News > Financial Services

Mega rounds keep rolling in amid IPO slump
Venture Capital
<p>It be might a lousy exit market right now but the big VC deals have still been coming through thick and fast these past three months with 68 startups globally each raising $100 million or more, according to a new report.</p> <p>The joint report by KPMG and CB Insights reveals there have been 170 of these so-called mega rounds for the first nine months of the year raising an aggregate $19 billion. In total VC-backed startups raised $37.6 billion worldwide during the three months and $98.4 billion for the year so far, already exceeding the 2014’s $88.7 billion total.  </p> <p>Asian mega deals in particular tipped the scales for the third quarter, with massive investments into the likes of Didi Kuaidi, LY.com, One97 Communication and Eleme. The top five deals in Asia accounted for $5.3 billion, or 39% of fundraising in the region. </p> <p>But the report also shows that while there are more late stage deals, there are fewer IPO exits than previous years, exacerbated by the fact that China suspended IPOs once again in July. The number of late-stage investments has affected the availability of cash for seed-stage investments. Despite more funds investing at the seed stage, seed investments have dropped to a five-quarter low of 28%, globally. </p> <p>In the short term at least it seems the gigantic late stage deals will continue to spur the rise of the unicorns - startups valued at $1 billion or more. There were 23 new unicorns in the quarter: 17 in the US, 3 in Asia and 3 in Europe.<br /> Photo: Maxwell Hamilton</p>
People Moves: JPAM CIO relocates to HK; Manulife AM adds CFO, CMO
Asset Management
<p>Carlyle names Southeast Asia chief. Sunil Kaul, a 30-year veteran of private equity and banking scene, has been appointed head of Southeast Asia of the Carlyle Asia buyout advisory team. Greg Zeluck, Managing Director and Co-Head of the Carlyle Asia buyout advisory team, had this to say:<br /> “Sunil is a Carlyle veteran with a wealth of experience in the private equity and financial services industries. With his deep industry expertise and strong networks, Sunil has significantly contributed to the success of many of our investments in Asia over the last seven years. In this newly created role, Sunil will lead our investment advisory activities in Southeast Asia as we continue to see great opportunities in this fast-growing region.”<br /> Before joining Carlyle in 2008, Kaul was president of Citibank Japan, a role he served concurrently with his chairmanship of Citi's credit card and consumer finance companies in Japan. He was also a member of the banking giant’s Global Management Committee and Global Consumer Planning Group. Carlyle</p> <p>JP Morgan AM CIO returns to Hong Kong. Richard Titherington, JP Morgan Asset Management’s London-based CIO for emerging market equities, will be returning to Hong Kong to lead the U.S. investment firm’s newly-merged emerging markets and Asia Pacific equity team. Titherington, who previously spent 14 years in the region, seems to be pretty stoked on the move:<br /> “For me, this move feels like coming home and I couldn’t be more pleased. The firm has a long and proud history in the region, backed by a very strong group of investment professionals. I am honoured to have been entrusted with this role and am very excited about the prospects for our team.”<br /> Despite the move, he will remain as portfolio manager for his UK and Luxembourg-domiciled portfolios. AsiaAssetManagement</p> <p>Manulife AM adds two key hires. Frederick Reidenbach, an old hand in the Japanese asset management space, has been named chief financial officer, wealth and asset management, Asia by Manulife Asset Management. Joining him at the firm will be Grace Ho, a ten-year veteran of the financial services marketing arena. She’ll be serving the firm as its chief marketing officer, wealth and asset management, Asia.</p> <p>Prior to joining Manulife, Reidenbach spent 10 years at Nikko Asset Management in Japan, working in various capacities including a dual role of CFO and COO. Ho meanwhile was the previous head of marketing, Asia Pacific for Schroders. Before that, she spent two years at JP Morgan as a VP in marketing following a four-year stint at AIG in a similar role. They will both be based in Hong Kong. FundSelectorAsia</p> <p>For Capital Markets moves, click here.<br /> Photo: Luke Ma</p>
Activist funds tank; down 10.3% in quarter 3; now -8.1% ytd
Hedge Funds
