J. #Safra Sarasin Snaps Up #Geneva Landmark

Brazilian-Swiss bank buying BNP's emblematic building in the heart of Geneva's financial district  

Banking group J. Safra Sarasin is buying a 15,000-square meter building in Geneva from BNP Paribas for

#Evergrande: “Kill the Chicken 🐓 , to scare the Monkeys 🙉 🙈 🙊”

Evergrander Debts: ~$300 Billion in liabilities. ~7X in 7 Years

Who's the monkey, you ask? 

There are two mainly

Red Hot #Chile 🌶

1. Cascade of cash —$49 Billion— from early withdrawals from the private pension funds established under Pinochet.

(N)#EverGrande… #China's Lehman moment"?

Evergrande currently has $305 billion in debts outstanding. If it implodes, will it be China's Lehman moment?

Sell Rosh Hashanah, Buy Yom Kippur

Perhaps it's Talmudic wisdom but, selling stocks before the eight-day span of the high holidays has avoided many declines, especially during uncertain times. While being long Yom Kippur to Passover has produced 64% more advances, half as many losses and average gains of 7.0%. This past year $DJIA gained 19.9% from Yom Kippur 2020 to Passover 2021.

Jeff Hirsch, editor of the Stock Trader's Almanac, says the basis for this, "Sell Rosh Hashanah, Buy Yom Kippur," pattern is that every autumn, when the "high holidays" are on the minds of traders as many of their Jewish colleagues take off to observe the Jewish New Year and Day of Atonement.., positions are closed out and volume fades creating a buying vacuum. Even in the age of algorithmic, computer, and high frequency trading these seasonal patterns persist as humans still need to turn the machines on and off and feed them money or take it away…

 

See the whole post from Jeff Hirsch on Almanac Trader here: Weakness Day After Labor Day & Sell Rosh Hashanah

https://jeffhirsch.tumblr.com/post/661256615398457344/weakness-day-after-labor-day-sell-rosh-hashanah 

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Global #Dividends to Reach Near-Record Payouts. These are the #ETFs to Buy

Global Dividends to Reach Near-Record Payouts? ETFs to Buy

$DVYE $KBWY $DIV $SDIV $KBWD $ALTY

The pandemic has proven to be less detrimental to corporate profits than expected, thanks to super dovish monetary and fiscal policies.  

Global companies are so cash-rich that they are looking to start churning out dividends. 

According to a global study by Janus Henderson Investors, as quoted on a Bloomberg article, payouts are expected to touch $1.39 trillion this year, the second-highest total ever. 

Janus believes that dividends will touch pre-pandemic highs within a year.

Mining companies remain among the biggest dividends payers, benefiting from the revival in commodity prices. Half of the restored payouts in Europe were from banks, Janus said. 

Now that dividend hikes are back, investors can look at the below-mentioned dividend ETFs:

Egyptian billionaire #Sawiris sets up $1.4bn #Gold #Mining Fund

Sawiris looks to open up his La Mancha Gold Investment vehicle to outside investors.  The Luxembourg domiciled fund will hold his 19% stakes in Endeavour Mining (EDV), Australia's Evolution Mining (EVO), African Refractory Gold Miner Golden Star (GSS) and Altus Strategies (ALS), the London based Royalty & Prospect Generator.  The fund will include a cornerstone investment of $100 Million from a currently undisclosed "Strategic Partner".

Egyptian billionaire Sawiris sets up $1.4bn gold mining vehicle

Naguib Sawiris has been one of the biggest investors in the gold mining sector, through his investment vehicle also called La Mancha © Diego Levy/Bloomberg

Egyptian billionaire Naguib Sawiris has set up a $1.4bn fund to hold his gold mining investments and pursue new opportunities in the sector, which he says is need of consolidation.

The Luxembourg-based La Mancha Fund will be a "deep value, long-only fund" dedicated to gold mining and open to new investors, Sawiris said. The fund will also invest in battery metals needed for electric cars.

…

Sawiris said the fund would take stakes in some of these junior miners and encourage further consolidation through mergers and acquisitions. It will also seek to improve the environmental, social and governance performance of the sector and broaden its appeal.

...

The fund will hold Sawiris' stakes in Endeavour Mining, the largest gold producer in West Africa, as well as Evolution Mining, Golden Star, and Altus Strategies. It also includes a $100m investment from "a strategic partner", who was not named.

