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Our briefing for Wednesday, January 12, 2022:
Jan 12, 2022 4:09:27 PM
- In the United States, the federal government announced it will increase the number of Covid-19 tests available to schools by 10 million per month, which will include five million rapid tests and five million PCR tests. The announcement came as part of a set of new measures that aim to keep schools open. Other measures include connecting local school districts with testing providers and providing full reimbursement to schools that set up their own testing programs. According to the Biden administration, its measures so far have allowed 96% of schools to open for in-person learning this month, up from 46% in January 2021.
- In Canada, the province of Quebec announced it will impose a health tax on those who refuse to get their Covid-19 vaccines. Premier Francois Legault did not say how much the tax would be or when it would take effect, but he did say he wanted it to be significant enough to incentivize people to get their shots. "These people, they put a very important burden on our health-care network," Legault said at a news conference. "I think it's reasonable a majority of the population is asking that there be consequences." Only about 10% of eligible Quebecers are unvaccinated.
- In the United Kingdom, case numbers reached 120,821 on Tuesday, and 379 deaths were recorded within a 24-hour period. This is the highest number of daily deaths since February 24 of last year, when 442 deaths were reported. This brings the total death toll since the start of the pandemic to 150,609. The U.K. crossed the 150,000 deaths threshold over the weekend, with Prime Minister Boris Johnson saying in a statement that the best way out of the pandemic is through boosters. So far about 62% of people aged 12 and above in the U.K. have had their booster shots.
- South Korea has approved the Novavax vaccine for use, to be produced by vaccine developer SK Bioscience Co. Ltd. Novavax is now added to the ranks of South Korea’s approved vaccines, which include Pfizer, Moderna, AstraZeneca, and Johnson & Johnson. The country is also preparing to distribute the first of Pfizer’s antiviral pills, known as Paxlovid. According to the health ministry, at least 21,000 pills will arrive in the country on Thursday, with another 100,000 expected by the end of the month. Paxlovid has been shown to reduce hospitalizations and deaths by 90% according to data from the company’s clinical trials.
- Brazil’s health regulator Anvisa has asked President Jair Bolsonaro to retract statements he made regarding the vaccination of children last week. In a letter made public over the weekend, retired rear admiral Antonio Barra Torres asked the president to provide evidence on his statement that there were undisclosed “interests” behind the decision to authorize the vaccine for children. Torres calls on Bolsonaro to retract his statements if he cannot provide the evidence. Bolsonaro openly criticized Anvisa last Thursday, saying he had never heard of children dying from Covid-19. The president’s office has not responded to the request for comment on the letter.
- In Australia, calls to expand the definition of “essential worker” are growing as Covid-19 continues to cause staff shortages across the country. The federal government and industry groups have held crisis talks as job vacancies surge. All sectors of the economy reported higher vacancies, with openings up 19.4% in the private sector from last August. Public sector vacancies were up 9.7%, the Guardian reports. Arts and Recreation saw an increase in job openings of about 260%, compared with February 2020. The numbers come as Omicron officially overtakes Delta as the dominant strain in Australia.
Covid-19 – Due Diligence And Asset Management
2021 private equity deal value surpasses pre-Lehman Brothers peak, says Preqin
Brief:After a surprisingly resilient 2020, private equity deal flow came roaring out of the gates in 2021, as fund managers looked to deploy record amounts of investor capital, while also taking advantage of buoyant listed equity markets to exit existing positions. Around 8,000 deals are expected to have been completed, conservatively annualising data to October 2021, with a combined value of more than USD800 billion, breaking the 2007 record of USD712 billion. That's according to the 2022 Global Private Equity Report published by Preqin, whilst also finds that private equity returns continue to outperform public markets, with the global private equity funds tracked by the company having achieved a net initial rate of return (IRR) of 18.8 per cent over the five years to March 2021. The surge in private equity investment activity has been supported by a virtuous circle driving the asset class to new heights.
Goldman: China’s Zero-Covid Policy Presents Risks to Global Investors
Brief: The Chinese city of Xi’an has been on lockdown for almost three weeks. Apart from the 14 million residents, the city is also home to several memory chip manufacturing facilities, including those of Samsung Electronics and Micron Technology. Although China’s strict zero-Covid policy implemented at the start of the pandemic was effective early on, the approach has disrupted global supply chains, worrying investors who have bet on a globalized economy, according to the latest report from the Investment Strategy Group at Goldman Sachs. The China findings are just one part of Goldman’s outlook published Wednesday. The report includes the firm’s investment recommendations and its 2022 outlook for global economies and financial markets.
Brevan Howard partners share GBP120m pandemic payout
Brief: Seventeen partners at hedge fund Brevan Howard have shared a bumper GBP120 million payout after profits surged following a series of successful bets during the first year of the coronavirus pandemic, according to reports in The Times and The Daily Telegraph. Founder Alan Howard took the lion's share earning over GBP55 million in the year to end March 2021, up from GBP29.9 million in the previous twelve months. In total the firm's partners received GBP43.4 million in remuneration and shared profits of GBP79 million, up from GBP18.3 million the previous year.
Which disruptive themes might drive the post-pandemic economy?
Brief: Investors and policymakers alike will have to come to grips with a radically different macro environment over the secular horizon as the post-financial-crisis, pre-pandemic New Normal decade of subpar-but-stable growth, below-target inflation, subdued volatility, and juicy asset returns is rapidly fading in the rear-view mirror. What lies ahead is a more uncertain and uneven growth and inflation environment with plenty of pitfalls for policymakers. Amid disruption, division, and divergence, overall capital market returns will likely be lower and more volatile. But active investors capable of navigating the difficult terrain should find good alpha opportunities.
The Renaissance Man of Venture Capital
Brief: Josh Wolfe, co-founder of venture-capital firm Lux Capital, is not a person one might expect to pen a dystopian vision for 2022. After all, the Covid-19 pandemic has put a torrent of cash in the wallets of investors and has pushed scientific breakthroughs to the forefront of their brains, leading to an incredible run at Lux, a relatively small player in the world of venture capital. In the past two years, its assets have doubled to $4 billion, with 25 of its portfolio companies creating almost $30 billion in value through mergers, acquisitions, or IPOs — including deals with 11 special-purpose acquisition companies. But the extraordinary run has clearly brought out the dark side of the quirky financier. “Failure comes from a failure to imagine failure,” he wrote in a recent ten-page letter to investors, proceeding to envision what he might be saying a year from now: “2022 has been a punch in the face.”
