Pensions swamped in a sea of negative real rates From FA Mag: Defined-benefit pension plans were already barely treading water heading into 2020. In the years ahead, the risk is as great as ever that a large swath of them will drown. As the name implies, defined-benefit pensions promise to pay a set amount to retirees. While corporate America has largel...

B. G., Opalesque Geneva: We revisit some of the original Corona Fighters - hedge funds and alternative asset managers who successfully protected assets and outperformed the markets during the first months of 2020 - and see how they are doing at the end of the year. The carbon fund The ...

Jeremy Grantham: "SPACs should be illegal" Special-purpose acquisition companies (SPACs) should be illegal, according to Jeremy Grantham, as they escape regulatory oversight and encourage the "most obscene type of investing." Grantham is the co-founder and chief investment strategist of Grantham, Mayo, & van Otterloo (GMO), a Boston...

The SPAC shareholder class action boom is coming From Reuters: I'm not the first to predict it, but the past few weeks have brought unmistakable signs that shareholder class action firms are homing in on Special Purpose Acquisition Companies, those so-called blank-check entities that go public in order to raise cash to acquire a private business within a limite...

From Law 360: Two blank-check companies, one led by former Disney executives and the other backed by Apollo Global Management, started trading Wednesday after raising a combined $561 million in initial public offerings. Forest Road Acquisition Corp. raised $261 million in its upsized debut, while Apollo's energy-focused Spartan Acquisition Corp. II raised $300 million in a down...

Where EcoR1 stands to profit from healthy deal making From Institutional Investor: These are busy times for the folks at Oleg Nodelman's EcoR1 Capital, an investment firm focused on therapeutic companies in the biotechnology sector. Silverback Therapeutics, a clinical-stage biopharmaceutical company backed by EcoR1 Capital, filed plans with regulators this week ...

Laxman Pai, Opalesque Asia: Already one of the fastest-growing alternative asset classes, with total assets under management (AUM) rising 168% from $315bn in 2010 to $845bn in 2019, the growth of private debt is expected to continue with a 73% increase in AUM to $1.46tn by 2025, said Preqin. "Private debt will continue the expansion of the past decade over the next five year...

Private-equity deals head for busy year-end From WSJ: Private-equity firms are bracing for a busy year-end, regardless of who wins the presidential election. A combination of an overstuffed pipeline of deals put on hold because of the Covid-19 pandemic, low interest rates for borrowing and concerns about potential tax increases if Democrats prevail in the...

Hedge funds scoop up SPAC shares From Institutional Investor: Hedge funds aren't just launching their own special purpose acquisition companies -they're also scooping up shares of these blank-check companies. Basso and Difesa have cashed in on the boom in blank-check companies. Firms such as Adage Capital Management, Falcon Edge Capital and Weiss ...

From BizarreNews: A Tennessee boy is being honored by Guinness World Records for an unusual accomplishment: achieving nuclear fusion just hours before his 13th birthday. Jackson Oswalt, now 15, of Memphis was dubbed by Guinness as the world's youngest person to achieve nuclear fusion after officials verified that he built his own nuclear fusion reactor at his family's home and successful...

Coronavirus triggers borrowing spree by private equity managers From FT: Private equity managers are turning to specialist borrowing facilities to ensure their highly leveraged strategies can survive the coronavirus pandemic, but there are growing concerns that the use of these complex financing deals poses new threats to investors. Demand for additional f...

A hedge fund looks to stop a big real estate owner from breaking up From CNBC: Land & Buildings is a real estate focused long-short hedge fund that will try to engage with management on a friendly basis when they see deep value. They invest in real estate in the public markets and select corporate engagements. Their positions are often under the thresh...

Tech stocks aren't in a bubble, but investors should be pickier, Credit Suisse says From Business Insider: Credit Suisse on Thursday trimmed its overweight rating for tech stocks, recommending investors be more selective with their sector picks. Crowding in tech giants and the stocks' high-flying valuations sparked some concerns of a dot-com-era bubble f...

Laxman Pai, Opalesque Asia: Apollo Global Management is venturing into the world of impact investing, following some of its biggest peers in targeting funds dedicated to sustainability. The New York-based global alternative investment manager announced the leadership team for the new platform known as Apollo Impact. Marc Becker, a senior partner at Apollo, and Joanna Re...

Druckenmiller says inflation could reach as high as 10% From Bloomberg: The markets are in a "raging mania" and rising inflation is a big threat, investor Stan Druckenmiller said. Inflation could hit 5% to 10% in the next four to five years, Druckenmiller said Wednesday in a CNBC interview, adding that the Federal Reserve has created conditions that have se...

Empty hotels might just be next big short for hedge funds From Bloomberg: Hedge funds and other short sellers are beginning to set their sights on a U.S. credit-derivatives index with outsized exposure to hotel debt as the pandemic sinks the hospitality industry into distress. The firms are starting to build up wagers against the synthetic index, known as C...

