s monetary policy committee, said information and communications technology is the only industry that indicating that staff can get more done from home. He analyzed data from an Office for National Statistics survey. “A net balance of firms across the vast majority of industries does not intend to use home working as a permanent feature,” Haskel said in a webinar on Friday. “It’s likely that the majority of industries will return to the workplace when the pandemic restrictions are lifted, lessening the impact of structural change from this quarter.” The remarks help explain why more people are traveling to work during the U.K.’s third national lockdown. Almost half of people reported leaving home for jobs at least once this week, reducing the portion of home working over the past few weeks. The number of people in offices now is similar to what it was in June when pandemic rules were looser. Prime Minister Boris Johnson plans to slowly loosen restrictions through the middle of the year, starting with reopening schools on March 8. He’s urged people to stick to the rules until the rules are loosened.
Brief: While both the European Union and China are committed to moving ahead with "vaccine passports," a government-mandated system for citizens to prove they’ve been inoculated against COVID-19 could be complicated to carry out in the U.S. because of privacy, equality, and practical concerns. This week, European Commission president Ursula von der Leyen said the EU would propose a “digital green pass” for EU citizens. China’s government said it intended to develop a certification program for citizens to show proof of vaccination or negative test results. And in February, Israel initiated its “Green Badge” system to exclude non-vaccinated individuals from certain activities. While some experts say there's a chance the U.S. government could pull off a successful and legal certification scheme, data privacy and anti-discrimination hurdles, as well as technical ones, could make a federal vaccine passport system tough to impose on Americans.
Brief: U.S. insurers are strengthening language in policies that cover business losses to protect them from future claims related to the coronavirus pandemic or other widespread illnesses that disrupt operations, industry sources say. New policies and renewals now define terms like “communicable disease” or “microorganism” – something existing policies often lacked, and which led to a flood of lawsuits that insurers have so far largely won. An exclusion drafted by the Lloyd’s Market Association, for example, says insurers will not cover any claim “directly or indirectly arising out of, attributable to, or occurring concurrently or in any sequence with a Communicable Disease.” Another, used by Farmers Mutual Hail Insurance Company of Iowa, excludes losses from even the “fear or threat” whether “actual or perceived” of a communicable disease or “any action in controlling, preventing, suppressing” it.
Brief: BentallGreenOak has raised 869 million euros ($1 billion) for its latest European real estate debt fund as the private equity firm muscles in on property lending amid a retreat by banks. The fund, which started raising cash before the onset of the pandemic, exceeded its initial target of 800 million euros, according to a statement Thursday. It issues loans secured against offices, warehouses and homes in Germany, the Netherlands, the Nordics and Ireland. “Post-Covid we have faced a lot less bank competition on the lending side,” said Jim Blakemore, a London-based managing partner and global head of debt. “This is a good market to be a lender in today.” The outbreak prompted banks to make hefty provisions for soured loans as widespread lockdowns threatened borrowers’ rent collections and their ability to repay loans. That’s diminished their appetite for new real estate lending, particularly to malls, stores and hotels that have seen their income wiped out. Non-bank lenders have spied an opportunity to step in and back investors seeking to reinvent those impaired properties. GreenOak Europe Secured Lending Fund II has so far lent 382 million euros, the statement said. The eight loans agreed to date have been for properties in the Netherlands and Ireland.
Brief: Energy hedge fund Deep Basin Capital LP is returning capital to investors after retail traders drove market volatility to extreme levels, overwhelming the fund’s positions, according a letter to investors reviewed by Bloomberg News. “I do not believe that risk markets are functioning properly and am deeply concerned about the immediate investment climate,” Matthew J. Smith, managing partner of the Stamford, Connecticut-based fund, wrote in the letter. “Further, the market structure has changed and become more dangerous in ways that at this point are difficult to quantify and understand, and I cannot fully study these changes while taking risk with partner capital,” he wrote. Hedge funds have struggled to make money for much of the last decade as equity markets surged, and there have been more hedge funds closures than launches since 2014, according to Hedge Fund Research. During the first three quarters of 2020, 619 funds shut compared with 364 that opened. Stock rallies driven by retail investors caused pain for short sellers this year, with funds like Melvin Capital Management and Maplelane Capital losing billions during January’s GameStop Corp. short squeeze. Melvin made up for some of its losses after gaining 22% in February. A spokesperson for Deep Basin declined to comment. An influx of retail traders weighed on the fund’s stock picks, with retail flows in stocks and options exceeding 50% of the daily volumes in Deep Basin’s positions.
