Buyout shops take risky exit to bypass deal crash 14 Mar 2024 A lack of M&A and IPOs has left private equity portfolios with $3 trln of companies, many past their sell-by dates. As a result, firms are increasingly cashing out backers while keeping assets. There are guardrails on the structures now, but they could easily spin out of control.
Rescuing a bank is like making a fine soufflé 13 Mar 2024 Steven Mnuchin’s $1 bln swoop on New York Community Bank may be more challenging than his rehabilitation of mortgage lender IndyMac in 2009, but the returns could be ample. Bank rescues have many ingredients. Timing, skill and luck separate those that rise from those that sag.
EU’s spending snags spoil joint borrowing success 12 Mar 2024 Europe’s 800 bln euro stimulus plan is stuck. The bonds that finance it sell like hotcakes, but so far it has paid out only 225 bln euros as countries struggle with projects. Unless the bloc can show it can use the money it raises from investors, it will lose much-needed funds.
Nickel rout is energy-transition warning for West 8 Mar 2024 Prices of the battery metal have halved in a year, leaving many mines unprofitable or mothballed. Indonesia’s China-backed industry now dominates. Piecemeal aid and a green premium push are unlikely to alter that. Absent smart planning, copper and lithium are vulnerable, too.
A year on, SVB’s killer is still at large 7 Mar 2024 Twelve months after Silicon Valley Bank’s demise, investors worry more about real estate than flighty depositors. The disjointed system that enabled a crisis remains intact, though, with patchy oversight, incomplete safety nets and ambiguity over who loses if a lender fails.
Swarming investor gnats circle too widely 6 Mar 2024 New US rules have started helping smaller fund managers make a mark. They’re increasingly needling boards and stinging CEOs. When they flit around bigger targets such as Disney and Crown Castle, however, they’re easily swatted away and become a nuisance for larger activists.
Japan faces a reckoning with its zombie companies 5 Mar 2024 Big firms are ready for the onset of higher wages and the end of negative rates. Smaller rivals, which employ 60% of workers, risk being crushed. One in six already struggles to cover interest payments. If too many fail, they can derail confidence and the economic recovery.
European telcos’ new deal hopes face reality check 1 Mar 2024 Executives gathered in Barcelona this week to plead for lighter regulation, cheaper spectrum and some financial help. Policymakers are unlikely to agree. Deutsche Telekom, Telefónica and others will have to convince investors that future growth requires more investment today.
Banks’ hot new trade could burn others, for once 29 Feb 2024 So-called synthetic risk transfers offer a Houdini-like way of loosening capital handcuffs. While best suited to the biggest lenders, it could also help smaller rivals burdened by shaky real-estate bets. The danger to banks is minimal; investors need to read the small print.
Shenzhen offers glimpse of China’s housing future 28 Feb 2024 The tech hub’s plan to put 60% of its 18 mln residents in subsidised homes answers President Xi Jinping’s call for a “new development model” prioritising affordability. The state is reclaiming a lead role in the property market of the world’s second-largest economy, at huge cost.