Henri de Combles de Nayves

Goldman Sachs Signals End of an Era in Private Equity With a Big Hire : it’s game over for the kind of operators who raised money and then sat back and watched gains roll in : long era of easy profits in private equity is gone : digging in deeper for the harder work ahead : profits driven by financial engineering and “multiples expansion” is over “Where your returns come from will be much more focused on creating better earnings growth” No longer can you “be the highest bidder, buy the company, sit there, wait for multiple expansion and sell again” The key for higher returns in the future will be to source good deals and focus on operational improvements : Buyout veterans warn that era of easy money is behind them : Ex-Honeywell CEO named chairman of private asset investments Wall Street firm’s asset-management business oversees some $140 billion in private equity assets and counts more than 300 portfolio companies under its charge : new normal of higher rates has boosted acquisition costs, crimped valuations and made it harder to unload portfolio companies with attractive returns — at least without fundamentally improving their operations. A half-century ago, that was in fact the stated mission of private equity pioneers : Apollo Global Management’s most senior executives, Scott Kleinman, hit similar notes at a gathering this month, warning “everything is not going to be OK”

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Jeffrey Kleintop's article illustrates how the sector composition of a nation's stock market can profoundly shape its performance. His analysis demonstrates how the U.S.'s heavy tech exposure contrasts sharply with France's industrial focus, driving their divergent market outcomes. This piece is a compelling reminder for investors to consider the sectoral underpinnings of their portfolios, especially in an era where technology can significantly sway market trajectories. Are we too concentrated in tech? Diversifying might be the strategic pivot we need to navigate future market landscapes effectively. #InvestmentStrategy #TechStocks #SectorAnalysis #MarketPerformance #PortfolioDiversification #CharlesSchwab #GlobalMarkets #InvestingInsights #FinancialAnalysis #StockMarket https://lnkd.in/g6VDZAsR

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UBS Revamps How It Sells Private Asset Funds as Demand Booms : Unified Global Alternatives pooling all of the bank’s private-markets offerings into one unit to provide a wider offering of alternative funds — everything from buyout shops to hedge funds to real estate — to all of its clients : Private Markets have been booming over the past decade thanks to low interest rates and rising valuations, helping pension funds and institutional investors to boost returns they wouldn’t find in public markets : UBS’s asset management and wealth business together manage $250 billion of invested assets in alternative markets

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No default is needed to make bonds less attractive from a multi-asset perspective. #France has a government #debt-to-GDP ratio of 110%. Its budget #deficit has averaged 5% since the Great Financial Crisis, 67% higher than the 3% norm, which, for a long time, was believed to help achieve a sustainable debt ratio. While this increases the odds of a French #default (despite the #ECB being the debt buyer of the last resort), massive changes will impact the traditional investor portfolio even without such a default. The simple fact that worries about France's debt sustainability broaden pushes the #volatility of debt/bonds higher relative to other asset classes. Take the chart below; it shows the ratio of the 3-year realized annualized volatility of #equities and #bonds. As the volatility of bonds spikes relative to that of equities, the realized volatility of French government bonds is 60% higher than the average of the last 20 years, the asset class becomes less attractive. Add the increasing likelihood that #yields must remain low to prevent debt from causing severe damage, and it's not difficult to see that the risk-return characteristics of bonds are nowhere near as attractive as they have been. Every investor taking this data into account, will allocate less to bonds. This does not require a French default or an implosion of the financial system.

