Family Office & RIA Weekly Roundup

Take a Lap Around the Industry

• The US Economy Is Slowing, Which Is Just Fine With the Fed (Bloomberg)
• McDonald’s Sales Soften, Sounding Alarm for Restaurants as Diners Curb Visits (WSJ)
• Google’s Anthropic AI Deal Gets Closer UK Regulator Scrutiny (Bloomberg)
  
• Bank of Japan to Meet as Volatile Yen, Sluggish Economy Fuel Rate Hike Debate (WSJ)

In 2024, Wall Street is witnessing a remarkable surge in bond fund investments, a stark contrast to the stock market's performance. With U.S.-listed fixed-income exchange-traded funds (ETFs) attracting nearly $150 billion by late July, this year stands out as a record-breaker for bond investments. High bond yields, coupled with expectations of future interest rate cuts, have prompted a wave of investors to shift their assets from cash and equities into bonds. Morningstar reports that taxable bond funds have been responsible for nearly 90% of net U.S. fund inflows in the first half of the year. Rick Rieder of BlackRock describes this period as "the golden age of fixed income," driven by the combination of elevated rates and falling inflation. The increased interest in both indexed and actively managed bond funds underscores a significant strategic shift as investors seek higher returns and risk reduction in their portfolios.

"We’re seeing people move out of cash and into bonds. Cash has been flipping a lot of yield, but now there’s a sense that the Fed is going to start lowering rates and that opportunity won’t be there anymore."

Rick Rieder (BlackRock)

Private Funding Pulse Check

• Backed by Colruyt's family office, Korys, Stockholm-based energy startup Greenely,  a smart digital energy company that helps you to reduce energy consumption and save money, has closed its Series A funding round, raising €8M.
• Archera, a cloud resource automation solution that optimizes and protects cloud resources, has completed a $17M Series B funding round led by Jonathon Jacobson's family office, Highsage Ventures.
• Autobahn Therapeutics has closed an oversubscribed $100M Series C funding round, led by Invus Group Family Office, to advance its pipeline of novel therapeutics for depression and other CNS disorders.
• Backed by Jim Pallota's family office, Raptor Group, Language I/O, a leader in AI-driven multilingual customer support technology, has secured $5M in funding.

Source: FINTRX Data

Rep Activity Tracker 🚨

• LPL Financial has recruited Investment Advisors Financial Group, a $1B advisory team from Osaic, to its corporate RIA, broker-dealer, and custody platform
• Formed in 1979 by Thomas Musumeci and now led with his daughter Annie Silvestro and principal James Flannery, the Eatontown, N.J.-based group includes 22 advisors, eight associates, and administrative staff
• The team cited a desire for more autonomy and the aspiration to enhance client experiences through integrated technology and robust services as reasons for their move to LPL
• LPL has experienced strong advisor recruiting, adding several teams from Osaic recently, and reported $20B in recruited assets for Q1 2024, its biggest recruiting quarter ever and a 57% year-over-year increase
  (Citywire)

Tech stocks are facing a significant downturn, with the Magnificent Seven tech giants losing $1.52 trillion in market value over the past three weeks—the largest drop on record for such a period. This decline, driven by a mix of disappointing earnings reports and waning enthusiasm for artificial intelligence, saw notable drops in Tesla and Alphabet shares. Investor sentiment shifted following a cool inflation report, sparking confidence in potential Federal Reserve interest rate cuts and prompting a move towards smaller companies with higher growth prospects. The S&P 500's tech sector has fallen 9.5% since the report, while the Russell 2000 has gained 8.9%. Upcoming earnings reports from other key tech players will be crucial, especially as some, like Alphabet and Tesla, have already underwhelmed investors. Despite recent selloffs, high valuations persist, making smaller companies increasingly attractive to investors.

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