Breakingviews

Review: Art market’s old vices go global

February 13, 2015

Georgina Adam’s “Big Bucks” explores how contemporary art, buoyed by billionaires’ cash, has exploded as an asset class. The financial shenanigans are breathtaking but there were plenty in, say, the 1920s, another era of the super-rich. But today, the whole world is joining in.

Memo to Wall Street: more Ace Greenberg please

July 25, 2014

The onetime Bear Stearns boss, famed for his pithy missives to staff, has died at 86. Though he was no longer in charge, the firm’s 2008 collapse is a notable blemish on an otherwise illustrious career. The industry could use more of Greenberg’s scrappy PSD: poor, smart, driven.

Investors beware: France will get more erratic

June 23, 2014

Paris is to buy most of Bouygues’ stake in Alstom in an expensive concession by François Hollande to his protectionist economy minister. Weakened by his unpopularity, the president seems increasingly unable to bring cohesion to his own cabinet. It can only get worse.

Harvard could get smarter about its endowment

June 12, 2014

Jane Mendillo, who ran the Ivy League university’s $33 bln portfolio for six years, is leaving. Predecessor Mohamed El-Erian is partly to blame for crisis losses, but Harvard overpaid for mediocre returns. Less of both Yale model investing and Wall Street pay may be in order.

M&A targets can get stiffed when they “go shop”

May 23, 2014

The tactic of seeking bids after signing up a buyer is meant to ensure top dollar. More often, it leads to low offers and sale prices, new research shows. Deals like Media General’s buyout of Lin Media suggest sellers are wising up, though, portending better value for investors.

Hedge fund customers’ yachts washing further away

May 14, 2014

The flood of money – now $2.7 trln – in hedge funds has squashed returns below public stock markets. Private equity doesn’t seem to be doing much better. Both investing styles intuitively offer finite opportunity, yet fees encourage managers to hoard assets. Investors beware.

Rob Cox: The worry now is a brewing M&A bubble

May 13, 2014

The corporate urge to merge has gone into global hyper-drive. Activity has surged as investors egg companies on and bid up the shares of acquirers well beyond mathematical prudence. When new metrics to justify the irrational are trotted out, it’s time to exercise caution.

Interpreting Apple/Beats using Andreessenomics

May 12, 2014

Venture capitalist Marc Andreessen partly justifies high tech valuations with the idea that huge companies can “attach” the products of smaller ones, rendering traditional analysis pointless. The idea can resonate - perhaps for Apple with Beats headphones - but it’s flawed.

Trendy new buyout clubs may let down eager patrons

April 8, 2014

Blackstone is enlisting some of its fund investors to help buy auto-parts maker Gates for $5.4 bln. Such collectives are increasingly displacing teams of private equity firms in bigger deals. Disappointing returns from so-called co-investing, though, could make it a passing fad.

Equity-bond decoupling shows risks have changed

November 17, 2011

Investors may be rethinking the inherent riskiness of equities, especially compared to sovereign bonds. That is a logical response to seismic shifts in the european debt markets. Shares aren’t invincible but they are pretty well equipped for these rough times.