NEWSLETTER of July 26, 2024

The following content has been added at finexpert:

We updated the capital market data
(Multiples, Betas and Returns) as to July 15, 2024 >more

Invesco
GLOBAL SOVEREIGN ASSET MANAGEMENT STUDY 2024
In 2024, sovereign investors are navigating changing macro environments, uncertainty surrounding global elections, while more and more are embracing AI, adopting ESG practices and increasing private credit allocations. The study revealed concerns about rising US debt levels. We also examined the growing interest in emerging markets and gold. >more

J.P. Morgan
FRESH MOMENTUM FOR THE REFORMED EUROPEAN LONG-TERM INVESTMENT FUND (ELTIF)
The reformed regulatory framework has brought a renewed sense of optimism to the market and there is a growing expectation that the ELTIF regime may now be able to achieve its full potential by truly opening up retail access to private markets for European savers. ELTIF 2.0 also expands the asset range for ELTIF investment portfolios giving retail investors access to previously unavailable investments including green bonds, minority co-investments, certain types of securitised assets such as mortgage securities, and both corporate and commercial loans. >more

Aurum
HEDGE FUND INDUSTRY PERFORMANCE DEEP DIVE – H1 2024
Hedge funds ended H1 2024 up 6.1%, outperforming bonds, -3.2%, but behind equities, +9.2%. Quant was the strongest performing master strategy in H1, +8.7%, after being the weakest master strategy in 2023. Arbitrage is the worst performing strategy, delivering +2.1% in H1, after being the second-worst strategy in 2023. Industry AUM grew, albeit marginally, in the first half. This growth was largely driven by P&L; all strategies had negative net flows except multi-strategy and quant. Alt UCITS underperformed hedge funds in all strategies, with the exception of long biased alt UCITS which delivered 6.2% v 5.5% for long biased hedge funds. >more

KPMG
Q2'24 VENTURE PULSE REPORT – EUROPE
VC investment in Europe rose quarter-over-quarter — from $13.9 billion in Q1’24 to $17.8 billion in Q2’24, driven by a solid uptick in mega-deals, including a $1 billion funding round by AI autonomous driving technology company Wayve, a $999.6 million raise by consumer lending platform Abound, a $650.6 million raise by LLM-focused Mistral AI, and a $621 million raise by neobank Monzo. >more

FROM MAN VS. MACHINE TO MAN + MACHINE: THE ART AND AI OF STOCK ANALYSES
Sean Cao, Wei Jiang, Junbo L. Wang, and Baozhong Yang
2024
An AI analyst trained to digest corporate disclosures, industry trends, and macroeconomic indicators surpasses most analysts in stock return predictions. Nevertheless, humans win “Man vs. Machine” when institutional knowledge is crucial, e.g., involving intangible assets and financial distress. AI wins when information is transparent but voluminous. Humans provide significant incremental value in “Man + Machine,” which also substantially reduces extreme errors. Analysts catch up with machines after “alternative data” become available if their employers build AI capabilities. Documented synergies between humans and machines inform how humans can leverage their advantage for better adaptation to the growing AI prowess. >more

THE SAVINGS OF CORPORATE GIANTS
Olivier Darmouni, and Lira Mota
2024
We construct a novel panel dataset to provide new evidence on how the largest nonfinancial firms manage their financial assets. Our granular data show that, over the past decade, bond portfolios have grown to be at least as large as cash-like instruments, driven by the meteoric rise of corporate bond holdings. To shed light on the drivers of this growth, we conduct a pair of event studies around the 2017 tax reform and the 2020 liquidity crisis. We find that large holdings of marketable securities are primarily driven by cross-border tax incentives, while cash-like instruments are driven by liquidity motives. >more