Blackstone’s clever REIT deal punts big question 4 Jan 2023 A $4 bln investment in its real-estate fund shows Blackstone can pull in big-name money on good terms for itself. It doesn’t, though, prove the fund’s assets are worth what they claim to be. Steve Schwarzman’s firm has firepower aplenty, but hasn’t answered valuation qualms.
Interlopers may yet crash the Gulf bank fee party 22 Dec 2022 The Middle East is one of the globe’s few healthy IPO markets. To relative outsiders like Barclays, it may look like big U.S. and domestic banks will grab the best mandates. Yet Saudi Arabia’s insistence that foreign banks base themselves in Riyadh presents an opportunity.
Goldman’s job cuts will be a problem shared 20 Dec 2022 The division that houses Marcus generates little return on its $16 bln of equity. Slashing too much in consumer and wealth would be counterproductive, however. Shareholders mostly subsidize the business; now, unlucky investment banking staff will shoulder some of the burden, too.
Buyout barons will court the panicking masses 20 Dec 2022 KKR and rivals may have maxed out with traditional backers like pension plans for now. Blackstone’s $236 bln in private-wealth assets shows a fresh source: the common rich. The disarray at its flagship retail fund exposes the risks, but managers will chase the lure of new money.
Who will be Wall Street’s un-American idol? 16 Dec 2022 BNP Paribas wants to grab a larger share of the U.S. market for deals and trading. So do Deutsche Bank and Barclays. This time, the goal isn’t to resculpt banking’s Mount Rushmore, but to slow the Americans’ march in Europe. It’s a plan shareholders ought to be able to get behind.
Hong Kong IPOs go back to a less luminous future 12 Dec 2022 Bankers and officials see the end of China’s Covid-19 restrictions as crucial to reviving the hub’s once-booming IPO market. That understates the city’s challenges. After vying for the hottest listings, the way investors and companies traverse the gateway to China is changing.
UK’s Big Bang barely mitigates City’s Brexit pain 9 Dec 2022 Finance minister Jeremy Hunt is fiddling with some peripheral regulations to try and boost the City’s competitiveness. It won’t reverse the flow of bankers to Europe. The exodus might even speed up if the EU finally gets moving on its own financial reforms.
Blackstone gets a slap from efficient markets 8 Dec 2022 Clients have pulled money from funds like BREIT, whose purported strength is that their valuations aren’t subject to public markets’ whims. That offered stability during recent strange times. But if investors decide the market’s pessimism might be justified, there’s a problem.
Congress can finally end private-equity tax break 8 Dec 2022 Presidents Obama, Trump, and Biden all tried to close the carried-interest tax loophole, and they all failed. Democrats’ latest election win gives them another shot at an overhaul. Lobbyists will push back, but liberals and deficit hawks should unite to end the unfair carve-out.
Banks’ buyout-debt machine defies quick jumpstart 8 Dec 2022 SocGen, BNP and Deutsche are buying slices of their own European collateralised loan obligations, which turn private-equity loans into bonds. That has echoes of 2008-style excess, but it’s not too risky. Their bigger problem is that the $1 trln market may be inexorably slowing.
BlackRock’s activist investor fights passive tide 7 Dec 2022 A tiny shareholder says boss Larry Fink’s climate-change position falls short and that the $8 trln asset manager shouldn’t impose its beliefs on companies. Some customers agree, but the firm’s solid performance makes it a tough target. When things are going well, inertia reigns.
Credit Suisse banks needn’t break too big a sweat 1 Dec 2022 The lender’s battered shares are now trading just 7% above the price of its $2.4 bln rights issue. A further slump could leave Deutsche, Morgan Stanley and 18 other underwriters with unwanted stock. But they have a margin of safety, and Credit Suisse may have backup options.
Credit Suisse rot infects wealth-management core 23 Nov 2022 The prized division lost 10% of its assets in six weeks, though the outflows have slowed. That undermines CEO Ulrich Körner’s narrative that the group’s problems are all in investment banking. Clients don’t make that distinction, and it’s easier to lose money than win it back.
SocGen’s BNP envy carries a cost 22 Nov 2022 Future CEO Slawomir Krupa is merging his stock research and trading unit with U.S. peer AllianceBernstein, aping his French rival’s capital markets drive. But the $20 bln bank will lack the scale of U.S. rivals, and growing in low-return businesses won’t help a lagging valuation.
Credit Suisse’s fuzzy Apollo deal better than none 15 Nov 2022 Boss Ulrich Körner is offloading $55 bln of assets in a securitised product unit, chiefly to the U.S. behemoth. Credit Suisse did not reveal the price, and it will pay Apollo to manage the remaining assets. But at least Körner avoided selling at a discount amid tricky markets.
How Credit Suisse’s turnaround could work 10 Nov 2022 CEO Ulrich Körner is raising $4 bln of fresh equity and shrinking the Zurich-based group’s trading business to put it on a steadier footing. In this Viewsroom podcast, Breakingviews columnists debate the merits of the plan and what’s at stake if it fails.
Credit Suisse puts “first” back into First Boston 3 Nov 2022 There’s no historical precedent for a global bank carving out and listing its underwriting and M&A unit. The spinoff’s revenue-sharing joint ventures will only partly smooth an awkward relationship with its Swiss parent. Future boss Michael Klein gets credit for novelty, though.
BNP defies French banks’ interest-rate malaise 3 Nov 2022 The 60 bln euro lender’s top line is rising handily. That’s partly because CEO Jean-Laurent Bonnafé has tilted BNP Paribas away from Gallic retail banking, where regulations restrict its ability to earn more as rates rise. A valuation premium to local rival SocGen looks assured.
Saudi Credit Suisse deal is fair Buffett imitation 2 Nov 2022 The kingdom’s biggest lender is ponying up $1.4 bln to help the weak bank raise capital. It’s not getting the sweet terms the Sage of Omaha extracted from Goldman in 2008 but the returns are still in his ballpark. And if Credit Suisse struggles, a breakup may limit the downside.
Hong Kong-Wall Street group hug only does so much 2 Nov 2022 James Gorman, David Solomon and other banking bigwigs flew in for a confab aimed at restoring the financial hub’s stature. Amid Covid curbs and geopolitical tensions, their presence alone is a boost. Curbing capital flight from the city and the mainland, though, will be tougher.