Mexican Client Leaves SLB, Halliburton Reeling with Over $1B in Unpaid Debt (Bloomberg)
First Republic Bank Faces Pressure to Unload Assets to Balance Books
First Republic Bank is considering selling between $50B and $100B of assets, including long-dated mortgages and securities, as part of its strategy to rescue the company. The sales would aim to reduce the mismatch between the bank's assets and liabilities, which is considered a key factor that left First Republic vulnerable after a run on deposits in March. The bank's shares dropped by 49% to a record low on Tuesday following disappointing earnings that fell short of analysts' estimates. The sales could include warrants or preferred equity offered as an incentive for buyers to acquire assets above their market value. The bank, which had assets worth $233B as of March, also plans to focus on loans that can be sold on the secondary market.
"We are working to restructure our balance sheet..."
Neal Holland, First Republic Bank
Private Funding Pulse Check
Orbital Therapeutics, a biotech firm aiming to advance global health through the creation of RNA-based drugs, has secured $270M in Series A funding, with participation from Invus Group and Moore Ventures among other investors
The Sabanci Family Office, Esas, has invested in a $13M Series B funding round in Neteera, a medical device company producing a continuous and contactless medical monitoring solution
In a recent Series B funding round, SPAN, a smart electrical panel company focused on revolutionizing home energy systems, successfully raised $96M in investment with participation from Capricorn Investment Group
Consensus, a search engine that utilizes advanced language models to quickly find answers in peer-reviewed literature, has secured $3M in Seed funding with participation from Winklevoss Capital
Over 100 SPAC-Backed Companies Running Out of Cash, WSJ Analysis Shows
More than 100 companies that went public through special-purpose acquisition companies (SPACs) are running out of cash, many of which were worth billions when they hit the market. These companies drew in small investors excited by the idea of investing in industries such as space tourism, cryptocurrencies and electric cars. Many of these companies now trade at less than $1 per share, having fallen more than 90% from their IPO and are in danger of being delisted. SPAC deals were supposed to provide a big lift for young companies, giving them cash and a public market listing. Instead, they put them under pressure to deliver and left them vulnerable to rising interest rates and the unforgiving nature of public markets.
"The financings that are available to these failing companies are just going to accelerate their demise..."
Adam Epstein, Third Creek Advisors LLC
Extreme Fluctuations in M2 Pose Risks to Economic Stability
The decline in the M2 money supply over the past year has exceeded that of the 1970s and 1980s when the Federal Reserve tightened policy aggressively. Economists warn that the extreme fluctuations in M2 run the risk of causing a severe recession, as there is a significant lag between changes in the money supply and price increases. While many believe that the recent decline in M2 is merely a normalization, experts argue that the decline could be dangerous. Although inflationary monetary policy may provide a temporary boost, it ultimately creates a contractionary pressure on real GDP due to the traditional lag between changes in the money supply and price fluctuations. The Fed’s aggressive tightening, leading to the largest decline in real M2 since 1960, could trigger a correction of a recent market rebound and a disinflation reversal.
"Attempting to return the money supply to its pre-COVID level would be a very dangerous economic proposition and would likely result in the next Great Depression well before such a level was reached."
Steven Anastasiou, Economics Uncovered
Navigating the Complexities of Family Offices: Insights from London Business School Conference
At a recent two-day conference held at the London Business School under the Institute of Entrepreneurship and Private Capital, a number of family office executives, the families they support and academics discussed subjects ranging from portfolio selection to the image of the sector and its relationship with philanthropy to the role of family members in the organizations. A common topic of discussion was the importance of taking a long-term approach and the growing expectation for family offices to establish goals that extend beyond maximizing returns. Family offices are expected to take a disciplined approach to philanthropy instead of simply handing out money. Additionally, family offices discussed the importance of differentiating between investment opportunities that require specialized expertise and those where a general strategy of keeping pace with market returns suffices.
"All serious family offices invest in private equity, but there is a trend towards them undertaking a lot of investments in the private market themselves."
Modern Wealth Management, founded less than three weeks ago, has acquired Barber Financial Group, a $1.5B AUM RIA with locations in Detroit and Kansas City (FA)
Wealth Enhancement Group has expanded by adding New Era Financial Advisors, a hybrid RIA with more than $1.1B in client assets (Yahoo)
MAI Capital Management, LLC has purchased Wiener Financial Management, adding approximately $120M in assets (Yahoo)
Written by:
Andrew Popp | Sr. Research Associate
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