Breakingviews

Investment acronyms shift from optimism to angst

February 2, 2016

BRICS has been buried. Just as well: it was a “Bloody Ridiculous Investment Concept”. Now VIIPs and TICKs vie to take its place. But searching for groups of vibrant economies jars with the gloomy mood. The most appropriate new acronym might be a set of worries labelled CFO.

New index puts long-term investors to useful test

By Rob Cox
January 21, 2016

Fund heavyweights, including Canada’s CPP and GIC of Singapore, are committing $2 bln to round up some 250 stocks that meet higher standards of corporate governance and profitability. Alphabet and Facebook, worth $760 bln combined, miss the cut. That makes it a bold experiment.

Das wasted Kapital: a tale of German inefficiency

January 14, 2016

German consumers are among Europe’s most avid savers, but earn abysmally low returns on their investments. Poor portfolio choices, driven by excessive risk aversion, have dented real household wealth by 15 pct in a decade. Resolving the savings paradox could spur German growth.

Arab sovereign wealth fund exodus just beginning

December 29, 2015

Oil-dependent Gulf sheikhdoms need money to shore up their budgets. They’ll hold on to trophy assets like stakes in VW or Barclays for as long as possible. But if the price of crude keeps sliding to $20, the region’s rulers might need to liquidate their rainy-day funds by 2020.

CalPERS gets what it pays for from private equity

November 24, 2015

The U.S. pension giant revealed that $24.2 bln of net gains from the asset class over 25 years came at the cost of $3.4 bln in so-called carried interest for fund managers. Private equity is pricey and hitherto opaque, but CalPERS’ analysis so far helps justify the fees.

New Chicago Skyway owners need long investing view

November 16, 2015

Ferrovial and Macquarie paid $1.8 bln in 2005, $1 bln more than the next bid. Now three Canadian pension funds are buying the Windy City turnpike for $2.8 bln. Thanks to extra debt, the sellers won’t see much profit on their equity. At least the buyers can afford to be patient.

Oprah’s diet-firm stake plumps up her pocketbook

October 19, 2015

The American talk-show queen is taking a 10 pct stake in Weight Watchers for $43 mln. By investing with her appetite, she follows in the footsteps of Warren Buffett, Victor Kiam and 50 Cent. Swapping corporate sponsorship fees for equity will also add heft to her wallet.

The Devil’s Dictionary of Post-Crisis Finance

October 16, 2015

Ambrose Bierce wrote “The Devil’s Dictionary” a century ago, ranging acerbically across government, commerce and life. Breakingviews’ original re-use of the form for finance – in 2007, when the crisis was barely beginning – is no longer adequate. Herewith part two of the sequel.

China’s world bank has rickety foundations

March 20, 2015

The country’s patchy record of funding big projects at home and abroad hasn’t deterred Western countries from rushing to join its new Asian infrastructure bank. To lure private capital, the body will have to be commercial and transparent. Early signs suggest it will be neither.

Asian fight against capital flight helps dollar

October 8, 2014

The region’s central banks fear foreign capital will flee when U.S. rates start rising. They hope higher rates at home will stem the flow. But domestic investment dips when interest costs rise. The result: spare Asian savings go into safe dollar assets, pushing the greenback up.