Lazard’s new CEO dares to evoke Bruce Wasserstein 14 Sep 2023 Peter Orszag aims to double revenue to about $5 bln by 2030 while delivering at least a 10% annual shareholder return. The firm’s recent history suggests the plan is bold. But it’s as good a time as any to heed the advice its former boss famously gave clients: “Dare to be great.”
Capital Calls: British wages 12 Sep 2023 Concise views on global finance: UK pay rose by an annualised 8.5% in the three months to July – more than inflation. That’s good for retirees, whose pensions will rise by that amount. But such a hot labour market is likely to prompt the Bank of England to hike rates next week.
Asia’s richest banker makes a meal of succession 4 Sep 2023 Uday Kotak has quit early as CEO of his $43 bln lender. He seems to be pitching it as a way for Kotak Mahindra Bank to appoint a replacement free from his interference. But he’s on the board and the firm’s biggest shareholder. And his legacy is tied to whoever takes his spot.
UBS cost-cut gains are a double-edged sword 31 Aug 2023 Boss Sergio Ermotti will keep Credit Suisse’s domestic unit, and hopes to slash $10 bln through the merger. His higher savings target easily offsets the hit from vanishing revenue as clients flee the acquired bank. The risk is that Swiss politicians think UBS’s deal is too sweet.
With housing, Buffett chooses a great location 30 Aug 2023 The billionaire’s Berkshire Hathaway recently backed US homebuilders such as Lennar even as mortgage rates rose. Although Americans will pay more in interest, higher wages can make up the difference. Plus, existing home sales have ground to a halt. Builders are in prime position.
UBS inherits tricky wealth legacy in Asia 29 Aug 2023 By gobbling up Credit Suisse, Sergio Ermotti is expanding his bank’s clout in serving the Asian super-rich. Yet exposures to risk-taking entrepreneurial clients used to big leverage pose a challenge. Regaining the wealth ground lost by its Swiss rival will also not come cheap.
Beware the hedge fund deal that’s not about money 23 Aug 2023 Bill Ackman, Marc Lasry and Boaz Weinstein want to buy Sculptor, which manages $34 bln. Instead, Daniel Och’s former shop accepted a lower bid from real estate investor Rithm. Sculptor’s doubts about the moguls’ funding sounds fishy, as does the idea they couldn’t work it out.
Unused safety net gives UBS best of both worlds 11 Aug 2023 The Swiss bank scrapped $10 bln of government insurance against losses from rescuing Credit Suisse and repaid emergency central bank loans. Turning down the political heat gives CEO Sergio Ermotti more scope to cut costs. Yet the state remains on the hook for any future problems.
Capital Calls: Uber’s road trip to redemption 1 Aug 2023 Concise views on global finance: The $95 bln ride-sharing firm notched its first operating profit and more than doubled free cash flow, but its valuation is lagging.
Europe’s listless IPOs are red flag for big floats 31 Jul 2023 The region’s string of mostly mid-sized initial public offerings this year are now just 3% above their listing price on average. Such poor performance will make investors wary of backing new ones. That will give larger float candidates, like CVC and Galderma, pause for thought.
Barclays CEO fiddles while valuation droops 27 Jul 2023 Despite earning adequate returns, the $32 bln UK bank has long traded at a big discount to rivals. Boss C. S. Venkat’s plan so far boils down to more of the same. Without clearer targets to move capital out of investment banking, the shares risk remaining stuck in the doldrums.
Goldman is losing Wall Street’s popularity contest 19 Jul 2023 Own goals dragged the investment bank’s return on equity down to 4% in the second quarter, half of Morgan Stanley’s level. Though Goldman Sachs still rules markets, its relative valuation has sagged under CEO David Solomon. He lacks his rival’s bold plan to win over investors.
Morgan Stanley and MUFG’s next act is well-timed 19 Jul 2023 The duo will collaborate on equities and currencies as their 15-year alliance evolves. With global interest in Japan driving up stocks as Tokyo toughens its stance on governance and amid a welcome return of inflation, the partnership will become even more the envy of its peers.
BlackRock’s Aramco embrace makes sense in a vacuum 18 Jul 2023 The $109 bln asset manager added the state-owned Saudi oil giant’s CEO Amin Nasser to its board. BlackRock boss Larry Fink may invite a political firestorm at home, but he needs a competitive advantage. Diversity of opinion helps, as does the ability to unlock new investments.
Research U-turn is poor fix for vanishing stocks 18 Jul 2023 The UK and EU may let investors pay for equity analysis through trade commissions again. The hope is that this will lead to more research and help small firms list. Yet asset managers will fear higher costs, and the IPO market faces bigger headwinds than a writeup shortage.
Citi cheers into the valuation void 14 Jul 2023 Even amid shrinking revenue and weak markets, CEO Jane Fraser is thumping the pulpit on the bank’s turnaround, sticking by a target of an 11% return on tangible equity. One problem is that investors don’t seem to believe it; the other is that rivals are already getting far more.
Mission Impossible: Paramount reckoning 5 Jul 2023 Everyone has a price and media mogul Shari Redstone is no different. The trouble is that her conglomerate’s TV networks alone are worth more than its $11 bln market value. Despite a rich history of breakups, it would take a financial Ethan Hunt to extract full value this time.
UK banks are appropriate airbag for mortgage crash 27 Jun 2023 British politicians are starting to call out lenders that have delayed passing on higher rates to savers, even as they charge borrowers more. Bank share valuations already implied such windfalls might be temporary. The sector’s rising margins justify some political arm-twisting.
Capital Calls: Eli Lilly gorges on obesity options 27 Jun 2023 Concise views on global finance: The drugmaker found patients losing an incredible 24% of their weight on one of its latest treatments. First-movers don’t always win out in pharma, however, as Pfizer proved with Lipitor. That’s why Lilly is wise to keep investing in alternatives.
Swiss $17 bln CoCo case could bite UBS on the tail 21 Jun 2023 Bondholders are suing regulator FINMA for ordering the writedown of funky hybrid bonds to smooth a Credit Suisse deal. If they win, the debt may come back to life, giving UBS a capital hole. Or the government may pick up the tab, creating new political headaches.