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Our briefing for Monday April 13, 2020:
Apr 13, 2020 4:29:51 PM
- Over the weekend, United Kingdom Prime Minister Boris Johnson was released from a London hospital and is recovering at Chequers, a home that usually serves as a country retreat for the Prime Minister. Johnson isn’t working while he recovers as Dominic Raab continues to serve as deputy leader in his absence. England has now surpassed over 10,000 deaths due to the coronavirus with Raab warning citizens that there is still a long way to go and the country have yet to pass the peak of the virus.
- The United States now own the grim distinction of having the most deaths due to the coronavirus, passing Italy over the weekend. The White House also had to do some damage control on Monday stating the government has no intention of firing lead immunologist Dr. Anthony Fauci calling it “chatter” and “ridiculous”. Dr. Fauci made the media rounds over the weekend stating on CNN that he and other health experts wanted the government to shut down in February, but government officials weren’t ready to do so. President Donald Trump then took to Twitter, retweeting a former Republican congressional candidate calling on Dr. Fauci to be fired.
- In Canada as the number of cases reached over 25,000, the attention has turned to some of the country’s most vulnerable: seniors in long-term care homes. Over the past several days, media reports have displayed some deplorable conditions at a Quebec seniors’ home where 31 residents have died since mid-March. The government said at least five of those deaths were linked to COVID-19. The province’s health officials are now inspecting all private long-term care facilities to see what measures are being taken amid the pandemic. There have also been other outbreaks at senior care facilities in British Columbia and Ontario since the outbreak began.
- Italy’s strict social distancing measures, which have been in place since March 9th, will be extended until May 3rd. While the country has seen improvements, Italy’s death toll is now over 20,000.
- France’s President Emmanuel Macron has also extended his country’s lockdown until May 11th as their death toll closes in on 15,000.
- Spain though has lifted some of its restrictions on Monday, allowing those who cannot work from home like construction and manufacturing industry workers to return. Shops, bars, restaurants, and other businesses deemed to be non-essential remain closed.
- Media reports are noting Japan’s Prime Minister Shinzo Abe’s “stay home” tweet over the weekend has rubbed a lot of his citizens the wrong way. The reason being is the government’s social distancing policy is voluntary and doesn’t come with compensation for poorer workers who can’t afford to “stay home”.
Covid-19 – Due Diligence And Asset Management
Leon Cooper says Gov’t Shouldn’t Let Companies go Bankrupt Because of Coronavirus
Brief: Billionaire investor Leon Cooperman told CNBC on Monday the U.S. government should offer financial assistance to companies struggling with the economic effects of the coronavirus pandemic. “If the government lets all these companies go bankrupt and they do disgorge labor, the government is going to have to basically pay a lot of unemployment benefits,” Cooperman said on “Fast Money Halftime Report.” “Instead, they make low-interest rate or interest-free loans to these companies that are experiencing [a] liquidity crisis, the companies fix themselves up and they come back.”
Polar Capital AuM Dips 12% Hit by Covid-19
Brief: British investment manager Polar Capital has revealed that its assets under management (AuM) dropped 12% on a year-on-year basis to £12.2bn at the end of March 2020.The firm attributed the fall to the impact of the pandemic and a sharp fall in the oil price, which led to a fall in global equity markets. The AuM dipped by £1.9bn in the three months ended 31 March 2020. The firm’s AuM as of 31 March 2019 was £13.8bn.
SoftBank Sees $12.5 Billion Loss as Startup Bets Backfire
Brief: SoftBank Group Corp. forecast a 1.35 trillion yen ($12.5 billion) operating loss for the fiscal year ended in March, a sign of how badly Masayoshi Son’s bets on technology startups have been battered in recent months. The Japanese company expects to record a 1.8 trillion yen loss from its Vision Fund and another 800 billion yen in losses from SoftBank’s own investments. It has written down the value of investments in companies, including office-rental startup WeWork and satellite operator OneWeb, which filed for bankruptcy last month. Son’s conglomerate has taken one blow after another since the implosion of WeWork’s initial public offering last year and SoftBank’s subsequent bailout. It bet heavily on sharing-economy startups, which allow people to split the use of offices or cars, but those investments have been particularly hard hit as the coronavirus pandemic curbs unnecessary human interaction.
AEW Core Property Trust Suspends Redemptions
Brief: Organized as a Maryland corporation, AEW Core Property Trust (U.S.) is an open-ended U.S. core real estate vehicle managed by Boston-based AEW Capital. Like other real estate funds, the trust is concerned about liquidity during the Wuhan coronavirus (COVID-19) pandemic. At December 31, 2019, the open-ended fund had US$ 9.5 billion of gross property value and net asset value equating to US$ 7.2 billion. AEW Capital informed investors that its suspending fund redemption requests. The fund is concerned about a rapid withdrawal, causing the portfolio’s value to drop sharply.
EJF Capital Asks to Borrow From Clients Amid Credit Market Turmoil
Brief: EJF Capital LLC, the multibillion-dollar credit-focused investment firm, is asking clients for a loan to avoid additional losses in one of its private funds, according to a recent company letter seen by Reuters. Sent to investors in the $206 million EJF Trust Preferred Fund LP, the letter said recent coronavirus-driven turbulence in short-term funding markets made continuing to use such debt a challenge, risking deeper fund losses if positions had to be liquidated to pay it back.
Billionaire Cliff Asness’ Hedge Fund AQR Hit with $43B COVID-19 Losses
Brief: Billionaire investor Cliff Asness has spent his quarantine watching $43 billion disappear. Asness’ AQR Capital — which managed $186 billion at the end of 2019 — has updated its Web site to reflect that its assets under management as of March 31 now stand at $143 billion. It’s unclear how much of the massive 23 percent drop in assets is due to investor withdrawals versus investment losses, but the notoriously outspoken Asness, 53,has been sufferingfrom redemptions amid sagging performance since last year. Returns have worsened this year for some of Asness’ funds as the coronavirus pandemicbatters the economyand the stock market, according to AQR’s Web site.
