News > Financial Services

Raising money? There's a new entry fund-raising step -- 'pre-seeding'
Venture Capital
<p>After family and friends, hopeful entrepreneurs would go to seed funds to raise money. There's a new step now in the fundraising process. It's called "pre-seed."  Sarah Lacy writes in Pando.com (paywall):<br /> Welcome to the messy, inevitable collision of four trends: The series A crunch, bigger rounds later in a company’s life demanding higher pro-ratas, the rise and success of institutional seed rounds over the last 5+ years, and the increasing prices of building a company in San Francisco.</p> <p>Simply put: “Seed” is no longer seed. Pre-seed is seed. And even that’s not the earliest round: There’s friends and family before that. “Series A is actually the fourth round of funding,” says Manu Kumar, of K9 ventures, the best known pre-seed fund. “Before that there is seed, then before that there is pre-seed and then before that there is friends and family. We are the first institution in, but typically we are the second money.”<br /> Photo: Hartwig HKD</p>
HK billionaire Li Ka-shing's tech fund is Israel’s biggest foreign investor for upstarts
Venture Capital
<p>Hong Kong billionaire Li Ka-shing’s Horizons Ventures Ltd, which invests in technology companies such as Facebook, Slack and Spotify, is the biggest source of foreign investment for a number of tech startups in Israel.</p> <p>Citing data from market tracker IVC Research Center, the WSJ says Horizons has invested in at least 28 tech startups in Israel including Corephonotics, designer of dual-lens system for mobile-phone cameras, and Kaiima, a seed-technology company. In fact, startups from Israel now accounts for more than a third of the tech venture-capital fund’s more than 60 portfolio of startups, it says.</p> <p>The latest information comes as no surprise as Li, ranked the second richest man in Asia according to Bloomberg, has been aggressively expanding his empire all over the world. Just this week, Li’s Hutchison Whampoa sealed a deal with Spain’s Telefonica to acquire its British mobile phone unit O2 for 10.25 billion pounds (US$15.3 billion).</p> <p>Hutchison has been active in Israel way ahead of Horizon. Hutchison has established its presence in the country for more than a decade while Horizon, the first major Asian investor to put up money in Israeli tech companies, only did so in 2011, the WSJ says.</p> <p>Hutchison owns stakes in Partner Communications, Israel’s No.2 mobile-phone company, and in SDL Desalination, a water company, the report says.<br /> Photo: Ron Shoshani</p>
Barclay hedge fund index drops 2.45% in August; emerging markets off 10.46% in past 3 months
Hedge Funds
<p>Here's a big whoopee: Hedge funds were down only 2.45% in August compared to a drop of 6.26%  for the S&amp;P 500. Of course, most broad stock market investors weren't paying huge upfront fees.</p> <p>Hedgies took smaller losses than the MSCI emerging markets index. In August the Barclay EM index fell 5.39% vs 9.04% for the MSCI EM index. In the past three months, the MSCI EM index tumbled an impressive 17.55% vs 10.46% for the funds in the Barclay universe.</p> <p>The Barclay Hedge Fund Index compiled by BarclayHedge is hanging on by its nails to a gain for the year, up 0.23%. Here's what the data collector had to say:<br /> “A surprise currency devaluation by the People’s Bank of China on August 11 was interpreted by investors as an indication of a weakening economy, and sparked a global sell-off of risk assets,” says Sol Waksman, founder and president of BarclayHedge.</p> <p>Fifteen of Barclay’s 18 hedge fund indices had losses in August. The Emerging Markets Index dropped 5.39%, its largest loss since May of 2012 when it dropped 5.39%. Emerging Markets have fallen 10.46% in the past three months.</p> <p>“Emerging markets were hit especially hard as concerns of a global slowdown provoked fears of contagion and triggered sell-offs in commodities as well as Asian currencies, credits, and equities," says Waksman.</p> <p>Healthcare &amp; Biotechnology lost 4.38% in August, Distressed Securities fell 4.28%, and the Equity Long Bias Index was down 3.37%.</p> <p>The Equity Short Bias Index was the big winner in August, with an 8.75% gain. Equity Market Neutral was up 0.42%, and Fixed Income Arbitrage added 0.12%.</p> <p>At the end of August, the Healthcare &amp; Biotechnology Index is up 9.96% for the year, Pacific Rim Equities have gained 5.19%, Merger Arbitrage is up 4.74%, and European Equites have gained 4.39%.</p> <p>The Distressed Securities Index has lost 5.63% year to date, Emerging Markets are down 3.15%. and the Event Driven Index has lost 0.53%.</p> <p>The Barclay Fund of Funds Index lost 2.10% in August, but is still up 0.92% in 2015.<br /> Photo: SteFou </p>
