Meme - Time to think creatively…could be a long day

True collective

News, WEEKLY SPIN

The HBO show True Detective won critical acclaim when it first appeared on screen. Asia’s wealthy pursuing philanthropic initiatives might want to apply the same focus to uncover the mystery of how to combat climate change. The region is one of the most climate-vulnerable regions with Swiss Re Institute forecasting that its aggregate GDP could fall by more than 25% in the next 25 years if collective action isn’t taken. Philanthropy is well placed to act as a catalytic (climate) converter and push the innovation envelope to uncover new solutions and tools to combat climate risk. Doing so could attract greater public and private investment to protect the region’s economic prospects. As Vanilla Ice famously said: “Stop. Collaborate and listen.” This is the philanthropy sector’s call to climate action.

Inspired by The World Economic Forum

https://www.japantimes.co.jp/business/2024/07/23/markets/blackstone-japan-funds-up/

Sayonara Savings, Hello Investments

News, WEEKLY SPIN

Just as wasabi gives a hot kick to any sushi roll, Japan’s retail investors are warming up to the value proposition of private equity. Like a cat drawn to a sunny windowsill, individual investors, are becoming increasingly interested in alternative assets. Blackstone’s inaugural private equity fund for individual investors has already raised $1.2 billion in just four months, according to the Japan Securities Dealers Association. Urged to invest their cash by Japan’s government, the growth opportunities for PE firms targeting Japanese investors could be significant in the next few years. Indeed, Blackstone also has a $252 million fund targeting unlisted U.S. REITs and a $580 million private credit fund. Democratizing private markets for private investors looks like it could bloom in Japan, like cherry blossoms in March. And have both PE firms and investors purring in satisfaction.

Inspired by The Japan Times

Suspicious minds

News, WEEKLY SPIN

Heightened criticism around Net Asset Value loans, what will suspicions mean in 2024? NAV loans have been under the spotlight of late. But Oaktree majority owned 17Capital – a NAV loan specialist – says the use of these loans by GPs to make distributions to LPs fell a whopping 90% during the last six months of 2023. So we wonder what that says about leverage and deal activity in the market today? The dividend dilemma had previously led PE firms to use NAV loan financing to compensate investors for a slower exit environment. In such an arrangement, the financing is secured against the underlying assets across a fund portfolio. The Fund Finance Association expects the market to grow from $100 billion to $600 billion by 2030. Still, if LPs increasingly harbor suspicious minds over NAV loan use for dividends, then the reported drop last year might be seen again.

Inspired by Financial Times

Distress signal

News, WEEKLY SPIN

Pain ahead for private equity and real estate, time to move into a higher gear? Oaktree Capital’s Howard Marks sees pain coming for the real estate and private equity space as firms struggle to refinance their debt. The same leverage that allowed these two asset classes to juice returns will generate disruption, impact returns, and offer up distressed investment opportunities. Speaking to Bloomberg, Marks thinks this will generate some of the best opportunities in more than a decade. Retail and office real estate owners who relied upon leverage to finance deals could hardly have expected the US Federal Reserve to hike interest rates by some 500 basis points. Now, as the time comes to renew those debt arrangements, distressed investors will hope to move into a higher gear themselves. Watch out for those distress signals over the coming years!

Inspired by Bloomberg