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People Moves: Nuveen builds ETF business; Voya poaches JP Morgan exec
Asset Management
Nuveen building ETF business. Nuveen Investments has hired Martin Kremenstein for the newly created role of head of ETFs. Kremenstein will report to Greg Bottjer, head of product strategy. Kremenstein most recently worked as managing director for asset and wealth management at Deutsche Bank, helping establish the firm's US ETF business. Voya grabs JP Morgan exec. Karen Eisenbach has joined
Wall Street still wants Jeb
Lifestyle, 4:01
<p>There's no love lost between Wall Street and Donald Trump. Or Ben Carson. Or a number of other presidential candidates for that matter. But Jeb Bush is quietly accumulating Wall Street support.</p> <p>Half of the top 10 employers of Bush donors are in finance: Goldman Sachs, Morgan Stanley, Merrill Lynch, Neuberger Berman, and Barclays, reports The Wall Street Journal. Employees from 11 major financial firms gave about $200,000 to Bush between July and September, far beyond Bush's Republican opponents. Hillary Clinton has raised less than $130,000 from those firms. Industry titan Anthony Scaramucci, founder of SkyBridge Capital, recently joined other finance professionals on Team Jeb after Wisconsin Gov. Scott Walker dropped out of the race.</p> <p>But filling his accounts with Wall Street money won't win Bush the hearts and minds of the Joe the Plumbers of this election. Is having the support of Wall Street a financial gift or a political curse?<br /> Photo: Gage Skidmore <br /> &nbsp;</p>
Hedge funds are fleeing stocks: one chart tells the story
Hedge Funds
<p>&nbsp;</p> <p> Evercore ISI’s recent hedge fund survey indicated that funds have their lowest net-long exposure to stocks in two years.</p> <p> Net-long exposure to stocks peaked in September of 2014.<br /> Analyst James Walsh said that funds’ net exposure has been a good contrary indicator of stock market movement.</p> <p>&nbsp;</p> <p>In a new report, Evercore ISI analyst James Walsh looked at hedge fund exposure to stocks. According to Evercore’s most recent survey, funds have been consistently reducing exposure to stocks for quite a while.<br /> Method<br /> Evercore surveyed 31 hedge funds with net assets of about $86 billion and asked them to rate their long exposure to stocks on a scale of 0 to 100, where 50 indicates normal net exposure. “Over the years, we have noticed that our hedge fund survey has been a good contrary indicator for the market,” Walsh wrote.</p> <p>Read more and see the chart at Benzinga. <br /> Photo: Umberto Salvagnin</p>
Daily Scan: Beware stock options expiration day; dark horse candidates pose fund raising challenge to incumbents
Capital Markets
<p>October 16</p> <p>Good morning everyone. Stock options expire today in the U.S. Watch out. For the past eight expirations, markets rallied the day before (ahem) and then tanked on expiration day. But for now, stocks are up a bit, with the Dow, Nasdaq, and S&amp;P 500 all adding 0.1%. Which makes us think of the Presidential primary election. What should we make of the fund-raising data just released? Ben Carson, the retired neurosurgeon gunning for the GOP nod, raised $20 million in the third quarter vs. $12 million for establishment candidate Senator Ted Cruz of Texas.  Favorite Jeb Bush? The former Florida governor took in just $11.4 million (though he raised tons in the summer). And Democratic frontrunner Hillary Clinton barely out-raised rival Bernie Sanders, the Vermont senator: $29.9 million vs $26.2 million.</p> <p>&nbsp;</p> <p>Here’s what else you need to know:</p> <p>U.S. industrial production drops. Industrial production fell in September for the second straight month, dropping 0.2%, as expected. The August decline was revised to a 0.1% fall. CNBC</p> <p>JOLTS report shows job openings down. The quits rate has held steady at 1.9% for the fifth consecutive month. Job openings in August were at 5.6 million, down from the adjusted 5.67 million in July. Business Insider</p> <p>GE surprises with better-than-expected earnings. Boosted by better aviation and transportation earnings, General Electric reported a profit of $2.51 billion, or 25 cents a share, last quarter. Excluding the finance business, which GE is moving to cut, the company had revenue of $27.9 billion, on a profit of 29 cents a share. Wall Street Journal</p> <p>Theranos backs away from much vaunted "nanotainer" tests. After an inspection by the Federal Drug Administration, the hot startup (company valuation $9 billion) is now able to use the assay to test just one condition -- not the 100 originally publicized. Wall Street Journal (exclusive, paywall)</p> <p>Roaring week for Chinese stocks. The Shanghai Composite notched gains fo 6.13% and the Shenzhen 7.66% on the back of  stimulus hopes both in China and in Japan. The Hang Seng hung back a bit, nudging 0.69% higher and the Nikkei 225 rose 3.14%. Hooray for stimulus.