Jean-Baptiste Masselin

Foreign direct investment in China fell last year to its lowest level since the 1990s, while the total value of private equity deals plummeted from a high of $47.6bn in 2021 to $4.5bn last year … better to invest in Japan, India and Australia

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April’s market monthly insights in #TMT here. Our monthly updates highlight the latest news, share macro indicators and list announced transactions all in one place. Great overview for my M&A connections. Check it out: https://lnkd.in/ejKJ-4MA  

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There are rumors on Wall Street that there are growing expectations that U.S. policymakers will cut interest rates as early as July. If this is true, it would be right to sell stocks in June. Once the interest rate cut begins, the stock market will plummet. In the past, as in 2019, As the interest rate cut began, the stock market crashed sharply. This is because the stock market reflects it in advance. In other words, when the interest rate cut begins, the stock market fluctuates with tremendous volatility. Look at the sharp crash of the European stock market a few days ago. #FED

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#Direct_deals #fund_investments The world of family offices is challenging to penetrate and understand. Family offices operate discreetly to safeguard the family’s interests and privacy. Despite this discretion, there is a growing need for information flow and collaboration among family offices, leading to the emergence of various family office clubs (such as SFO Alliance, Campden Wealth Institute, Horizon.org, etc.), and multi-family setups. https://lnkd.in/gYc2-Pty

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Is the multistrategy hedge fund model stifling the growth of genuine portfolio management talent? Multistrategy hedge funds have been a defining feature of the last decade, renowned for their explosive growth, high returns, and lavish compensation packages. These funds, structured to be market neutral, rely on diverse teams running distinct strategies under portfolio managers within "pods." While this setup has generated impressive risk-adjusted returns, it's also sparked debate about its impact on talent development. During a recent conversation with industry veterans, concerns were raised about the new generation of portfolio managers. Many of these managers, typically aged 25-35, operate within $30m sleeves with tight stop-losses. This environment fosters a very narrow skill set, with centralised risk management and extrinsic hedging, leaving little room for individual managers to develop a holistic understanding of portfolio management. One seasoned portfolio manager lamented, "The industry is full of kids who know almost nothing about generating alpha with their own long and short trades. They are used to operating within strict confines and have limited experience managing risk independently." The pressure to deliver consistent, risk-free returns often means that promising trades with longer-term potential are sidelined. The focus on short-term performance can lead to a revolving door of portfolio managers, with many unable to last in the high-pressure environment of multistrategy funds. Giuseppe Paleologo, a former risk manager at top funds like Millennium, noted in a Bloomberg interview that around 20% of PMs are let go or leave every year. Contrast this with single-manager funds, where managers like Chris Rokos can weather significant drawdowns—down 26% in 2021, but up more than 50% in 2022—allowing them to place long-term bets and hedge them over time. This situation raises important questions about the future of hedge fund talent. Despite giving more people a chance to run money, are multistrategy hedge funds actually stifling the development of true portfolio management skills? Can groups balance the need for short-term performance with the cultivation of long-term investment expertise? https://lnkd.in/dScii7wG #hedgefunds #quantitativeresearch #portfoliomanagement #financialmarkets #quantitativefinance #hedgefundtalent #investmentstrategies #futureoffinance

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BNP Paribas is cutting off #Oil & #Gas financing to please non profit "green" organizations that are not even significant shareholders. It is not very reassuring to see that BNP get its strategy dictated by NGO ! Lets keep in mind that similar well intentioned NGO shutdown the German #Nuclear industry (and nearly killed the French) to push "Green" Russian Gas. For consumer this is bad news as consumer price will increase. But investors can take solace that small and medium sized energy companies are paying very attractive spread to get financing. https://lnkd.in/eeEPe6Jz

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In the Strategy Snapshot this week, Daniel Cassidy and I ‘connects the dots’ to make sense of recent market performance, this in the wake of last week’s inflation data, along with the outcome of the June FOMC meeting. We also consider emerging geopolitical risks, and upcoming macro factors. Finally, we review out current investment recommendations. Listen to the podcast for all the details. #shareubs https://lnkd.in/eQ56ciir

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Team Transitory vs.Team Permanent: Tie Game The debate on inflation rages on. Many papers and books have been and will be written on this topic. Ben Bernanke and Olivier Blanchard published a recent research note and working paper investigating disinflation from 2022:Q2 to 2023:Q2 in the United States and Europe which can be found here: https://lnkd.in/ezkUbWbA Their conclusion in brief: “Team Transitory was right that shocks to prices (e.g., for energy and food) would have short-lived effects on inflation, but it did not anticipate that there would be such a long sequence of shocks, leading to an extended period of inflation. Team Permanent was right to worry about labor market tightness but significantly overestimated its likely contribution to inflation early on.” #inflation #federalreserve #equity #stocks #bonds #interestrates