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THE SUMMER SOLSTICE HAS ARRIVED HOWEVER THE BIG NEWS OF INTEREST RATE CUTS AND INFLATION HAS BEEN OVERSHADOWED BY THE EUROPEAN ELECTIONS WHICH HAS WOBBLED THE E.U ESPECIALLY WITH FRANCE'S SNAP ELECTION ! THIS NEW WAVE OF VOLATILITY GRIPPED MARKETS LAST WEEK AS THE POLITICAL CRISIS DEEPENED IN FRANCE . EQUITIES WERE PUNISHED AND FOLKS SAW A DASH INTO SAFE HAVENS FROM BONDS TO GOLD AND EVEN THE OLD FAITHFUL GREENBACK . WE BEEN MENTIONING ALL YEAR HOW INFLUENTIAL THE TREASURY MARKETS ARE ESPECIALLY WITH GOVERNMENT AUCTIONS EVERY WEEK AND A GROWING DEBT . THE DANGERS ARE BEGINNING TO BE NOTICED . GERMAN BUNDS LAST WEEK PROVIDED UNDERLYING SUPPORT, BUND YIELDS DROPPED BY MORE THAN 10BPS IN ONE DAY BUT ALSO SAW THE FRENCH /GERMAN 10 YEAR SPREAD WIDEN TO A NEW RECORD OF 30BPS ON THE WEEK . THESE MOVES IN THE BOND MARKETS CAUSED CONTAGION IN MOST OTHER CONTRACTS . ( the bonds sneeze and we all catch a cold !) ECB OFFICIALS SAW NO CAUSE FOR ALARM ON THE FRENCH TURBULENCE DESPITE THE OAT / BUND SPREAD WIPING OVER $210 BILLION OFF THE STOCK MARKETS . RETAIL TRADERS WERE LIKE RABBITS IN HEADLIGHTS TO WHAT WAS HAPPENING ! WE HAVE MENTIONED THAT SUMMER IS ON OUR DOORSTEPS AND "SELL IN MAY AND GO AWAY " IS ON THE CARDS AND THIS WEEK WE ARE ENTERING THE JUNE 2024 EXPIRY IN INDICES AND THE BIGGEST OPTION EXPIRY ON FRIDAY . ROLLOVERS AND EXPIRY ARE DIFFICULT TIMES TO TRADE ESPECIALLY WHEN THE SEPTEMBER CONTRACT IS OUT OF LINE WITH JUNE . BOTH NASDAQ AND S&P ARE NEAR ALL TIME HIGHS AND THEREFORE EXPECT SELLERS IN THE SPREAD BUT WALL STREET ,FTSE ,DAX AND STOXS ARE IN LIMBO DUE TO ELECTIONS AND DEBT . THE DISCONNECT BETWEEN WALL STREET AND NASDAQ HAS BEEN VERY CLEAR FOR A FEW WEEKS . NEXT WEEK IS BUSY AND WE EVEN HAVE TO CATER FOR A BIDEN "JUNETEENTH" HOLIDAY , SO EXPECT LESS LIQUIDITY AND VOLUME BUT HIGHTENED VOLATILITY . CENTRAL BANKS FROM AUSTRALIA, SWITZERLAND, NORWAY AND UK ARE ALL ON INTEREST RATE DUTY AND WE OBVIOUSLY HAVE A MULTITUDE OF BOTH ECB AND FED SPEAKERS ON THE WIRES TO ADDRESS A FAIRLY NERVOUS MARKET . SUMMER MARKETS BRING DIFFERENT TRADING PLANS AND WE HAVE TO ADAPT TO ALTERNATIVE TRADING PATTERNS AND NEWS IS VERY MUCH THE HEADLINE WHICH A FEW TECHNICAL TRADERS ARE BEGINNING TO ACCEPT. THE OPENINGS AND CLOSES ARE PROVIDING GREAT VOLATILITY AS COMPANIES USING THEIR MARKET ORDERS TO ENTER AND CLOSE ON YHE DAY .(very clear folks are not taking trades home overnight) . WE ARE SOMETIMES SEEING THE RANGE FOR THE DAY IN THE 8.00AM - 9AM TIME FRAME . FINALLY IF FOLKS BEGIN TO WORRY ABOUT A E.U WOBBLE WE DO EXPECT FUNDS TO WIND DOWN POSITION SIZES AND PERHAPS WATCH THE EURO FOOTBALL OR LIE ON A BEACH . THE FLIGHT INTO GOVERNMENT BONDS LAST WEEK TELLS ME ITS ALREADY STARTED ! PERHAPS TIME FOR TECHNICAL TRADERS TO STUDY FUNDAMENTALS AND THEIR ACTIONS AND UNDERSTAND WHY MARKETS HAVE MOVED . NEIL CRAMMOND