</p> <p>Since June, asset classes in synch for first time in 20 years. And that's not good. Robeco Investment Solutions show that gold, real estate, stocks, high yield bonds, stocks are all in the tank. Usually different asset classes hedge one another. MarketWatch</p> <p>Yuan heads to weekly low. With the PBOC fixing the yuan’s midpoint down 0.05% to 6.3436, both onshore (CNY) and offshore (CNH) yuan are heading to their weekly lows. CNY touched 6.3555 against the greenback today, just as the CNH dipped to 6.3583. </p>
Raj Rajaratnam sued by brother Rengan
Hedge Funds
<p>Raj Rajaratnam is not a happy man. Not only does he still have nine years left on his prison sentence, but apparently, he’s having family problems as well.</p> <p>According to Reuters, the once high-flying Galleon chief was recently sued by his younger brother Rengan, who claims that Raj, as well as Galleon, owe him over $13 million in unpaid performance fees and legal costs.</p> <p>Rengan, who was cleared of insider trading charges following his brother’s conviction, alleges that Galleon failed to pay him his 10% share on the $83 million he made for the fund back in 2009, and not only that, he also claims the fund stiffed him for up to $1 million over his stock recommendations, among other things:<br /> “He said Galleon also wrongly did not pay him up to $1 million for telecommunications stock recommendations he made in his other role as an analyst, and also failed to advance his legal fees and costs during the insider trading case.</p> <p>As a result, Rengan Rajaratnam said he had to pay $2 million in legal fees out-of-pocket and may owe another $2 million. Galleon also failed to help cover any of the $840,000 civil settlement he reached with the U.S. Securities and Exchange Commission after his acquittal, the lawsuit said.”<br /> Raj, who recently had an awkward reunion with Rajat Gupta in Ayer, probably isn’t too pleased about this.<br /> Photo: Marc Treble</p>
Founders, investors gather in Hong Kong to share past failures
<p>Learning and growing from one's past failures is a core part of startup culture and this week a group of founders will gather in Hong Kong to observe that tradition at the 2nd annual Postmortem conference.</p> <p>The event will be held at KPMG's Causeway Bay office at Hysan Place and will feature a line-up of HK's best startup founders, investors and mentors sharing their personal failures, pivots, regrets, and mea culpas. Confirmed speakers at the event include:</p> <p> Deepak Madnani, Paperclip<br /> Daniel Walker, Dragon Law<br /> Christopher Geary, Asianet Group<br /> Elsa Chan, Jetlun<br /> Andrea Livotto, Perpetu<br /> Sam Gellman, Uber<br /> Jeffrey Broer, Grayscale<br /> Donna NguyenPhuoc, Angel investor</p> <p>The event starts tomorrow (October 17) but a handful of tickets are still available.<br /> Photo: Steve Jurvetson<br /> &nbsp;</p> <p>&nbsp;</p>
Mega rounds keep rolling in amid IPO slump
Venture Capital
<p>It be might a lousy exit market right now but the big VC deals have still been coming through thick and fast these past three months with 68 startups globally each raising $100 million or more, according to a new report.</p> <p>The joint report by KPMG and CB Insights reveals there have been 170 of these so-called mega rounds for the first nine months of the year raising an aggregate $19 billion. In total VC-backed startups raised $37.6 billion worldwide during the three months and $98.4 billion for the year so far, already exceeding the 2014’s $88.7 billion total.  </p> <p>Asian mega deals in particular tipped the scales for the third quarter, with massive investments into the likes of Didi Kuaidi, LY.com, One97 Communication and Eleme. The top five deals in Asia accounted for $5.3 billion, or 39% of fundraising in the region. </p> <p>But the report also shows that while there are more late stage deals, there are fewer IPO exits than previous years, exacerbated by the fact that China suspended IPOs once again in July. The number of late-stage investments has affected the availability of cash for seed-stage investments. Despite more funds investing at the seed stage, seed investments have dropped to a five-quarter low of 28%, globally. </p> <p>In the short term at least it seems the gigantic late stage deals will continue to spur the rise of the unicorns - startups valued at $1 billion or more. There were 23 new unicorns in the quarter: 17 in the US, 3 in Asia and 3 in Europe.<br /> Photo: Maxwell Hamilton</p>
Can blockchain tech revolutionise IP and digital content ?
