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☆ Private credit investments surged 89% in 2022 - report
▼ + stars: | 2023-02-22 | by ( Chiara | ) www.reuters.com time to read: +2 min

LONDON (Reuters) - Private credit and infrastructure investments across emerging and developing markets surged to record levels in 2022 as borrowers looked for alternative financing options amid rising interest rates, according to a report published on Wednesday. REUTERS/Tingshu Wang/File PhotoThe Global Private Capital Association (GPCA) said private credit investment saw the largest rise, growing by 89% to $10.8 billion in 2022 from the year before in Asia, Latin America, Africa, Central and Eastern Europe (CEE) and the Middle East. Private credit is financing provided by a lender other than a bank, such as an investment fund. “There are persistent financing gaps unaddressed by global or local banks that private credit funds are helping to fill,” said Jeff Schlapinski, Managing Director, Research at GPCA. The Middle East was the only region that in 2022 saw an increase in overall private capital investment, rising 30% to $19.8 billion.

☆ Here are 5 ETFs that offer more than 10% yield right now to beat inflation
▼ + stars: | 2023-02-13 | by ( Ganesh Rao | ) www.cnbc.com time to read: +3 min

JPMorgan Equity Premium Income ETF (Ticker: JEPI) The ETFs that showed up on the screen included JPMorgan's actively managed equity and equity derivative ETF , known by its ticker JEPI. The 30-day SEC yield shows the dividends and interest earned after expenses. VanEck Mortgage REIT Income ETF (Ticker: MORT) The rise in risk-free rates led to the dramatic re-rating of real estate investment trusts in 2022. The ETF tracks the ICE BofA CCC and Lower U.S. High Yield Constrained Index and currently offers a 30-day SEC yield of 13.26%. JPMorgan Nasdaq Equity Premium Income ETF (Ticker: JEPQ) The JPMorgan Nasdaq Equity Premium Income ETF appears to be a riskier alternative to the defensive-leaning JEPI.

☆ KKR reports 42% drop in earnings on lower asset sales
▼ + stars: | 2023-02-07 | by ( Chibuike Oguh | ) www.reuters.com time to read: +2 min

NEW YORK, Feb 7 (Reuters) - KKR & Co Inc (KKR.N) said on Tuesday its fourth-quarter after-tax distributable earnings dropped 42% year-on-year, driven by asset sale declines in its private equity portfolio and lower transaction fees in the capital markets division. KKR and other private equity firms struggled to sell assets for top dollar for much of the last year due to market volatility, rising inflation, recession worries and geopolitical tensions. Transaction fees from its capital markets business, which collects lucrative fees for arranging financing for KKR portfolio companies, declined by 55% to $144.4 million. During the quarter, KKR said its private equity portfolio was flat in value, while opportunistic real estate funds depreciated by 8%. By contrast, Blackstone Inc (BX.N) had reported that its opportunistic and core real estate funds depreciated by 2% and 1.5%, respectively, while its corporate private equity funds gained 3.8%.

☆ Investor reaction to Adani market rout after short-seller report
▼ + stars: | 2023-02-02 | by ( ) www.reuters.com time to read: +4 min

The rout has sparked concern that the fallout could also affect, more broadly, confidence in India. GEORGE BOUBOURAS, HEAD OF RESEARCH AT K2 ASSET MANAGEMENT, MELBOURNE (UNDERWEIGHT ON INDIA)"The Adani effect works both ways given the market cap relative to index. "To attract more capital the Indian economy needs more FTAs (free-trade agreements) and more financial market reform - a long process." Given there has not been any significant change for now for the market valuation, the market remains overall expensive in our view." Adani is a known levered name in India, so I would think most participants should not associate the same issues for other Indian assets."

Foreign investors, many of them already underweight what they consider an overpriced stock market, are reducing exposure. "Only Adani Group is trading with these ridiculously high multiples, and that is the core of the problem." "At this point in time, I don’t think it’s a systemic risk," said Jimmy Lim, chief investment officer at Modular Asset Management in Singapore. "We don't think that there's going to be a default anytime soon, although I don't expect any kind of near-term resolution between Adani Group and Hindenburg," Chao said. Yet Chao expects the selloff to help bring Indian stock valuations to more "palatable levels" for investors.

☆ Private Equity Taps Insurers’ Cash to Speed Up Growth
▼ + stars: | 2023-01-31 | by ( Matt Wirz | Leslie Scism | ) www.wsj.com time to read: 1 min

New York-based Apollo Global Management merged with an annuity insurer that now accounts for almost half of the $523 billion Apollo manages. Investment firms that play on the cutting edge of finance are turning to one of the oldest businesses on Wall Street to turbocharge their growth: insurance. Private-credit fund managers such as Blackstone Inc., Carlyle Group Inc. and Centerbridge Partners are increasingly forming partnerships with insurers, or buying them outright. Call it the merger of slow money and fast money.

