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Goldman Sachs' startups to watch
Venture Capital
<p>Goldman Sachs is edging its way into the hearts and minds of startups looking for funding and support, particularly the unicorns. The investment firm examined some of the up-and-coming firms for a list of the top 10 startups to watch, reports Business Insider.</p> <p> Appear Here- $9.4 million, London- finds pop-up shop storefronts to rent, much like booking a hotel room.<br /> EquipmentShare- $2.2 million, Missouri- allows contractors to rent and lend construction equipment.<br /> Getaround- $43 million, California- lets you rent your car in advance or on demand.<br /> Mast Mobile- $5.4 million, New York- combines your business and personal mobiles into one device.<br /> Narrative Science- $32.4 million, Illinois- automates simple reports and journalistic stories.<br /> Nutmeg- $37.3 million, London- customized financial portfolios to replace traditional advisors.<br /> Plated- $56.4 million, New York- food delivery services that provides the exact ingredients and recipes needed to cook.<br /> TradeBlock- $2.8 million, New York- bitcoin data provider.<br /> Vestorly- $2 million, New York- automated content marketing for businesses and leveraged use of online connections.<br /> Yhat- $2.6 million, New York- tool to make big data implementation more efficient.</p> <p>Photo: George Redgrave</p>
JPMorgan’s Kolanovic slams HFT, says it stepped back during crisis
Hedge Funds
<p>High Frequency Trading (HFT) is the opposite of human liquidity providers in a trading pit and HFT is in large part responsible for the August 24 market crash, J.P.Morgan’s Global Head of Quantitative and Derivatives Research, Marko Kolanovic, said in a research note dated September 24.<br /> J.P.Morgan's Marko Kolanovic weighs in on the controversial topic of human vs robotic led markets<br /> Commenting on “Derivatives Gamma, HFT Liquidity and Market Dislocations,” Kolanovic drew significant distinctions between how human market makers managed liquidity during crashes and the disappearing influence of HFT during market crisis.</p> <p>“HFT is fully engaged in stable market regimes but tend to dial down or completely step away during periods of high volatility or large market dislocations,” he wrote, touching on a hot topic, one that has been actively debated.</p> <p>August stock market sell-off was a “Flash Crash” similar to October 2015 “Flash Crash”<br /> Kolanovic casually terms the August 24 event a “Flash Crash,” one he compares to the October 15, 2014 bond market “Flash Crash.” He observes that on each of the 3 days prior to the crash, end of the day momentum becoming increasingly larger and starting earlier in the day. “A rates crash happened around the same time on the morning of Oct 15th and was also equivalent to a ~8 standard deviation move based on trailing 1M volatility,” then he compares it to the most recent market value adjustment. “Similar to the S&amp;P 500 on August 24th, the crash largely reverted in a ~30 minute period, and there was also an end of the day rebalance impact.”</p> <p>While some have said the performance drivers between the market sell-offs are different, Kolanovic cuts off such debate using clear if somewhat aggressive verbiage. “The striking similarity between the two events is not a coincidence,” he declares, “they were both driven by hedging of short gamma (convex) positions.” Citing Risk magazine and Joint Staff Report (The U.S. Treasury Market on October 15th, 2014), Kolanovic points to a large short gamma exposure in the Treasury market that emerged as certain US asset managers exited bond option selling programs. He says that hedging in a low liquidity environment was “a significant driver of price action.”</p> <p>“Good to see others are recognizing August 24 for what it is: a devastating real flash crash,” HFT critic and president of Nanex, Eric Hunsader, said. “Contrast that to some HFT firms crowing about having their best trading day ever - sure wasn't from providing liquidity or catching knives.”</p> <p>Kolanovic: Reasons HFT stands aside during crisis<br /> Kol</p>
Twitter reacts to Boehner resignation
Lifestyle, 4:01
