As we wrap up the Thanksgiving festivities, the financial markets have given investors some late-year gifts to be grateful for in 2023 despite swirling volatility. Chief among these are resilience in economic growth and cooling inflation, an end to interest rate hikes from central banks, and renewed opportunities across stocks and bonds. Though fears of recession ran high entering 2023, various factors like fiscal stimulus and steady housing markets have kept the economy afloat. Meanwhile, inflation has tempered significantly from highs though still remains above the Fed’s 2% target. With rate hikes seemingly over for now and chances of cuts on the horizon, hard-hit areas like manufacturing and mortgages may stabilize. And finally, corrections across assets have opened the door for investors to capitalize on income potential in bonds and growth opportunities in stocks.
"For those looking to put more risk on the table, stocks look compelling. Following a period of reckoning in corporate earnings, U.S. stocks, especially the big tech names (as AI stands to generate real revenue growth), look poised to continue their rally in the year ahead."
JP Morgan Wealth Management
Private Funding Pulse Check
Cradle, a biotechnology company designing custom protein cells, has secured $24M in a Series A funding round joined by New York, NY-based family office Angelic Ventures
In a recent Pre-Seed round, Elkstone Family Office participated in an $3.8M investment in Zerve, a platform enabling collaboration between data science and artificial intelligence development teams
Silvio Berlusconi's family office, H14, has participated in a $20M Series B funding round for WeRoad, a travel and tourism community offering custom tours
Clarke Capital Partners has engaged in a $10M Series A investment in Biolexis Therapeutics, a Salt Lake City, UT-based biotechnology company developing small molecules targeting cancers and autoimmune diseases
LPs Betting Big on Private Credit as Alternative Yield Play
Private credit is rapidly gaining favor as an alternative investment among limited partners (LPs), with 71% believing it will assume a far greater allocation role over the next year per a recent LP survey. The heightened interest is driven by private credit's potential to deliver attractive yields of 5.5-10% in the current rising rate climate, combined with its resilience and lower default rates than public debt. To meet surging LP demand for greater exposure, private credit fund managers are providing more customized offerings like managed accounts and partial liquidity options to enable bespoke risk and liquidity profiles. The shift of capital out of assets like hedge funds and into private credit is expected to continue as LPs seek higher returns and downside protection. However, the growth will likely bring more scrutiny on private credit fund fee structures and transparency expectations from LPs going forward.
"We believe private credit managers may see equity-like returns in debt markets over the next three to five years...As 2024 comes into focus, we see potential yields of 5.5 to 10 percent available across investment grade through private credit assets. Family offices can thus seek to preserve wealth with yields that may exceed long-term inflation rates."
Citi Private Bank
Scrutiny Rises for Middle East Wealth Funds Over Perceived China Links
Middle Eastern sovereign wealth funds are facing intensifying scrutiny from the Committee on Foreign Investment in the United States (CFIUS) under the Biden administration, with over half a dozen multibillion dollar deals currently under review over perceived close ties with China. As Gulf funds substantially ramp up investments into China, CFIUS is requesting extensive access to their internal records to mitigate concerns that critical technologies and data could end up in China's possession. Funds like Abu Dhabi's Mubadala are exploring bringing on U.S. partners to obtain regulatory approval. While the scrutinized funds underscore their longstanding alliance with the U.S., the new focus spotlights how geopolitics is increasingly intersecting with global dealmaking and investments, even among historically steadfast partners.
"The UAE is working closely and positively with the US, including CFIUS, to facilitate and expand trade and investment while securing and protecting sensitive technologies, data and intellectual property..."
Yousef Al Otaiba, UAE Ambassador
Pritzker Family Goes Against VC Grain With $190M Seed Fund Launch
The Pritzker family office, The Pritzker Organization (TPO), has launched a $190 million venture capital fund called 53 Stations to invest in early-stage startups, aiming to capitalize on the ongoing venture market slump. 53 Stations will target sectors like proptech and construction tech that could ultimately benefit TPO's mature portfolio companies in symbiotic ways, such as by integrating new technologies. The single limited partner structure also enables more aggressive investing amidst the downturn versus multi-LP funds. While follow-on investments could still prove difficult in the current climate, 53 Stations will focus on capital-efficient startups not dependent on large external funding. Overall, 53 Stations exemplifies how family offices can leverage their permanent capital and flexibility to make counter-cyclical bets and forge strategic connections between their venture and later-stage holdings.
"Had we been in a 2021-type environment, we might have been more apprehensive about launching the fund...The irony across markets is that the best time to deploy capital is often when it’s most difficult to raise it. TPO knows that you have to lean into those points when it feels less ideal and sometimes lean out when everything seems flushed."
Rockefeller Capital Management has acquired Shaffer Wealth Partners, a 4-person private wealth team based in the DC Metro area, to join its Rockefeller Global Family Office division
Shaffer Wealth Partners is led by Managing Director and Private Advisor Sheila Shaffer, who has over 35 years of experience having worked at Merrill Lynch, Legg Mason, Smith Barney, and Janney Montgomery Scott
The Shaffer Wealth Partners team also includes Senior Vice President Eric Walker, who has worked with Sheila Shaffer since 2015; Vice President Daniel Spainhour; and Associate Vice President Allyson Albert
The team will report to Kristen Sario, Southeast Divisional Director at Rockefeller Capital Management (BW)
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.
.png?quality=high&upscale=true&width=320&upscale=true&name=download%20(32).png)