☆ Adani’s battle with Hindenburg leaves investors sizing up exposure to the global banking sector
▼ + stars: | 2023-01-31 | by ( Seema Mody | ) www.cnbc.com time to read: +4 min

Indeed, Indian banks make up 0.6% of the group's sector loans, according to JPMorgan. This may seem low but the total exposure to the Adani Group is still around $9 billion, wrote Saurabh Kumar, an analyst at JPMorgan. Gautam Adani, chairman of Adani Group. Jefferies analyst Prakhar Sharma writes that, for now, the risk to Indian banks is low, saying, "we don't see material risk to the Indian banking sector." Of the seven companies operated by the Adani Group: Adani Green Energy, Adani Power and Adani Ports are sitting on the most net debt, according to analysts.

☆ Blackstone's earnings fall 41% as assets sales slump
▼ + stars: | 2023-01-26 | by ( Chibuike Oguh | ) www.reuters.com time to read: +2 min

NEW YORK, Jan 26 (Reuters) - Blackstone Inc (BX.N) said on Thursday its fourth quarter distributable earnings fell 41% year-on-year as the world's largest manager of alternative assets cashed out fewer investments across its key portfolios. Distributable earnings, which represents the cash used to pay dividends to shareholders, fell to $1.3 billion from $2.3 billion a year earlier. Blackstone's closely watched fee-related earnings fell 39% to $1.1 billion. Secondary funds fell 1.8% while corporate private equity and private credit funds gained 3.8% and 2.4%, respectively. By contrast, the benchmark S&P 500 index (.SPX) rose 7.08% in the fourth quarter.

☆ Bank earnings become a post-Covid parlor game
▼ + stars: | 2023-01-23 | by ( John Foley | ) www.reuters.com time to read: +6 min

Chief among the mysteries is how much interest banks will harvest in 2023 and beyond. Even then, the link between benchmark interest rates and the rate banks actually charge is getting harder to forecast. Bank of America boss Brian Moynihan said that depositors who used to have roughly $3,500 with the bank now have almost four times more. Goldman just laid off 6% of its workforce, but it remains bigger than it was in 2019; Bank of America says it’s still hiring. To that end, the fog is arguably less troublesome for Goldman and Morgan Stanley than it is for JPMorgan, Bank of America and Citigroup (C.N).

☆ Hedge fund industry lost $125 bln worth of assets in 2022 - HFR
▼ + stars: | 2023-01-20 | by ( Nell Mackenzie | ) www.reuters.com time to read: +1 min

LONDON, Jan 20 (Reuters) - Almost $125 billion worth of assets, from performance losses and asset flows, left the hedge fund industry in 2022, Hedge Fund Research (HFR) data showed on Friday in the latest sign of the havoc that volatility wreaked on the industry last year. Investors rethought putting their money into hedge funds, leading to a net outflow of $55 billion in assets, making it the largest capital flight from the industry since 2016, HFR said. A sharp change from 2021, when the industry saw a positive $15 billion of net inflows. The only kind of hedge fund strategy that saw an increase of investor money was the $4.3 billion that flew into event-driven mergers and acquisition and credit funds. The size of the hedge fund industry grew in the fourth quarter to $3.83 trillion, a quarterly increase of $44 billion, HFR said.

☆ This property tech startup offers fractional home ownership to wealthy individuals. Check out the 16-slide pitch deck Fractal Homes used to raise $30 million.
▼ + stars: | 2023-01-09 | by ( Callum Burroughs | ) www.businessinsider.com time to read: +2 min

London-based startup Fractal Homes has raised $30 million in debt and equity funding. The property tech company offers fractional home ownership for wealthy individuals from MENA. Fractal Homes, a property tech startup that helps wealthy individuals purchase second homes in desirable cities, has raised $30 million in debt and equity funding. To date, wealthy individuals from the MENA region have struggled to access the European housing market, Fractal claims. Check out Fractal Homes' pitch deck below:

☆ Market Chill Opens Path for Buyout Lender Sixth Street’s Rise
▼ + stars: | 2022-12-23 | by ( Matt Wirz | ) www.wsj.com time to read: 1 min

The leveraged buyout of an Emerson Electric business is one of several large deals recently financed by Sixth Street. The credit crunch on Wall Street is forcing some of its biggest deal makers to turn to a little-known investment firm to bankroll their purchases: Sixth Street Partners . Many banks and private-credit funds are tightening their purse strings after taking losses on big junk-rated loans that they committed to before debt markets seized up this summer. That leaves Sixth Street, which manages about $65 billion, as one of the few outfits willing to write fat checks to finance corporate takeovers.