<p>Managed futures and quantitative equity funds excelled while activists’ pain continued.</p> <p>The hedge fund industry produced an aggregate return of -1.20% in September, dropping YTD returns further into negative territory for 2015, -2.35%. The industry’s last annual decline was 2011 when average returns were -4.99% and the S&amp;P rose +2.11%.</p> <p>For many in the hedge fund industry, 2015 is shaping up as the worst year since 2011, if not since 2008. One primary difference between 2015 and 2011 is many major markets produced positive returns in 2011, more so on the credit side, and the hedge fund industry was generally perceived to have lagged significantly. In 2015 the industry is mostly outperforming equity, multi-asset, commodity and regional/country specific indices.</p> <p>Systematic strategies performed well during September's global volatility<br /> Systematic, or quantitative strategies performed well during September’s global volatility. Most interesting was the performance of those focused on equity markets, given declines seen following the US Fed meeting mid-month. Quantitative equity strategies returned an average of 0.58% in September and were down only slightly in Q3, -0.39%, while the S&amp;P 500 and MSCI were -6.44% and -8.45% in Q3, respectively.</p> <p>After four down months in the last five, managed futures funds, heavily populated with systematic strategies, gained +1.01% in September, ending Q3 only -0.26%. The difference between large and smaller managed futures funds has been significant in 2015. Those with greater than $1 billion in AUM entering 2015 returned an average of +2.53% in September, +3.62% in Q3 and +4.40% YTD, while their smaller peers returned +0.80%. -0.54% and -1.59% in the same periods.</p> <p>Through the end of Q3, event driven returns are on pace for their worst year since 2008, having eclipsed 2011 losses of -3.90%. Event driven funds fell an additional -2.53% in September, bringing YTD returns to -4.15%. The group declined -20.48% in 2008, but bounced back with +30.35% in 2009 and +11.78% in 2010.</p> <p>Activist fund returns decline<br /> Activist fund returns have been increasingly negative in each of the last four months, having declined an average of -10.92% during this stretch. Losses in September of -5.06% are the largest since September 2011. Activist funds went on to return -4.26% in 2011, followed by 14% in 2012 and 20% in 2013.</p> <p>Credit strategies posted their fourth consecutive aggregate decline in September, with losses accelerating in each of the last two months. In the last twelve months, credit funds have declined -3.82% and experienced nine monthly declines. Larger funds continue to mitigate losses more effectively than their smaller peers, returning -2.60% in Q3 and -1.00% YTD compared to -3.34% and -2.64%, respectively. However, the securitized sector continues to be a standout in 2015.</p>
Paul Singer says developed countries are “utterly insolvent”, buy gold
Hedge Funds
<p>Billionaire Paul Singer, founder of hedge fund firm Elliott Management and one of the most disliked people in the world, hammered central bank monetary policy at a conference in Israel on Wednesday.</p> <p>Making his controversial comments at the first ever Tel Aviv Sohn Conference, Singer argued that since the financial crisis blew up in 2008, advanced nations have been propped up by a cult of central bankers. Paul Singer’s comments are courtesy of tweets from Bloomberg TV’s Elliott Gotkine, who is attending the conference.</p> <p>Singer is no stranger to controversy. A well-known and less-than popular “vulture investor”, Singer is known for figuratively going for the throat in many of his business dealings. His unrelenting pursuit of defaulted sovereign Argentina bonds through the U.S. court system, even though some note that he paid just pennies on the dollar for the bad debt, is one example of his “vulture” style of investing.</p> <p>According to the tweets from Gotkine, Singer commented that “the balance sheets of developed economies were hopelessly and utterly insolvent once long-term entitlements were added in”.</p> <p>Of note, Singer has previously argued that prices of stocks and bonds have been notably “distorted” by over-accommodative central-bank monetary policy. Singer has also gone on record as saying if central banks make the disastrous decision to “do more” (such as another round of QE) then a global recession or depression likely. Singer has echoed these themes in the past in his letters to investors.<br /> Gotkine also tweeted that Singer said “I like gold. I believe it’s underowned.”  Singer further noted “every institutional portfolio should be 5-10 percent invested in gold to protect against zero interest rates that are degrading the value of paper currency.”<br /> Singer also argued that gold was the one tradable asset that has been “treated unfairly”, and pointed out that his fund holds gold through options.</p> <p>“Gold is the only real money,” Singer claimed. “Gold would do well if people felt they needed some real asset to protect against inflation, government policy and/or diversification from stocks and bonds.”</p> <p>Singer also commented:</p> <p>“In a world where the value of paper money is affirmatively aimed at being degraded by central bank policy, it’s kind of surprising to me that gold can’t catch a bid.”</p> <p>This article was originally published by ValueWalk.</p> <p>Photo: Bullion Vault </p>
