Retail Traders Wave the White Flag, Millennials Move Back Home and Commercial Real Estate Funds Face Pressure in this week's edition...
Take a Lap Around the Industry
iPhone Chip Maker TSMC Triples Down on Arizona Manufacturing Plant, Totaling $40B (BBC)
China's Trade Drops to Lowest Level Since 2020 (Bloomberg)
Robinhood Announces IRA with Matching Contributions (Fox)
Nearly 70% of Americans are Struggling to Pay Grocery Bills (Fox)
Retail Traders Retreat Into Hibernation Amid Retail Volume Plummet
As abruptly as the meme stock retail trade movement burst onto the scene during the height of the Covid-19 pandemic, it seems to have disappeared just as quickly. The so called "dumb-money crowd" of traders flocked to trading highly volatile equities and derivatives in search of exponential and life-changing returns. However, for every success story there were many more cases of people losing either a large portion or their entire savings. Many of the same investors fell victim to the collapse of FTX where millions of accounts remain locked and perhaps now worthless. A recent JPMorgan Chase report highlighted the dismal returns posted by retail traders this calendar year, down 40% on average. High-growth technology stocks have had a particularly rough year, declining more than 30%. Overall retail trade across U.S. equities makes up nearly 20% of the total volume, this figure is down from 37% during the height of the craze.
"High-flying technology stocks have especially fallen out of favor, as seen in the performance of the ARK Innovation exchange-traded fund, a pandemic darling that’s down 63% this year...And according to one measure by market researcher SentimenTrader, confidence among retail investors is hovering near early pandemic lows."
Denitsa Tsekova, Bloomberg
Private Funding Pulse Check
Blue 9 Capital has participated in an $14.5M Series A funding round for Buckzy Payments Inc., a cross-border payment platform and a Banking-As-A-Service (BaaS) company
Get Covered, a technology company providing property coverage, has finalized on a $6M Series A round led in part by the LeFrak Family Office
Premji Invest engaged in an $80M Series D funding round in KreditBee, an Indian lending platform offering instant personal loans
EPIQ Capital Group took part in a $16M Series C deal with Park+, an all-in-one app for car maintenance and support services
As rent prices and the cost of living soars, hoards of millennials have decided to move back home to live with their parents. According to a recent survey, roughly one in four people between the ages of 26 and 41 are living with their parents, equating to about 18 million people across the United States. However, rent prices are cooling off as outlined in RealPage, which recorded a third straight month of declines in November. Some driving factors of the trend include the desire to save money, lack of rent affordability and recent job losses. Many surveys tracking living situations reveal that this is the highest recording of millennial "move backs" since the Great Depression, a time when almost half of young adults decided to move home.
"The share of young adults living with their parents is higher than in any previous measurement (based on current surveys and decennial censuses). Before 2020, the highest measured value was in the 1940 census at the end of the Great Depression, when 48% of young adults lived with their parents."
Pew Research Center
Commercial Property Funds Fall Under Pressure from Withdrawals
Over the past few weeks, some of the largest commercial real-estate investment trusts have come under pressure from investor withdrawal requests. In response, Blackstone Inc. and Starwood Capital Group each released a statement saying they would limit withdrawal amounts from their industry leading funds. Rising interest rates coupled with a declining demand for new projects have put a damper on the sector. The move highlights an ever-softening investor outlook for the real estate industry, crippled by slowing rent growth and weak demand for office space among other factors. Oftentimes large pensions pulling out of funds in an effort to increase cash positions spurs a domino effect, resulting in real estate funds liquidating positions, in turn depressing price levels. In response to the "redemption limitation" announcement, shares of Blackstone Inc. fell 7%.
"Appraisals look backwards, and markets look forward, and people are trying to arbitrage and get their money out before the write-down occurs..."
Nori Lietz, Harvard Business School
Fanatics Founder Michael Rubin Raises $700M in New Funding
Michael Rubin, American businessman, billionaire and CEO of sports merchandiser Fanatics has finalized a funding round that values his company at $31B. Those close to the deal believe the company will use the fresh capital to expand its portfolio into the collectibles and sports betting verticals. Fanatics has undergone exponential growth over the past year, beginning as a traditional sports e-commerce company, it has since expanded its user base to include more than 94 million people. More recent deals for the company have included a $500M purchase of sports card manufacturer Topps, clothing brand Mitchell and Ness and a licensing deal with Nike to sell college sports apparel. Rubin remains bullish on the sports betting market, stating that "Fanatics’ other business segments could achieve $8B in annual profit in the next decade".
"The company is also weighing an initial public offering, and Rubin recently met with more than 90 internet, retail and gaming analysts from various Wall Street firms, where he spoke of Fanatics growth plans."
SageView Advisory Group has announced the close of Deer Park, IL-based RIA Lakeview Wealth Management, managing $415M in client capital (Cision)
Waverly Advisors, an RIA that specializes in investment management and financial planning has acquired Wall Advisors, marking its third acquisition of the year (BW)
Mercer Advisors acquires Atlanta, GA-based RIA Resource Planning Group, encompassing more than 330 clients with $325M in AUM (Cision)
Written by:
Andrew Popp | Data Research Associate
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