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Though the far right didn’t get a relative majority in the French legislative elections that most observers expected, the most likely scenario remains a paralysed French government. A budget is due in September which will give us an idea of the new government’s true colours, but we do not expect any progress on reining in the fiscal deficit. Therefore, the risk premium on French assets is likely to remain more elevated than before the elections. For now, we maintain our Market Weight in Europe and continue to prefer high quality stocks with a global revenue base in the Technology, Health Care and Industrial sectors as they should be largely shielded from domestic developments.

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FIXED INCOME FOCUS - JULY 2024❗️ By Edouard Desbonnets, Senior Investment Strategist - BNP Paribas Wealth Management 📖🖊️ Summary: 1️⃣ Monetary policy: decoupling and prudence. The ECB struck a hawkish tone at its annual forum, while the Fed sounded dovish. Both central banks will base their upcoming monetary policy decisions on incoming data. We expect two more rate cuts from the ECB (in September and December) and only one from the Fed (in September). In 2025, we expect three rate cuts in the eurozone and four in the US. 2️⃣ Politics have been driving rate markets, but at some point, monetary policy will take over. We expect the US 10-year yield to fall to 4.25% over the next 12 months, while the German equivalent should reach 2.25%. We are Positive on US government bonds and Neutral on German government bonds. We favour intermediate maturities (up to 10 years) in Germany, and we prefer to wait before adding duration in the US (3-5 years for now). 3️⃣ French political risk has receded. We stay Neutral on French government bonds. The 10-year OAT-bund spread is unlikely to return to the pre-election range of 45–55bp. We expect it to trade in a range of 55–70bp in the medium term. 4️⃣ Theme in focus: EM hard currency bonds. Fundamentals are improving. Yields are elevated. Supply is likely to fall in 2H24. Financing needs look manageable, and EM sovereigns are finding new financing channels. In addition, falling interest rate volatility and an expected lower dollar should support EM bonds. We are Positive on EM hard currency bonds. 5️⃣ Opportunities in Fixed Income: we are Positive on US Treasuries, US inflation-linked bonds, US Agency Mortgage-Backed Securities, UK gilts, as well as European and US investment grade corporate bonds. We are also Positive on Emerging Market bonds in hard and local currency. Enjoy this exciting read📖❗️ #bnpparibas #wealthmanagement #privatebanking #markets #economy #strategy #articles BNP Paribas Wealth Management - Private Banking

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#France's headline #inflation for September was revised down to 1.1%. This is way below the #ECB target. To be clear, the ECB only cares about price changes and not price levels. If that sounds like the ECB is detached from reality, it is because it is. The lowflation around the Eurozone will be cheered by the ECB as it will allow it to speed up interest rate cuts. Below-target inflation and faltering GDP growth help the ECB quickly forget about the massive inflation spike we suffered in 2022/2023. It also helps the ECB by not having to answer difficult questions about its implicit (or should I say ever more explicit) target of #debt sustainability. Since France is making headlines about its lack of fiscal prudence, rising debt levels, and spiking bond spreads, this inflation number is Lagarde's blessing in the sky. All while you keep paying exceptionally high prices for groceries and the like.