Brief : Federal Reserve Chair Jerome Powell said he is monitoring financial conditions and would be “concerned” by disorderly markets, but stopped short of offering specific steps -- which sent Treasury yields higher. “We monitor a broad range of financial conditions and we think that we are a long way from our goals,” he said in a Wall Street Journal webinar on Thursday. “I would be concerned by disorderly conditions in markets or persistent tightening in financial conditions that threatens the achievement of our goals.” Bond yields have shot higher in recent weeks on mounting expectations of stronger economic growth and faster inflation. Trading has been turbulent at times as dealers have struggled to keep up with the order flow. Investors also have moved forward their expectations for the first Fed rate hike to early 2023 as they begin to question the central bank’s commitment to keeping policy easy until inflation overshoots 2%.
Brief: The biggest hedge fund firms topped performance charts and drew the most investor capital over the course of last year, with 2020 proving “the year of outsourcing” for a range of middle office functions, as the industry demonstrated its value to investor portfolios, according to new analysis by Citco. Citco Fund Services’ ‘2020 Hedge Fund Report: A Year In Review’ said the past 12 months had been a “huge year” for the industry, as managers went from “strength to relative strength”, withstanding surging trading volumes and spikes in volatility. Citco, which provides asset servicing solutions to the global hedge fund and alternative investment industry, probed performance data, trade volumes, treasury services, and investor flows. Its report suggested hedge funds’ resilience ultimately underlined the sector as a key portfolio diversifier during turbulent times. A vast majority – 77.6 per cent – of funds delivered a positive annual return last year, with all strategies and assets under administration categories finishing 2020 in the black.
Brief: UK equity funds saw inflows for the first time in eight months during February, which is seen as a sign of recovery from Covid-19’s impact on markets. Latest fund inflow data also suggests records being set for ESG investment funds, according to two separate pieces of research. However, the return to UK equities was described as “tentative” with UK investors adding £145 million to their holdings, which followed outflows of £2.2 billion in the previous eight months, according to Calastone, a fund transaction network. Calastone also cautioned that in the final week of February, UK equity funds saw £19 million of outflows. Edward Glyn, head of global markets at Calastone said: “UK funds have been so out of favour for so long that some rotation is clearly taking place now…”.
Brief: China Investment Corp. posted a return of more than 12% on overseas investments in 2020 after markets rallied on loose monetary policies, marking a breakout year for China’s $1 trillion sovereign wealth fund. The unaudited returns bring the Beijing-based fund’s 10-year rolling average to more than 6.6%, beating its target. Executive Vice President Zhao Haiying expects calmer markets this year even as policy makers try to stimulate growth without spurring runaway inflation. “2020 was a very unusual year,” Zhao, also a member of the Chinese People’s Political Consultative Conference, said in an interview before the top advisory body convenes for its annual meetings in Beijing. CIC stuck to its position as a long-term investor despite market gyrations, Zhao said. “We withstood the test of strong winds and waves, and delivered relatively good returns.”
