Matthew O'Keeffe

Join our webcast with chief strategist Luca Paolini on Tuesday 3rd December for our return forecasts for the next 12 months across asset classes as well as the implications of Trumponomics for markets. We'll also cover: -Why the UK could be the growth wildcard and outperform its European counterparts -Why we expect a modest recovery in the Euro-area economy next year -How conditions are becoming supportive for risk assets globally Register here: https://lnkd.in/dujXsWY9

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A pleasure to appear on Sky News Business Live yesterday afternoon to dissect market reaction to rising tensions between Russia and Ukraine, as well as the news that president-elect Donald Trump has named Howard W. Lutnick to serve as US Secretary of Commerce.   Fascinating to discuss how markets’ attitude to geopolitical tensions has changed in recent years with Darren McCaffrey – the team at Mergermarket will continue to monitor reaction in the coming months as we begin to understand more about upcoming geopolitical and trade developments, and how they will impact markets in Europe.   #markets #privateequity #tariffs #IPO #equities  

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Excellent analysis that speaks to the need for regulators to shift their focus away from price and number of networks and instead look towards the value delivered to customers and economies from having robust and well invested networks capable of carrying and nurturing new services and products.

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Prominent investment adviser Gary Black has raised serious concerns about the valuation of MicroStrategy Incorporated (MSTR), arguing that the stock of the company may in fact be significantly overpriced. In a recent post on X, Black, managing partner at The Future Fund LLC, expressed confusion after pointing out that the Bitcoin (BTC) holdings of MicroStrategy were valued at $31.2 billion at the time, with a net debt of $4.2 billion, resulting in an equity value of around $27 billion. Yet, its market cap stood at an eye-popping $106 billion. Read the full story on the CryptoWeekly website using our link below. #cryptocurrency #crypto #microstrategy #investment #stock

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This should be required reading for investors. Kudos to Caroline Escott and Chris Hodge. Audit underpins market integrity, yet there is strong evidence that it is failing. The US regulator’s latest inspections bring this to life (https://lnkd.in/eVxwrhkZ): 34% of reviewed audits by six global firms lacked evidence to support their opinions. High rates of audit deficiencies are repeated globally (International Forum of Independent Audit Regulators (IFIAR). Two points I’d highlight on the back of this report: 1. Investors should use their votes Of the steps that Railpen points to, one that investors can immediately action is their vote. Despite audit failings, investors keep reappointing auditors and audit committees. Auditors in the UK received an average 99% support in 2023. In the US, the figure was 98%. Investor indifference permits poor audit quality. Please see my article on the need for robust voting: https://lnkd.in/epsep6WK 2. Poor audit quality is a risk to capital protection One insidious consequence of audit weakness is not getting the attention it should. Auditors appear to be failing to check company compliance with capital maintenance rules, opening the door to over-distribution, weaker capital buffers and heightened risk of failure. Auditors generally have a role in policing capital maintenance rules (not the same as accounting standards – https://lnkd.in/eWzBy3_7). Critically, companies generally mustn’t distribute (i.e. pay dividends / share buybacks) out of unrealised (e.g. mark-to-market) gains. It is not clear, however, that this is being enforced. This was a key conclusion of the UK’s BEIS Select Committee 2019 inquiry into audit (https://lnkd.in/e8vqGGBd), chaired by Rt Hon Rachel Reeves, now Chancellor. The Committee called for urgent action to enforce capital maintenance rules. Recent research by Andy Haldane (https://lnkd.in/ecqct3Tj) and Adam Leaver (https://lnkd.in/ev43tNP6) underlines ongoing problems of overdistribution. As the UK advances its Audit and Corporate Governance Reform Bill, it should return to the Select Committee’s original proposals. Companies should publish in full their distributable reserves and a breakdown of their unrealised and realised profits, taking away the veil which can enable over-distribution. Auditors should be held accountable for ensuring this is done. Of the options on the table to boost growth, this has the advantage of being fiscally neutral. For their part, investors should start holding auditors and audit committees accountable for capital maintenance.

