Investing and Global Finance News


Economic Impact of International Women’s Day

On March 8, women around the world called for more equality for women, with a particular emphasis on wages and rights.  Lima Charlie’s recent blog discussed the impact that this will have, with data from the Boston Consulting Group which found that:

“between 2010 and 2015, private wealth held by women rose from 34 trillion dollars to 51 trillion dollars. As a portion of all private wealth, women’s wealth also experienced an uptick from 28% to 30%. In just two years, women are projected to hold 72 trillion dollars, or a little under one-third of the total.”

What kind of consequence, Lima Charlie asks, does this have for “risk-assessment and asset management?”  Quite significant ones as has been recognized by the IZA Institute of Labor Economics considering the “stark differences in risk attitudes between the genders: while women are more likely to purchase and retain, men are usually more ready to buy rapidly. Investors view this as a tendency to consider risk more carefully among the former, than the latter.”

In another article in The Economist, this belief was supported with the conclusion that this will generate:

“big implications for asset managers. Take risk-profiling. Surveys show that men’s attitudes to risk are typically more gung-ho, whereas women are more likely to buy and hold, which leads advisers to conclude that men are less risk-averse. And men are more likely to say that they understand financial concepts, which might seem to suggest that they are more financially literate.”

Plus, Morgan Stanley found that while 67% of men were interested in sustainable investing (financial returns with social/environmental goals), that figure was 84% for women.



Great Early Hedge Fund Performance Reviews

There has been a definite wave of optimistic records for hedge funds.  In particular – according to a recent CNBC report – this has been the case for macro strategies.  In the first month of the year they pulled in $6.87 billion. Long/short equity funds have likewise had a good time with $4.16 billion being pulled in the same month.

Having said that, when we look at 2016 in comparison, the news might not be quite as celebratory.  The amount pulled then was a staggering $111.64 billion.  Nonetheless, as we are now finally witnessing an improvement in performance. As such investors are returning to hedge funds with $14 billion being pulled in January of this year which is half the amount for the entire 2017.  And that’s significant especially since such a substantial escalation has not happened since January of 2014!

So for those pleased with this news and looking to start a hedge fund investment career, what should they look out for?  According to a recent analysis by Tabby Kinder in Financial News London, we have learned that the “small, nimble funds” are the way to go as they can “deliver higher returns…because they are able to trade less liquid stocks than some of their more established peers.”  However, it is not as simple as that since small funds have a harder time “absorbing huge sums of capital [which] has kept them out of reach of many large institutional investors.”

Hopefully though – if the banking and investing experts are to be believed – this is changing, slowly.

New Asian Hedge Funds

While the beginning of 2017 did not look all that good for the emergence of new hedge funds in Asia, the tables seem to be substantially turning.  One of the ways in which they are doing this according to a recent Bloomberg article, is by “striking out on their own.” Examples of this action include: Moore Capital Management, Millennium Management and Soros Fund Management.

An individual who has made it in startups in China is also launching his own hedge fund.  Using $100 million of his own money, Qian Yongqiang who has been successful in tech start ups and Chinese education is now established QQQ Capital Fund.  Based in Singapore, the firm will begin trading in April as a long-short fund in education, technology and tourism.  The annul return being targeted is 15 percent.  at the age of 21, Qian was the co-founder of New Oriental Education & Technology Group Inc. which today has a market capitalization of $14.7 billion.

According to Global Co-Head of Prime Finance and EMEA Head of Equity Trading at Deutsche Bank, Ashley Wilson:

“Investors appear more optimistic in their outlook for Europe and Asia. Our [Deutsche Bank’s 16th annual Alternative Investment] Survey indicates that investor interest in European hedge funds has more than doubled year on year and that thirty per cent of respondents are planning to add exposure to Asia. These regions provide more alpha opportunities across multiple countries with diverse market structures.”

Top Performing Businesses

Three recent top performing businesses nationwide that will be reviewed in this article include: Newmont Mining Corporation, the Commercial Bank of California and Immunovaccine.

The Sustainability Yearbook 2018  (published by RobecoSAM) recently recognized the Newmont Mining Corporation for top level performance in the mining sector.  This is the fourth consecutive year the corporation has been ranked by RobecoSAM (which determines the Dow Jones Sustainability World Index’s composition) for such excellence.