From Forbes: Billionaire investor and philanthropist Robert F. Smith, the wealthiest Black man in America and founder of Vista Equity Partners, is under investigation for possible tax crimes, according to a Bloomberg investigation. Federal authorities have reportedly spent four years investigating whether Smith failed to pay U.S. taxes on about $200 million in assets that moved from Vis...

PE compliance functions in focus as SEC uncovers conflicts of interest Some private fund managers still do not meet their compliance obligations or fulfill their fiduciary duties despite being subject to the rules since the Dodd-Frank Act required them to register with the Securities and Exchange Commission in 2012. Compliance procedures have fallen short i...

How private equity co-investments can accelerate investor returns following a crisis Investing in a post-crisis period is never simple. The atmosphere of opportunity compels investors to put capital to work. However, where and how to best invest becomes more important than ever. Private equity can perform especially strongly in the years following a crisi...

Laxman Pai, Opalesque Asia: GCM Grosvenor, a global alternative asset management solutions provider with approximately $57 billion in assets under management, is planning to go public by merging with a special purpose acquisition company backed by the financial-services firm Cantor Fitzgerald in a deal valued at $2 billion. The 50-year-old Chicago asset manager, currently owned...

Yield stocks are the way to go for this Australian hedge fund From Bloomberg: Equities that offer attractive yields are the last remaining place investors can get returns in a world of zero interest rates, according to Kardinia Capital. The Sydney-based absolute return manager of one of Australia's longest-running long/short funds is increasing exposure ...

Venture funds and their investors differ on portfolio valuation during pandemic From WSJ: Venture-capital funds and their investors don't always agree on how to tally up the performance of venture portfolios, and estimating the value of a portfolio has become much more complicated this year. Since private company stock is illiquid there is no single ...

Laxman Pai, Opalesque Asia: Dallas-based alternatives manager founded on the principles of conscious capitalism, Satori Capital has agreed to back compatriot investment firm Mountain Cove Capital Management. Satori, a multi-strategy firm with more than $1 billion in assets under management, committed to investing $10 million in Mountain Cove as part of its Satori XL Partnership P...

Hedge fund Marshall Wace will bet on ESG stocks with new $1bn fund From Forbes: Hedge fund Marshall Wace plans to raise $1 billion for a new fund that will invest in stocks with strong environmental, sustainability and governance (ESG) ratings while betting against stocks with poor ratings, according to a source familiar with the matter. The London-based f...

GP Bullhound raises $141m for its fifth tech fund From PE News: Technology-focused investment firm GP Bullhound has held the first close of its latest fund with €125m ($141m) of capital commitments. GP Bullhound Fund V is a pan-European venture capital fund targeting primarily late-stage digital economy investments, with a focus on Sweden, Spain, th...

From SMH: Steve Schwarzman, chief executive officer of Blackstone Group said the economy is likely to benefit from a V-type recovery in the next few months. The co-founder of the world's biggest alternative asset management firm weighed in on markets in an interview during the Bloomberg Invest Global virtual event. "You'll see a big V in terms of the economy going up for t...

Laxman Pai, Opalesque Asia: Operationally focused middle-market private equity firm the Sterling Group has closed its fifth flagship private equity fund on a $2 billion hard cap, exceeding a predecessor that raised $1.25 billion in 2015. Founded in 1982 and based in Houston, Sterling is a middle-market firm that typically invests in manufacturing, distribution and industrial serv...

Dealmaking coming to a crashing halt, sellers and buyers finding a way to agree to a transaction From Institutional Investor: In the last financial crisis, private equity firms that quickly put money to work in struggling companies generated the best returns when the economy recovered. That's not lost on the current crop of private equity buyers in the current C...

Apeira Capital seeks $200m for hedge fund-like bets From Bloomberg: Natalie Hwang, the former head of Simon Property Group Inc.'s venture capital arm, has launched a new firm and is seeking $200 million for a debut fund. Hwang has been discussing the vehicle with prospective investors, according to documents seen by Bloomberg and a person with knowledge of the mat...

Singer bets on Europe, emerging markets From Investment Magazine: William Blair's Brian Singer is looking to invest in Europe and the emerging markets as the recovery from the global economic shutdown to contain the pandemic will likely take longer than what the market has priced in. The head of dynamic allocation strategies said the swings in pricing ov...

Laxman Pai, Opalesque Asia: Tiger Global Management holds on to its position as market-leader in US-based venture capital, said a study. According to Preqin, the closure of tech-focused Tiger Global Private Investment Partners XII in January means the New York-based firm has raised more than $16bn in venture capital over the past 10 years. New Enterprise Associates has...

Elliott files first U.K. suit to say coronavirus can't stop its deal From Bloomberg: The question of whether the coronavirus pandemic can be used to terminate an acquisition is set to get a first hearing in a U.K. court. Activist Elliott Management Corp.'s Travelport unit, filed a lawsuit in London Monday to stop Wex Inc. from abandoning its $1.7 b...

'Last chance to sell': Hedge fund warns of impending stock market crash From CCN: Hedge fund manager Kevin Smith is extremely bearish on the stock market, and he says this may be your "last chance to sell" before the crash. The founder of Crescat Capital says the stock market is about to suffer another plunge. Kevin Smith draws...

