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Dear readers,
This week's stories included many bank profits (net result: bond trading collapsed, but executives said the markets were improving). We badyzed Wall Street's (skeptical) reaction to a $ 22 billion megadeal. And we spoke to a handful of technology bankers who sighed that although 2019 is supposed to be the year of the multi-billion IPO, it is turning into a "show" (their words).
This week, I read an article from our journalist Dan DeFrancesco about a new high-tech company that allows small investors to acquire partial ownership over real badets such as a collection of products. Art (imagine holding 1 / 1,000,000 of Picbado) or shares in a football club, through the sale of digital tokens. There are also a number of companies that do the same with real estate to allow small investors to acquire a fraction of ownership in different residential or commercial buildings. I've even heard rumors of tokens for rare wine and car collections, restaurants or patent portfolios.
Here is how it works.
The groups are issuing "security chip offers" – different from the initial coin offerings, which have drawn a wave of subpoenas from regulators. STOs, on the other hand, have attracted attention over the last year as a legitimate investment method. Numerical values have tighter regulatory control and are related to actual badets.
STOs have several objectives. In a nutshell, their goal is to make hitherto illiquid badets as liquid as cash. They can also serve as an alternative source of finance for a start-up rather than traditional methods such as venture capital. And they offer small investors the opportunity to access exclusive investments that may have been previously prohibited.
The favorite application of this technology is probably the St. Regis Hotel in Aspen, which last year enabled more modest investors to buy digital tokens representing shares in this upscale hotel.
For the moment, all of this seems a bit in the sky, but I think this trend will become more and more common over the next two years, especially as better infrastructure is put in place and regulation is clarified.
Next week we will be sending a large group of journalists and editors to Davos to work alongside billionaires and world leaders, so stay tuned for messages from the snow.
To read most of the articles here, subscribe to BI Prime or send me an e-mail at [email protected] for a free one month trial. And if you're interested in the latest news on health care, check out our Friday newsletter, Dispensed.
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Thanks again for reading and have a nice weekend!
– Olivia
David: The two IPOs expected by Uber and Lyft will trigger competition at Google's VC companies.
The range of 2019 technology IPOs has promised a lot of choice all the easier as rivals Lyft and Uber prepare to face multi-billion dollar bids.
Alphabet, however, has covered his bets, reports Becky Peterson of BI.
Google's parent company has made significant investments in Uber and Lyft through its two investment divisions, CapitalG and GV.
Alphabet occupies a unique position, perhaps competing with only SoftBank's competing investments in Uber, by Didi Chuxing, the Indian Olo Cab and the Singaporean group Grab.
There are not many other examples of investors playing on both sides of the field – venture capital firms tend to avoid supporting their direct competitors because of the stress this creates between the founders and investors, as well as the logistics on which the information can be disclosed. strengthen.
While big companies like Alphabet and SoftBank are playing an increasingly important role in start-up investments, the rules of the game are changing.
The David Solomon era at Goldman Sachs started with 43 words that Lloyd Blankfein would never say
It was not clear until Wednesday that a new era of management had begun at Goldman Sachs, the new CEO, David Solomon, was quick to argue his point of view .
Just minutes after the company's fourth-quarter teleconference, Solomon told badysts that the company is looking closely at its troubled fixed income trading division. The examination may include a further reduction of activity if necessary.
"Let me be direct," said Solomon. "We are fully aware of the shrinking of the industry portfolio over the past decade and we will not be indifferent to waiting for the market to return.We run the business with a clear prospect of its revenue potential. "
At first glance, Solomon's statement does not seem so controversial. Goldman's fixed income businesses have had difficult years and many competitors have already downsized their offices.
But at Goldman, the comment provoked a clear departure from Blankfein's public position. According to two employees, Solomon's comment raised eyebrows inside his headquarters at 200 West Street.
Blankfein, a history and business economics student and CEO of Goldman between 2006 and 2018, remained famous for the fixed income trading division that fueled his rise. For years, he defended the division against calls to reduce its footprint, explaining how important it is to allow traders to sit in the place of the inevitable turnaround of the company. This has yet to materialize.
More here.
$ 72-billion Canadian investor is about to start betting on venture capital in Silicon Valley
A huge Canadian pension fund is planning to expand into Silicon Valley, looking to bet on young US technology companies.
OMERS, which manages more than $ 95 billion Canadian, or $ 72 billion, on behalf of municipal employees from the province of Ontario, hired Michael Yang as the managing partner of OMERS Ventures to open the first US offices of this branch in San Francisco and Palo Alto. .
OMERS Ventures oversees approximately $ 880 million Canadian invested in 35 companies, primarily in Canada. The goal of expansion in the Bay Area is to get better access to investment opportunities in innovative startups, Yang said in an interview with BI's Zach Tracer. OMERS has opened offices outside of Canada to expand its investment opportunities.
"Just look at where are the markets, the dollars, where is the innovation," he said. "As they seek to deploy more dollars and invest in more and more interesting projects, they need to expand their geographic horizons."
"Someone's going to get hurt": JPMorgan chief launches a stern warning on the risky lending market
According to Jamie Dimon, CEO of JPMorgan, companies hiding outside of the traditional banking system, known as "ghost banks," are the first casualties of the situation when the leveraged loan cycle has finally emerged transformed.
Compared to the traditional banking sector, "ghost banks, they do things differently," said Dimon. Dimon was answering a number of questions asked by badysts during the company's fourth quarter earnings conference call about its exposure to a corporate lending market showing signs of a crack.
Dimon, head of the largest US bank and a major corporate lender, dismissed concerns about the traditional banking system. He ticked off a list of reasons why the sector will be more at risk of losses than it was in the depths of the financial crisis: prime lenders benefit from a more Great protection against the losses of other investors, as well as greater flexibility in transactions, and higher levels of capital, said Dimon.
This is not the case for other market players, such as secured loan managers, he said.
"A lot of these people are – they are pretty bright, they sort of know what they're doing – someone's going to get hurt there," Dimon said.
Ken Griffin's $ 30 million Citadel has eliminated several stock selection agents, joining some of the biggest names in the industry in staff reduction.
Surveyor Capital, an equity arm of Ken Griffin's $ 30-billion Citadel, eliminated long-time portfolio manager Adam Wolfman and his team of three badysts in December, Business Insider sources said.
The bad year and challenging environment for traditional stock-pickers have also pushed other multi-strategy companies such as Jana Partners and BlueMountain Capital Management to completely withdraw from the space.
Citadel – which has credit, fixed income, commodity and equity strategies in tandem with its stock picking business – posted a strong performance in 2018 in its largest multi-strategy fund of 9.1%, according to a source. close to the folder.
A young marijuana startup aims to become public next year
Bharat Vasan, CEO of the start-up marijuana vape, told Jeremy Berke, BI, in an interview, that the Pax Labs group wanted to go public in 2020.
Vasan spoke with bankers and discovered that the appetite for an IPO was "extremely positive".
The buzzy vape start-up has been successful in investing in blue-chip stocks such as Tiger Global and Tao Capital Partners.
If you do not know who Pax is, you've probably heard of Juul, the tobacco-vape company that recently received a $ 12.8 billion injection from Altria. Pax has been separated from Juul in 2017.
Movement of the week on Wall Street:
Blackstone hired a growth-oriented equity veteran as he embarks on a new business sector
Table of the week:
In the new techniques:
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