In a move that surprised some around the industry, the Federal Reserve took a firm stance in combating inflation by raising its benchmark rate by 75 basis points. According to multiple sources, many predict the benchmark rate to end this year at 3.4%, significantly higher than the March estimate. In addition, economists cut their GDP outlook for 2022, now expecting a 1.7% gain, compared to 2.8% in March. The funds rate remains a key driver for short-term borrowing, as well as having an indirect impact on adjustable-rate mortgages, auto loans and credit cards.
“Overall economic activity appears to have picked up after edging down in the first quarter...Job gains have been robust in recent months, and the unemployment rate has remained low. Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher energy prices, and broader price pressures"
Wall Street Executives Produce Conflicting Recession Predictions
Bank executives on Wall Street are given a first-hand pulse on the economy, something that very few have. Over the past few months the U.S. has posted a mixed-bag of economic data. Unemployment sits near a record low 3.6%, consumer and production data remains strong, existing home sales have remained steady and home prices continue to rise. However, inflation topped 8.6% in May, treasury yields pushed higher and the S&P 500 fell into bear market territory. When it comes to predicting a recession, many executives, namely Morgan Stanley's James Gorman, JPMorgan Chase's Jamie Dimon and Wells Fargo's Charlie Scharf, believe it is going to be difficult to avoid some degree of a recession. More worrisome, Dimon believes that many consumers have roughly six to nine months of spending power in their bank accounts, revealing that any extended downturn may have a significant impact.
Islamic Startup Backed by Paul Pogba Valued at $300M
Wahed Invest LLC, a New York, NY-based investment advisory service platform, is in the process of completing a funding round totaling $50M. The company is aiming to disrupt the Islamic finance space, having landed UFC fighter Khabib Nurmagomedov as a brand ambassador. Participants in the round of funding included a number of notable names, such as soccer star Paul Pogba, Saudi Aramco and multiple family offices. Founded in 2015, Wahed Invest services over 300K customers across the U.S., U.K. and Malaysia.
“Islamic banking is booming worldwide, with the industry growing 11% in 2020 to encompass $2.7 trillion of assets...Wahed said there was high demand for fintech products that are both ethical and easily accessible for individual investors"
Dastgyr, a B2B marketplace app, has raised $3.7M in its Series A funding round that included single-family office Zinal Growth
San Francisco, CA-based Dolby Family Ventures has taken part in a $5.7M seed deal with Okapi, a software service designed to operate satellites
Otium Capital engaged in a Series A investment with JUST, a purchasing e-commerce solution, totaling $3.1M
Jeff Bezos' single-family office, Bezos Expeditions, finalizes on a $3.2M venture deal with Realworld, a personalized platform designed to simplify decisions for young adults around finance, health, work and life
Citi Appoints Hofmann as Global Head of Family Office Group
According to a number of sources, Citi has appointed Hannes Hofmann as the new global head of the London-based Family Office Group. Hofmann comes from JPMorgan, where he spent 20 years across a number of roles including head of Multi-Family Office and intermediaries for APAC, EMEA and Latin America regions. Upon starting, Hofmann will report to the Global Head at Citi Private Bank executive Ida Liu. This move comes on the heels of Citi's clear effort to expand its service offerings for its high-net-worth clients.
OneDigital Investment Advisors has acquired Danvers, MA-based RIA firm Time Scale Financial who oversees roughly $3B between institutional and individual assets (FAIQ)
Concord, CA-based RIA AssetMark Inc. has agreed to acquire Adhesion Wealth, a leading provider of wealth management technology solutions for over 2,800 advisors and 180 RIAs with $9.5B in assets (GNW)
Cary Street Partners is absorbing $1.6B worth of holdings from Atlantic Union Bank's Dixon, Hubard, Feinour & Brown investment arm, bringing their total AUM to $7B (RichmondBizSense)
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