Fossil Fuel Use Must Plunge 25 Percent to Meet Climate Goals, Says IEA (Insider)
Government Shutdown Looms as Congress Fails to Reach Spending Deal (Reuters)
Oil Prices on Track to Hit $100 as Energy Markets Heat Up (NYT)
Down Market Years Reveal Edge for Hedge Funds
A recent analysis of historical returns shows an interesting trend in the relative performance of hedge funds versus the S&P 500 stock market index. Looking specifically at calendar year returns over the past two decades, hedge funds as an asset class appear to outperform the broader equity market only in down years for stocks. During years when the S&P 500 generates positive returns, it tends to exceed the average returns of various hedge fund indices tracked by data provider HFR Research. However, in years when stocks decline, hedge funds demonstrate an ability to preserve capital better than the equity market, with less negative or sometimes even positive returns compared to the S&P 500. This highlights both the diversification potential of hedge funds across asset classes and their managers' abilities to maneuver portfolios to capitalize on market downturns. Whether this relationship persists remains to be seen, but the historical data presents an interesting narrative.
"Everything that I'm looking at makes me think that there is trouble ahead...And if I'm right about that, then the market is dangerous."
Byron Wien, Blackstone
Private Funding Pulse Check
CMR Surgical, a medical device company developing a surgical robot, has secured $165M in a Series D funding round led by Oslo, Norway-based Watrium AS
In a recent Series B round, Narotam Sekhsaria Family Office participated in a $20M investment in Pilgrim, an innovative direct-to-consumer (D2C) company in the beauty space
Junson Capital has participated in a $23M Series B funding round for Corsair Pharma, a company developing transformative solutions to improve the therapeutic profile of medications
Horizons Ventures has engaged in a $49M Series B investment in Kneron, a San Diego, CA-based leading provider of edge AI solutions
Weinstein Bids for Control of Sculptor Capital Management
Boaz Weinstein, a hedge fund manager known for his savvy credit market bets, is embarking on his most daring move yet - attempting to catapult his $4B firm Saba Capital into another level of the hedge fund industry. Weinstein has assembled a group of billionaire investors including Bill Ackman, Marc Lasry and Jeff Yass to bid for the struggling Sculptor Capital Management. Weinstein sees an opportunity to significantly expand his assets under management by acquiring Sculptor's $8.5B flagship fund, but faces competition from mortgage servicer Rithm Capital which has the backing of Sculptor's current management. The high-profile deal has captivated Wall Street, given Sculptor's troubled history including scandals, poor performance and management's internal conflicts. While Weinstein offered a higher bid, Sculptor favors Rithm's offer to maintain the status quo. The outcome of the sale has implications for the future direction of Sculptor and whether Weinstein can realize his ambitions of establishing a major player in the hedge fund world.
"Do we really think portfolio managers are focused on making money when there is a war raging in the hallways?...It’s like everybody’s battling for control of the ship, but no one is thinking about the investors trapped in the hold."
Andrew Beer, DBi
Private Lenders Muscle In As Banks Pull Back
The private debt market has exploded in recent years, more than tripling in size since 2015 to over $200B raised annually. This growth is being driven by private lenders swooping in to fill financing gaps as banks pull back, especially amidst post-pandemic struggles for smaller banks. Impending regulations that increase bank capital requirements also advantage private credit funds over banks. Meanwhile, private lenders are taking market share in areas like corporate loans, as well as moving into specialized niches like auto and real estate lending. While this rapid rise has filled crucial financing needs, the scale of private credit now likely exceeds regulatory visibility into market risks, and remains untested through an economic downturn.
"Banks have impaired balance sheets, and private credit lenders are jumping in to fill that void — and have probably lessened the overall impact to the economy compared to what would have happened if they weren't there..."
Ida Liu, Citi Private Bank
European VC Powerhouse secures $700M Despite Cooling Market
Even as venture capital funding has slowed amid shifting market dynamics, prominent London-based VC firm Dawn Capital has raised an impressive $700M in new funds. This sizable haul demonstrates Dawn's strong relationships with backers who remain excited about tech's future. The firm plans to invest the capital across 20 companies, split between a $620M early-stage fund and an $80M growth fund for standout portfolio firms. With a track record including major exits like PayPal's $2.2B acquisition of iZettle and Visa's $1.9B purchase of Tink, Dawn Capital is well-positioned to continue backing promising software startups across Europe. The fundraising highlights resilience and ongoing belief among certain investors, even during periods of uncertainty. While VC investment has cooled recently, history shows exciting new tech can emerge in all markets.
"We’re doubling down on what we’ve always done...AI is absolutely one of the areas we’re looking at. Both investing in AI companies but also as something that’s disrupting every sector and company."
Wealthspire Advisors to acquire GM Advisory Group (GMAG), adding $3B in assets under management and $3.3B in AUA
The acquisition expands Wealthspire's presence on the East Coast, adding GMAG offices in Florida, NYC, and Long Island
GMAG founder Frank Marzano to join Wealthspire, bringing expertise in serving high net worth clients and families
The deal grows Wealthspire's assets under management to $24.4B and advisor team to over 40 professionals (Cision)
Written by:
Andrew Popp | Sr. Research Associate
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