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

By Edward Chancellor
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.

Future financiers condemned to repeat sins of past

June 7, 2014

Some 150,000 wannabe investment advisers, bankers and analysts take the CFA exam this weekend. Success hinges on understanding WACC and ROE. Knowledge of the South Sea Bubble or the Great Crash is not required. Vast ignorance of financial history is an overlooked systemic risk.

Review: China gives Africa handy investment lesson

By Stephanie Rogan
June 6, 2014

Howard French’s new book paints an unflattering picture of the PRC’s heavy involvement in Africa. But China’s presence is not all bad. At a minimum, it gives African governments and businesses a benchmark for other offers now that the continent is attracting Western interest too.

GDP-linked debt could make finance safer

By Edward Hadas
January 9, 2012

Ordinary fixed-interest securities are prone to default. Inflation-linked debt gives investors few of the benefits of economic expansion. Equities bring exposure to growth but are much more risky. Bonds with payments that vary with GDP could give investors a happier medium.

Iraq offers investors ultra-high risk-reward bet

February 20, 2012

When war ends, investment opportunity begins. There has been enough peace in Iraq for the Baghdad bourse to rise 32 pct over two years, outperforming bigger Middle East rivals. The risks are huge, but reconstruction, demographics and oil make this frontier market tempting.