Breakingviews

Traders need help to make Wall Street shine

October 8, 2014

Markets are more volatile, but not enough to ensure decent Q3 profitability for Goldman, JPMorgan and Morgan Stanley. That’d take up to $12 bln of extra revenue trading bonds, FX and commodities among them. Expect additional cost cuts. And other businesses will have to step up.

U.S.-backed China tech shows investment curb folly

August 1, 2014

Foreign funds sank $5 bln into venture capital the first half of 2014 – three times what local funds raised. That the country’s next Alibaba will probably be funded by Silicon Valley investors may jar with national pride and official rules. But China’s economy is the undeniable beneficiary.

Take hedge fund exuberance with grain of SALT

May 16, 2014

Amid moans about conference fatigue, a near-unanimous confidence emerged at SkyBridge’s annual Las Vegas confab. Long-awaited opportunities in M&A, bargains in Europe and collapsing correlations have finally arrived all at once. The consensus itself, however, is reason for pause.

BlackRock may fancy revisiting Blackstone heritage

January 23, 2014

Larry Fink’s firm manages $4.3 trln while Steve Schwarzman’s, with only 6 pct of the assets, now earns just as much. For BlackRock, a chip off Blackstone 20 years ago, private equity must be tempting. It dumped a plan to build such a business but could buy one like, say, TPG.

Banks can gain as well as lose from fund usurpers

January 23, 2014

Asset managers are making inroads into corporate lending. Banks once looked on these “direct lenders” as rivals, but funds’ help can allow them to make more loans while reducing refinancing risk. The two may not always live together harmoniously, but there’s room for both to gain.

Fund managers could learn from hometown Red Sox

October 30, 2013

The team is a win away from being baseball’s champs. Its success hinges on the disposal of concentrated long-term bets in favor of liquidity, early-stage backing and steadier assets. Such diversification is a good reminder for the Boston-based investment industry and beyond.

Bond jitters shouldn’t delay Japan pension reform

June 4, 2013

Asking state funds to buy fewer government bonds when the central bank is struggling to control yields may look an own goal. But juicier returns should reduce the taxpayer’s exposure to future shortfalls. Besides more money moving out of Japan will help keep the yen weak.

Private equity at 4-and-20? Think twice

March 13, 2013

A new vehicle will open Carlyle’s funds to smaller investors, at a total cost far higher than institutions pay the buyout shop. While the firm’s long-term IRRs, after fees, are nearly 20 pct, today’s reality is less inviting. The structure could be risky for Carlyle, too.

U.S. venture capital needs a reboot

February 4, 2013

A decade of insufficient shrinkage hasn’t fixed wimpy performance, which undershoots boring stock indexes. The dot-com boom is history, startups find capital elsewhere, and funds chase assets over returns. A few big names aside, investors need to strip VCs of their mystique.

Temasek’s triple personality bodes well for returns

May 9, 2012

The Singaporean state investor is developing the trading eye of a hedge fund, a private equity taste for financial engineering, and the pay structure of an investment bank. That should improve its sub-par performance, though it won’t always sit well with Temasek’s political ties.