Quant giant Two Sigma's funds sink in first quarter From Institutional Investor: Two Sigma has posted its worst stretch of performance in recent memory. The quant titan lost money in most of its key funds in the first quarter, according to investors and private databases. The funds have recovered somewhat in the first half of April. Most of the quant g...

The Q1 2020 global VC report: Funding slowly impacted by coronavirus From Crunch Base: Chronologically, the first quarter of 2020 began just over three months ago. But psychologically, it feels like a lifetime ago. The New Year rolled in with bullish expectations for startup investment across much of the globe. Now, consensus is we're in for a protracted decline.&...

B. G., Opalesque Geneva: Giles Coghlan, chief currency analyst at HYCM, a forex broker, shares his take on currencies, cash, recovery, and oil. Opalesque: You say the USD, the JPY and the CHF act as safe-haven currencies. Do you think that is likely to last? ...

From WSJ: The $3 trillion hedge-fund industry, with its defensive approach to investing, has significantly underperformed the stock market over the past decade. But in the current market turmoil, hedge funds have been holding up much better than stocks. During the first two months of the year (February being the latest full month for which hedge-fund data is available from the Backstop B...

Ray Dalio's Bridgewater scales down European short bets after $3.2bn windfall From Financial News: Bridgewater Associates, the world's biggest hedge fund, has retreated from shorting European stocks after making an estimated €2.9bn ($3.2bn), as its founder and co-chairman Ray Dalio contends with recent performance struggles. According to an...

Bailey McCann, Opalesque New York: Markets are selling off, but some hedge fund managers are finding buying opportunities and a few shops are raising new funds in order to participate in the recovery. In an i...

Unicorns sometimes sting From PIonline.com: Venture capital firms are on a roll. Some 259 U.S. venture capital funds amassed $46.3 billion in 2019, the second highest by amount of capital raised and number of funds since 2006, according to the PitchBook-NVCA Venture Monitor. The biggest fundraising year since 2006 was 2018, when 299 venture capital funds raised $58 bil...

Matthias Knab, Opalesque: A comment from Ian Hamilton, Chairman, Scotstone: The Corona Virus has put the world on hold with investors behaving like people fighting over toilet rolls. But was it unexpected? In 2007 Nassim Taleb, in his book "Black Swan" warned of such an event: "as we travel more on this planet, epidemics will be...

Bailey McCann, Opalesque New York: Petershill, an investing unit within Goldman Sachs that makes minority investments in asset managers, is in talks to invest in British private equity house Permira. The Wall Street Journal first reported the news. T...

From Bloomberg: Former Harbinger Capital hedge fund manager Philip Falcone was accused in a New York lawsuit of defaulting on $65.8 million in loans and violating the terms of lending agreements by selling two paintings used as collateral, including one by Andy Warhol. Melody Business Finance LLC sued Falcone in Manhattan state court Friday, claiming he and his wife, Lisa Falcone, had pe...

Venture debt: Is it a loan? Is it equity? Is it an pportunity? From Forbes: Venture Capital is usually the default option for fast-growth startups looking for a cash injection, thanks to our willingness to take risks in return for equity, and with no need to pay anything back - at least not until you've made it big. But in recent years, a new type of financing h...

By Don Steinbrugge, Founder and CEO, Agecroft Partners (DonSteinbrugge@agecroftpartners.com): Hedge funds fees remain under extreme pressure across the industry. This strong trend is driven by declining return expectations from investors, increased competition across the industry, and an increasing share of industry assets...

From Institutional Investor: Investors expect low-volatility factor funds to give them most of the equity market's return during good times, while also softening the blow if there's a correction. But early indications show that these funds have been disappointing investors by massively trailing equity markets, a new analysis shows. With low-vol strategies, investors are willing...

JPMorgan takes contrarian view of energy stocks From Institutional Investor: JPMorgan Chase & Co.'s asset management group sees investment opportunity in beaten-down energy stocks, a contrarian view as it looks beyond the sector's reputation for "poor capital discipline." "Our portfolio managers see some reasons to be a little mo...

Laxman Pai, Opalesque Asia: J.P. Morgan has taken an equity stake in Arcesium, an investment-management technology business that D.E. Shaw & Co. launched as an independent company in 2015. New York-based Arcesium LLC is an investment management technology and services firm, offering services in post-trade activities. Quant hedge fund giant D. E. Shaw group launched ...

For Howard Marks, investing is like a game From Institutional Investor: Investors can take apply lessons from games like backgammon and poker to their day jobs, according to Oaktree Capital Management's Howard Marks. Marks - who has enjoyed pursuits like Old Maid and gin rummy since childhood - shared those lessons in his latest memo, published Monday....

By: Kris Hatch, Idan Netser, Fenwick & West LLP U.S.-based venture capital and other funds that invest in foreign companies must be careful to avoid the passive foreign investment company (PFIC) rules, which could substantially increase the tax owed on exit for U.S. taxpaying investors. U.S. persons who are limited partners (LPs) of funds must also be aware of the PFIC rules, as they...