The fund will look to buy "significant stakes" in junior mining companies with "strong managerial and geological potential to implement a 3-to-5-year value creation strategy," it said.

It will also look to improve operational efficiency of mining operations and help companies expand through exploration and new mines. It will be supported by an advisory committee made up of mining professionals that will be chaired by Sawiris.

See the whole article on the FT here: https://www.ft.com/content/5cc8e9a5-3c2a-40a0-b795-e526dbb31104

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Andreessen Horowitz @A16z launches Jumbo #Crypto #VC Fund

Andreessen Horowitz's latest $2.2 Billion Crypto Fund III gives it flexibility to do more late-stage VC rounds. The firm previously targeted just $1 billion for the fund, the Financial Times reported in April.

Crypto Fund III is gigantic even by a16z standards. The firm's $3.2 billion late-stage vehicle, which closed last year in conjunction with a $1.3 billion early-stage fund, is the only one to exceed Crypto Fund III in size. Andreessen Horowitz's other crypto funds include a $515 million vehicle closed last year and a $350 million fund from 2018.

A16z's crypto investments exemplify the venture industry's so-called power law, which holds that a small number of investments provide the bulk of returns. Chris Dixon, who has led many of Andreessen Horowitz's crypto investments including Coinbase and Dapper Labs, has called this phenomenon the "Babe Ruth effect."

"The best VCs funds truly do exemplify the Babe Ruth effect: they swing hard, and either hit big or miss big," Dixon wrote in a 2015 blog post. "You can't have grand slams without a lot of strikeouts."

See the whole article on PitchBook here: https://pitchbook.com/news/articles/andreessen-horowitz-launches-crypto-arms-race-as-check-sizes-swell

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#Commodities Traders look to #GreenEnergy as they transition away from Hydrocarbons

Marco Dunand of Mercuria said he had long been a 'closet environmentalist'

Mercuria pledges half its investments to energy transition

June 15, 2021

Commodity traders that have reaped huge profits from the oil market in recent years now want to play a role in renewable energy.

Speaking at the FT commodities Summit in Lausanne, all the major traders reinforced their intention to continue to invest in Renewable Energy projects as they shift away from fossil fuels. 

Mercuria co-founder Marco Dunand: "within five years, 50 per cent of all investments are going to be for the energy transition. We have started and have invested well over $500m."

Russell Hardy, chief executive of Vitol, the world's biggest independent oil trader, said it aimed to put half of its investments in renewables and transitional energy, such as gas. The trading house has committed over $1bn in capital for renewable projects.

Torbjörn Törnqvist, Gunvor chair, said it was increasing its investments in power trading, existing renewable technology as well as decarbonisation technologies.

Trafigura last year announced plans to build or buy 2 gigawatts of solar, wind and power storage projects over the next few years through a joint venture with fund manager IFM Investors.

…

"Every time the company invests into say an upstream [oil and gas] asset . . . we are going to have to put the equivalent money into the energy transition," Dunand said. 

Unlike some of its peers, which are primarily focused on physical oil trading, Mercuria has also pushed into financing, offering clients complex services more akin to those offered by investment banks. In 2014 it bought part of JPMorgan's physical commodities trading business to bolster its operations, particularly in power markets. 

Read the whole article on the FT here: Mercuria pledges half its investments to energy transition https://www.ft.com/content/06ea940a-2bfe-487a-8c50-5d8fcd402525

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#Europe's #Unicorn herd grows almost 3X in 2021 vs 2020, 2X vs. 2019–and we’re not even half way through the year!

PitchBook reports 2021 has seen a record number of European startups achieve unicorn status as the increased participation of US investors pushes up valuations.

23 companies in Europe and Israel have become unicorns so far this year, easily beating 2020's total of eight, according to PitchBook data.

A record amount of VC capital has continued to flow to European startups, with €32.5 billion (around $39.3 billion) invested so far, putting the year on track to surpass last year's €37.6 billion.

The increasing participation of US-based investors has been a factor in the increase of investment. Nearly half of the top 10 backers of European unicorns in terms of deal count are based across the Atlantic.

Europe's tech startups tend to have lower valuations than US counterparts, offering more opportunities for higher growth rates.