<p>Republican Speak of the House John Boehner announced Friday that he will be retiring at the end of October.</p> <p>My heart is full with gratitude for my family, colleagues &amp; the people of Ohio’s 8th District http://t.co/uylVed86h2 pic.twitter.com/mc5acb9dGs<br /> — Speaker John Boehner (@SpeakerBoehner) September 25, 2015<br /> Boehner has butted heads with President Barack Obama throughout his two terms, but Boehner has also found himself at odds with the more conservative parts of his own GOP. Some are saying the far-right pushed Boehner out. </p> <p>Rep. Pete King: Boehner's resignation is "a victory for the crazies" http://t.co/ZLZfYQTNWJ pic.twitter.com/6RjN5azLeb — Talking Points Memo (@TPM) September 25, 2015</p> <p>Rubio to Value Voters: "Just a few mins ago, Speaker Boehner announced he will be resigning." HUGE ovation. Many standing. — Steve Peoples (@sppeoples) September 25, 2015</p> <p>Schumer praises Boehner while Rubio says it was time for him to go. Gives you a sense of his position — Sam Stein (@samsteinhp) September 25, 2015</p> <p>Reactions to the resignation have been mixed. In a press conference, Obama said Boehner was a "good man" and a patriot. </p> <p>I was right. Pope just knocked him out. http://t.co/uqkZXnQHOe — Downtown Josh Brown (@ReformedBroker) September 25, 2015</p> <p>&nbsp;</p> <p>John Boehner's Legacy Is That He Doesn't Really Have One. http://t.co/dKdYyRIteR — David Corn (@DavidCornDC) September 25, 2015</p> <p>I really hope Boehner becomes a TV host instead of a lobbyist. I'd watch his show.</p> <p>— Josh Barro (@jbarro) September 25, 2015<br /> Either way, Americans will surely miss those crystal blue eyes on their television screens.</p> <p>Typical American Family, shown here, reacts to the Boehner resignation pic.twitter.com/fhAn8smmxV — Rudolf E. Havenstein (@RudyHavenstein) September 25, 2015</p>
Are investors better off with small hedge funds in times of crisis?
Hedge Funds
<p>Several years ago, AllAboutAlpha.com -- an online strategic information service for the asset management and hedge fund industries -- set out to answer a key question; do smaller Hedge Funds outperform larger peers?</p> <p>The study was confined to long/short equity hedge funds only and looked at the returns of nearly 3,000 funds over a ten year period. Funds were divided into two size groups, those that managed $50 million to $500 million (small) and those that managed more (large).</p> <p>AllAboutAlpha's study found that the group of small hedge funds outperformed their larger peers by an average of by 254 bps per annum over five years and 220 bps per annum over ten years.</p> <p>What's more, virtually all of the outperformance was due to alpha, not beta and the dispersion of returns among smaller funds was greater than those of larger firms. You can see the study in full here.</p> <p>AllAboutAlpha's return figures also showed that the outperformance of the small hedge fund group was more pronounced during preceding and following the financial crisis, especially during 2009.<br /> Small hedge funds produce the best returns<br /> Are investors better off with small hedge funds in times of crisis? This is the question Andrew Clare, Dirk Nitzsche and Nick Motson, from the Centre for Asset Management Research, The Sir John Cass Business School, City University, London, UK set out to answer in a research paper published earlier this year.</p> <p>The paper, aptly titled, "Are investors better off with small hedge funds in times of crisis?" looked at the relationship between hedge fund performance and size. This paper claims to be the most comprehensive study to date of the relationship between hedge fund performance and size. The data sample used spans the period from January 1994 to 2014 and encompasses two major financial market crises.<br /> "The results in this panel confirm...there is a negative relationship between hedge fund size and performance...the relationship does change from year to year, but that in all but three of the twenty years the relationship has been negative. More interestingly, three periods arguably stand out in particular: 1999 to 2000, 2003 to 2004 and 2008 to 2010. The Fama-MacBeth t-statistics for both of these periods show that the relationship was highly statistically significant. These periods were marked by financial market crisis. Other things equal, these results suggest, perhaps surprisingly, that investors would have been better off with small rather than big hedge funds over these crisis periods."<br /> This article was originally published by </p>
These ETFs have technology problems
Asset Management
<p>If someone an investor trusts were to tell that investor that over the past six months shares of Petrobras S.A. (NYSE: PBR) and PetroChina Co. (NYSE: PTR) were each down more than 31 percent, adding to the equation that shares of Ecopetrol SA (NYSE: EC) are off 43.3 percent and that the exchange traded fund that only holds Chinese banks is lower by 13.3 percent, the takeaway would logically be that this is another brutal year for state-owned emerging markets companies.</p> <p>That is what the aforementioned oil companies and most Chinese banks are. The problem is these companies still sport mammoth market capitalizations, meaning they play pivotal roles in charting the courses for well-known emerging markets ETFs such as the Vanguard FTSE Emerging Markets ETF (NYSE: VWO) and the iShares MSCI Emerging Markets ETF(NYSE: EEM). VWO and EEM, the two largest emerging markets ETF by assets, are down an average of 16.9 percent over the past six months.</p> <p>Read the full story at Benzinga. <br /> Photo: Will Clayton</p>
