As 2019 draws to a close ActiveAllocator concludes its research agenda for the year by providing you a compendium of our recent reports. These are loosely structured around the active asset allocation and management theme with a focus on hedge funds and private equity transactions. We also have a section on the role of investments in climate change – a topic we foresee garner increased attention in 2020. This compendium is attached here in PDF. See you next year!
ActiveAllocator is pleased to share with you our research piece on “Management Compensation, Retention, Severance in Private Equity Leveraged BuyOut “. Gleaned from our own experience across over $40 billion in M&A, poring over scores of SEC filings, and our private investment diligence credentials we bring visibility to a topic long shrouded in secrecy. Our deck sheds light on why the average CEO pay is 271 times the nearly annual average pay of the typical American worker, why select normal senior executives become extra ordinarily wealthy during certain corporate events, and other subjects of conversation. We describe the main components of compensation, the general features of equity retention and severance arrangements and employment contracts, and conclude with a few case studies to illustrate calculations.
Emmanuel Macron of France clearly upstaged all other EU leaders and certainly President Trump at the NATO summit this week. Here is my analysis on his vision for Europe and his increasing assertiveness.
Institutional investors running deep pools of capital moving to in-house management, now increasingly do club and direct deals outside allocating to traditional private equity fund sponsors. They compete and win and also outperform co-investments. The ones who do, usually have excellent in house talent, access to deals etc. But what exactly is a deal? How do you buy a company? The actual process has long been shrouded in secrecy and practitioner jargon. Having done +$40 billion in M&A, seen and evaluated hundreds of buy offers, having sold portfolios of assets and companies, we bring sunlight to the ‘investment banking’ buy space.
We build on our M&A series by drawing attention to changes in US regulatory environment for foreign deals in the Trump presidency. The national security landscape has shifted in recent years, and so has the nature of the investments that pose the greatest potential risk to national security. Recent amendments to the Committee on Foreign Investment in the United States (CFIUS) process now brings significant hurdles to foreign investment in ‘sensitive’ sectors. The Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA) was signed into law after receiving broad bipartisan support in Congress and new regulations are expected. We provide historical context, highlight recent evolution and provide color on consummating such transactions.
Download deck here: Rise of Protection in M&A Deals in USA
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ActiveAllocator, is pleased to share with you our latest research piece ” M&A and Activist Hedge Funds”. Given our unique vantage point we see trades, that such firms do. These secretive funds have long been subject of folklore . Preserving confidentiality , we introduce here the ‘anatomy’ of how such deals get played out. In future we also hope to show you 30-40 case studies
PDF here: Activist Hedge Funds
ActiveAllocator is pleased to share with you our latest research piece ” Event Driven Hedge Funds – Share Buyback”. Event Driven hedge funds exploit pricing inefficiency before, during or after corporate events. Episodes of shares buyback or around dividends announcement are a potential source of alpha. We explain the capital redistribution framework and illustrate the mechanism of a tender offer to provide color.
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ActiveAllocator is pleased to share with you our latest research piece ” Intra hedge fund asset allocation framework”. We explain how one may intelligently choose from +20 hedge fund sub-strategies, sift jargon, and combine in the right amounts to meet specific asset allocation objectives, through correct portfolio construction
Video preview of deck here
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ActiveAllocator allocates to major hedge fund strategies and their sub-types including Merger Arbitrage. Given the wide dispersion in returns in M&A funds we believe that hedging the time period deal risk is integral to both profitable trade as well as helpful for diligence. We present the anatomy of the M&A trade by drawing attention to the ‘Collar’ and reconstructing it from first principles.
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See video summary of the deck here:
ActiveAllocator is pleased to share with you our latest research piece – Climate Change. In this comprehensive deck we explain our take on: Climate Change and Government, Global Financial Markets Response, Impact of Climate Change on Developing World, Deforestation, Role of Investment and Finance.
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ActiveAllocator summarizes the imminent Aramco IPO- soon to become the world’s most valuable company. We touch upon the offering, the firm’s vision, status, synergies between its upstream-downstream business, competitive strengths, risks to investing and general prospects.
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Disclosure: Inputs sourced from internet searches, offering docs, conversations. Shares are not offered in the USA and some other countries. This is not an offer to sell or a solicitation of any offer to sell any securities.
ActiveAllocator research presents its views on tactical opportunities within Alternative Investments during economic downturns
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ActiveAllocator is a MIT-Harvard-Technion-Yale -UCDavis alum founded WealthTech startup. We analyze and integrate traditional, illiquid and alternative investments to improve complex portfolios: This actual live screen capture here aggregates customers accounts across +15,000 banks, sources capital market inputs from +10 Wall Street firms, simultaneously analyzes +10 million asset allocations deployed across +4 million securities, within +50 granular asset sub-classes, personalizing target portfolio to +100,000 preferences, whilst executing seamlessly across +20 broker dealer systems. All done in under 2 minutes.
#Germany: Lead, follow, or get out of EU’s way! My political view from beautiful #FreiburgCathedral, Germany ..built around 700 years ago. What does Germany want to be when it grows up?
ActiveAllocator argues that investing passively now in traditional fixed income exposes investors to low expected returns, little scope for capital appreciation, significant interest rate risk, forsakes illiquidity premium, and excludes niches in credit investing. It presents a new lens and framework to re-imagine fixed income investing.
We suggest that market signals – the inverted yield curve, recent stock markets decline, global GDP slowdown etc, in itself is not a predictor of an inevitable US recession.
ActiveAllocator revises macro eco outlook for Switzerland. Forecast diverges from OECD and Wall Street consensus…
Excerpts from an interview to #InvestmentNews where I discuss illiquid real estate for retail investors
Shareholders before Stakeholders. Business ought not accede to the tyranny of the crowd. To do so is the path to poverty for any capitalist society.
Doping in sports is a strict no no – ethically and otherwise. Is usage of cognitive enhancers and stimulants to boost academic performance ok?
Rudyard Kipling’s book “The Man Who Would Be King” made into a flick with Sean Connery has some huge lessons on the difference between ‘Authority and Leadership’. I heartily reco this movie. My own takeaways
Notre Dame and other religious structures are oft referred to as ‘House of God’. Do we need God? I discuss attitudes to religion and God in this century