"We expect transatlantic capital flows to continue to increase and strengthen valuations in Europe, as cash-rich US investors seek new companies showing strong potential that could be introduced to the US market," said Nalin Patel, a private capital analyst at PitchBook.

See the full article on PitchBook here: Europe's unicorn herd grows bigger and faster in 2021 | PitchBook

The incredible story of #Shein. The online fashion retailer you’ve never heard of

This week it surpassed Amazon as the most downloaded e-commerce app in the US.

Its rise was turbocharged by Trump's Trade War with China and the COVID pandemic.

Shein, China's First Global Fashion Giant
https://www.bloomberg.com/news/articles/2021-06-14/online-fashion-giant-shein-emerged-from-china-thanks-to-donald-trump-s-trade-war


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#Copper boom: #CleanEnergy is driving this #Commodities supercycle

Excellent article on Copper from the FT by Neil Hume and Henry Sanderson. 

Copper boom: how clean energy is driving a commodities supercycle
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Read the full article here: https://on.ft.com/3w3jlnS

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#Greensill Capital’s Ponzi Scheme’s Collapse is the Story That Keeps On Giving—Except, of course, If You Were a Credit Suisse Investor…

This time the latest victim is West Vir­ginia Gov. Jim Justice who is said to be personally ­on the hook for nearly $700 mil­lion in loans his coal company, Bluestone Resources,  took out from now-defunct Green­sill Capital. 

Green­sill packaged the loans and sold them to the $10 bil­lion in sup­ply-chain finance investment funds managed by Credit Suisse Group AG. 

WSJ reports that Gov. Justice's  Blue­stone com­pa­nies re­ceived fi­nanc­ing over a three-year pe­riod. When the first set of loans ma­tured, Green­sill re­placed them with new loans in a process that be­came known as a "cash­less roll," ac­cord­ing to the Blue­stone law­suit.

See the whole story on the Wall Street Journal here: 

West Virginia Governor Is Liable for $700 Million in Greensill Loans

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#Citibank bites the bullet on #Bitcoin

The biggest change with Bitcoin is the shift from it being primarily a retail-focused endeavor to something that looks attractive for institutional investors.

Concerns mount that a supercharged global economy will stoke #inflation as Corporate buying & hoarding is pushing supply chains to the brink of seizing up.

In order "to survive the breakneck speed at which demand for goods is recovering and assuage that primal fear of running out. The corporate buying and hoarding is pushing supply chains to the brink of seizing up. Shortages, transportation bottlenecks and price spikes are nearing the highest levels in recent memory, raising concern that a supercharged global economy will stoke inflation."

See the article on Bloomberg: 

The World Economy Is Suddenly Running Low on Everything

by Brendan Murray, Enda Curran and Kim Chipman

'It is anything but efficient or normal.' Surging corporate demand is upending global supply chains. 

https://www.bloomberg.com/news/articles/2021-05-17/inflation-rate-2021-and-shortages-companies-panic-buying-as-supplies-run-short?

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Coronavirus notwithstanding, Corporations purchased record 23.7GW of #CleanPower, +18%, in 2020 through long-term #PPA’s

• Clean energy contracts were signed by more than 130 companies in sectors ranging from oil & gas to big tech.

• Underpinning the market is surging stakeholder interest in corporate sustainability and expanding access to clean energy globally.

• Corporate PPA volumes in the Europe, Middle East and Africa (EMEA) region nearly tripled, from 2.6GW in 2019 to a record 7.2GW in 2020. 

• In Spain, companies announced contracts to purchase no less than 4.2GW of clean energy, up from 300MW the previous year. 

• Solar and wind projects in Spain yield some of the cheapest and most competitive prices in Europe, thanks to strong natural resources and a large pool of experienced developers. 

• Companies like Total and Anheuser Busch are orchestrating 'cross-border virtual PPAs' in Spain, buying clean energy in the country to offset their load elsewhere in Europe.

• Amazon was the leading buyer of clean energy in 2020, announcing 35 separate clean energy PPAs in 2020, totalling 5.1GW. 

• Amazon has now purchased over 7.5GW of clean energy to date, vaulting it ahead of Google (6.6GW) and Facebook (5.9GW) as the world's largest clean energy buyer. 

