Kimberly Chin

In the paper's Closing Bell column, looked at how documents lodged with SEC show Bill Ackman is set to IPO his biggest fund yet for retail investors, targeting a $US26b raising, zero performance fees, zero management fees for 12 months, close-ended structure, UBS, Citi underwriting, spoke to Geoff Wilson Wilson Asset Management https://lnkd.in/gHgd9te5

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If you are confused about Fed messaging right now, I try to unpack the problem in this story. To put it simply, the Fed communicates in baselines, not in bets, to paraphrase Annie Duke. They need a better way to communicate probabilities. Every policy maker who said three cuts this year looks like a good baseline most likely had an unusually high probability of less than three that they didn't communicate. There are many ways to communicate about risk and uncertainty. The Fed is behind other central banks on this front. https://lnkd.in/ese7jpEb

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NEW: MUFG's US corporate lending arms just came back to market from an almost four month break after getting dinged by regulators. More details now available for subscribers on 9fin. If you want access to this and more on what's happening in the private credit market, contact [email protected] for more information. The latest w/ David Brooke: #privatecredit #leveragedfinance

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MY LATEST ON PRIVATE CREDIT: Blue-chip asset managers known primarily for their private-equity businesses have significantly increased private credit as a percentage of their assets under management within the past year. Private-equity giant Blackstone, with assets that rose about 7% to more than $1.06 trillion in the first quarter, increased its credit and insurance assets 13% to $329.6 billion at the end of March from $291.3 billion a year earlier. At buyout firm KKR & Co., assets managed by its credit business rose almost 12% to $260 billion at the end of this year’s first quarter from $233 billion a year earlier. Other publicly traded asset managers have also noted the increasing importance of private credit. In recent earnings reports and conference calls on the results, firm leaders cited strong returns as well as significant investor and borrower interest in debt offerings as driving forces of growth in the asset class. https://lnkd.in/ebDbhWw2

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The latest episode of Reinventing Banking explores why open banking could be a competitive opportunity for small financial institutions that play it right. Listen here!

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Listen to the latest episode of Reinventing Banking for my conversation with John Pitts about how small banks can approach impending open banking rules as an opportunity.

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Did you see The Guardian's story on securitization/CLOs/private securitizations/not quite sure what? Perhaps as someone working in finance, The Guardian/Observer is not your cup of tea. And, to be fair, you're probably not a key demographic for them either! But if you work in #securitization and you believe lighter regulations in Europe are in your interest, or just good for the UK/EU's broader economic prospects, then you need to be aware of this story. Anyway, the story... The writer clearly doesn't really know what they're writing about and neither do the editors. No market participant has been spoken to (aside from an analyst that doesn't appear to work in structured finance). It talks mostly to an academic at LSE and uses an ancient quote from a billionaire as evidence of a problem arising now. All of this is done to create the image in the reader's mind that what The Guardian broadly understands as structured finance is banking's version of Rosemary's Baby. (I would suggest that their views could even have been taken out of context, accidentally) And on top of it all, in one fell swoop, this article probably has more views than all of mine at GlobalCapital combined. And so naturally, here I am howling at the moon about it all. But herein lies the problem. It's easy for market participants to look at this and whinge about it, but it also reflects a failure on the industry's part to engage. Journalism 101 is to be accurate. It is sacred. I think it's fair to assume that The Guardian wanted to write an accurate (and good) story. But it appears that no one in the market gave them the time of day. Did all the banks and investors say "thanks but no thanks"? Perhaps they didn't know where to look (quite likely)? Perhaps they were just palmed off at every turn? But I think it's incumbent on the market as a whole to engage with national newspapers and more generalist audiences, particularly if it wants to regulation to be reformed. It's not easy, and there are risks, but supporting journalists to write better, more accurate and nuanced stories is going to be key in helping the legislators of Europe come round to the idea that there is more to securitization than Margot Robbie and economic catastrophe. Anyway, read it yourself. Complain to the editor. Or offer to do a more thoughtful chat about it! Link below: https://lnkd.in/eFSJTzNu

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The U.S. election is one of multiple event-related risks which executive and business leaders are bracing for next month, said Tanvir Sandhu, chief global derivatives strategist at Bloomberg Intelligence. Sandhu spoke on cross-asset and macroeconomic volatility during the Bloomberg Volatility Forum which took place Oct. 1 in New York. “We have a confluence of employment reports, we have the election, and then we have the FOMC meeting,” he said in an interview of events that are all occurring in the first week of November. “So there’s a lot of event risk in that seven days, and the [volatility] market is reflecting that event risk.” #volatility #election #scenarios https://lnkd.in/g8GUcu6n

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Why is getting added to key market indexes is a plus for management? It creates built in demand for the stock. https://lnkd.in/eWyRaUnT

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An "infamous" hedge fund trade on convertible bonds, which was crushed in 2008 but made storming gains in the pandemic era, is making a return. Convertible arbitrage, in which investors try to capitalize on price discrepancies between a convertible bond and its underlying stock, attracted inflows in the first quarter as investors pulled billions out of other strategies, according to Nasdaq eVestment Hedge funds such as Man Group are allocating more to the strategy as companies such as Alibaba, Coinbase and Ubisoft all hit the convertible bonds market, providing fertile territory for investment. Liza Tetley and myself talk to Adam Singleton, Alexandre FADE, CFA, Lawrence Berner and Pierre-Henri de Monts de Savasse, CFA about the growing popularity of the strategy, and the role hedge funds have to play in this niche but crucial corner of the market. And a little thank you to Justin Craib-Cox, CFA, who put me on to this in the first place! If you have any thoughts or know of any cool trades in this space, let me know in the comments below or drop me a DM. #convertiblebonds #hedgefunds https://lnkd.in/eY_5nCNA

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FEATURE: The the most common trait shared by alternatives is the way in which investors access them. Since they are not publicly traded, constructing adequately diversified portfolios can be challenging. Alternatives are difficult to trade. Their prices aren’t listed on transparent exchanges. Buyers and sellers must first be found and then prices individually negotiated. As a result, investors frequently invest via funds with specialized managers, such as private equity and venture capital firms, which provide liquidity, diversification and expertise.

