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The first signs of a unicorn extinction event?
Venture Capital
<p>This week it was revealed that Fidelity Investments marked down the value of its stake in social photo app Snapchat by 25%. Now Fortune reports that Fidelity is marking down several other portfolio investments, including two other unicorns: e-cigarette maker NJoy and HR software developer Zenefits.</p> <p>The rout doesn't stop there. Last month, the Wall Street Journal reported that cloud storage startup Dropbox was warned by investment bankers that it would not be able to IPO at its last $10 billion valuation. Even more recently,  Square – the payments firm headed by Twitter CEO Jack Dorsey – set its IPO terms far below expectations with a price range of $11 to $13. Assuming a mid-point price of $12, this would value the company at around $4 billion, far below its $6 billion valuation at its last private fundraising round.</p> <p>This is scratching the surface. Silicon Valley has known for a long time that many of its unicorns are painfully overvalued, and few can have any real expectation of going public at their current private market valuation. The tech bubble has begun to wobble. Will it go down with a fizzle or a bang?<br /> Photo: Baltasar Vischi</p>
CITIC Capital to list on the New Third Board
Asset Management
<p>China may have lifted its IPO ban, but that doesn’t mean firms have quit listing on the New Third Board.</p> <p>China Money Network reports that CITIC Capital Holdings is planning to list on the Beijing-based over-the-counter equity exchange, joining the likes of ChinaEquity Group, Heaven-Sent Capital Management, and various other asset managers.</p> <p>It isn't listing directly though:<br /> “CITIC Capital is to list through its wholly-owned subsidiary, CITIC Capital Equity Investment (Tianjin) Corporation, which was founded in 2009 and into which CITIC Capital has injected certain assets.</p> <p>The subsidiary has three main businesses, including private equity, fund-of-funds, and the OBOR fund. CITIC Capital says it may inject more assets into the listed entity in the future.”<br /> The 13-year old firm, which manages around $5 billion across several dollar and RMB-denominated funds, expects the listing to be completed either by the end year or in early 2016.<br /> Photo: Allan Ajifo</p>
UK finance minister wants London to claim the fintech crown
FinTech
<p>London already soars ahead of most other cities when it comes to fintech, but the UK’s finance minister George Osborne wants the city to be nothing less than the world leader.</p> <p>Speaking at the Bank of England Open Forum event on Wednesday, the chancellor of the exchequer said the government was working with big four audit firm EY to draw up a benchmark to compare London with international fintech rivals like New York, Silicon Valley, and Hong Kong, reported the Financial Times (paywall). </p> <p>Osborne has already long since pinned his colors to the mast as a champion for London’s fintech industry. Earlier this year he chose VC Passion Capital’s Eileen Burbidge as the UK’s special envoy for fintech. The government has also put 10 million pounds ($15 million) towards research into blockchain technology. </p> <p>His latest speech, however, seems to recognize that London has some serious competitors, he said: “The race is on, but we’re determined to win it”. Plenty of other cities have echoed a similar sentiment, but given the size of the industry and opportunity, one has to wonder: is it really a zero-sum game?<br /> Photo: Altogetherfool</p>
China cracks down on leading asset managers
Asset Management
In the latest twist in China’s “irregular trading” saga, the CSRC reportedly descended upon several of the nation’s leading fund houses, as Asia Asset Management reports: “China Securities Regulatory Commission (CSRC) has reportedly launched surprise investigations into a number of asset management firms in Shanghai and Beijing, including Harvest Fund Management (Harvest) and Changsheng Fund Management (Changsheng). As yet no
Bridgewater's 'All Weather Fund' rebounds
Hedge Funds
<p>It may still be underwater, but Ray Dalio’s mammoth All Weather Fund is slowly inching its way back into the black, according to Reuters.<br /> “The $70 billion Bridgewater All Weather Fund, managed by hedge fund titan Ray Dalio, was up 4.1 percent in October, but still down 3.4 percent through the first 10 months of the year, two people familiar with the fund's performance said on Tuesday.</p> <p>The All Weather Fund is one of two big portfolios managed by Bridgewater Associates and uses a ‘risk parity’ strategy that is supposed to make money for investors if bonds or stocks sell off, though not simultaneously.”<br /> It still has a lot of catching up to do though as far performance is concerned, SPX climbed over 8% in October, while the Dow tacked on nearly 10%.<br /> Photo: Mark Robinson</p>
Robo-advisors moving into Bank of America Merrill Lynch
FinTech
First robots took over the world of trading, and now algorithmic eyes are focused on human financial advisors. Among the first major warehouses to submit to the trend of offering “robotic” advice options to its customers is Bank of America Merrill Lynch. Reported robo-advisors firm at Bank of America Merrill Lynch to initially tackle accounts with under $250,000 in assets
Golden Gate bets $4m on Southeast Asia with six new deals
Venture Capital