• French oil major Total (3GW), TSMC (1.2GW) and U.S. telecom Verizon (1GW) were the next largest corporate buyers of clean energy in 2020 (see Figure 2).

Corporate Clean Energy Buying Grew 18% in 2020, Despite Mountain of Adversity | BloombergNEF

BloombergNEF

January 26, 2021

Corporations purchased a record 23.7GW of clean power through long-term agreements, propelled by growth in new markets

New York and London, January 26, 2021 – Corporations purchased a record of 23.7GW of clean energy in 2020, up from 20.1GW in 2019 and 13.6GW in 2018, according to new research published by BloombergNEF (BNEF). The increase came despite a year devastated by the Covid-19 pandemic, a global recession and uncertainty about U.S. energy policy ahead of the presidential election.

BNEF finds in its 1H 2021 Corporate Energy Market Outlook that clean energy contracts were signed by more than 130 companies in sectors ranging from oil & gas to big tech. Underpinning the market is surging stakeholder interest in corporate sustainability and expanding access to clean energy globally.

Kyle Harrison, BNEF senior associate and the lead author of the report, commented: "Corporations faced a wave of adversity in 2020 – internal corporate functions were disrupted on the outset of the pandemic, and many companies saw revenues plummet as global economies buckled. Question marks before – and after – the U.S. election further complicated long-term decision-making for companies. To not only maintain, but grow, the clean energy procurement market under these conditions is a testament to how high sustainability is on many corporations' agendas."

The U.S. was once again the largest market, but was less dominant than in previous years. Companies announced 11.9GW of corporate PPAs in the U.S. in 2020, down from 14.1GW in 2019 – the first year-on-year drop since 2016. The first half, coinciding with the start of the pandemic, was particularly subdued, with companies announcing just 4.3GW of corporate PPAs in the U.S. in that period.

Latin America also had a down year, with PPA volumes dropping from 2GW in 2019 to 1.5GW in 2020. The region was hit hard by the Covid-19 pandemic and the economic downturn. Yet companies in Brazil signed a record 1,047MW of corporate PPAs in 2020, as many continued to migrate to the country's free market, where they can sign bilateral clean energy contracts directly with developers. Once the main draw for corporate procurement in the region, Mexico saw deal volumes all but dissipate, as the current administration continues to undermine the country's clean energy sector.

While the U.S. and Latin America slipped back, other corporate procurement markets stepped up. Corporate PPA volumes in the Europe, Middle East and Africa (EMEA) region nearly tripled, from 2.6GW in 2019 to a record 7.2GW in 2020. In Spain, companies announced contracts to purchase no less than 4.2GW of clean energy, up from 300MW the previous year. Solar and wind projects in Spain yield some of the cheapest and most competitive prices in Europe, thanks to strong natural resources and a large pool of experienced developers. Companies like Total and Anheuser Busch are orchestrating 'cross-border virtual PPAs' in Spain, buying clean energy in the country to offset their load elsewhere in Europe.

Corporations also purchased record clean energy volumes in the Asia Pacific (APAC) region, announcing contracts for 2.9GW of solar and wind. Taiwan established itself as a major corporate clean energy market in 2020, with companies signing PPAs totalling 1.25GW. Taiwan's market should be supported by a new policy that requires companies with an annual load above 5MW to buy clean power. Also, the island has a high concentration of large manufacturers, many of which are feeling pressure from their customers to decarbonize.

South Korea is expected to be the next major corporate procurement market in Asia. Policymakers revised the country's Electric Utility Act in the beginning of 2021, creating a PPA mechanism and a green tariff program with Korea Electric Power Corporation. The revision will also allow companies to purchase unbundled certificates and retire them against sustainability commitments. South Korean companies face similar supply chain pressures to those in Taiwan.

Jonas Rooze, lead sustainability analyst at BNEF, said: "More than ever before, corporations have access to affordable clean energy at a global scale. Companies no longer have an excuse for falling behind on setting and working towards a clean energy target."

Amazon was the leading buyer of clean energy in 2020, announcing 35 separate clean energy PPAs in 2020, totalling 5.1GW. The company has now purchased over 7.5GW of clean energy to date, vaulting it ahead of Google (6.6GW) and Facebook (5.9GW) as the world's largest clean energy buyer. French oil major Total (3GW), TSMC (1.2GW) and U.S. telecom Verizon (1GW) were the next largest corporate buyers of clean energy in 2020 (see Figure 2).