"[But] private equity funds still have significant amounts of dry powder, and by the second half of next year, they will be looking to put some of it to work," he said. Private equity firms normally buy companies with a combination of debt and equity. "Ticket sizes across the private credit industry are likely to come down depending on the deal. Banks often highlight debt funds' - or direct lenders - higher prices and more stringent documentation requirements as competitive disadvantages to the syndicated loan and junk bond markets. But some see private credit as part of the solution at a time when money is scarce.

☆ Analysis: Private debt markets face reality check as companies grapple with rising rates, recession
▼ + stars: | 2022-12-20 | by ( Chiara Elisei | ) www.reuters.com time to read: +5 min

An era of ultra-easy cash from central banks lured investors into private credit, attracted by juicy returns in the high-single to low-double-digits. The private debt market has expanded to $1.4 trillion, up from $250 billion in 2010, according to data provider Prequin, with funds including Ares, Blackstone (BX.N) and KKR (KKR.N) holding big positions. Corporate default risks are rising, making investors think twice about holding riskier private debt. A Private Credit Default Index by law firm Proskauer showed a default rate of 1.56% on U.S. dollar-denominated deals in the third quarter, the first notable increase over the past 18 months. "While the default rate is likely to go up, I wouldn't expect to see a significant spike in 2023," he added.

☆ The SEC is reaching out to Blackstone and Starwood after the real-estate giants limited investors' withdrawals from their funds, report says
▼ + stars: | 2022-12-16 | by ( Alex Nicoll | Rebecca Ungarino | ) www.businessinsider.com time to read: +3 min

Investors are pulling their money from big real estate funds at a quick pace. Blackstone and Starwood recently limited investors' ability to withdraw. The real estate funds have recently seen a surge in withdrawal requests amid a broad drop in investor sentiment and potential economic downturn. Representatives for the SEC and Starwood did not immediately return requests for comment on Friday. But this year has brought challenges as the real estate market sours and more investors are turning bearish.

☆ Morgan Stanley's top auto analyst Jonas sees tough year ahead for EVs, gives his top picks
▼ + stars: | 2022-12-14 | by ( Alex Harring | ) www.cnbc.com time to read: +4 min

Analyst Adam Jonas is expecting a "challenging" 2023 for auto earnings on the back of declining demand and deflation – particularly for electric vehicle makers. But Jonas' price target implies the stock could gain 10.6% from where it closed Tuesday. Jonas cut the expected electric vehicle penetration forecasts for 2025 and 2030 to 11% and 26%, respectively, from 13% and 32%. Tesla and Rivian are both electric vehicle makers among his top picks. The stock, which is down 48.4% this year, has a price target that shows it could gain 34% over Tuesday's close.

New York CNN —FTX founder Sam Bankman-Fried was indicted on eight criminal charges including wire fraud and conspiracy by misusing customer funds, according to an indictment from the US Attorney of the Southern District of New York. Separately Tuesday, US markets regulators charged Bankman-Fried with defrauding investors and customers in his failed crypto exchange FTX. The Securities and Exchange Commission said Bankman-Fried, “orchestrated a years-long fraud” to conceal from FTX investors the diversion of customer funds to Alameda Research, his crypto-trading hedge fund. Star athletes and celebrities who backed FTX also reportedly received a stake in the company, including Tom Brady and Gisele. That meant there was no meaningful distinction between FTX customer funds and Alameda’s funds that Bankman-Fried used as his “personal piggy bank,” the complaint says.

☆ Blackstone gets a slap from efficient markets
▼ + stars: | 2022-12-08 | by ( Jonathan Guilford | ) www.reuters.com time to read: +9 min

NEW YORK, Dec 8 (Reuters Breakingviews) - Private markets seemed, for a while, the perfect antidote to the weirdness of public markets. Those models typically move much more slowly than the rapidly changing prices served up by public markets. These charms became much more potent during the stresses of Covid-19, when it became clear that public markets are not always a ruthlessly efficient price-discovery mechanism. RESILIENCE OR INTRANSIGENCECovid briefly scrambled the world, but bigger changes are coming that may scramble the calculus for private markets. During Covid, public markets seemed backward-looking, overreacting to the present moment while private markets were able to focus on the future.

☆ Blackstone's credit fund reaches withdrawal limit
▼ + stars: | 2022-12-07 | by ( ) www.reuters.com time to read: +1 min

This is the first time redemption requests had reached the pre-set limit of 5% since Blackstone launched the product in January last year. Blackstone Private Credit Fund (BCRED) received withdrawal requests from its investors that were about 5% of the fund's outstanding shares in the fourth quarter that ended on Nov. 30, according to a regulatory filing. Blackstone said all redemption requests made to BCRED will be honored and that the fund has $8 billion of immediate liquidity. "We saw net positive flows this quarter as investors sought compelling yields in high-quality assets with little volatility." Reporting by Chibuike Oguh in New York; Editing by Stephen CoatesOur Standards: The Thomson Reuters Trust Principles.