The net income report for 2017 of the Commercial Bank of California showed a 44 percent increase from 2016.  The figure for this year – $4,329,000 was substantially higher than the $3,004,000 2016 figure.  Total net interest income also increased over the last year by 16 percent from $25.9 million to $30.0 million between 2016 and 2017.  According to President and CEO of Commercial Bank of California Ash Patel:

“2017 represented another year of achievement for Commercial Bank of California.  The strengthening of our performance continued in 2017, as we recorded a significant increase in profitability and solid growth in our balance sheet.”

Meanwhile Immunovaccine investors have also had cause for celebration. Apart from the firm being ranked among OTCQX Best Market’s top 10 best performing companies (no. 6) the return to investors the company achieved was 274%.  It also comes in the top place for biotechnology companies on that list.  Within its clinical program, R&D, finances and operations, it has made substantial progress in 2017.

Global Investments

There has been a steady increase in investments Singapore has made around the world over the last few years.  For example, while the figure in 2011 was $9 billion, by 2017 that had reached $19 billion.

America has not been the only region that has become attractive to Singapore although it is the area that is part of Singapore’s “global strategy.” In commercial property, Singapore put $1 billion into the US, which was even greater than the amount the Chinese invested.  According to a recent article by Forbes contributor Danielle Keeton-Olsen,  this is “a clear sign of the nation’s steady rise in global investments.”

For Singaporeans wishing to spread their wings in the legal field, the process is about to get a lot easier.  Thanks to a collaboration between the Law Society of Singapore, International Enterprise Singapore and the Ministry of Law, a program was just launched at the beginning of this month.  The Lawyers Go Global program is meant to give lawyers a boost in expanding their network outside of Singapore, providing trips, training and branding.

In addition, it is hoped that this will beef up Singapore’s status as a global legal hub. As Indranee Rajah, Senior Minister of State for Law and Finance noted, this is helping lawyers to expand the market and giving lawyers greater options of additional places to offer their services, again impacting the overall Singaporean global investment industry.

Pre-Seed Investing

Getting pre-seed investments has, over the years, been a real struggle for potential businesses.  But today, some investors are making a shift toward the notion that it is actually not only not a bad idea, but more beneficial than later-stage investing.

According to a recent article in Tech Crunch, one reason for this could be put down to the escalating chasm between “what founders are seeking at the seed stage and what the market is offering.”

Writing in SmallBiz Trends, Scott Shane gives readers his opinion on the “best way for angels interested in making pre-seed stage investments to put money into start-up companies.”  His research led him to the belief that “investing in accelerator funds is better than joining an angel group.” Nonetheless it should be noted that when in 2005, business accelerators (groups which offer capital and counsel to pre-seed stage companies) were established, this led to angels moving their money from angel groups to accelerator funds. There were, Shane believes, three main reasons for this:

  1. lower valuations (the price that angels pay for their investments is much lower),
  2. diversification (diversification for angels is increased with this investment) and
  3. time (angels need to spend way less time when making this investment).

So what happens to companies that need to secure funding at this stage but run into so many roadblocks?  According to Dima Kfouri, founder of the Outfitable, “It’s a bit of a catch-22 when early-stage start-ups need pre-seed investment to gain traction, but need to prove traction to gain pre-seed investment. It was a big challenge in the early days, which is why I’m thankful for NDRC’s Launchpad accelerator that gave us the needed support to get Outfitable up and running. The Irish start-up scene is small enough that you get to know it very well – all the players, all the support services, all the peers, etc. There are plenty of people to reach out to, and most are super accessible. In our line of work, it’s expected that you put in long hours and weekends. But our time is our most precious resource, and I feel it’s more important to be efficient, to work smarter rather than just harder. Learn and fail quickly, find efficiencies by measuring everything, find the low-hanging fruit and easy wins, and, most importantly, learn to prioritise. When a team is looking to you for leadership, that’s the most useful skill to have that allows you to delegate and manage everyone’s time wisely.”

Advice?  Keep networking and look for companies and high net-worth individuals more likely to invest at the pre-seed stage.