The flow of new companies making clean energy commitments is another indicator of how much more the market can grow. Some 65 new companies joined the RE100 in 2020, pledging to offset 100% of their electricity consumption with clean energy. BNEF forecasts that the 285 RE100 members will collectively need to purchase an additional 269TWh of clean electricity in 2030 to meet their RE100 goals. Should this shortfall be met exclusively with offsite PPAs, it would catalyze an estimated 93GW of new, incremental solar and wind build.

Harrison commented: "Investor interest in sustainability is sky high, with inflows to sustainability-focused funds growing 300% between 2019 and 2020. Companies in all sectors, including hard-to-abate ones like oil & gas and mining, are feeling the pressure to purchase clean energy and decarbonize. This group is only just scratching the surface on the amount of clean energy build it can catalyze."

BNEF updates its data on corporate procurement each month and publishes a market outlook on corporate energy strategy bi-annually.

Contacts
Veronika Henze
BloombergNEF
+1-646-324-1596
vhenze@bloomberg.net

About BloombergNEF

BloombergNEF (BNEF) is a strategic research provider covering global commodity markets and the disruptive technologies driving the transition to a low-carbon economy. Our expert coverage assesses pathways for the power, transport, industry, buildings and agriculture sectors to adapt to the energy transition. We help commodity trading, corporate strategy, finance and policy professionals navigate change and generate opportunities.

See the article online here: https://about.bnef.com/blog/corporate-clean-energy-buying-grew-18-in-2020-despite-mountain-of-adversity/#:~:text=BNEF finds in its 1H,oil & gas to big tech.&text=Companies announced 11.9GW of,on-year drop since 2016. 

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“Everyone is getting in line, trying to get a piece of #CITGO and lock in a judgment from a US court.” #Venezuela #Bondholders Trying To Get Anything They Can...

Investors who hold at least 25% of Venezuela's benchmark dollar bonds due in 2025 are pushing to speed up payments on the notes after three years of sitting in default.

From Bloomberg:

The move may be largely symbolic as Venezuela's cash-strapped economy is in no condition to pay, and the South American nation's overseas assets are protected from seizure by U.S. sanctions. Still, the acceleration foretells a legal battle that's brewing over the country's $60 billion of defaulted debt as well as the state oil giant's Houston-based subsidiary Citgo.

"It's basically a frustration," said Russ Dallen, managing partner at Caracas Capital in Miami. Bondholders are looking at "the possibility of getting a court judgment and getting those Venezuelan assets as everyone is getting in line, trying to get a piece of Citgo and lock in a judgment from a U.S. court."

...

In September, a New York judge ruled that the country owes $390.7 million to Pharo Management and Casa Express Corp in overdue arrears, rejecting claims by the nation's representatives to delay the payment. The following month, London-based hedge fund Altana Wealth Ltd sued over defaulted debt. Bondholders have already accelerated on Venezuela's notes due in 2034.

Venezuela Bondholders Seek to Accelerate Payment on 2025 Notes

Nicolle Yapur 

https://www.bloomberg.com/news/articles/2021-03-02/venezuela-bondholders-seek-to-accelerate-payment-on-2025-notes

#Bitcoin’s roughly tripled in past 3 months, but its liquidity has deteriorated

#Bitcoin liquidity is only $10BN/day vs. $100BN for #Gold, making it much more prone to wild gyrations from relatively small orders. $BTCUSD

Bitcoin Rally Faces Potential Test From Falling Market Liquidity

Joanna Ossinger

February 22, 2021, 6:48 AM GMT+1

Ether hit records on the weekend passing $2000/ $ETH

The rally in Bitcoin that took the digital token to a fresh peak over the weekend could face a test from declining liquidity in the market for the largest cryptocurrency.

Bitcoin rose as high as $58,350 on Sunday before retreating to about $56,200 as of 2:30 p.m. in Tokyo on Monday. The token has roughly tripled in the past three months but its liquidity has deteriorated, according to Nikolaos Panigirtzoglou, a strategist at JPMorgan Chase & Co.

"Market liquidity is currently much lower for Bitcoin than in gold or the S&P 500, which implies that even small flows can have a large price impact," he wrote in a note on Friday. 