Why this China ETF should keep working
Asset Management
<p>Over the past month, exchange-traded funds tracking Chinese A-shares, stocks trading on the mainland of the world's second-largest economy, figure prominently on the top 10 list of worst-performing non-leveraged ETFs.</p> <p>Of course, that is good news for the Direxion Daily CSI 300 China A Share Bear 1X Shares(NYSE: CHAD), a fund that has been highlighted multiple times in this space over the past two months.</p> <p>With Friday's gain of about 2.4 percent, CHAD is up nearly 7 percent over the past month and more than 21 percent over the past 90 days. Those are not staggering gains, but remember CHAD is not a leveraged ETF. In a perfect world, when China's widely followed CSI 300 Index falls 1 percent on a particular day, CHAD should rise by the same amount.<br /> What It Means<br /> As A-shares have tumbled in recent months, ...</p> <p>Full story available on Benzinga.com</p> <p>Photo: Dhi</p>
Video: The rise of the private IPO
Venture Capital
<p>Frederic Kerrest, COO and Co-Founder, of Okta, a unicorn and red-hot identity management company, sat down with Fortune journalist Dan Primack and Anand Sanwal, CEO and Co-Founder of CB Insights, the venture capital research company. First question: Would you invest in an index comprised of unicorns? How would you answer?</p>
UK asset managers are not happy with Yellen
Asset Management
<p>While fund managers in the U.S. were a little more simpatico with Janet Yellen’s decision to keep rates on hold, across the pond, British money runners were apparently not that happy.</p> <p>According to the Financial Times, several U.K.-based asset managers found the Fed’s recent decision not only “frustrating,” but also a blow to the central bank’s creditability.</p> <p>Luca Paolini, Pictet’s chief strategist, said that by keeping the status quo, the Fed has only made things worse: “The uncertainty is worse than a rate hike. A Fed hike could have been a major turning point for emerging markets. Now the concerns about global growth will intensify.”</p> <p>Kevin Adams and Kevin O’Nolan meanwhile both agreed that the move was “pretty frustrating,” with Adams – head of institutional fixed income at Henderson – adding that it “massively undermines [the Fed’s] credibility,” while O’Nolan – a portfolio manager at Fidelity – stated that this just means that “uncertainty [over emerging markets] will remain.”</p> <p>And they do have a point. While the buyside did push spoos higher after the announcement, fear and loathing eventually overcame the equity markets and bathed it in a sea of red. The only things bidding up right now are safe havens such as the swissie, the yen, and gold. Heck, even the euro – a currency not known for its stability and virtue – actually managed to post some gains.</p> <p>All is not lost however. While it did spike January Fed fund rates after she insisted on a 2015 rate hike, the market still hasn’t voted against Yellen in a real way. So while things may get a little choppy, it could be much worse.</p> <p>Her belief in the Phillips Curve should be of some concern though.<br /> Photo: Brookings Institute</p>
The rise of the ethical hedge fund
Hedge Funds
<p>Hedge funds, in the eyes of the general public, seem to be nothing but vehicles of cutthroat greed, tools for untold and unfair riches, or to quote former UK Prime Minister Edward Heath, “the unacceptable face of capitalism.” With investors pushing for more ethical investments however, that image might actually change.</p> <p>The Financial News reports that Deutsche Asset &amp; Wealth Management has just sealed a deal with an unnamed hedge fund to create a product that will “invest only in stocks screened using ethical, social and governance guidelines,” adding that it plans to create more of these vehicles in the near future.</p> <p>This isn’t the first time a fund decided to integrate ESG principles though, Jersey-based Auriel Capital has been doing so since 2009, and Lansdowne Partners have been running a version of its $10 billion Developed Markets fund using ethical guidelines for quite some time already.</p> <p>However, they’re quite miniscule compared to their unconstrained brethren. Lansdowne’s ESG fund runs a mere $212 million compared to its 11-figure big brother, while Auriel Capital’s ESG strategies seem to be a non-dominant slice of its total AUM.</p> <p>Still, Deutsche’s signing could mean a lot for the space in the longer term, and as their competitor Lyxor says, demand for such products have been growing at “a very fast pace” the past years. That, coupled with the industry’s current scramble to repackage itself, could mean that we might see friendlier, more socially and environmentally conscious hedge funds within the decade. Stay tuned.<br /> Photo: Julija Rauluševičiūtė</p>