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Highlights from a recent Mckinsey report on M&A trends: - Global M&A activity dropped 16% in 2023, but a jump in activity in Q4 signals optimism returning to the market. -"...latest analysis of ...the world’s largest global public companies—found that those making more than two small to midsized deals annually over ten years through 2022 delivered a median excess total shareholder return of 2.3 percent. This programmatic approach outperformed all other M&A strategies, including organic growth, which actually destroyed value in the same period" #M&A

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Less than a week to go and we will be discussing GCC allocations in Private Credit. Can the pools of liquidity gathering in the region be tapped to finance development in Emerging Markets with superior returns? And what can GCC Private Debt investors learn from other Private Credit markets? I will be joined by fellow BancTrust & Co. crew Isil Caglayan, George Niedringhaus, Greys Penaloza and Charlie Foley #gcc #dubai #emergingmarkets #sustainablefinace #privatedebt #privatecredit

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Strong demand for liquidity in the private equity secondaries market is propelling GPs to generate liquidity options. Regardless of whether it is a single- or multi-asset GP-led secondaries transaction or a co-investment deal, investors want to see a credible path to long-term operational value creation. But what does it take to get a deal over the line in this evolving market? Read the full interview to find out! https://bit.ly/4buypPt @JochenMende #ShareUBS #privatemarkets #privateequity #secondaries #assetmanagement

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Despite over two decades of robust family office flows into private equity, these flows have slowed over the last two years. The question is, “Why?” I recently discussed this topic with Joyce Guevarra at S&P Global Market Intelligence. I believe there are at least two factors at play. You can read the full article here: https://lnkd.in/exG9wV-J. #alternativeinvestments #privateequity #hedgefunds

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Dear Network, At the business close of May the 31st, and on Year (2024) to Date basis, our USD Conservative portfolio delivered + 3.62%, the USD Balanced + 4.66% and the USD Aggressive + 5.65% implying a relative performance of + 322, + 171 and + 15 bps respectively over the assigned benchmarks. At the same time and since 31.12.2019 cumulatively, (the Year before Covid) the USD conservative portfolio had delivered + 46.31%, the USD Balanced one + 74.81% and the USD Aggressive + 104.49% implying an outperformance of + 40.38%, + 56.56% and + 73.64% respectively over the assigned benchmarks. Family Offices and Chief Investment Officers of Private Banks are highly welcome to discuss our tactical view on global markets for Q2 2024 and how our "Net Zero" Equity Allocation together with a low duration Fixed Income one, in an environment of increased macro and financial uncertainties, yet rich valuations may continue to provide investors with the "right carry", while sustainably outperforming benchmarks and peers. Please kindly note that One (1) Day Time Deposits (i.e daily access to capital) earning 5.33% on the USD, 3.92% on the EUR and 1.45% on the CHF are now available and for less than 10 bps of a custodian fee.  #FidelisGryphem#portablealpha# Francesco Sandrini

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Sharing my latest update on the liquid loans and CLO markets.

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May’s market monthly insights in #TMT here. Our monthly updates highlight the latest news, share macro indicators and list announced transactions all in one place. Great overview for my M&A connections. Check it out: https://lnkd.in/ePKWTTk3

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RATE EXPECTATIONS - FROM ONE EXTREME TO ANOTHER Last week's FOMC rather hawkish minutes and UK inflation data really moved the dial on rate expectations. The bond market has moved from one extreme, 7 cuts in 2024, to another. 0-1 cuts in the US, 1 in the UK and 2 in the EU. While this scenario is much more likely to materialise, given the trajectory of growth and inflation, I think we have now gone to the other extreme, that of rate pessimism, mostly due to the persistence of US inflation. Inflation in the US is sticky, to be sure, but in Europe, it is coming down quickly. The ECB is ready to begin cuts. Lower growth in Europe affects that of the UK. European central banks can't go too far ahead of the Fed, to be sure, or they risk capital flight. But they can begin and hope that US data allows the Fed to begin this year. #markets #economy #interestrates #wealthmanagement #financialplanning