Such a backdrop opens up the possibility of sharp moves higher or lower in the cryptocurrency depending on the prevailing ardor for digital assets. Of late, even some of the token's biggest backers appear surprised by its ascent. In a recent tweet, Elon Musk said Bitcoin prices "seem high," having earlier called it a "less dumb" version of cash.

Bitcoin trading volumes are around $10 billion daily for the spot and futures market combined, compared with an equivalent figure of $100 billion for gold, Panigirtzoglou wrote. That's consistent with "much lower liquidity in Bitcoin than in gold," he said.

Cryptocurrencies have enjoyed a strong start to the year, leaving other assets in the dust. The Bitcoin faithful argue corporate treasurers and institutional investors are new sources of demand and that the token can hedge risks such as faster inflation. Others see a prime example of speculative froth stoked by hedge funds and day traders in markets awash with stimulus.

"Bitcoin seems impervious to the barrage of fear, uncertainty and doubt waged against the industry," Paolo Ardoino, chief technology officer at cryptocurrency exchange Bitfinex, wrote in an email.

Shares of Asian cryptocurrency stocks advanced Monday in the wake of Bitcoin's all-time high. One of the biggest movers was Japan's Monex Group Inc., which jumped as much as 16%.

Ether, the largest token after Bitcoin, also rallied over the weekend, topping $2,000 for the first time on Saturday. It's up about 150% year-to-date.

See the piece on Bloomberg here: 

https://www.bloomberg.com/news/articles/2021-02-22/bitcoin-rally-faces-potential-test-from-falling-market-liquidity?sref=VxHCy32x

Additional resources:

Explain This: Bitcoin's Wild Ride 

https://www.bloomberg.com/news/videos/2021-02-10/explain-this-bitcoin-s-wild-ride?sref=VxHCy32x

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Someone is Missing Something... $TLRY $APHA

Aphria shareholders will get 0.8381 shares of Tilray for each common share of Aphria they hold.(1) 

The spread doesn't make sense w regards to the prices.!!

#Silver’s recent surge is just the beginning of the coming #Commodities boom

The Digital economy will still need Metals & Minerals, says the FT, so get ready for a Commodities Boom!

"This is to be the year in which "the narrative of a greener government supported transformation of the social paradigm meets the reality of too little supply, inadequate infrastructure and a business world that has been so busy getting digital it forgot the physical world".

Great products don't just need to be hailed on social media, they need to be produced, shipped and delivered. That needs real-world commodities.

"where are we in the cycle now? At the beginning of the good bit (from an investor point of view at least.). The big metal miners effectively went on investment strike in 2014 — stopping almost all expansionary spending with the result that a large number of industrial metals were already in short supply even as we went into the pandemic last year."

In the post-Covid-19 era, it appears that no one will worry much about fiscal prudence. Instead, there is every chance that the fashion for the government to fill individuals' pockets will continue; that the endless promises of green transformation and infrastructure revolution will come good; and, crucially, that governments will prioritise high levels of employment over low levels of inflation. Think of the volume of cash that will spray around economies, and perhaps we are moving into something of a "Keynesian golden age" says Gavekal Research.

All this is wonderful for industrial metals and particularly wonderful for any materials that are at the core of green transformation. There is, for example, no replacement for copper in electrification. The more you think green, the more you need brown metal.

See the article by Merryn Somerset Webb, editor-in-chief of MoneyWeek (Twitter:  @MerrynSW ), on the FT here:

Silver surge could signal coming commodities boom

https://www.ft.com/content/faef0bde-f95a-4f9b-a3f1-4cdea304b12a

#Greylock, one of the best-known #EmergingMarkets #Debt #HedgeFunds, Finds Itself at Similar Crossroads As Its Previous Targets, #Bankruptcy

Some 25 years after its founding, the firm -- its assets headed to a mere $350 million or so by the end of March -- on Sunday filed for bankruptcy protection in New York

Argentina, Mozambique, Barbados and the Republic of Congo have two things in common: They’ve all restructured their debt, and they’ve all tangled with Greylock Capital Management.