Brief: Hedge fund impresario Anthony Scaramucci, the managing partner of $9.2 billion fund-of-funds SkyBridge Capital, is bringing his famed SALT Conference to New York City in September. "I thought it was important to bring the conference back at a time where New York could use the boost. We did something very similar in Las Vegas after the global financial crisis," Scaramucci told Yahoo Finance Live exclusively. SALT, one of the widely-attended hedge fund conferences, first debuted in Las Vegas in 2009, during the depths of the global financial crisis. In the last 11 years, SALT, which is traditionally held at the Bellagio in mid-May, has held ten conferences in Las Vegas and other forums in Abu Dhabi, Singapore, and Tokyo. The New York City version will take place in-person at the Javits Center from Sept. 13 to 15. SALT's programming will center around alternative investments, bitcoin, fintech, healthcare, infrastructure, and sustainability. The conference will also offer a hybrid format for remote attendees to watch content and network virtually. There will also be outings and entertainment in the city.
Brief : Consumers in the world’s largest economies amassed US$2.9 trillion in extra savings during COVID-related lockdowns, a vast cash hoard that creates the potential for a powerful recovery from the pandemic recession. Households in the U.S., China, U.K., Japan and the biggest euro-area nations socked money away when forced by the coronavirus to stay home and out of the shops, according to estimates by Bloomberg Economics. They are likely continuing to do so as restrictions remain and governments dole out stimulus. Half that total — US$1.5 trillion and growing — is in the U.S. alone, the data show. That’s at least double the average annual growth of gross domestic product witnessed in the last expansion and equivalent to the annual output of South Korea. Such savings should provide fuel for economies to rebound once COVID-19 is finally wrestled under control and as vaccines roll out. The optimists are betting on a shopping spree as people return to retailers, restaurants, entertainment venues, tourist hot spots and sports events as well as accelerate those big-ticket purchases they held back on. Those who are less confident wonder if the money will instead be used to cover debts or hoarded until the health crisis passes and labor markets look stronger. In the U.S., a running down of all the money saved in the past year would propel economic growth to as much as 9 per cent rather than the 4.6 per cent currently projected for 2021 GDP, according to BE. By contrast, if the savings go unspent, the economy will likely grow just 2.2 per cent.ompared to Q1. The sector reported 31 attacks between March and May alone.
Brief: Michaels Cos., the U.S. crafting and hobby retail chain, has agreed to a sale to Apollo Global Management at an equity value of about $3.3 billion. Apollo will pay $22 a share to Michaels shareholders, representing a 22% premium from Tuesday’s close. The Michaels board has unanimously approved the deal, according to a statement Wednesday. Although the offer was unsolicited, Michaels Chairman James Quella said it made sense. The company’s management “firmly believes Apollo’s offer represents a compelling value to our shareholders.” Apollo’s interest in Michaels comes on the heels of the company’s best annual stock performance since its latest initial public offering in 2014. Shares rose 61% last year, fueled by all the crafting items and home decor purchased by families stuck at home during the pandemic. That marked a major turnaround from prior years, when the growth of Amazon.com Inc. and flagging sales had forced the chain to shutter dozens of locations.
Brief: British businesses were on Wednesday urged to review how they claimed for government support during the coronavirus pandemic as the country launched a 100 million pound ($140 million) taskforce to tackle fraud. Britain’s spending watchdog said last October that companies may have fraudulently claimed up to 3.9 billion pounds in public money by accepting funds from schemes such as salary support packages while ordering furloughed staff to continue working during national lockdowns. Unveiling the Taxpayer Protection Taskforce in Wednesday’s budget, Finance Minister Rishi Sunak said the new body would investigate, prosecute and recover unlawfully claimed payments through schemes such as furlough and the Self-Employment Income Support Scheme (SEISS).
Brief: More than one-third of U.S. nonprofits are in jeopardy of closing within two years because of the financial harm inflicted by the viral pandemic, according to a study being released Wednesday by the philanthropy research group Candid and the Center for Disaster Philanthropy. The study's findings underscore the perils for nonprofits and charities whose financial needs have escalated over the past year, well in excess of the donations that most have received from individuals and foundations. The researchers analyzed how roughly 300,000 nonprofits would fare under 20 scenarios of varying severity. The worst-case scenario led to the closings of 38% of the nonprofits. Even the scenarios seen as more realistic resulted in closures well into double digit percentages. Officials of Candid, which includes the philanthropic information resources GuideStar and Foundation, and the Center for Disaster Philanthropy, which analyzes charitable giving during crises, said the most dire scenarios could be avoided if donations were to increase substantially — from the government as well as from private contributors.