☆ Inside the private-debt boom: Wall Street's hottest asset faces a tremendous test in a dimming economy
▼ + stars: | 2022-12-05 | by ( Rebecca Ungarino | ) www.businessinsider.com time to read: +10 min

Defaults on private loans, which have fallen steadily since the pandemic's height in 2020, are ticking up. Private credit, or private debt, are catch-all terms to describe privately negotiated loans outside the public debt markets. Private credit firms engage in what's known as direct lending, making these private loans to companies who turn to them instead of a traditional bank. Analysts and asset management executives say private debt has held up well in 2022 in the face of brutal stock and bond market volatility. 'Fighting for allocation'A challenge for private debt funds in the past decade has been a dearth of companies they can lend to.

☆ Equity funds suffer biggest weekly outflow in three months - BofA
▼ + stars: | 2022-12-02 | by ( ) www.reuters.com time to read: +1 min

LONDON, Dec 2 (Reuters) - Equity funds suffered a $14.1 billion outflow in the week to Wednesday in the largest exit in three months, BofA Global Research said in a note on Friday. U.S. equity funds saw an $16.2 billion outflow, the biggest since April, the latest flow data from BofA also showed. Bond funds also saw outflows, to the tune of $2.4 billion, while cash funds attracted $31.1 billion inflows and gold funds added $59 million, BofA said citing EPFR data. In its weekly note, BofA noted that outflows from credit funds in 2022 of $316 billion have unwound all the inflows of 2021. It added that while equity funds have seen inflows this year of some $207 billion, this was down from the "euphoric inflows" seen last year.

LONDON, Dec 2 (Reuters) - Investors have withdrawn $316 billion from credit funds this year, unwinding all of the previous year's inflows, BofA Global Research said in a note on Friday. In its latest note on fund flows, BofA said equities funds had seen inflows of $207 billion in 2022, below the "euphoric inflows" of the previous year. Equity funds suffered a $14.1 billion outflow in the largest exit in three months, BofA said, citing EPFR data. Cash funds attracted $31.1 billion of inflows and gold funds added $59 million, BofA added. In emerging markets, BofA said bonds had a 15th week of outflows, losing $500 million, while equities attracted $1.1 billion of inflows.

☆ Blackstone's bet on small investors bites the private-equity giant as investors pull out of its high-profile real-estate fund
▼ + stars: | 2022-12-01 | by ( Rebecca Ungarino | ) www.businessinsider.com time to read: +4 min

BREIT, as the large real-estate fund is known, has been key to the firm's retail investor push. Blackstone, the $951 billion private-equity behemoth, is better known for its big buyouts, splashy deals, and real-estate market domination than its products catering to individuals. BREIT, as the real-estate fund is known, has posted a return of 9.3% so far this year and a 15.5% three-year annualized return, according to its website. But investor sentiment has appeared to turn for this real-estate fund, posing a challenge for the firm's retail push. Last month, Credit Suisse downgraded Blackstone stock over concerns in BREIT and BCRED.

☆ S&P warns of possible trebling of U.S., European default rates
▼ + stars: | 2022-12-01 | by ( ) www.reuters.com time to read: +1 min

LONDON, Dec 1 (Reuters) - Credit rating firm S&P Global has warned that speculative-grade U.S. and European corporate default rates are likely to double and might even treble next year as rising borrowing costs take their toll. The firm estimated that the "trailing-12-month default rates" in the U.S. and Europe would reach 3.75% and 3.25% respectively by September, more than double the 1.6% and 1.4% in September 2022. With so much depending on the length, breadth and depth of a potential global economic downturn, however, S&P added that "pessimistic forecasts for default rates of 6.0% and 5.5% aren’t out of the question". "We expect credit ratings to deteriorate, as credit fundamentals - for many corporates and some sovereigns - erode further", S&P's 2023 outlook report said. Reporting by Marc Jones; editing by Danilo MasoniOur Standards: The Thomson Reuters Trust Principles.

☆ Blackstone draws a rare 'sell' rating from Wall Street as an analyst raises concerns over 2 high-profile funds
▼ + stars: | 2022-11-22 | by ( Rebecca Ungarino | Casey Sullivan | ) www.businessinsider.com time to read: +3 min

In a rare move for Blackstone, an analyst downgraded the firm's stock rating to "underperform." Blackstone, which has expanded funds aimed at retail investors, said performance is strong. Blackstone shares fell on Tuesday after a Wall Street analyst outlined a grim picture for two of the private-equity and real-estate giant's most prized funds. Credit Suisse research analyst Bill Katz assigned an "underperform" rating to Blackstone. It's a rare negative rating on the firm, which tends to draw cheers from Wall Street analysts who are bullish on Blackstone's position as the largest private-equity investor.

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