<p>Singapore-headquartered venture capital firm Golden Gate Ventures has just revealed six new additions to its portfolio worth $ 4 million. The deals are further evidence that early stage investment appetite is still strong in Southeast Asia despite fears that VCs are tightening their purse strings elsewhere in Asia. These are new the additions:</p> <p> Claim Di in Thailand<br /> GoQuo in Malaysia<br /> Stamp in Thailand<br /> Alodokter in Indonesia<br /> Ruma in Indonesia<br /> IndoTrading in Indonesia</p> <p>The news comes just two weeks after the VC made a bet on Thai online payments gateway Omise.co, its biggest Southeast Asian investment to date and its first Thailand deal in two years. Golden Gate also made recently made recent deals with Singapore’s HipVan and Indonesia’s Laku6, both e-commerce startups. Vinnie Lauria (pictured), one of the VC’s co-founders, tells NexChange there has been a pick up in interest in both Thailand and South Asia as a whole.<br /> “Southeast Asia is becoming more attractive to investors as valuations for good startups still remain quite low when compared to other parts of Asia. Thailand has definitely seen a pickup in activity because the ecosystem has reached a point where we are seeing a lot of co-working spaces and incubators being set up.”<br /> Lauria adds that Golden Gate is now a third of the way through its $50 million second fund which was announced in July – about half of the fund is reserved for new investments while the rest is earmarked for follow-on investments into Goldengate's existing portfolio companies.<br /> Photo: Randy Stewart</p>
Global earnings update: Europe and Japan coming up short
Capital Markets
<p>KEY TAKEAWAYS<br /> · European earnings have disappointed relative to expectations and may suggest tempering near-term expectations for European stocks.<br /> · While we are encouraged by Japan’s economic progress, its earnings season has also fallen short of expectations.<br /> · We recommend suitable investors focus equity allocations in the U.S., while maintaining modest developed international equity exposure.<br /> Earnings overseas have generally not kept up with the U.S. We spend a lot of time dissecting earnings season in the U.S. because we believe earnings are the single biggest driver of stock prices over the long run. But earnings are not just important for U.S. stocks, they are also important for stocks overseas. This week we provide an earnings update in Europe and Japan, where results thus far have mostly fallen short of those in the U.S. While we continue to focus our equity allocations in the U.S., we still recommend modest developed international equity exposure for suitable investors, despite third quarter 2015 earnings shortfalls overseas. Prospects for international earnings to improve over the rest of 2015 and into 2016, and for additional monetary stimulus, are supportive.</p> <p>The Source:<br /> Earnings figures may vary depending on the source (Thomson, FactSet, Bloomberg, etc.). Data providers have different methodologies for calculating earnings, and different interpretations of what constitutes operating earnings as compared with reported (GAAP) earnings. In general, we favor the Thomson data series’ long history in the U.S., but view FactSet as a reliable source of international earnings data.</p> <p>U.S. EARNINGS SEASON TRACKING ACCORDING TO PLAN<br /> We wrote about third quarter 2015 earnings season in the U.S. in our recent Weekly Market Commentary, “Corporate Beige Book,” where we compared the number of positive words relative to the number of negative words in earnings conference call transcripts to assess the mood of management teams discussing results. Despite the challenging environment, particularly for global companies impacted by the strong U.S. dollar and companies tied to commodities, moods were generally positive. That exercise also highlighted the increased attention on China.<br /> Earnings season in the U.S. is about 90% complete, ahead of Europe (51%) and Japan (73%), so we have a near final picture of where the numbers will end up. Results relative to expectations have been very good, with a 5% upside surprise thus far for S&amp;P 500 earnings; and excluding the energy sector, earnings are on track to grow at a solid 6% pace. Excluding the drag from currency due to the strong U.S. dollar, earnings would be on track for a near 9% year-over-year increase, a very respectable figure for this stage of the economic cycle. U.S. earnings are poised to accelerate during the fourth quarter of 2015 and potentially return to mid- to high-single-digit growth rates within the next several quarters.<br /> EUROPE DISAPPOINTS<br /> In Europe, where the third quarter 2015 reporting season is only about halfway complete, results thus far have been disappointing on a variety of metrics. First, based on MSCI indexes, Europe has suffered the biggest year-over-year decline in earnings and revenue compared with the U.S. and Japan [Figure 1]. The story is no different if the sharp declines in energy sector profits are excluded. Second, the earnings beat rate (percent of companies beating earnings estimates) at 50% is significantly lower than the 70%-plus rate in the U.S. (and in-line with Japan’s rate) [Figure 2]. And third, the earnings surprise, at a 5% shortfall, is far worse than the 5% upside surprise to earnings in the U.S. thus far and worse than the 2% shortfall in Japan [Figure 3]. The only metric in which Europe compares favorably to the U.S. and Japan is the revenue surprise (+2%), which is better than the U.S. result and Japan’s 1% shortfall.</p> <p>These results are discouraging for several reasons. For one, Europe has a currency advantage relative to the U.S. The drag from a str
Long term returns comparison Elliott Associates LP since 1977 till September 2015
Hedge Funds
<p>Long Term Returns Comparison Elliott Associates LP since 1977 till September 2015</p> <p>&nbsp;</p> <p>This story first appeared in ValueWalk<br /> Photo: World Economic Forum</p>
Jamie Dimon is the best big bank CEO, by shareholder returns
Capital Markets
<p>After almost a decade leading JPMorgan, Jamie Dimon has provided better shareholder returns than any of his competitors.</p> <p>Since Dimon took control at the beginning of 2006 the total shareholder return for the $2.4 trillion JPMorgan has been a total 119.5%, including dividends, reports the Motley Fool. Dimon is also the longest ranking big bank CEO. Dimon's closest competition is Wells Fargo CEO John Stumpf. Wells Fargo has had 97.3% shareholder return since Stumpf became CEO in June 2007.</p> <p>Goldman Sachs reported 47.1% shareholder return since Lloyd Blankfein became CEO in June 2006. Morgan Stanley has 40.6% return since James Gorman's appointment in January 2010. And Bank of America reported 22.1% return since Brian Moynihan became CEO in January 2010.<br /> Photo: Financial Times </p>