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BREAKING: The largest European-headquartered investment firm, Amundi, just released it's 2025 Investment Outlook, including some bold calls. 📊 📢 In my view, it's one of the best Outlook papers on the street, helping CIOs and portfolio managers think about asset allocation for the year ahead. It also includes a review of the firm's 2024 predictions - what they got right and where they were surprised - plus asset allocation views on major asset classes (see table). Some key takeaways: 🎯 Soft Landing: Amundi's central scenario is a "soft landing" globally, with slowing growth but no recession. Inflation is expected to ease, leading to rate cuts by central banks. 🌎 Geopolitical and Policy Impacts: Persistent geopolitical tensions and policy shifts expected with the U.S. and Europe focusing on strategic autonomy, while Emerging Asia strengthens regional ties. 📈 Equities - Broadening Out: Amundi suggests looking beyond U.S. mega-caps, favouring sectors like financials, communication services, and consumer discretionary. Japan and Emerging Markets, especially India, are expected to outperform. 🏦 Bonds - Income Opportunities: Bonds, particularly investment grade and high-yield, present attractive yields, given stable macro conditions and easing inflation. 🌉 Private Markets: Infrastructure, private debt, and other alternative investments could offer stable returns amid economic shifts. 🎨 Diversification in a Riskier World: The Outlook suggests a pro-risk stance but balanced with inflation-hedging assets like gold and inflation-linked bonds. 🔗 Full paper sourced via Markets Recon yesterday and linked here: https://lnkd.in/eRZdUtv2 Do you agree with their calls? Let me know in the comments! ** Not investment advice | Capital at risk | Do your own research ** #Amundi #2025InvestmentOutlook #InvestmentManagement #AssetAllocation #Equities #Bonds #FixedIncome #Gold #China #Europe #MarketsRecon #InvestmentInsights

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We forecast global #private capital to reach $20 trillion by 2028. PitchBook on how #privatemarkets will look in five years? Private’s Path to 20 Trillion 👉 https://lnkd.in/erNnNQKn ▪️ #Privatemarkets now control $14.7 trillion in AUM after growing at an annualized rate of 12.8% from 2012 to 2022, vastly outpacing the growth of #stocks, and #fixedincome assets by 2.5 times ▪️Not all strategies will benefit equally: #PE, #privatedebt, and #realassets have a steeper forecasted growth trajectory than #VC and #realestate. ▪️ #Secondaries are expected to contribute to the boom, growing from $462 to over $700 billion in our base-case scenario. ▪️Commitments to #FoF have declined and we are forecasting AUM to stagnate (no growth) at $1 tn. Due to the proliferation of #evergreen vehicles allowing investors to easily access #privatemarkets #Markets #investing #PrivateMarkets #growth #PE #VC #realestate #realassets #privatedebt #secondaries #FoF #US #trends

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🇫🇷 €𝟭𝟬𝟬𝗠 𝗱𝗶𝗴𝗶𝘁𝗮𝗹 𝗯𝗼𝗻𝗱 𝗜𝘀𝘀𝘂𝗲𝗱 𝘄𝗶𝘁𝗵 𝗕𝗮𝗻𝗾𝘂𝗲 𝗱𝗲 𝗙𝗿𝗮𝗻𝗰𝗲’𝘀 𝗽𝗶𝗹𝗼𝘁 𝘄𝗖𝗕𝗗𝗖 Groupe Caisse des Dépôts has issued a €100 million Digitally Native Note (#DNN) as part of the European Central Bank’s DLT trials. The bond was rated AA- by S&P, and was listed on Euronext Paris 📈 𝙆𝙚𝙮 𝙥𝙡𝙖𝙮𝙚𝙧𝙨 𝙞𝙣𝙫𝙤𝙡𝙫𝙚𝙙: • 𝘐𝘴𝘴𝘶𝘪𝘯𝘨 𝘢𝘨𝘦𝘯𝘵: BNP Paribas Securities Services • 𝘋𝘦𝘢𝘭𝘦𝘳𝘴: Crédit Agricole CIB and Natixis CIB • 𝘐𝘯𝘷𝘦𝘴𝘵𝘰𝘳: ICBC Luxembourg Branch • 𝘈𝘥𝘷𝘪𝘴𝘰𝘳: Clifford Chance 💡 This marks the first time two digital platforms have achieved interoperability: Euroclear’s D-FMI issued the digital bond, while Banque de France’s DL3S managed its settlement. #CaisseDesDépôts #DigitalBond #wCBDC #BanqueDeFrance #EuronextParis #CliffordChance #BNPParibas #ECB #Blockchain #DigitalFinance #Tokenization #FinancialInnovation