Now Greylock, one of the best-known hedge funds in emerging markets investing, finds itself at a similar crossroads. Some 25 years after its founding, the firm -- its assets headed to a mere $350 million or so by the end of March -- on Sunday filed for bankruptcy protection in New York. The firm is seeking to end its lease in midtown Manhattan after investors pulled their money following three years of losses, most recently stemming from the pandemic.

It’s a humbling turnaround for the hedge fund, which made a name for itself for its deep expertise and as one of the more outspoken firms in the emerging-market space, punching well above its weight. While the firm has no plans to shut down, it’s operating at a fraction of its former self: a staff of nine, down from 21 in 2017, and assets at about 30% of their $1.1 billion peak. Paying $100,000 in monthly rent for now-unused Manhattan offices was becoming untenable.
...

Altogether, Greylock’s partners have participated in over 50 creditor committees in more than 30 countries, dating back to the 1980s and early 1990s, including restructuring the debt of several countries into Brady Bonds.

Its more notable deals include Greece, where Greylock was the only U.S. creditor on the steering committee to negotiate the nation’s debt restructuring. The hedge fund also co-chaired a steering committee before Argentina’s notorious 2005 debt restructuring, and was among bondholders that rejected that 30-cent offer. The firm’s partners have been involved with no less than five workouts in Argentina.
…

Poor Performance

The firm was digging itself out of 3% losses in 2019 from private credit trades gone awry and tighter oil sanctions that pummeled Venezuelan debt when the Covid-19 pandemic hit. The flagship fund plunged about 14% last year as the virus slammed risk assets. Losses were led by Argentina and Venezuela, while the firm continued to write off some private credit trades, according to Mediratta.

Investor withdrawals were mostly spurred by the poor performance. The firm was stung by one particularly large withdrawal by an institution concerned with socially responsible investing that didn’t like the optics of being invested in countries such as Mozambique.

In the absence of new money, assets will drop to about $350 million at the end of March. Despite the recent losses, Greylock’s flagship fund has had annualized returns of 11% since its inception, beating the average hedge fund and JPMorgan Chase & Co.’s benchmark emerging-market debt index over the same span.

See the whole piece on Bloomberg here: 
For Shrinking Greylock Hedge Fund, $100,000-a-Month Rent Proved Too Much

Making $$ from "Democratizing Investing” - The more risk #Robinhood’s customers take in their hyperactive trading accounts, the more it profits from the whales it sells their orders to….

Robinhood earns a majority of its revenue from Payment for Order Flow, with Citadel, Susquehanna and Wolverine accounting for more than 35% of overall revenue. 

Robinhood: Rise Of The Retail Investor

Robinhood's Revenue streams:

1. Premium subscriptions: Provides basic features like- Research reports from Morningstar, Level 2 quotes, Increase your instant deposit limit, Extended hours trading (pre-market and after hours), $1,000 of additional margin.

2. Securities Lending: Let’s its traders use margins in order to trade

3. Payment for Order Flow: Sells the order flow to bigger operators like Citadel, Point72, and others.

Robinhood has definitely democratized investing but this quote from a Forbes article perfectly encapsulates the other side of the story: “In fact, an analysis reveals that the more risk Robinhood’s customers take in their hyperactive trading accounts, the more the Silicon Valley startup profits from the whales it sells their orders to. And while Robinhood’s successful recruitment of inexperienced young traders may have inadvertently minted a few new millionaires riding the debt-fueled bull market, it is also deluding an entire generation into believing that trading options successfully is as easy as leveling up on a video game.”

It seems like Robinhood has sold the story of helping the average investor but its business model does the exact opposite: sells the little guy to rich market operators with very sharp elbows. This has also landed Robinhood in some regulatory trouble around not being able to fulfill the promise of best execution of the trades while selling the order flow. This has not caused huge troubles till now but can be fairly controversial as the company grows further.

Revenue Diversification

Robinhood earns a majority of its revenue from PFOF which again consolidated in a couple of customers. As shown in the graph Citadel, Susquehanna and Wolverine account for more than 35% of overall revenue. I believe that Robinhood must try to capitalize on its huge user base to diversify its overall revenue profile through premium subscription and securities lending. I believe that this could be achieved if Robinhood starts spending more resources on overall customer education and service. This would kill two birds with one stone as it would decrease regulatory burdens and increase user’s engagement with other paid features hence provide increased stability.

See the whole article here: Robinhood: Rise Of The Retail Investor: