Tom Auchterlonie

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

18

As the countdown to the Fed's September meeting progresses to T-minus zero, and interest rates are expected to retreat officially, the question among many CD savers is what to do when their CD matures in a falling rate environment? To complicate matters, many CD accounts will be maturing in the next year, during which time interest rates will decline. Because many savers took advantage of higher rates over the past couple of years by opening short-term CDs, many of those CDs are now coming due -- in the form of a "CD tsunami" -- at a time when rates are starting to drop. So, what are savers to do in search of high-yielding accounts? My #Bankrate colleague Sheiresa McRae Ngo helps make sense of it all for savers. https://lnkd.in/e-QMGu5C

8

1 Comment

Jamie Dimon is not happy with investment bankers in training who quietly accept future-dated jobs with buyout firms. Kaja Whitehouse reports: During the Q&A section of a talk at Georgetown University, Dimon called the practice "unethical" and said he may "eliminate" it at JPMorgan, one of Wall Street's biggest and most influential banks. "The other thing I don't like," he told the crowd, "a lot of you work at JPMorgan, and you take a job from private equity before you even start with us." Read the full story at Business Insider: https://lnkd.in/eUnWGd24

9

Some banks are extending the terms of commercial real estate mortgages to paper over the distressed nature of the debt, fresh New York Fed research says. “Banks ‘extended-and-pretended’ their impaired CRE mortgages in the post-pandemic period to avoid writing off their capital, leading to credit misallocation and a buildup of financial fragility,” the researcher write. This could create broader risks to the financial system as these shifted mortgages risk "large losses materializing in a short period of time.” #federalreserve #realestate #cre #banks #finreg #financialstability #monetarypolicy https://lnkd.in/eFGjgPfB

22

1 Comment

As we inch day by day to the Sept. 18 Fed meeting -- where it's a strong probability that the federal funds rate will drop by 25 basis points (or 0.25%) -- what are we to do about CDs? Top rates among online-only and traditional banks, not to mention credit unions, are already paring back. Can you still get a highly competitive APY by opening a CD now? And what should we do about CDs as we enter a lower rate environment? Fortunately, my colleague Karen Bennett is no stranger to certificates of deposit and offers her keen insights into five factors you should consider NOW about CDs in your banking portfolio. https://lnkd.in/erfbUKYn

8

> Founded by Steven Schnall in 2009, New York based Quontic Bank is a #neobank that offers a variety of #mortgage solutions. > On the upside, it does not charge any monthly fees and the interest rates are competitive, but on the downside, there is no customer support on weekends, and there are no physical locations. > More insights into this 'different kind of bank' in an article in Banking Frontiers by Mohan N. CLICK HERE >> https://lnkd.in/e7ys4nkM If you like my #content, please follow me on Linkedin.

5

Brevan Howard's $12 billion flagship fund is down 2.4% this year. 🏢 Despite gaining 0.77% in May, Brevan Howard's Master Fund is falling behind the industry average. 🏢 Hedge funds have averaged 5% gains year-to-date, according to data from research firm HFR. 🏢 Macro hedge funds have beaten equity and emerging market funds to post average gains of 6.5% this year. #hedgefunds https://lnkd.in/eBNMyhMX

76

Goldman’s Scott Rubner Says ‘Not Buying the Dip’ as Correction Begins ** Strategist says July 17 tends to mark peak in S&P 500 returns ** Donald Trump odds are getting priced into S&P, Rubner adds ** July 17, has historically marked a turning point for returns on the equities benchmark ** While some investors argue that strong earnings, a possible near-term interest rate cut from the Federal Reserve, and the rising odds of Donald Trump winning the US presidential election would provide another boost for stocks, Rubner says they won’t be positive catalysts. ** Such events are already getting priced into the market and the bar for earnings for the biggest technology stocks that drove market to record highs is remarkably high. “And by high, I mean they need to be great,” he wrote. Full story here, edited by Cristin Flanagan https://lnkd.in/e--pxuEt

44

For the complete list of distressed retailers rated CCC+ or Caa1 or worse by S&P Global Ratings and Moody's Ratings read Axios' deep dive on this crucial sector headed into the holiday season.

2

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

11

The Federal Open Market Committee has lowered interest rates by 50 basis points and Chairman Jay Powell has signaled more cuts are coming soon. How is your company reacting, if at all, to the change in interest rates? Let us know what you think by taking this four-question, three-minute survey from Endeavor Business Intelligence! We look forward to sharing the results. #interestrates #investment #capex #management #strategy

4

After 50 years in their founders' profitable cultures, insular investment giants Vanguard and SEI, based in suburban Philly, this year turned outside, to industry leader BlackRock's EFT sales execs, for top bosses to manage growth and complexity. My latest: https://lnkd.in/eeZjn_jg 

9

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

7

This is the latest installment of our Year of Descending Dangerously series, on interenational central banks' attempts to retreat from high interest rates. Just in time for the FOMC, and written with Richard Annerquaye Abbey and Carolyn Silverman Hope it's of interest. #interestrates #inflation #centralbanks

22

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

36

10 Comments

Another one bites the dust as a regional bank falters under the weight of current economic pressures. While this may not be a repeat of the Global Financial Crisis, banks are still grappling with significant challenges, particularly in relation to their balance sheets. The situation is unlikely to ease until interest rates see a substantial decrease or all debt-dependent asset classes adapt to the new reality of high interest rates for longer. My prediction leans towards the latter scenario. In any case, we should brace ourselves for a turbulent 18 months ahead, especially for debt-dependent asset classes such as commercial real estate. These unprecedented times have left many commercial real estate owners indecisive, particularly as property values have plummeted rapidly over the past two years, primarily due to rate fluctuations rather than the performance of the assets themselves. We believe this situation, combined with trillions of dollars of loan maturities, will lead to numerous Special Situations in the equity side of commercial real estate, too. Analyzing data and understanding patterns has been central to our investment strategy since our inception, allowing us to navigate these scenarios effectively, identify emerging opportunities, assess risks and make informed decisions as the market evolves. Now more than ever, professional guidance is essential to make these critical decisions. The Wall Street Journal Peachtree Group Peachtree Group Credit Jared Schlosser Brian Waldman Jatin Desai Daniel Siegel Michael Ritz Michael Harper Brent LeBlanc Gina Heeb Lauren Thomas Justin Baer https://lnkd.in/gMCi8CWz

84

8 Comments

Interesting to see how investment managers' recommendations have been evolving during 2024, along with dramatic developments in #US election campaign, starting with wealth firms 'proofing' portfolios against Republican victory, then playing the 'Trump trade' to profit from it, followed by 'Red rotations' as they hedge their bets. Here's my Professional Wealth Management (PWM) opinion piece, with inspiration from Pictet Wealth Management, abrdn, political adviser Kyle Taylor and IMpower Incorporating FundForum https://lnkd.in/eUd7h3q9

14