Brief: Société Générale SA will cut the bonus pool at its investment bank by about 20%, after trading hits in 2020 handed the group its first losing year in more than three decades. Across the company, payouts are being reduced by an average of 15%, according to a person familiar with the matter, who asked not to be named discussing confidential matters. SocGen’s markets unit, which posted a net loss last year, saw even bigger pay reductions, with some equity derivatives traders facing a bonus cut of more than 80%, another person said. The sweeping cuts cap a damaging year for Chief Executive Officer Frederic Oudea, who has seen shares of the French lender slump by more than two thirds since he took over in 2008. SocGen’s payouts are likely to be among the lowest among global investment banks after most peers seized on the pandemic market swings to deliver trading and deal-making gains. The bank’s traditionally-robust equity trading unit delivered a 49% revenue drop in 2020. On Wall Street, investment banks posted double-digit gains and bonuses to match.
Brief: Publicly traded asset managers’ revenues and profit margins were up in the fourth quarter, but most gains are going to a small group of firms that have been able to capitalize on trends like investors’ appetite for alternatives, according to an analysis from strategy consultant Casey Quirk, which is owned by Deloitte. “At the beginning of 2020, we would have expected to see more margin and revenue pressure than we’ve seen. But it’s been a positive year for the industry writ large,” said Amanda Walters, a principal at Casey Quirk, in an interview. “The dispersion of winners and losers, however, is more pronounced and accelerating.” Walters said the consultancy included five publicly traded alternatives firms in its most recent analysis. “That group of firms is doing very well,” she said. “But it’s also larger traditional firms that have both active and passive, are managing their expense base efficiently, and have a significant portion of their asset base aligned with equity markets. So you can’t say only the alternatives firms are winning.” According to Walters, the asset managers that are winning can also be characterized as having profitable growth. “We’re not seeing them cutting their way to profitability,” she said.
Brief : The global Covid-19 pandemic has disrupted the cybersecurity landscape, with ransomware seeing some of the largest pivots in attacker strategy, leaving organisations across sectors – including finance – vulnerable. Data from the CrowdStrike Intelligence team reveals a surge in ransomware attacks during the pandemic, with data extortion becoming the most used attack method for all sectors – with 1,430 incidents reported globally in 2020. The financial sector was one of the most targeted by cybercriminals in 2020 during the Covid-19 pandemic at a time when rapid shifts in working practices left organisations vulnerable. In the first emergency phase of the pandemic in Q2 2020, ransomware attacks on financial organisations using data extortion techniques were up 417 per cent compared to Q1. The sector reported 31 attacks between March and May alone.
Brief: Polar Capital fund manager Guy Rushton took his own life in May last year having been “uncertain about the future” and “extremely stressed” about his health, the pressures of work and the dwindling size of his fund, a coroner’s court has heard. Rushton, 36, was found dead in a barn near his home in Wiltshire shortly after he went missing on 22 May, 2020. Two weeks before his death, he had been discharged from a psychiatric hospital and had been prescribed antidepressants following a previous suicide attempt. His widow Alannah Rushton told Wiltshire and Swindon assistant coroner Ian Singleton that the manager of the Polar Capital UK Absolute Return fund had “experienced high stress due to a number of factors”, the Times reported. Rushton (pictured) had been diagnosed in October 2019 with high blood pressure which his family attributed to the stress of being sole manager of the fund and not feeling like he could take time off. The Polar Capital UK Absolute Return fund had been among the top-performers in the Investment Association Targeted Absolute Return sector, but its performance faltered during the coronavirus sell-off. It had held £472.17m at the time of its February factsheet but that had fallen to £292.2m by the time Polar decided to wind up the fund.
