Investors need to learn to ride inflation cycle 23 Jun 2022 Bonds and shares are tumbling as prices soar, just as in the 1970s. The experience of that decade suggests value stocks, commodities and safe-haven currencies offer the best protection, says Edward Chancellor. But wild swings in inflation can still catch markets off-guard.
Green investors need to get their hands dirty 22 Jun 2022 Most money managers fight climate change by shunning stocks of polluting companies. By contrast, so-called transition funds target dirtier assets to clean them up. Though the approach brings risks, it could also deploy trillions of dollars of green capital in a smarter way.
Capital Calls: Fertilizer woes plant seed of doubt 8 Jun 2022 Concise views on global finance: Scotts Miracle-Gro’s profit warning nods to wide effect of commodities price surge.
DWS CEO exit is helpful deterrent for greenwashing 1 Jun 2022 Asoka Woehrmann resigned from the $7 bln asset manager as regulators probe allegations it exaggerated its sustainable investing skills. Fund groups have benefitted from booming demand for ESG investments. The fallout at DWS gives other bosses an incentive to tone down the hype.
Credit Suisse capital hike would speed turnaround 31 May 2022 The bank is considering raising $1 bln of equity, Reuters reported. That would be painful at such a low valuation, and the company denied it. But bigger balance-sheet buffers could fund faster shrinkage of the accident-prone investment bank, reducing its share-price drag sooner.
Allianz’s U.S. wound is not entirely staunched 17 May 2022 Europe’s largest insurer has effectively been kicked out of the U.S. market after admitting fraud and being forced to pay $6 bln in fines and compensation. CEO Oliver Baete will hope these body blows enable closure. But the fiasco raises questions about the rest of the business.
BlackRock spikes guns of green activists 10 May 2022 Larry Fink’s group will back more oil and gas production. After COP26, institutional money looked set to phase out fossil fuels, but an energy crisis has intervened. Rivals may follow the $10 trln fund giant, propping up driller valuations and complicating the green transition.
The elusive value of past investment mistakes 5 May 2022 A new library in Edinburgh hopes to improve financial understanding by studying historical errors. The best investors understand the importance of learning from their painful howlers. Yet, says Edward Chancellor, ultra-low interest rates have induced a kind of collective amnesia.
Deutsche can leave Credit Suisse in the dust 27 Apr 2022 Europe’s erstwhile bank basket case is now valued by investors on the same multiple of book value as the Swiss wealth manager. Rate hikes and a debt-trading boom will play to its strengths. Meanwhile, Credit Suisse’s weak capital ratio and slow growth will keep its shares gloomy.
UK fund manager picks canny time to do right thing 26 Apr 2022 The $10 bln Schroders is ditching its non-voting shares. A 37% discount to the voting stock helps smooth a deal without its dominant family losing out too much either. It’s a timely corrective to UK Chancellor Rishi Sunak’s efforts to lure more dual-share structures to London.
Asia wealth slump renders bank hype a little rich 26 Apr 2022 UBS’s pre-tax profit from private banking in the region slumped 38% in the first quarter. Lockdown pains should ease eventually, but China’s “common prosperity” agenda may undermine the highly touted opportunity. Hiring blitzes by Citi, HSBC and others could be hard to justify.
Energy efficiency starts to attract the big bucks 25 Apr 2022 Brookfield’s potential $4 bln pitch for UK boiler repair group HomeServe sounds like small fry for a group with $690 bln of funds. But decarbonising buildings is a key growth area in the energy transition. Institutional investors are manoeuvring to ensure they don’t miss out.
EU greenwashing fix gets off to dodgy start 14 Apr 2022 Some 4 trln euros of funds are now deemed sustainable under European disclosure rules governing ESG investing. Yet the EU yardstick for such a definition is vaguer than for some private sector players. At the very least this is confusing; at most it actually aids greenwashing.
Money-manager deal gets asset allocation all wrong 6 Apr 2022 Perpetual’s $1.8 bln bid for J.O. Hambro owner Pendal would create an Australian giant with $180 bln under management. A 39% premium on a depressed valuation paid for using 75% in stock is hardly compelling, though. It’s a wise investment that can be structured better.
Capital Calls: U.S. truck drivers go missing 4 Apr 2022 Concise views on global finance: Bonuses and concessions from Washington aren't enough to fill the industry's empty cabs.
Capital Calls: Chip supply chain bites own tail 31 Mar 2022 Concise views on global finance: Semiconductor factories rely on machines made by ASM International. Paradoxically, the firm is having trouble finding the chips it needs. Untangling the mess will take a while.
AIG life IPO marks 5,000 days of post-crisis slog 29 Mar 2022 That’s how long it took to fix the global insurer after its 2008 bailout. It has now reached a point where, with a little help from Blackstone and even BlackRock, it can float its life and retirement business, probably worth at least $22 bln. It’s a key moment in AIG’s reboot.
National Grid gas sale has green edge on Macquarie 28 Mar 2022 The $54 bln UK company is selling 60% of its gas pipelines arm to a group led by the Australian finance house. The $13 bln deal has financial benefits for both. But National Grid’s switch to electricity is more immediate than the buyers’ plan to pump hydrogen through the pipes.
Prologis has to go extra mile for Blackstone sheds 22 Mar 2022 The property giant offered over $23 bln for Mileway, which owns European warehouses. Sky-high valuations and frenetic M&A imply it’s a good time for Steve Schwarzman’s group to cash out. But limited city space and booming online deliveries mean asset values can keep rising.
Russians lose private banks’ golden goose status 21 Mar 2022 Spooked by sanctions, wealth managers are treating all Russian clients as suspicious. That limits the scope to offer lucrative loans or new products to customers who have $213 bln stashed in Swiss banks. Higher compliance costs will turn them from cash cows to financial baggage.