U.S. Economy Stands Strong, Defying Recessionary Predictions (MarketWatch)
Survey Reveals Surge in Family Office CIO Salaries Across Continents (Insider)
Golf Industry Surprised as PGA Tour and LIV Golf Announce Game-Changing Merger
The PGA Tour and LIV Golf have shocked the golf world by announcing their merger, bringing an end to a fierce dispute that has divided fans and players. LIV Golf, backed by Saudi Arabia's sovereign wealth fund, enticed top players away from the PGA Tour with lucrative offers, sparking a legal battle worth billions of dollars. The deal marks a significant victory for Saudi Arabia, which seeks to increase its global influence by investing its oil riches in various sports, including Soccer and Formula 1. The merger is likely to face regulatory scrutiny, with the U.S. Justice Department already investigating potential antitrust violations by the PGA Tour. Under the agreement, the PGA Tour, LIV Golf and the European golf circuit DP World Tour will combine their business operations. Saudi Arabia's Public Investment Fund is prepared to inject billions of dollars into the new venture, conceivably to have a large influence on the product, operations and marketing of the new company. The merger signals Saudi Arabia's growing presence in the sports world, while raising concerns regarding the country's human rights record and motives for engaging in sports investments.
"The recent announcement has undoubtedly caught the golf industry by surprise...However, we believe that this unexpected agreement holds immense potential to elevate the sport of golf to new heights."
Randal Konik, Jefferies
Private Funding Pulse Check
A biotechnology company focused on nutritional science research, Mend, has successfully secured $15M in their Series A round, with participation from Chicago, IL-based family office Builders Private Capital
The Deshpande Family Office, Sparta Group LLC, has invested in a $36M Series B funding round in Pixxel, a space data company building a fleet of earth imaging satellites to predict global phenomena
Cytovation ASA, a clinical-stage biotechnology company developing a drug designed to target tumor cell membranes, has garnered $8M in investment in a recent Series A round, with the participation of Canica AS
A.G. Hill Partners has participated in a $1.6M Seed investment in PureWest Energy, an independent natural gas company focused on development in the U.S. Rockies
Sequoia Capital Announces Breakup: Three Distinct Entities to Forge Their Own Paths
Sequoia, the renowned global venture capital firm, has announced its breakup and is dividing into three separate entities. The firm, recognized for its early investments in prominent U.S. tech companies such as Airbnb, WhatsApp, and Zoom, as well as international giants like ByteDance and GoTo, will now consist of Sequoia Capital covering the U.S. and Europe, HongShan in China, and Peak XV Partners in India and Southeast Asia. The decision to split the global brand emerged gradually over the past months due to conflicts between the funds' respective startup portfolios, diverging strategies causing brand confusion, and the growing complexity of maintaining centralized regulatory compliance. The split is seen as an opportunity for the fully independent firms to achieve further success and expand their businesses. Founded in 1972, Sequoia established its presence in Silicon Valley and later expanded globally, with the China and India funds evolving into "regional powerhouses". While the separation is not primarily motivated by geopolitical tensions, it reflects the increasing competition and diverging interests among the different regions, as they seek to grow beyond domestic markets and adapt to a changing business landscape.
"Things seemed to be going in a direction where it gets harder, not easier...This isn’t a retreat saying, ‘white flag, we failed.’ It’s more of a victory in the sense that we have these fully independent businesses that can go even further."
Roelof Botha, Sequoia
Diverging Equity Strategies: China vs. U.S.
In the ever-evolving landscape of global equities, the growth-value pendulum has "ceased to swing in unison" between China and the United States. Last week, the S&P 500 showcased a reversal of trends observed in 2022, with tech stocks driving the rebound while energy shares faded. This week, MSCI data highlighted the divergence between "value" and "growth" stocks across various economies. The primary distinction between the two lies in their earnings potential and business models, with growth stocks embodying future growth prospects and value stocks offering predictable business models at discounted valuations. In the midst of the pandemic-ridden 2020, growth technology stocks largely outpaced value. However since mid-2021 the trend has deviated back towards an emphasis on value, with U.S. tech only recently making a comeback. This has caused a clear deviation between the United States and China, with Chinese value stocks outshining growth, largely due to the underperformance of the Chinese technology sector.
"Investors underestimated the growth profile of the US and overestimated the pace of recovery in China...They did not have AI on their radar at that point, which has easily been the biggest factor driving the markets."
Mark Freeman, Socorro Asset Management LP
Insights from 650 Family Office Professionals: Key Trends and Analysis Unveiled in New Report
Agreus Group and KPMG Private Enterprise have jointly released the 2023 Global Family Office Compensation Benchmark Report, providing a comprehensive analysis of the financial landscape for family offices. The report draws insights from the input of over 650 family office professionals worldwide, including interviews with c-suite executives from a number of regions. The piece benchmarks salaries, career history, and global family office demographics, while also shedding light on emerging industry trends. Key topics covered include succession planning, social mobility, wealth transfers, governance structures and preferred asset classes. Notably, the analysis reveals that family offices have developed effective strategies to navigate uncertain times and market fluctuations. Furthermore, it emphasizes the unique success factors of family offices and highlights valuable lessons applicable to businesses across industries. With the family office sector showing steady growth and expansion, the demand for talented professionals is set to rise, making it a prime destination for seasoned experts looking to switch gears.
"Family Offices are and will always be incredibly unique entities and they clearly display a framework for organizational success. The analysis on hand offers an inside look at an industry that is bucking global trends, continuing to thrive in what for many has become a slower economic time, with lessons applicable for all businesses."
Mercer Global Advisors has announced the acquisition of Madison, WI-based RIA RMR Wealth Advisors, with over 150 clients and $350M in AUM (Cision)
Cetera Holdings closes a deal with The Retirement Group, LLC, an independent RIA with $1.4B in AUM across 1,825 accounts (Yahoo)
Hightower is moving ahead with another large acquisition, announcing plans to purchase Boston Wealth Advisors, an RIA with $1B in client assets (Barron's)
Written by:
Andrew Popp | Sr. Research Associate
FINTRX delivers an industry-leading suite of private wealth data and research solutions to the alternative investment space and private capital markets. Engineered to help clients identify and access family office and RIA capital intuitively, the FINTRX platform ensures accurate and updated data and research on 850,000+ private wealth records globally. To subscribe to our newsletter and see previous versions click below.
