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Our briefing for Tuesday, February 1, 2022:
Feb 1, 2022 4:25:00 PM
- On Monday, the United States granted full approval to the Moderna Covid-19 vaccine, the second most widely distributed vaccine in the country. The drug had been on emergency approval status and is now the second vaccine to gain full approval from federal regulators following the approval of the Pfizer-BioNTech shot in August of last year. The green light came only five months after Moderna had applied for full regulatory approval and will now adhere to various mandates that have been in place across the country for Pfizer. Over 204 million doses of the Moderna vaccine have been administered in the U.S. to date. Federal regulators will remain busy however, because on Tuesday Pfizer Inc. began sending data to the United States seeking approval of its Covid-19 vaccine for children under age 5. The current Pfizer-BioNTech vaccine is approved for children over aged 5 and the new data submissions may include evidence to support giving children a third dose.
- Canadian Prime Minister Justin Trudeau has condemned anti-vaccine-mandate protests which have gripped the country, after most of the convoy left the capital on Tuesday. The prime minister, who is currently isolating after having tested posted for Covid-19, said that the protesters are not representative of most Canadians. He further reiterated his pro-vaccine stance and continued that vaccine mandates are the best way to move through the pandemic. The PM refused to meet with anyone who held what he called “anti-science” views and who “promote hate” after several memorials had been defaced over the weekend. The Conservative party has said that Trudeau is instead maligning peaceful protesters that only want their views to be heard by those in power. With respect to how he is feeling as he recovers from Covid-19, Trudeau says he is feeling “fine,” and will continue to isolate and work remotely. "It's a big challenge that my family and I are facing but there's nothing unusual or special about it. It's a challenge too many Canadians and people around the world know all too well," Trudeau said.
- Former Prime Minister of the United Kingdom Theresa May grilled her successor Boris Johnson in Parliament on Monday for his alleged disregard for Covid restrictions. "The Covid regulations imposed significant restrictions on the freedoms of members of the public. They had a right to expect their prime minister to have read the rules,” said May in the House of Commons. May’s remarks come after British civil servant Sue Gray released an update on her investigation into parties held at 10 Downing Street during country-wide lockdowns last year. The report suggested that members of Johnson’s staff were in attendance at the prime minister’s residence the night before Prince Phillips funeral, which saw the Queen sit unattended due to restriction imposed by the government. "What the Gray report does show," May continued, "is that No. 10 Downing Street was not observing the regulations they had imposed on members of the public. So, either my right honorable friend [Johnson] had not read the rules or didn't understand what they meant.”
- Denmark has officially lifted all Covid-19 restrictions as it deems the virus no longer causes a “socially critical sickness.” Mask mandates, vaccination records and the legal obligation to self-isolate upon receiving a positive test will all be removed as of Tuesday. The country is the first in the European Union to remove the restrictions and comes as the nation has the second-highest infection rate, or seven-day average of new infections, in the world. Danish Health Minister Magnus Heunicke told CNN in an interview on Monday that "no one can know what will happen next December. But we promised the citizens of Denmark that we will only have restrictions if they are truly necessary, and we'll lift them as soon as we can. That’s what’s happening right now.” Heunicke said that widespread vaccinations are helping the country open up and that the number of patients in intensive care units is falling. Currently, 81 per cent of the Danish population is fully vaccinated.
- Authorities in China are worried that celebrations for the Lunar New Year, or Spring Festival, will become a super spreader event in the country. The Chinese government estimates that 1.8 billion trips will be made over what is regarded as the largest holiday in the calendar year. That number is still lower than pre-pandemic levels, but the government – still trying to enforce its Covid Zero policy – is on high alert. Chinese citizens are being placed under strict surveillance with a color-coded system intended to mark where and when a person will be able to travel. The new measures include having to show a green pass on their phone to prove that they have not been in a Covid-infected area before boarding public transit or passing through highway checkpoints. The Winter Olympics are scheduled to take place on the first day of the Spring Festival and authorities are doubling their efforts to make sure those games can continue without mass outbreaks. Several municipalities have been shut down completely after Covid exposures have been detected, forcing residents to remain in their house and business to be closed.