Two behemoths clash for title of biggest bond ETF
Asset Management
<p>On a global basis last year, investors pumped a record $81.9 billion into fixed-income exchange-traded funds. Despite all the talk about the Federal Reserve possibility raising interest rates, investors' enthusiasm for bond ETFs has not waned in 2015, as such funds have attracted over $44 billion in new assets as of the end of July.</p> <p>Momentum for bond ETFs has also significantly increased during the current quarter. On a year-to-date basis, just one fixed income fund, the iShares Barclays 1-3 Year Treasry Bnd Fd (NYSE: SHY) is among the top 10 asset-gathering ETFs. However, in the third quarter, six of the top 10 asset-gathering ETFs, including SHY, are bond funds.<br /> Bond Funds<br /> Another member of that group of six is the ...</p> <p>Full story available on Benzinga.com<br /> Photo: Edward Dalmulder</p>
Robert Sechan, Steven Tananbaum and Anthony Scaramucci On 'Post-Economic Traumatic Stress' – or, the decline of Lehman
Asset Management
<p>&nbsp;</p> <p>&nbsp;</p> <p> Benzinga got a sneak peek of this Sunday’s Wall Street Week show.</p> <p> This week’s guests will be Mary Deatherage, managing director at Morgan Stanley Private Wealth Management; Robert Sechan, managing director at UBS; Steven Tananbaum, managing partner and CIO at GoldenTree Asset Management.<br /> Host Anthony Scaramucci believes “post-economic traumatic stress” is upon the investment world; SEchan and Tananbaum supplement the discussion with their lessons learned from Lehman.</p> <p>&nbsp;</p> <p>“Did Lehman’s bankruptcy throw us into oblivion?” Skybridge Capital’s Scaramucci asked.</p> <p>Sechan responded, “Well, I do not. I think what happened was...Bear Stearns happened. It created a general market assumption that every bank out there was too big to fail. And then, when Lehman was let under, all hell broke loose.”</p> <p>Tananbaum ...</p> <p>Full story available on Benzinga.com</p> <p>Photo: World Economic Forum</p>
Immigrants: Why Merkel opened up the flood gates
Asset Management
<p>The Fed Punts Again<br /> The Demographic Realities of the European Immigration Crisis<br /> A New East-West Rift<br /> Merkel Has a Plan<br /> Newfound Sympathy<br /> Detroit, Toronto, NYC?, and Coconut Grove<br /> “The European Project has very little economic and political capital left to defend it if anything goes wrong now. As Mr Juncker says, the bell tolls.”<br /> – Ambrose Evans-Pritchard<br /> Perhaps I should issue a storm warning for this letter. Maybe it’s because I had major gum surgery on my entire lower jaw this week and am in a bit of discomfort, but as I read the news coming through my inbox, it’s not helping my mood. This week’s letter will focus on the immigration crisis in Europe – after I muse on what I think is the very disturbing aftermath of this week’s Federal Reserve meeting.</p> <p>It wasn’t a shock that the Federal Reserve did not raise rates. Even the most inside of insiders said the odds were at most 50-50. Those Wall Street Journal reporters who have an “inside ear” at the Federal Reserve all indicated there would be no rate increase. The IMF and the World Bank were pounding the table, declaring that it was inappropriate to raise rates now, and although most FOMC members give lip service to the fact that Federal Reserve policy is to be based solely on domestic considerations, global concerns may well have played a role in their decision.</p> <p>What surprised me was the aggressively dovish stance taken by Yellen in her press conference and in the press release. It would have been one thing to come out and say, “We’re not going to raise rates at this meeting, but conditions are getting better, so get ready,” so that the market could have a little certainty. The statement we got instead, combined with early data from the quarter, is making me rethink my entire view on the timing of an interest rate increase.</p> <p>My immediate reaction upon reading the press release was almost perfectly echoed by my good friend Peter Boockvar of the Lindsey Group):<br /> The Fed punts AGAIN on a new set of excuses, and I'm sorry to many<br /> The Fed punted AGAIN and thus are inviting us to the daily obsession of when they eventually will hike for another 6 weeks. While the economic commentary on the US was not much different than the last statement, they added “recent global economic and financial developments may restrain economic activity somewhat and are likely to put further downward pressure on inflation in the near term.” They see the risks to the outlook for economic activity and the labor market as nearly balanced but [are] “monitoring developments abroad.” Jeff Lacker is the only one that stood out fr</p>