As the U.S. financial system and broader economy swoon from fear of the damage that the coronavirus will leave in its wake, private equity deal flow will soon begin to feel the pinch. Although data for the first quarter of 2020 is not yet complete, indications are that deal flow has slowed based on the dollar value, deal count and average premiums paid in ... READ MORE >
As ESG accreditation evolves, don’t forget the Principles for Responsible Investment
As socially responsible investing has grown in recent years, so too have the number of organizations looking to create some sort of accreditation for investors. Groups like the Sustainable Accounting Standards Board, the Global Reporting Initiative and CDP Global are looking for ways to provide a sort of Good Housekeeping Seal of Approval that reassures ... READ MORE >
Private equity is booming. So why are fewer middle market launches planned for 2020?
These are heady times for the private equity industry. With interest rates low and doubts swirling about the bull market’s longevity – not to mention dreary returns in the competing hedge fund industry – investors are pouring cash into private equity funds. Indeed, there is more private equity capital to deploy than ever before. According to Preqin, a ... READ MORE >
Middle market hedge funds, facing a squeeze, look to AI and alternative data
Hedge funds appear vulnerable headed in to 2020. Portfolio gains have been sluggish, fees are at their lowest levels since tracking began, and 2019 ended a five-year period when investors pulled out more money than they invested in the industry. This all took place amid increased geopolitical risk resulting from China trade tensions and, most recently, ... READ MORE >
Private equity looks for recession-proof deals
These are flush times for American private equity funds. Through November, they have raised more capital than any other fiscal year. But a good portion of that cash has not been put to use – yet. One reason is that many takeover targets have simply become too expensive, a dynamic reflected in the drop in deal activity for 2019. According to RSM Bloomberg, ... READ MORE >
In the free-for-all among retail brokers, will the middle market be left behind?
Charles Schwab Corp. announced recently that it would eliminate trading commissions for retail investors, making Schwab the latest Wall Street broker to embrace the push to zero commissions. But with $3.75 trillion in assets, Schwab is in a position to make such an aggressive move. Like other larger retail e-brokers, Schwab is capitalizing on its scale ... READ MORE >
Passive investing reaches a milestone, surpassing value of active counterparts
For years a profound shift has been taking place in the financial community as individual investors have increasingly favored a passive, low-cost approach over the traditional actively traded assets. Last year, that shift reached a significant milestone as the value of assets under passive management surpassed the value of active investing assets. For ... READ MORE >
Public scrutiny over ESG holdings will cause universal reporting change
As environmental, social and governance investing continues to grow in popularity, investors need to carefully evaluate how their holdings will be viewed by the public. Asset managers must balance their desire to promote ESG consciousness with their fiduciary duty to drive financial returns. ESG funds under management increased to $60 billion through June ... READ MORE >
For private equity funds, bigger is not always better
The rise of billion-dollar private equity buyout funds reflects the growing demand from large investors willing to write big checks. Interest rates remain historically low and, with additional rate cuts almost certain to come, investors continue to expect high returns. The larger the fund, so the thinking goes, the larger the return. This may not be the ... READ MORE >
BDCs’ popularity unlikely to be slowed by recent Fed rate cut, but headwinds remain
Business development corporations are unlikely to lose their momentum in the near term, despite last week’s interest rate cut by the Federal Reserve and the ongoing trade conflict with China. BDCs—the companies that invest in financially distressed small to medium-size private businesses—have yet to be affected by lower rates, which makes corporate bank ... READ MORE >