Covid-19 – Due Diligence And Asset Management
Bill Ackman reportedly made nearly $4 billion from $200 million in pandemic-related bets — and here are his next moves
Brief: Billionaire investor Bill Ackman turned about $200 million in complex, pandemic-related bets into payoffs totaling nearly $4 billion, The Wall Street Journal reported Monday. The first bet happened early on in the pandemic. The CEO of Pershing Square Capital Management in February 2020 invested $27 million into instruments that would pay off if corporate bonds tumbled in value, the WSJ said. Ackman then sold his position a few weeks later for $2.6 billion after investors realized that companies affected by the crisis might not be able to pay off their debts. The second bet occurred as 2020 was winding down. This time, he assumed consumer spending would soar, stoke high inflation, and prompt the Federal Reserve to respond with rate hikes to cool prices.
Lenders Help Private Equity Hang On to Pandemic-Hit Companies
Brief: With the pandemic wrecking the growth plans of some private equity-owned companies, lenders are helping buyout shops hold on to such assets until they develop further. Fund-to-fund transfers -- which allow a private equity firm to sell an asset from one of its fund to another -- are set to increase in 2022, bankers say. Strong investor demand for the debt package behind BC Partners’ transfer of CeramTec suggests more buyout firms may follow this model. The deal will let one arm of the buyout shop sell the commercial ceramics maker to satisfy the return requirements for one customer base, while allowing the other to sponsor an asset BC Partners believes has longer term potential. This kind of move isn’t entirely new, but it’s far from widespread. Bankers are entering into talks with a number of private equity firms about such transactions in a bid to deal with the adverse impacts of Covid-19. The moves are popular with institutional investors, as it’s quicker and easier to reinvest in an asset they already know and believe has bright prospects.
Viking Hedge Fund Blames 2021 Losses on ‘Underestimating’ Covid
Brief: After posting its worst ever performance last year, Viking Global Investors is trying to explain its losses -- and it’s pinning the blame on the Covid-19 pandemic. The firm’s hedge fund, which invested in 2021 laggards such as Peloton Interactive Inc., Coupa Software Inc. and Adaptive Biotechnologies Corp., fell 4.5% in the year because it “underestimated the ongoing impact of Covid,” founder Andreas Halvorsen wrote in a letter to investors dated Jan. 18. Viking has been one of the hedge fund world’s biggest successes since its founding in 1999, registering only four down years, including the most recent one. But it suffered because of its bet that consumer spending would normalize, and that shoppers would shift back toward services such as travel and elective medical procedures. “In hindsight, these were bad bets,” Halvorsen said in the letter. But, he added, “we have maintained our positioning and believe companies exposed to reopening will benefit from both an improvement in fundamentals and a re-rating of multiples.”
Hines Looks to Wealth Managers for New “Recovery Fund”
Brief: Investors like family offices and high-net worth individuals have an opportunity to put their money into transformative real estate redevelopments planned by Hines, an international real estate firm that announced the first of a series of "tactical" real estate investment funds in January 2022. Investors have already committed about $590 million in equity to Hines U.S. Property Recovery Fund—the money gives the fund the capacity to invest $1.5 billion immediately. Hines plans to close the fund by May 2022 with a total investment of $1 billion, with a purchasing power of $2.5 billion after leverage. The fund has already bought assets like a trailer park in California with plans to redevelop it as industrial. Other projects might redevelop empty malls as mixed-use town centers or redevelop aging office buildings as apartments. So why does Hines believe now is a good time for a fund focused on redevelopment? And why is Hines so interested in small, equity investments from investors like family offices and high-net worth individuals?
Private Equity In The Aftermath Of COVID-19
Brief: In 2019 we interviewed Omiros D. Sarikas, the visionary CEO of Brookstreet Equity Partners – a London-based fund innovating the Private Equity and Venture Capital asset class – about the concept of investing in ‘asymmetric’ markets to generate alpha returns. In 2022, we ask Omiros what has changed in the aftermath of COVID-19. He talks to CEO Today about the development of Brookstreet 2.0, the era of ESG, and brings to the table Lucia Labuzikova to highlight the importance of Diversity, Inclusion and Talent Management in unlocking value for private equity investments. Omiros, good to have you back. Please reintroduce our readers to Brookstreet Equity Partners. Brookstreet Equity Partners (Brookstreet) is an award-winning, Mayfair-based investment platform that seeks out global asymmetric opportunities in undercapitalised markets. We set up the firm with the intention to be a beacon in the industry and developed a solid infrastructure. By means of example, our legal counsel also advised on Softbank’s $100bn+ Vision fund, our administrators handle $1.3+ trillion, our senior professionals have worked at McKinsey, Bulge Bracket Investment Banks and top tier Cross-Border Funds, our teams were educated at Harvard, Oxford and London and train at the British Venture Capital & Private Equity Association (BVCA) and the CFA Institute.