Pimco leaves Bill Gross in the dust
Asset Management
<p>Here’s something interesting. Pimco, the behemoth bond house once expected to wither away and die when its founder left, actually posted better returns than Bill Gross himself.</p> <p>And it’s not just that. While Gross’s old stomping ground – the Pimco Total Return Fund – saw its assets under management shrink by at least $120 billion, guess how much made its way back to the dethroned bond king? Barely $1 billion, according to the Financial Times.</p> <p>Gross, whose weird antics of late include writing TMI investment letters, calling trades he doesn’t even do, and losing 3% – in a bond fund – in a single day, may inadvertently be helping Pimco score more clients:<br /> “By underperforming, Mr Gross may be inadvertently helping Pimco make its own case: that the investment process, trading infrastructure and intellectual firepower across the asset management group count for as much, if not more, than any one individual’s investing talent.”<br /> Interestingly, that might actually be the case. Despite all the outflows, things have actually been working well for Pimco lately. Cash has been flowing to where they want it to be – their so-called “future platforms” – and Total Return’s new team have been making good bets on volatility and the greenback.</p> <p>As for Gross, he worryingly skipped his personal musings in his latest outlook. Instead of opening with thoughts on plugged toilets, steam showers, or how a 67-year old's midsection isn't a pretty sight (I'm actually paraphrasing him here), this month we get nothing but a dry analysis of interest rates and a Phillips Curve critique. Things might not be going so well for him.<br /> Photo: Defence Images</p>
Samsung Pay sees strong S. Korea debut, so should its US rivals worry?
FinTech
<p>Within a month of launching in South Korea, Samsung Pay has clocked up 1.5 million transactions worth $30 million, and it will now take on the US market.</p> <p>It's a strong start. Data released by the company shows that since August 36% of Samsung phone owners used the service and 10% of  those did so every day. Around 60% these purchases were made using the Galaxy Note 5.</p> <p>Samsung had a home advantage by launching in South Korea first but it's still an impressive debut. How will it stack up against Apple and Android Pay when it enters the US next month?</p> <p>It is hard to compare performance. Apple Pay has enjoyed an adoption rate of 42% among iPhone 6 and iPhone 6 Plus users, according to Auriemma Consulting Group, but that's with a year-long head start. No data yet exists on Android Pay, which only started rolling out earlier this month.</p> <p>The biggest curve ball for Android and Apple is likely to be Samsung's payment technology. Both Apple and Android rely on contactless near field communication (NFC) technology - which means merchants need to have an NFC reader installed.</p> <p>Samsung Pay uses MST technology which means merchants without NFC readers can accept it. Weirdly, the Galaxy S6 can emulate the magnetic strip of a card wirelessly so - Samsung claims - it can work on over 90% of card payment machines.<br /> Photo credit: TechStage </p>
VC-backed phone giant Xiaomi launches new service
Venture Capital
<p>Xiaomi made big waves in the smartphone industry when it introduced its first low-cost phone in 2011. Now the Chinese electronics firm plans to bring its unique brand of disruption to the laptops and telecoms space.</p> <p>This week Xiaomi launched its new telecoms service, Mi Mobile, alongside its latest Mi 4C budget smartphone. The company has been given a state license for a virtual telecoms network, which means it can lease infrastructure from one of China’s three big telecoms to offer self-branded services.  </p> <p>The fact that Xiaomi is bringing its brand to a fresh and potentially very lucrative sector should no doubt be welcome  to its venture capital backers which include IDG Capital, Morningside Group, GIC, DST Global, Hopu investments, and All-Star Investments.</p> <p>Tech in Asia reports that less than 1% of China’s mobile users subscribe to China’s virtual telecom operators. Xiaomi hopes to topple the existing but lackluster service providers by leveraging its brand and offering both pay-as-you-go and contract services.  </p> <p>And it’s not just China's virtual operators that are facing fresh competition. Xiaomi has confirmed it will be releasing a laptop. The details are sparcse at this point, but the firm is looking to launch in the second quarter of 2016.<br /> Photo: Kārlis Dambrāns</p>