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Congratulations to the 96 firms (and associated portfolio management teams) that managed a total of 132 strategies that passed the $1bn AuM milestone as of Q1 2024! Almost 20 firms had two or more strategies passing the $1bn mark! While reaching such a milestone often demonstrates the success of the investment approach (and team) it can potentially lead to further interest from potential clients, especially those that seek scale and to invest alongside a broader, more diversified, client base. Passing such a landmark is a great opportunity to review presence in the Nasdaq eVestment platform to optimize visibility with consultants and investors. Additionally, one can leverage the Nasdaq eVestment platform to understand: - If your strategy is outpacing peers in terms of growth or set realistic growth expectations for the future (Asset Flows) - Viable opportunities, since investors may require a strategy with a minimum AuM threshold as part of their initial screen or search (Market Lens) Please do get in touch with the Nasdaq eVestment team if you have questions or wish to competitive positioning or viable opportunities! #equities #fixedincome #balanced #milestones #esg https://lnkd.in/g5s7UjVS

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VC Enhances portfolio returns For many years private equity was seen as one of the smartest divesification strategies away from listed equities, bonds, and liquid alternatives. One of the principal reasons for private equitie's outsized returns was that investors typically had to give up liquidity with 7 year lockups (or something around that number) Private equity has run into several problems, foremost amongst them is too much cash chasing too few returns, the 2nd big problem is that private equity investors used increasing levels of leverage in order to purchase the companies, while paying themselves dividends no matter what... just look at what happened to Thames water. The 3rd and most recent problem is rising interest rates which has of course not only impacted borrowing costs but has impacted the companies themselves with higher required IRR's in order to offset increased costs both for input prices as well as funding. The area that is now becoming very attractive and that investors should pay attention to is earlier stage venture capital. Venture capital is usually 1 of the 1st rounds of funding for a company that is still growing, requires capital to actually begin to deliver results, and a much more binary investment with some of the comapnies failing, some of them doing nothing, and if you're lucky a few doing very well. *The difficulties therefore venture-capital portfolios include: * assessing the risks * doing due diligence * building a sufficiently large portfolio so that the winners compensate you for the losers * maintaining contact with and understanding what the company is doing * avoiding dilution if you don't follow your initial capital with more capital your ownership percentage will reduce * diversification.. i.e. diversified across different industries What I'm pointing out is you can have some significant outsized winners if you invest early and stay on top of your investment. This article points out that seasoned venture-capital firms with a strong track record of identifying winners stands a much better chance of raising capital than the start ups and some of the smaller funds who can't achieve diversification or don't have a pipeline of good deals. But the take away from this article is that venture-capital is very attractive in the current market environment, and that it should form part of your portfolio albeit a potentially small percentage 5-10% but can represent a very important part of your portfolio in terms of total compensation if you get it right Happy to discuss in more detail, welcome your thoughts... #Venturecapital #vc #privateequity #equity #investments #markets #portfolio #SiliconValley #investing

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There have been multiple market narrative plot twists this year, going from a Goldilocks soft landing early in 1Q to the possibility of an extended “no landing” phase at the end of the quarter, to talk of stagflation by mid-April. Two events last week—the FOMC meeting and the April payrolls report—resurrected Goldilocks talk from the dead. The labor data last week was Goldilocks-esque because it suggests that the labor market is simultaneously strong, disinflationary, and sufficiently balanced such that the Fed can legitimately give the full employment part of its dual mandate near equal consideration as price stability. That was a the message from the Fed last week, as well as that the committee thinks policy is sufficiently restrictive to bring down inflation and that rate hikes aren't on the table. In short, the outcome was a reminder that the Fed is still biased to cut rates, which means that the Fed put is alive. Whether a Goldilocks macro environment does return depends primarily on disinflation. April CPI data released on May 15 would go a long way in validating those hopes if there is a downside surprise. After that on June 12 May CPI data comes out in the morning and the FOMC meeting concludes in the afternoon. Inflation data permitting, if the Fed is forecasting two rate cuts this year, that's the point it becomes likely that it will happen. Investors haven't waited to start pricing in a Goldilocks sequel. Cross-asset returns post-FOMC align with such a soft landing. Bonds and stocks were both up by a decent amount, commodities were down, and previous equity laggards (real estate, tech, small-caps) led the way. The bottom line: The economic stars could align to produce a Goldilocks sequel, but this will hinge on disinflation giving an award-winning performance in upcoming data. There are reasons to be optimistic, but investors should be cautious in embracing this view until they see the data. See the report for all the details. #shareubs

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