Brief: Saudi Arabia’s sovereign wealth fund is set to close a deal for its biggest loan ever as soon as this week, according to people familiar with the matter. The Public Investment Fund is raising about $15 billion from a group of international banks to finance new investments, the people said, asking not to be identified as the information is private. The final bank group participating in the facility is still being determined, and the size of the loan as well as the timing may change, they said. The PIF declined to comment. The wealth fund has more than doubled the size of the loan from an initial plan to raise up to $7 billion, Bloomberg reported last month. The $400 billion sovereign investor fund is tapping banks for its third loan so far, after borrowing $11 billion in its debut debt raising, and another $10 billion bridge facility in 2019 that it paid off last year. The fund has also received cash injections in the form of the $30 billion proceeds from the sale of shares in Saudi Aramco and a $40 billion transfer from the kingdom’s foreign reserves last year as it looked to finance an asset-buying spree during a slump in equity markets caused by the coronavirus.
Brief: Paper Source Inc., the stationery and craft supplies chain, filed for bankruptcy with plans to sell itself after Covid-19 hampered expansion plans. The company intends to hand control of the business to an affiliate of MidCap Financial, a lending arm of Apollo Global Management, in exchange for debt forgiveness, court papers show. Paper Source owes about $103 million to lenders, including more than $55 million under a first-lien term loan. Paper Source, which has 158 stores across the U.S., expanded its reach last March when it bought about 30 stores from rival chain Papyrus out of bankruptcy. Less than three weeks later, Paper Source temporarily shut down all of its own stores, which generated more than 80% of sales in 2019. The company brought in gross sales of $104 million in 2020, down more than 30% from $153 million in 2019. In an attempt to preserve cash, Paper Source asked landlords for breaks on rent and stretched payment terms with vendors. Its rent concessions expired in January and vendors have threatened to stop doing business with the company, court papers show.
Brief: The head of a group representing major U.S. passenger airlines and a senior union official made the case to lawmakers on Tuesday for a third round of federal government assistance, according to testimony seen by Reuters. Since March 2020, Congress has awarded passenger and cargo airlines, airports and contractors nearly $90 billion in government assistance and low-cost loans, including two prior rounds of payroll assistance for U.S. passenger airlines totaling $40 billion. The $1.9 trillion COVID-19 relief package approved by the U.S. House last week includes another $14 billion for passenger airlines to keep workers on payrolls for an additional six months. It awaits action by the U.S. Senate. “We are still struggling and in dire straits,” Nick Calio, who heads Airlines for America, a trade group representing American Airlines, Delta Air Lines, United Airlines and others, said in testimony before the House Transportation and Infrastructure’s aviation subcommittee. “We were hoping it would be better by now.”
Brief: It is stating the obvious, but the pandemic has had a negative impact on real estate investment in Europe, with volumes for the year projected to be around 15-20% lower than in 2019, but still similar to 2016. This is only a superficial impact on the market and masks what are more profound changes. The cause of the reduction in real estate investment in Europe is not simply due to the restrictions in mobility that frustrate capital movements in what is now an increasingly internationalised industry, but may be more substantially attributed to the undermining of capital market confidence in occupier markets and not just in the short term, but more importantly into the long term. Although important, this isn’t just about confidence in occupier covenant strength as a result of the financial strain of the pandemic, but rather it is to do with the manner in which the pandemic is revolutionising the way in which we occupy real estate. Trends that were evident pre-pandemic are being accelerated both for good and bad. This might be most evident in the trauma being experienced in the retail sector and the contrasting exuberance of the industrial sector, but it also applies to the future use of offices and even the homes within which we live, indeed the entire built environment is being rethought.