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A nice research piece by Gavekal on who’s got #French #debt? 1/ Non-resident investors hold over half of the €2.5trn pool of French outstanding tradable government securities, the biggest in the eurozone. The Bank of France holds about a quarter of the debt and French financial institutions such as banks and insurers hold about 20%. 2/ Foreign accounts tend to be more mobile than resident ones. This debt structure thus leaves the French bond market, and ultimately the #euro, vulnerable if further political upheaval leads foreign investors to lose confidence in the French signature. But there is a silver line -> The high foreign ownership in the French bond market does not only reflect non-bank mobile accounts. The scarcity of German debt securities leaves French debt as the second largest and best rated pool of euro securities. Foreign holdings also reflect high demand from global #centralbanks as it comprises part of their foreign currency reserves, and from #eurozone financial institutions for use as #collateral. Source: Gavekal Research

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China's Stimulus: What Asset Managers Are Saying About Valuations and Risks. China’s latest stimulus program aims to boost its economy, but how do asset managers see its impact on valuations, risks, and opportunities across equities and bonds? 🤔 Read the quick insights below and swipe to see charts. 👨‍💻 👉 Edmond de Rothschild Asset Management highlighted the mixed outlook on Chinese equities, noting that while the stimulus supports growth, the underlying structural challenges such as high debt levels remain. Investors should be cautious, as the effects may take time to materialise, particularly in consumer sectors. 🔗 https://lnkd.in/ef2A_aWN Federated Hermes Limited is cautiously optimistic, suggesting that while consumption and infrastructure sectors will see a short-term boost, investor focus should be on longer-term reform. They believe valuations in real estate and consumer sectors could become more attractive as liquidity improves, but this doesn’t signal an immediate bullish shift. 🔗 https://lnkd.in/edbRAH84 State Street Global Advisors warned that while asset prices have risen, corporate earnings remain sluggish. They suggest caution for investors in equities, as the stimulus seems to lift prices rather than fundamentals. The bond market may offer more stability as yields adjust to looser financial conditions. 🔗 https://lnkd.in/e6PPRkcT M&G Investments sees opportunities for a short-term lift in growth but emphasizes the ongoing risks. Investors should remain cautious in sectors like property, which continue to face headwinds. The stimulus could support fixed-income markets, where select high-yield bonds may become attractive due to lower rates. 🔗 https://lnkd.in/e8PH9_Ha Lombard Odier Investment Managers remains sceptical about the long-term impact. They argue that while the stimulus may provide short-term liquidity boosts, it won’t address deeper economic vulnerabilities. The firm remains cautious on both Chinese equities and bonds, advising investors to be selective and focus on structural trends over cyclical stimuli. 🔗 https://lnkd.in/evcyrgvy For more, visit Markets Recon. 💥 📈 #China #Investing #InvestmentManagement #FundManagement #MarketsRecon #CriticalIntelligence

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“Equitification” of credit ??? The author seems to confuse improved liquidity of corporate bonds in this brave new world of ETF’s (and “block” trading of corporate bonds) with improved transparency (or overall investability) of credit markets. I would love for bid ask spreads in corporates to be lower and these innovations do help. BUT…there is a reason why that market is less liquid than equities. Every bond is a separate “contract” with its own unique term to maturity, covenants, seniority ranking etc. Maybe the quality of covenants seems to be laughable for some today but eventually they do matter and make a difference between 20% or 80% recovery in bankruptcy. Maybe the author was planting a subliminal thought of “equitization” of credit rather than “equitification”.

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