Lyft CEO Owns Up to Margin Miscalculation (Bloomberg)
Family Offices Increase Alternative Asset Allocations Amid Market Downturn, KKR Survey Finds
Amid a global slowdown in capital markets, a new KKR survey reveals family offices are shifting their investment strategies, with leading CIOs planning to increase allocations to alternative assets like private credit, infrastructure and private equity in 2024. This move bucks the broader private investment pullback, driven by a pursuit of the illiquidity premium to efficiently compound wealth across generations. The survey underscores a strategic pivot, financed by reductions in public equities and cash holdings, as family offices enhance risk management and seek partnerships leveraging their long-term focus and operational expertise. The findings highlight a growth mode for many family offices, aiming to gain a competitive edge in global capital markets through a concentrated push into alternatives. As traditional asset classes underperform, multi-generational investors are doubling down on illiquid bets in an effort to drive superior returns.
"Now is an interesting time to play offense, given that many others need liquidity, and we don’t. We are particularly keen on going direct, for example, in sectors where we have owned businesses in the past. At the same time, we increasingly want to partner with GPs in areas where we may not have regional expertise or industry expertise to further build out our portfolio"
Undisclosed CIO
Private Funding Pulse Check
Securing $72M in Series C funding, ZEDEDA, a leader in management and orchestration of the distributed edge, has received backing from Pittsburgh-based Hillman Company
EDventure Holdings recently took part in a Series B funding round, investing $21M in Ezra, a company detecting cancer early using Full Body MRIs
Neurona Therapeutics, a biotherapeutics company developing neural cell therapies, has successfully closed a $120M Series E funding round, led by Willett Advisors
With a focus on modernizing critical legacy application, Mechanical Orchard, has attracted a $24M Series A investment from Webb Family Office, Webb Investment Network
AI Rally Accounts for 96% of Wealth Gains Among World's Top 500 Billionaires
The staggering rise of artificial intelligence stocks has made the world's wealthiest even richer this year. Among the top 500 billionaires, 30 have fortunes tied to AI companies tracked by the Bloomberg Global Artificial Intelligence Index. Their combined net worth has surged by a remarkable $124 billion so far in 2024, accounting for 96% of total wealth gains on the Bloomberg Billionaires Index. Tech titans like Jensen Huang, Mark Zuckerberg, and Michael Dell have seen their riches swell thanks to AI initiatives at companies like Nvidia, Meta, and Dell. The rally has even minted new billionaires, including Lisa Su of AMD and Charles Liang of Supermicro. However, the magnitude of the stock surge raises sustainability concerns, with some analysts warning of dot-com bubble echoes. As AI disrupts industries, its growing influence is translating to monumental wealth creation for the ultra-rich.
"The magnitude of the gains is raising questions about the rally's sustainability..."
Michael Hartnett, Bank of America Corp.
With Just 5 Staffers, Baylor's $2B Endowment Trounces Ivy Rivals
Baylor University's endowment has defied expectations, beating out prestigious Ivy League schools with a nimble, tactical approach to investing. Led by former trader, David Morehead, Baylor rapidly adjusts its exposure across asset classes and fund managers to capitalize on major market movements. Over the past five years, the $2B endowment has delivered a 10.9% annualized return, ranking in the top 5% of U.S. endowments and outperforming all Ivies except Brown. Morehead's small team moves quickly, adding or trimming funds following shifts of 10% or more in sectors like energy and biotech. They made a prescient bet in 2020 on the economic reopening by overweighting companies set to benefit. Baylor also thrives with a concentrated portfolio of long-term private investments in technology and healthcare. Though easier to generate big gains with fewer assets, Baylor's agile, opportunistic strategy has paid dividends amid volatile markets.
"Dave [Morehead] in particular is much more active with asset allocation than pretty much anybody I’ve met in the business...Tactical can sometimes cut both ways, but he’s been consistently right."
Ken Lee, Children's Health
iCapital Brings Cutting-Edge Portfolio Builder to Wealth Industry
iCapital, the leading fintech platform for alternative investments, has expanded access to its groundbreaking portfolio construction tool, Architect, across the wealth management industry. Now available to over 350K U.S. financial advisors on the iCapital Marketplace, Architect empowers advisors to seamlessly incorporate alternative and structured investments into traditional portfolios. The intuitive tool provides sophisticated analytics to evaluate the impact of adding alternatives like private equity, credit, real estate, and hedge funds alongside public assets. Advisors can compare scenarios, simulate historical performance, identify macro drivers, and assess alignment with client objectives. Architect's launch, following a successful beta with over 300 wealth managers, enhances iCapital's comprehensive technology suite, giving advisors advanced capabilities to optimize diversification and returns. As advisors seek enhanced tools to build stronger, more holistic portfolios, iCapital aims to make alternatives more accessible by bridging the data and analytics gap between public and private markets.
"Architect is a real-time tool for advisors to explore allocations to alternatives, support diversification goals, and ultimately build holistic portfolios that offer enhanced return and income opportunities."
Morgan Stanley recruited a $3M broker, Jonathan P. Torop, from UBS Wealth Management in New York
Torop, who managed $329M in assets, joined Morgan Stanley's Avenue of the Americas office in Midtown Manhattan, along with client associate Gregory Lang
Torop began his career at Goldman Sachs in 1999 and worked at Credit Suisse before joining UBS in 2013, according to BrokerCheck
Morgan Stanley ended the fourth quarter with $5.13T in total client assets and roughly 15,000 brokers (AdvisorHub)
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.