Brief : Vaccine optimism and hopes of an end to coronavirus quarantines and lockdowns are spurring growth among emerging markets-focused hedge fund managers, new industry analysis shows. Hedge Fund Research said on Friday that an upsurge in both performance and capital over the past year have positioned emerging markets managers – and, in particular, those focused on China – for a “strong continuation” of gains in 2021. EM hedge funds – as measured by HFR’s Emerging Markets (Total) Index – gained 12.7 per cent in 2020. China-focused strategies powered the advance, with the Emerging Markets China Index soaring more than 26.3 percent in the 12-month period between January and December.
Brief: CQS is shutting one of its best-performing strategies because the fund’s chief investment officer is leaving to join Citadel, adding to a string of departures from Michael Hintze’s hedge-fund firm. Prakash Narayanan, who ran CQS Global Relative Value, is exiting after more than three years, according to people with knowledge of the matter. He is joining Citadel’s Global Credit business as a portfolio manager to run a strategy similar to the one at CQS, a spokesman for Citadel confirmed. Narayanan’s was one of the senior partners that Hintze recently included in a succession plan. His strategy was a rare bright spot for CQS last year when the firm’s hedge funds tumbled, with the Global Relative Value fund surging 30% while Hintze’s flagship money pool slumped by a record 35% as his structured credit bets imploded, according to an investor document.
Brief: The growing footprint in New York of major tech companies like Amazon.com Inc, Facebook Inc and Alphabet Inc’s Google has given property owners and brokers hope that once the coronavirus has been conquered demand for office space will quickly return to pre-pandemic levels. But the popularity of working from home and the exodus of people from expensive coastal cities will likely weigh on demand and change workspace requirements, leaving office buildings that do not adjust less valuable. Big Tech’s expanding real estate clout already hides declining values for lower-quality properties. Prices for premier workspace in U.S. gateway cities have held or even risen during the pandemic in a flight to quality. But leasing volumes and number of buildings sold have plummeted, with valuations at the lower end falling, data shows.
Brief: The U.K. government has taken stakes in 37 startup companies after state loans to help them grow during the pandemic were converted into equity. The figure was revealed Friday in response to a freedom-of-information request by Bloomberg to the British Business Bank, which administers the so-called Future Fund program. While the government is usually averse to taking stakes in private companies, the bank said 30.4 million pounds ($42.4 million) of loans had been converted. The Future Fund was announced in April to ensure “high-growth” startups got funding to continue operations as the coronavirus triggered the worst recession in more than 300 years. Billed as a 500-million pound program, it’s issued 1,140 loans worth 1.1 billion pounds. The bank declined to provide details of the companies in which the government now owns stakes, or the size of the state’s holdings. “The Convertible Loan Agreement in place with each investee company is confidential in nature,” it said.
Brief: Despite COVID, venture capital activity across the globe remained robust throughout 2020 and deal activity, thus far in 2021, suggests venture capital will continue to fly high this year. Below we outline Covid winners, challenges and opportunities in ESG within the VC space and discuss what managers can do to thrive in this new financial environment. The winners. Healthcare and life sciences. Unsurprisingly, healthcare and life sciences have done particularly well. According to Rock Health, 2020 has seen more digital health funding than any other year with USD2.4 billion invested each quarter — significantly outperforming the last 2 years’ quarterly average of USD2.1 billion. The US was particularly strong in this sector. Q3’20 hit USD36.5 billion, a 7-quarter high for VC companies and is an increase of 30 percent from Q2 2020.
Brief: Private equity buyouts have historically performed better in the periods immediately following market collapses like the dot-com bubble or the 2008 financial crisis. But the best performance belongs to co-investment deals, according to a new report from private markets firm Capital Dynamics. In a study of 435 co-investment buyout transactions made between 1998 and 2017, the multi-manager firm found that co-investments delivered higher internal rates of returns than the overall buyout market in the three-year periods following the last major crises before the pandemic. Report authors Andrew Beaton, David Smith, and Kairat Perembetov found that the co-investment deals performed better on the median, as well as delivering higher upper- and lower-quartile returns — and that was on a gross basis, before the more favorable fees associated with co-investments were taken into account.
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