FinTech
<p>When people talk about blockchain technology they invariably talk about bitcoin, but its applications go far beyond cryptocurrency. There is now a community of startups that are looking at how blockchain can be used to protect digital content and intellectual property.</p> <p>In a nutshell: just as blockchain is used as a virtual decentralised ledger to track bitcoin transactions, it can also be used as a tool to track the rights and transactions attached to all manner of digital creative works from music to artwork.</p> <p>To this end there are now platforms like Ethereum coming into existence that use blockchain tech to issue smart contracts: decentralised computer protocols used to verify contractual agreements. There is now an ecosystem of companies being built around platforms like Ethereum that focus on IP solutions and other alternative blockchain applications. </p> <p>Many of the leading lights of this nascent industry gathered at the "Smart Contracts for Smart Cities" conference in Hong Kong’s Cyberport this week to share their views in the future of blockchain technology. Trent McConaghy – the founder of Ascribe, a digital IP platform – is one of the people looking to solve the issues surrounding IP and digital content on the internet, he said:<br /> “A fundamental challenge of the internet is that if you are a creator you are getting a raw deal. When you put your stuff on the internet you are probably not going to get paid, or at best you are only getting a fraction of its value. Ads are a horrible solution to monetization.”<br /> A similar frustration was expressed by Juan Benet, the creator of  InterPlanetary File System (IPFS), a type of peer-to-peer protocol. Benet explains that blockchain and timestamping services can be used to create an auditable trail of content ownership from creation through to the transfer of rights and beyond.  He added that the democratization of the process could also address some imbalances in the patent system:<br /> “Currently the patent system in software is pretty broken, it allows for a lot of things that shouldn't be allowed as patents and excludes others things that should be. It is a very tricky situation when you have these massive companies  amassing these huge portfolios and only they get to wield patents.”<br /> Photo: Mattwalker69</p>
People Moves: Credit Suisse strengthens China research team; HSBC to relocate bankers to HK
Capital Markets
<p>Credit Suisse bolsters A-share research team. Li Chen, an Institutional Investor-ranked portfolio strategist, is among the six new hires Credit Suisse made to bolster it’s A-shares research team.</p> <p>Prior to joining Credit Suisse, Li spent five years at UBS, serving various key roles including head of China equity strategy. Before that, he was head of research for one of China’s largest mutual funds, the Harvest Fund. He will report to Vincent Chan, Credit Suisse’s head of China research, and he will continue to be based in Hong Kong. Finance Asia</p> <p>HSBC bankers move to Hong Kong. Agustin Gargallo, a New York-based director for HSBC’s emerging markets debt syndicate, is set to relocate to Hong Kong amid a massive reshuffle within the British firm’s debt syndicate unit. Also set to head to Hong Kong is Alison Chan, a London-based associate within the bank’s EMEA corporate and structured syndicate team.</p> <p>The two of them seem to have spent most of their careers at HSBC, although Gargallo joined the firm following a two-year stint at Goldman Sachs Asset Management. They will both report to Carla Goudge, head of debt syndicate, Asia Pacific. Reuters</p> <p>For Asset Management moves, click here.</p> <p>Photo: Wendy</p>
People Moves: JPAM CIO relocates to HK; Manulife AM adds CFO, CMO
Asset Management
<p>Carlyle names Southeast Asia chief. Sunil Kaul, a 30-year veteran of private equity and banking scene, has been appointed head of Southeast Asia of the Carlyle Asia buyout advisory team. Greg Zeluck, Managing Director and Co-Head of the Carlyle Asia buyout advisory team, had this to say:<br /> “Sunil is a Carlyle veteran with a wealth of experience in the private equity and financial services industries. With his deep industry expertise and strong networks, Sunil has significantly contributed to the success of many of our investments in Asia over the last seven years. In this newly created role, Sunil will lead our investment advisory activities in Southeast Asia as we continue to see great opportunities in this fast-growing region.”<br /> Before joining Carlyle in 2008, Kaul was president of Citibank Japan, a role he served concurrently with his chairmanship of Citi's credit card and consumer finance companies in Japan. He was also a member of the banking giant’s Global Management Committee and Global Consumer Planning Group. Carlyle</p> <p>JP Morgan AM CIO returns to Hong Kong. Richard Titherington, JP Morgan Asset Management’s London-based CIO for emerging market equities, will be returning to Hong Kong to lead the U.S. investment firm’s newly-merged emerging markets and Asia Pacific equity team. Titherington, who previously spent 14 years in the region, seems to be pretty stoked on the move:<br /> “For me, this move feels like coming home and I couldn’t be more pleased. The firm has a long and proud history in the region, backed by a very strong group of investment professionals. I am honoured to have been entrusted with this role and am very excited about the prospects for our team.”<br /> Despite the move, he will remain as portfolio manager for his UK and Luxembourg-domiciled portfolios. AsiaAssetManagement</p> <p>Manulife AM adds two key hires. Frederick Reidenbach, an old hand in the Japanese asset management space, has been named chief financial officer, wealth and asset management, Asia by Manulife Asset Management. Joining him at the firm will be Grace Ho, a ten-year veteran of the financial services marketing arena. She’ll be serving the firm as its chief marketing officer, wealth and asset management, Asia.</p> <p>Prior to joining Manulife, Reidenbach spent 10 years at Nikko Asset Management in Japan, working in various capacities including a dual role of CFO and COO. Ho meanwhile was the previous head of marketing, Asia Pacific for Schroders. Before that, she spent two years at JP Morgan as a VP in marketing following a four-year stint at AIG in a similar role. They will both be based in Hong Kong. FundSelectorAsia</p> <p>For Capital Markets moves, click here.<br /> Photo: Luke Ma</p>