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Imagine this. You have a chance to buy a stake in a private-equity deal for 20% of what the private-equity firm says the investment is worth. That's 80% off -- a huge discount to the stated value. You buy it. You own it, and the private-equity firm says it's still worth five times what you paid for it. Now ask yourself this: Do you use the private-equity firm's valuation number to mark that asset on your own balance sheet? Or do you say the investment is worth the same as what you paid for it? Generally speaking, the accounting rules say you can mark it at five times what you paid for it on day 1, because that's what the private-equity firm told you it's worth. Now imagine if you could charge fees on those markups. To see more about how all of this could be, see my story today in The Wall Street Journal. https://lnkd.in/gtGn_QCe #privateequity #pe #venture #vc #accounting #

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Republicans are poised to dismantle corporate greenhouse gas emissions reporting requirements and other priorities of President Joe Biden’s SEC, after Donald Trump takes office next year. Trump’s Securities and Exchange Commission is expected to start undoing the climate rules as soon as January, less than a year after their March release under Democratic Chair Gary Gensler. The regulations have yet to take effect; the agency paused them in April after companies, Republican state attorneys general, and others sued. The process of unraveling SEC regulations, however, can take years. And court battles could be slow to wind down, especially in situations where outside parties like Democratic state attorneys general have intervened to defend SEC rules. https://lnkd.in/emhXVfgG

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My latest for Finadium - also free to access - is the second in our conference preview series. How UST clearing is changing the market and what that might imply about new players that could boost the market as well as alternative routes for transacting.

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New for Barron's: On the face of it, Bank of America and Goldman Sachs’s annual shareholder meetings this week were uneventful—no blowout wins for long-shot proposals, no drawn-out battles with infamous activist funds. But among the sea of shareholder resolutions, two failed proposals warrant a closer look. The two resolutions called on BofA and Goldman to implement policies to prevent the chief executive from also holding the title of board chair—both banks’ CEOs, David Solomon and Brian Moynihan, currently do—in the interest of sounder corporate governance and checks on power. While this has been a longstanding debate, what stands out is the increased support these proposals drew when shareholders’ votes were tallied on April 24. Very curious what people think about this ahead of these proposals also being on the ballot at Citi, BlackRock, and JPMorgan Chase & Co. this proxy season. It's obviously not a new issue. Some folks I spoke with said it seemed inevitable that firms will eventually more widely adopt the policy, though, especially after JPMorgan separates the titles once Dimon is replaced as CEO. (Although, lol, as most people think, that just means he would be able to stick around as chair.) Please keep sending your feedback and tips/ideas! [email protected] #corporategovernance

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Headlines are full of return-to-office mandates; but offices are still half empty. I explain the disparity here for Bloomberg Opinion. (With thanks to Nick Bloom, Jose Maria Barrero, and Steven J. Davis for their research on this — the source of the first chart!) #hybridwork #wfh #remotework

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While the S&P 500 has set 31 new records this year, few of its members outside of the technology high-flyers are participating in the advance. In the last three months, the 10 largest stocks in the index by market capitalization — mostly tech giants — have posted a median gain of 17%, while the rest have lost 1.3%, according to data compiled by Bloomberg Intelligence. With Jan-Patrick Barnert

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Hedge funds including Anchorage Capital Advisors and Squarepoint Capital LLP have been building positions in cobalt by buying up physical material, as tumbling spot prices and a more liquid futures market create new trading opportunities in the battery metal. Cobalt is a relatively tiny and specialized market compared with commodities like copper or oil, and prices have dropped to the lowest in more than seven years as the market is flooded with production from the Democratic Republic of Congo and Indonesia. The hedge funds’ moves are the latest sign of financial players getting involved in physical metal trades, as money flows back into commodities while oversupplied metal markets create opportunities to make a profit by buying at cheap spot prices. It’s also reviving memories from almost a decade ago, when funds including Pala Investments took advantage of weak cobalt prices to buy up piles of metal in a bet on the nascent energy transition. (The bet paid off, as prices soared over the next couple of years.) At the time, the absence of a liquid futures market meant that buying real-world cobalt was one of the only ways available to bet on rising prices. Today, the situation looks a little different. Cobalt futures trading has taken off on CME Group’s Comex exchange, creating a way for traders to hedge their physical positions in the newly liquid futures market. The ballooning surplus has also led to a widening gap between depressed spot prices and higher-priced futures on the Comex, with contracts for delivery in a year’s time having traded as much as 20% higher than spot prices. Yvonne Yue Li Mark Burton Archie Hunter #cobalt #metals #commoditytrading #hedgefunds https://lnkd.in/enMdDQTg

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