People moves: Amundi bags ex-hedge fund economist; Credit Suisse names new Asia-Pac CIO
Asset Management
<p>Credit Suisse appoints new Asia-Pac CIO. John Woods, a 25-year veteran of the investment arena, has been named Chief Investment Officer Asia Pacific, Private Banking &amp; Wealth Management by Credit Suisse. He will be responsible for developing the unit’s investment views across all assets, and will also help expand the firm’s strategies for its clients.</p> <p>Prior to joining Credit Suisse, Woods was Head of Fixed Income Asia Pacific for Citi Investment Management, and held the role of Chief Investment Strategist for Asia Pacific at Citi Private Bank before that. He also held several key roles in HSBC, including Global Head of Credit Research and Strategy. He will report to Nannette Hechler-Fayd’herbe, the Swiss firm’s Global Head of Investment Strategy, and will be based in Hong Kong. Credit Suisse</p> <p>Amundi Hong Kong nabs economist from Azentus. Mo Ji, an economist who studied under Nobel Laureate Joseph E. Stiglitz, has been appointed Chief Economist, Asia ex-Japan by Amundi Hong Kong.</p> <p>She joins Amundi after four years at Azentus Capital Management – the global macro fund run by ex-Goldman trader Morgan Sze – where she held the role of Global Chief Economist. Before that, Ji spent almost two years Deutsche Bank, working as a research associate for the German firm’s Hong Kong and China research unit. She will report to Amundi’s Global Head of Research, Strategy and Analysis, Philippe Ithurbide. Asia Asset Management</p> <p>M&amp;G Investments Asia MD steps down. Andrew Hendry, M&amp;G Investments’ point man in Asia, will be leaving the British investment firm by the end of the year. This is what they had to say about it:<br /> “His departure follows the successful completion of the first phase of our expansion in the region. Under Andrew’s leadership, M&amp;G has opened offices in Singapore and Hong Kong, hired teams in both locations and manages over $4.5bn of assets for clients.”<br /> Singapore-based Hendry was M&amp;G’s Managing Director for Asia the past 4 ½ years, joining the firm back in 2011 after a two-year stint as a director for Marpac. He also spent 10 years at the Capital Group, taking on several roles including Vice President of Global Distributor Relations. FundSelectorAsia</p> <p>For Capital Markets moves, click here.<br /> Photo: Luke Ma</p>
People Moves: HSBC names new APAC chief; RBC loses fixed income boss
Capital Markets
<p>HSBC names new Asia-Pac chief. Paul Skelton, a long-time HSBC man, has been named by the firm as its new Regional Head of Commercial Banking, Asia-Pacific. Here’s what Simon Cooper, HSBC’s Global Head of Commercial Banking, had to say:<br /> “Paul brings with him a wealth of experience from both MENA as well as from his time within Asia-Pacific. He will focus on capturing the region’s emerging wealth by connecting corporates to opportunities across the world, with a renewed focus on China’s Pearl River Delta as well as the rising Asean.”<br /> Skelton was previously Regional Head of Commercial Banking for HSBC Middle East and North Africa, a post he held after spending 13 years in HSBC’s corporate and investment banking business in the Asia-Pacific region. He will report to the aforementioned Simon Cooper, as well as to Peter Wong, the firm’s Deputy Chairman. Global Trade Review</p> <p>BAML appoints Greater China equities head. Xia Yang, a 10-year veteran investment banking veteran, has been appointed Head of Greater China equities by Bank of America Merrill Lynch.</p> <p>Yang joins BAML from the Swiss giant UBS, where he was most recently Head of Equities for UBS China and chairman of UBS Futures China. He spent almost a decade at the firm, working at its Tokyo office from 2005 to 2007 and at its Hong Kong office from 2007 to 2012 before relocating to Shanghai. He will report to Olivier Thiriet, Head of Asia-Pacific equities for the American firm. Finance Asia</p> <p>RBC loses fixed income boss. Frédéric Lainé, an old hand in Hong Kong’s fixed income trading scene, has reportedly left RBC Capital Markets sometime this month.</p> <p>Lainé, who has over 20 years of rates and currency experience under his belt, was the Canadian firm’s Head of Fixed Income and Currencies for Asia the past four years. Prior to joining RBC, he was Asia ex-Japan chief of Credit Agricole’s Financial Institutions Group, and served the French firm as its Asia ex-Japan fixed income trading head from 2004 to 2010. Before that, he spent 12 years at Credit Lyonnais, with his most recent post there being Head of Interest Rate Derivatives, Asia ex-Japan. Global Capital</p> <p>For Asset Management moves, click here.<br /> Photo: Wendy</p>