On July 30, the Federal Reserve announced a 25-basis-point reduction in the federal funds rate. Federal Reserve Chair Jerome Powell characterized the move as an “insurance” cut to help extend what is now a record-long U.S. economic expansion amid economic headwinds related to a slowing global economy and an inversion of the yield curve, which many market ... READ MORE >
Financial Services
Comprising everything from private equity firms to family offices, financiers are active participants in the middle market. They provide the vital capital infusions needed to take growth companies to the next level.
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 >
Hedge fund performance may be tested—again
The average performance of the hedge fund sector since the Great Recession has lagged the returns of passive investments including broad-based equity index funds tied to the S&P 500 as well as exchange-traded funds. The underperformance of hedge funds, a risky but historically high-flying sector whose managers are compensated on their ability to ... READ MORE >
Venture capital tech investments show strength in first half of 2019
For cash-intensive technology companies, access to capital is frequently required to sustain operations and quickly achieve scale. Venture capital firms invested over $30 billion in tech startups in the second quarter of 2019, according to data from Pitchbook, putting total investment on pace to eclipse $100 billion for the second straight ... 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 >
Crowdfunding proves to widen the reach of companies seeking early-stage capital
In the past, companies looking for alternative funding would have tried their luck with venture capital and private equity firms. But the advent of crowdfunding—which offers Main Street investors the ability to make equity investments in growing businesses—has given some companies a boost they might not have gotten from using the typical sources. The ... READ MORE >
Latest C-corporation conversion announcement follows trend with largest alternative asset managers
Carlyle Group LP, among the world's largest private equity firms, is expected to announce it conversion to a C-corporation from a publicly trade partnership during its second-quarter earnings call on July 31. It is the latest alternative asset manager to make the conversion following peers that include Apollo Global Management LLC, Blackstone Group LP, Ares ... READ MORE >
SEC’s move to redefine high-net-worth investors may broaden investor base down the road
A new government proposal to loosen restrictions on who qualifies as high-net-worth individuals known as accredited investors could be a boon to asset managers seeking new sources of capital. The U.S. Securities and Exchange Commission issued a concept release on June 18 requesting public comment on several exemptions from registration under the ... READ MORE >
Managers fear heavy costs following SEC’s proposed fund-of-funds rule change
A proposed federal rule would expand the ability of investment funds to boost their portfolios in other funds. But critics say it would require significant fund restructuring by the funds and burden investors. Under the Investment Company Act of 1940, the new Securities and Exchange Commission rule is intended to enhance the regulatory framework applicable ... READ MORE >
Want a fuller picture of biotech’s promise? Look beyond the public markets
A recent Wall Street Journal article highlights the underperformance of the Nasdaq Biotech Index against other benchmarks. The article implies the weak returns are due to a lack of blockbuster biotech therapies; at the same time, the piece underscores the robust private funding activity within the biotech ecosystem. The ecosystem and the capital markets in ... READ MORE >