Family Office & RIA Weekly Roundup: Gold Prices Spook Investors👻

Family Office & RIA Weekly Roundup

Volume 127

10/31/2024 (5 Min. Read)

Crypto Taps into Derivatives, Private Equity Group Positions itself for Acquisition, and Arms Holdings Gains Prominence in AI in this Week's Edition...

Take a Lap Around the Industry

Companies’ Earnings Reports Increase Volatility of US Stocks (Financial Times)
Nigeria-Based Fintech Moniepoint Gains ‘Unicorn’ Status (Financial Times)
Wall Street Sees Lines Blur Between Private Credit and Bank Debt (Bloomberg)
US GDP Expanded by 2.8% in Third Quarter (Financial Times)

Crypto Exchanges Sink Their Teeth into Derivatives Amid Regulation Shift

Crypto trading venues are increasingly venturing into derivatives, targeting both retail and institutional investors with promises of high leverage and compliance amid a tightening regulatory landscape. Dutch platform, D2X, UK-based One Trading, and GFO-X are among the latest entrants, joining industry giants CME Group, Binance, and Bybit as they race to capture a share of the growing derivatives market. With bitcoin’s 50% price increase this year and over 70% of crypto trading volumes attributed to futures and options, demand for leveraged exposure has surged. Crypto derivatives allow traders to amplify bets by borrowing up to 125 times their original stake, a particularly attractive feature since the collapse of lenders like Genesis and BlockFi left a void in unsecured credit. As institutional interest rises, established exchanges like CME and Coinbase as well as new platforms are enhancing offerings to meet demand, leveraging regulatory credentials to assure wary investors.

"The CME’s volumes are booming because it’s the place where all these highly regulated investment managers can go get exposure."

Nico Cordeiro (Strix Leviathan)

Private Funding Pulse Check

Agomab Therapeutics, a biotech firm focused on developing treatments to resolve fibrosis and restore organ function, announced an $89M Series D funding round, with backing from Invus Group Family Office
Tom Singh's family office, Rianta Capital, has participated in a $1.4M initial Seed funding round for REOME, a UK-based biotech skincare label
With support from Invus Group Family Office, Lithuanian-based, Vinted, a second-hand marketplace, has secured a valuation of $5.4B after closing a secondary share sale worth of $367M
Reality Defender, a New York City-based company specializing in deepfake and AI-generated media detection, has announced an expansion of its Series A funding, bringing the total raised to $33 million
Source: FINTRX Data

RIA Activity Tracker 🚨

Alvarez & Marsal (A&M) has launched A&M Private Wealth Partners (AMPWP), a registered investment advisor aimed at ultra-high-net-worth clients, offering family office services, investment advice, and wealth planning
AMPWP will operate independently from A&M with a team of 20, including seven partners from offices in West Palm Beach, New York City, Atlanta, and Los Angeles
Led by Chair Peter Sacripanti and Practice Lead Michael Calkin, AMPWP emphasizes a fiduciary approach, offering clients personalized financial strategies and holistic wealth management advice
The leadership team includes Jonathan Fitzgerald overseeing wealth planning, Michael Murgio as CIO, and with Senior Advisor, Joseph Berardino, providing additional support through A&M’s resources
(Yahoo Finance)

Michael Murgio

CIO of A&M Private Wealth Partners

EQT Haunts Private Capital with New Acquisition Spree

Europe’s largest publicly traded private equity group, EQT, is positioning itself for an acquisition drive, anticipating a period of industry consolidation within the $10 trillion private capital market. CEO Christian Sinding shared that EQT is exploring strategic acquisitions to enhance its capabilities, particularly in growth-focused sectors such as healthcare, digital infrastructure, and carbon transition solutions. EQT, valued at $36 billion, sees these acquisitions as a means to broaden its investment portfolio and expand geographically, especially in areas where it lacks presence, like the U.S. healthcare market. Since going public in 2019, EQT has grown its assets under management fourfold, with acquisitions like Barings Private Equity Asia and Exeter Property Group helping it enter new regions and sectors. Sinding suggests that as institutional investors prioritize managers with robust resources and succession plans, private equity firms without a clear strategy may struggle to attract capital, fueling further consolidation across the industry.

"There are still geographies and capabilities that we don’t have, both in growth investments and in private equity.”

Christian Sinding

Source: Financial Times

Arm's Resurrection: Rising from Mobile King to AI Powerhouse

Arm Holdings, once a minor player in the semiconductor industry, has steadily gained prominence by focusing on energy-efficient chip designs, securing a near-monopoly in mobile processors and now edging into AI applications. Initially dismissed by Intel, Arm’s chip architecture became the standard for mobile devices, powering a $500 billion market largely due to its efficiency. This success, combined with the surging demand for AI data centers, has led SoftBank, Arm's primary stakeholder, to position the company as a challenger to Nvidia. Arm’s recent partnerships with Nvidia, including the integration of its CPUs with Nvidia's AI processors, demonstrate its growing role in AI infrastructure. SoftBank CEO Masayoshi Son envisions a future where Arm powers AI data centers, sparking debates over Arm’s shift from neutral intellectual property licensing to potential chip production. This shift has raised concerns about conflicts with major clients like Qualcomm, highlighting Arm’s delicate balance between expansion and industry diplomacy.

“We’ve seen such advancement across AI in the last couple of years that the amount of innovation this is going to drive is just going to be incredible.”

Rene Haas (Arm Holdings)

Spooked Investors Fuel Gold's Price Surge

Investor-driven demand for gold reached record levels in Q3, marking the first time global demand surpassed $100 billion, according to the World Gold Council (WGC). Investors' fear of missing out has intensified amid the yellow metal’s 34% year-to-date rally, pushing prices to an unprecedented $2,788 per troy ounce. A 5% rise in demand volume to 1,313 tonnes underscores a shift toward gold as investors respond to geopolitical tensions and currency diversification away from the U.S. dollar. Although central bank buying slowed sharply, investor demand more than compensated, with ETFs seeing a net inflow after a prolonged period of outflows. Family offices, concerned about rising U.S. debt levels, have also fueled gold purchases, seeking to protect generational wealth. Despite high prices dampening jewelry demand, the trend of investors capitalizing on any price dips suggests continued resilience for gold, especially as interest rates decline globally.

"Family offices tend to think in longer time horizons than retail investors. They think of generational wealth protection, the grandchildren — and they have become really concerned about debt levels, particularly in the U.S."

John Reade (WGC)

Written by:

Sharah Roy | Research Associate

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