The global alternative investment space now sits at more than $9 trillion in global assets, and we’re just getting started. Roughly 40% of RIAs are using alternative investments. With the RIA space expanding and alternative investment demand rising among investors – a surge in data, news, and opinion will continue. This channel cuts through the noise to give you the most important actionable insight.
Hedge Funds Up Amid Volatile Markets. Hedge funds were up nearly two percent in the month of June. This means that the industry faced its third monthly gain in a row. Although the industry aggregate — as measured by the HFRI Fund Weighted Composite Index — is still down, hedge funds are doing well considering…
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Like most of the other publicly traded private equity firms, the Carlyle Group (NYSE: CG) recorded an accounting loss for the first quarter.
The loss is a result of mark to mark accounting rules than none less than Warren Buffett has labeled ridiculous. Without the markdowns, Carlyle had Distributable Earnings of $175 million for Q1 2020 on a pre-tax basis or $0.48 per common share on a post-tax basis. Over the last 12 months, the alternative asset manager had distributable earnings of $721 million, or $1.93 per common share.
DailyAlts Playbook: Buffett Ditches Airlines, Wall Street Movies, Black Swans, and Stimulus Estimates.
This morning CNBC is covering the Berkshire Hathaway meeting the same way that ESPN covers the day after “The Last Dance” on ESPN. The big focus is on Buffett’s message “Nothing can basically stop America.” But my two key takeaways – as I assess Buffett’s career and philosophy – center on Berkshire’s decisions during March. My generation is one that looks at Buffett as a nice grandfather who likes to spend time with the family – not the ruthless businessman who was able to get General Electric to pay him 10% in 2008 on top of $3 billion in stock. It’s one of the reasons why people say “You mean the guy getting ice cream with his grandkids in HBO’s Too Big to Fail.”
We might not have live sports right now. But we do have the constant jarring back and forth between Greenlight Capital and Tesla Inc. The former’s founder David Einhorn is one of the most prominent hedge fund managers shorting Elon Musk’s company. On Thursday – the day after Tesla’s earnings report – Einhorn questioned the financials of the electric vehicle manufacturer. Specifically, he wanted more information about the firm’s accounts receivable, costs, stalled factories, and the effects of international currency shifts.
This week, we sat down with Meb Faber of Cambria Investments to discuss his investment approach and how it can help investors miss the massive sell-offs that occur in the stock market. We also discuss his tail risk strategy that uses Treasury Bonds and options to hedge equity portfolios in turbulent times. Meb Faber is the author of seven investment books and the host of The Meb Faber Show Podcast. Cambria Investments offers 11 different Exchange Traded Funds based on Meb’s investment philosophy.
DailyAlts Playbook: Icahn’s Victory Lap, An Opening Worth Celebrating, The Fed Talks, and the End of Mergers as We Know It.
THE DAILYALTS PLAYBOOK April 29, 2020 DailyAlts Playbook: Icahn’s Victory Lap, An Opening Worth Celebrating, The Fed Talks, and the End of Mergers as We Know It. PRIME OVERVIEW Good morning, There is a plan. No, not the Federal Reserve. No, not from the White House. Major League Baseball is considering a plan that would…
Two prominent Democrats are moving to pass the Pandemic Anti-Monopoly Act, legislation to stop mergers while the U.S. deals with COVID-19. Senator Elizabeth Warren (D-Mass.) and Representative Alexandria Ocasio Cortez are pushing the bill. This new bill would place a moratorium on all mergers reported to the FTC. It would also stop any deals involving firms with more than $100 million or engaged in private equity.
DailyAlts Playbook: Gundlach Shorts, Technical Wizards, Germany’s Economy, PE Lobbying, and the Lakers Take a Loan…
The Federal Reserve will kick off its two-day meeting to discuss monetary policy in the wake of the history coronavirus outbreak. The Fed has taken extraordinary steps to stimulate the U.S. economy, including slashing interest rates to zero and buying junk bonds. The central bank will likely not announce any new plans until it has further information on the state of the American economy. The economy, which could face levels of unemployment we haven’t seen in more than 80 years, could take more than 18 months to recover. However, we could see some sectors fail to return to their pre-COVID strengths.
CNBC examined a number of records tied to lobbying efforts. Reporters suggested that the firms were not attempting to obtain capital for the private equity industry. Instead, the firms aimed to ensure participation among portfolio companies in federal loan programs. Blackstone CEO Steve Schwarzman participated in a phone call with President Trump and Vice President Mike Pence. Other established investors taking place on that call included Dan Loeb of Third Point, Intercontinental Exchange’s Jeffrey Sprecher, and Paul Tudor Jones.
