Let's dive straight into the top stories from this past week...
Green Energy M&A Sets Eyes on Record Year
Over recent years, an intensifying climate crisis and geopolitical pressure have pushed the green energy industry to the forefront. High oil prices have left multinational energy companies with large cash piles, providing a catalyst for expansion of their clean energy businesses. According to a Bloomberg data report, deal value throughout the renewable sector reached $112.4B last year and has shown no signs of slowing down. Just last week, Bloomberg reported that BP, Shell and Engie were among a group of companies eyeing a nearly $2B bid for Nature Energy, a global leader in biomethane production. Historically, cash piles of this magnitude would warrant additional capital deployment into fossil fuel projects, however many of Europe's largest energy companies have made a firm commitment to pivot away from their core businesses.
“These companies have plenty of cash now and much stronger balance sheets...There is a build versus buy discussion happening within the core of Big Oil and their renewables businesses right now"
Pensions Face Pressure Amid Worst Fiscal Year Since '09
According to a Wilshire Trust data report, pubic pensions lost a median 7.9% in the fiscal year that ended June 30, the worst annual performance since 2009. Public Pensions manage the retirement savings for many public service workers and in total manage hundreds of billions in assets ultimately needed to cover future benefits. However, the looming issue of benefit costs outpacing the growth of assets exposes funds to the possibility of insolvency. This issue has led many pension funds to take on overly risky investments in the search for higher returns. Larger pensions generally outperformed their smaller counterparts over the last year, with funds managing over $1B returning -6.6% and plans over $5B returning -5.1% on average.
Mumbai-based company, UpGrad has finalized a $210M venture round. Participants in the round included Bharti Airtel, Narotam Sekhsaria family office and Artisan Investments. Established in 2015, UpGrad has secured more than $930M in private funding, valuing the company at roughly $2.25B. With the funds from this latest round, the company intends to expand its employee force to 7,600 over the next few months. The UpGrad deal highlights a broader trend in the EdTech space, as online learning and tutoring becomes more common around the world.
“Higher edtech will be on the rise for the next four to five decades. UpGrad, in the last 12 months, has reshaped itself to be the most integrated company in this space with career opportunities for the college learners and working professionals from the age of 18 to 58 and will be a lifelong learning partner for millions in the coming years"
SEC Charges Wall Street Banks with Identity Theft Protection Deficiency
According to a recent SEC report, JP Morgan, UBS and TradeStation have been accused of insufficient identity theft protections within their programs. From January 2017 to October 2019, the groups failed to implement necessary procedures to identify and address account and personal information red flags. The SEC requires that broker-dealers and investment advisors design theft prevention programs and mandate training on security procedures. All three groups agreed to pay a violation fee set out by the SEC.
The Dubai International Financial Centre (DIFC) has launched a global family business and private wealth centre, the first of its kind. The centre aims to attract a number of high-net-worth individuals, family businesses, holding companies and other private wealth groups in a single hub. The space will provide access to a suite of support services with a particular focus on estate and legacy planning. According to the report, an estimated $1 trillion in assets will be transferred to future generations in the Middle East over the next decade.
“Aligning with the UAE Government's commitment to helping family businesses play a prominent role in our society, DIFC is pleased to be launching the world's first Family Business and Private Wealth Centre. The UAE has a vast number of family businesses, owned by citizens and residents who contribute to the country's economy"
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