Valaida W. Randolph’s Education Management Corporation

In 1989, Valaida W. Randolph’s established the Education Management Corporation in order to:

“provide quality individuals to the workplace who are creative, responsible problem-solvers and have the skills and attitudes on which employers can build.”

As such, the organization hires “dedicated, committed, professional staff [to] serve as positive role models and empower each individual placed in [their] care to develop the competencies, skills, and personal traits needed for successful job performance.”

Since its establishment – with founder Valaida W. Randolph at the helm in the positions of president and primary principal – has successfully trained and educated “the disadvantaged youth” of America, providing services to the US Department of Labor as prime contractor and subcontractor for their Job Corps centers.

EMC has been trying to “be a quality service provider assisting our nation in improving the education and employability skills of ‘at-risk’ youth and adults, thereby enhancing the quality of our labor force to meet the challenges and needs of today’s and tomorrow’s workplace…today.” As such, with over three decades of experience working with agencies on federal, international, municipal and state levels, Valaida W. Randolph has to date, successfully managed to contribute to the creation and running of 19 Job Corps center. Other programs on which they have worked include: youth correctional facilities, provision of training services globally, US Army basic academic training, data collection and post-secondary academic institution related research services.

EMC is a “small, woman-owned disadvantaged business, certified as both an “8(a)” corporation by the U.S. Small Business Administration and a Minority Business Enterprise/Small Business Enterprise for the state of New Jersey and the city of Philadelphia.”


Andrew Winakor: Elderly Individuals and Medical Appointment Transportation

As Chief Executive Officer at National MedTrans Network, Inc., Andrew Winakor’s company has – over the last few years – been working on assisting people encountering logistical difficulties with getting to doctor’s appointments.  The issue is that often people who have medical appointments far from home, simply do not have the means to get there.  As Department of Transportation representative Therese McMillan explained that there are around 3.6 million Americans who end up missing their appointments (or getting there late) each year as they simply do not have a ride.  Often, as Andrew Winakor notes, these people are elderly or have a chronic condition and since the US population is aging, a transportation solution needs to be found.

Since hospital staff saw patients arriving in Uber and other ride-hailing services, an idea thus emerged – via National MedTrans Network Inc. – to use the ride-sharing companies to facilitate the trips.  The price of the trip is often covered by Medicaid and other medical insurance companies.

It was in February 2015 that the National MedTrans Network decided to establish a partnership with Lyft.  This was because as Andrew Winakor explained, the situation had become “dangerous.”  When one of their clients – an elderly woman – was left waiting for a ride to a New York hospital in 30 minutes and the driver was a no-show – the National MedTrans Network called one of these services.  Within six minutes the lady had her ride inspiring the partnership proposal to “respond immediately to canceled rides.”

The other advantage of this partnership is that since medical appointments can often run late, there is no need to book ahead.

Global Economy: Soundbites

According to recent notifications from the IMF, 3.9 percent of growth is anticipated for 2018 and further increase next year, putting the numbers at the “quickest expansion since 2011.”  At least half of this escalation is due to changes that were approved at the end of last year to America’s tax code.    This US economy growth will positively impact Canada and Mexico.

The IMF expects the U.S. economy to grow by 2.7% in 2018, significantly faster than its earlier prediction of 2.3%. Growth will slow to 2.5% in 2019, but that’s still much faster than the IMF’s previous forecast of 1.9%.  America’s top trading partners will also see benefits, especially Canada and Mexico. The optimism is reflected in stock markets which are showing incredible resilience too.

Still, while there is substantial reason to be confident about the global economy, there is still much to be concerned about. One example of this is Brexit, which over the next year will impact the global economy.  Nobel Prize recipient and economist Joseph Stiglitz commented on Brexit in this regard:

“[t]he UK’s decision to leave the European Union didn’t have the jolting economic effect that those who opposed it anticipated, largely because of the pound’s depreciation. But it has become increasingly clear that Prime Minister Theresa May’s government has no clear view about how to manage the UK’s withdrawal, or about the country’s post-Brexit relationship with the EU.”

Theresa May will thus still be on trial for the impact on the global economy.