The DailyAlts Playbook: Incentives for Work, Crude Crushed, Monty Bennett Keeps the Money, and Cuomo’s Collective
We start this morning with Scott Minerd’s take on the V-shaped recovery, unintended consequences of fiscal and monetary policy, and the moral hazard facing our economy.
The CIO of Guggenheim Partners dropped his latest insights in the middle of the night, and they’re quite jarring. If you don’t know Minerd, be sure to read his analysis during the COVID crisis.
Filippo Mezzanotti, an Assistant Professor of Finance at the Kellogg School of Management at Northwestern University, has been studying how private equity fares in a crisis.
He examined data from nearly 500 PE-backed companies in the United Kingdom before and after the Great Recession. He and his research team found that d that PE-backed companies weathered the crisis better than other companies.
The Washington State Investment Board has committed up to $1.9 billion in new infrastructure, private equity, and real estate investments. The board oversees pension as well as other state assets. They have had an outsized commitment to private investment for several years. Washington State Investment Board Allocations Washington only has about 33% of its portfolio…
The DailyAlts Playbook: Peloton Purchases, Elliott Fines in France, Negative $100 Oil, and Blackstone’s Real Estate Portfolio.
THE DAILYALTS PLAYBOOK April 23, 2020 The DailyAlts Playbook: Peloton Purchases, Elliott Fines in France, Negative $100 Oil, and Blackstone’s Real Estate Portfolio. PRIME OVERVIEW Good morning, It’s Christmas here in Estero, Florida. I’ve purchased either my greatest present to myself or the single dumbest one. Time will tell. The golf club on which I…
The Federal Reserve will drive gold prices to $3,000. That’s a prediction by Bank of America this week. In a report titled, “The Fed Can’t Print Gold,” the bank sees the yellow metal as a smart hedge against inflation. That price target represents an 80% return from the date of Monday’s report.
Uranium, the radioactive metal used to power nuclear power plants, has gained 31% this year. Its price has shot up because coronavirus lockdowns have forced producers to idle mining operations. Meanwhile, nuclear power plants, designated an essential service, have maintained generation. With production down by a third, a demand-supply gap in uranium is pushing up its price.
The DailyAlts Playbook: The Madness of Shorting Tesla, Expedia’s Capital Raise, the Belt Road Initiative, and “Gooooooold.”
THE DAILYALTS PLAYBOOK April 22, 2020 The DailyAlts Playbook Talks About The Madness of Shorting Tesla, Expedia’s Capital Raise, the Belt Road Initiative, and “Gooooooold.” PRIME OVERVIEW Good morning, Yesterday, I received a text from a close friend who had an idea. He wanted to short a stock that was trading at nosebleed levels, had…
The USO Fund LP has halted trading. Yesterday, the fund was largely responsible for pushing WTI May crude prices into negative territory. Crude prices effectively collapsed by 300%.
The United States Oil Fund LP (NYSEARCA: USO) said in a regulatory filing today that it would suspend buying of crude. This action suspends USO Authorized Purchasers from buying new creating new baskets. The WTI May contract expires today.
The CAIA has issued a comprehensive report “The Next Decade of Alternative Investments: from Adolescence to Responsible Citizenship” based on a survey of over 1,000 CAIA members.
The report expresses the Association’s thoughts on the future of alternative investments, as well as its four-point call to action for the industry.
On Monday, oil futures fell into negative territory for the first time in market history. With expiration taking place today, producers were forced to pay traders to take crude off their hands at the delivery point at Cushing, Oklahoma. Crude for May delivery fell to negative $37.63 per barrel. This morning, the June contract fell 24% to $15.50, while the Brent crude contract shed nearly 19%.
Marjan Delatinne, global head of banking, Ripple, writes in a post in Bobsguide that the payments industry is being transformed through mergers and acquisitions, innovation in technology and the new lessons from the coronavirus.
Blackrock CEO Larry Fink took umbrage with at a question from Patrick Davitt of Autonomous Research. Davitt asked during a conference call this week if the Fed buying ETFs was a bailout for Blackrock.
BlackRock Q1 earnings dropped today.
The world’s largest asset manager reported revenue s growth 11% compared to a year ago. However, profits fell slightly compared to the first quarter of 2019. The asset manager also said that they continue to reward shareholders as they bought back $400 million of share repurchases in the current quarter and increased the quarterly cash dividend to $3.63 per share, or 10%. Earnings of $5.15 a share fell short of the analyst consensus estimates of $6.61 per share.
In the Great Credit Crisis, banks took the biggest hit and the lion’s share of blame for the economic collapse.
Banks entered the crisis with too little equity capital. Their loan portfolios consisted of garbage loans. From 2008 to 2012, 414 banks with almost $700 billion in assets failed. Hundreds more had to seek a merger with financially secure institutions.
This time, the banking system enters into an economic slowdown in much better shape.