Energy excellence: it could be the refiners ETF
Asset Management
<p>Although oil prices have retreated a bit in recent sessions, the United States Oil Fund(NYSE: USO) is still up 3.3 percent over the past month. That move has been enough to boost the fortunes of an array of equity-based energy ETFs.</p> <p>Included on that list is the Market Vectors Oil Refiners ETF (NYSE: CRAK). CRAK, the first dedicated refiners ETF, is higher by 4.3 percent over the past month. That is impressive when considering refiners benefit when oil prices slide due to lower crack spreads, perhaps the inspiration for CRAK's ticker, and the few ETFs with robust refiners exposure have been noticeably less bad this year than traditional equity-based energy sector counterparts.</p> <p>The gains posted by some refining stocks, including several of the 26 held by CRAK, are enough to make investors ponder if the ETF and its holdings can remain firm going forward.</p> <p>Read more on Benzinga. <br /> Photo: Natalie Maynor</p>
Fund managers are snapping up Japanese small-caps
Hedge Funds
Faced with uncertainty over Japan Inc.’s future earnings, hedge funds and asset managers are trying on something a little different from their bread and butter. According to the Nikkei Asian Review, a slew of profit downgrades coupled with a shaky global economy have led investors to flee from Japanese large-caps in favor of the more domestically-oriented small-caps: “Institutional investors are
Underserved and uncompetitive: Why VCs are dropping anchor in Vietnam
Venture Capital
Vietnam’s young demographics and increasingly tech-savvy population are making the country a draw for tech investors but the market is still largely underserved, say local venture capitalists (VCs). 500 Startups’ recent decision to add two new venture partners - Binh Tran and Eddie Thai - in Vietnam is the  latest indication that more VCs are interested in the country, The
Japanese mutual fund assets fall to 2015 low
Asset Management
<p>Just as the Nikkei was shrinking 8%, apparently, Japanese mutual fund assets did some shrinking of their own.</p> <p>Citing data from the Investment Trusts Association, the Nikkei Asian Review reports that mutual funds in the land of the rising sun saw their assets under management shrink by a whopping ¥3.57 trillion ($30 billion) in September. That’s the same amount needed to rebuild Fukushima.</p> <p>The drop left the industry with just ¥93 trillion ($782 billion) in assets last month – its lowest level for the year – though still above last November’s ¥92.6 trillion ($779 billion) reading, not to mention the dramatic, post-Lehman decline.</p> <p>A lot of variables contributed to this, the surging yen for example ate away at foreign currency-denominated investments, while operating losses – now on its fourth consecutive month – continued to erode value.</p> <p>Still, inflows continue to be positive, and if investor commentary is anything to go on, investors are still in love the region, deteriorating fundamentals or not.<br /> Photo: Moyan Brenn</p>
Riding the ETF momentum into 2016
Asset Management
<p>A phenomenon that has caught plenty of market observers by surprise this year is the outperformance of the momentum factor over its value counterpart. Momentum can take on multiple forms and it is not limited to glitzy biotechnology and Internet stocks.</p> <p>However, it is some of those glitzy Internet stocks that have driven the impressive returns accrued by the consumer discretionary group, this year's top-performing S&amp;P 500 sector.<br /> Don't Be Surprised<br /> "The strength of consumer discretionary stocks is not altogether surprising, given the strength of the labor market. Wage and salary growth is up 4.0% since last August, and consumers’ assessment of the job market is also favorable. According to The Conference Board, the spread between those stating that jobs are "plentiful" and those claiming that jobs are "hard to get" was 0.8 in September – the widest chasm in sentiment since the spring of 2008," said PowerShares, the fourth-largest U.S. ETF issuer, in a recent note.</p> <p>Read more at Benzinga. <br /> Photo: B4bees</p>
Video: Warren Buffett on activist investors
Hedge Funds
<p>Speaking at Fortune's Most Powerful Women Summit, former activist investor Warren Buffett had some pretty nice things to say about activism. Activist funds however seem to continue drawing his ire, especially when it comes to the fees they garner. “They’re like sharks, they got to keep swimming.”</p> <p>Photo: Fortune Live Media</p>