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The FRC has launched a consultation on updates to the 2020 UK Stewardship Code this week. I encourage investors to read Adam Matthews and Stephen Barrie's posts on the critical issue of the stewardship definition, which the FRC is proposing to change to emphasise "the need to create long-term sustainable value for clients and beneficiaries as a key outcome of good stewardship". Creating sustainable value for clients and beneficiaries should be core to the stewardship proposition - correct. Including the viability of economic, social and environmental systems upon which clients/beneficiaries depend in that assessment of "sustainable value creation" for clients/beneficiaries - also correct. BOTH are required to drive better member outcomes when dealing with systemic risks. Is it crucial that any stewardship definition explicitly acknowledges this connection? Now more than ever. Don't believe me? Take a look at this excerpt from the recent FMLC paper on pension fund trustees and fiduciary duty............................ One thing (among others) that is increasing is dispute or litigation risk in connection with businesses’ and governments’ response (or lack of response) to the subject of climate change. Because the subject of climate change is a worldwide issue, this is a risk that can present from anywhere in the world. It brings its own relevant issues, including possible adverse outcome and responses, but also the cost, the time and the element of uncertainty in litigation or arbitration. If it is a risk that comes with an investment it may outlast the holding of an investment. Pension funds exist as participants in much wider financial and economic networks. It is a feature of the subject of climate change that it is of major scale. From the position of the pension fund trustee, all the changes identified above or the possibility of them may be relevant to the return of a particular investment and the risk to that return. But so too certain investment strategies, principles and policies may be particularly vulnerable to their impact. And, as with sustainability generally, in the context of a pension fund and the purpose of a pension scheme, relevant too is the effect of the subject of climate change on return or risk anywhere across the pension fund and including by reference to all applicable time horizons. Financial factors therefore need to be considered at a number of levels: at the level of a specific asset or investment, at a portfolio level, and at the level of whole economies material to the pension fund. In responding to this consultation, please support the explicit acknowledgement of economic, social and environmental systems in delivering value for members. In this political landscape, it is more important than ever. Adam Matthews Stephen Barrie Faith Ward Vaishnavi Ravishankar Shipra Gupta Eva Cairns Claire Curtin Diandra Soobiah Renata Kostrzewa Caroline Escott Michael Marshall Jen Sisson People's Partnership

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Excellent that Phoenix and Schroders are partnering to create a huge new fund to channel money directly into fast growing private companies, as reported by the FT. "The world is shifting from public to private" and "The UK's private companies are an untapped universe of investment opportunity" according to Schroders CEO. This is fantastic news for the UK Middle Market space where entrepreneurialism is abundant in highly motivated Board rooms up and down the UK. Investment managers will likely struggle to generate market leading returns if the middle market space is absent from their strategy given the high growth nature of this market segment. It bodes well for middle market M&A advisors and sellers with more buyers now in town and means some niche advisors, if they haven't already, need to turn to private company advisory to remain in the game in the context of advisor consolidation over the last couple of years. #corporatefinance #investmentbanking #privateequity

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In the Strategy Snapshot this week, Daniel Cassidy and I break down the drivers behind the market volatility, explain our current investment outlook, and share guidance for positioning during these volatile conditions. Listen to the podcast for all the details. #shareubs https://lnkd.in/e6tdDHdA

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Really enjoyed being on the panel at Private Equity Insights conference in London last week discussing best sectors for Private Equity going forward. PE investments are long term and it’s important for PE to invest in sectors with long term positive trends. Operational improvement is key for PE managers to deliver best returns and hence specialization is a key trend we can observe in the industry. In our selection of managers, Cubera Private Equity focuses on their sector expertise and ability to improve businesses.   #privateequity

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How are retail investors navigating market volatility? Great to speak to a podcasting master, in the form of Carl Hazeley from Finimize, about the results of the latest Modern Investor Pulse - lifting the lid on retail investor trends. Listen to the latest abrdn Macro Bytes episode here -> https://lnkd.in/e73BV6dc

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Coverage of Temple Bar's recently published annual results in this article from Citywire's Gavin Lumsden, highlighting recent bid activity in the UK stock market and the "miserly valuations" attached to UK stocks, among other things. https://lnkd.in/eh8ymF8C No investment strategy or risk management technique can guarantee returns or eliminate risks in any market environment.   #valueinvesting #ukinvestment #opportunity 

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Navigating Growth in the UK and Ireland: https://lnkd.in/eg2sv4v5 Sylvain Agar, head of distribution for the UK & Ireland at Principal Asset Management, discusses the firm’s strategic priorities in funds distribution https://lnkd.in/eg2sv4v5 #funds #investment #funddistribution #UKfunds

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I was delighted to host a media breakfast today with journalists, where we discussed how UK investors are navigating changes within the global economy and their growing confidence in returning to equities. In a world where change is constant, we are excited to offer UK investors a global equity fund designed to thrive on transformational shifts in the global economy. Time-tested over 50+ years, our flagship global equity strategy is now available as a UK-domiciled OEIC (open-ended investment company). Find out how Capital Group could help your investments thrive on change. https://lnkd.in/dzD-pY8z Financial promotion. Investment involves risk. #CapitalGroup #investing #equities

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THE EUROPEAN ECONOMY IS DECELERATING, BUT INFLATION IS ACCELERATING. WILL THE ECB CUT RATES? From our discussion last week with CNBC Thanks Carolin Roth. Forvis Mazars in the UK, Forvis Mazars Group #economy #markets #wealthmanagement #financialplanning

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Jacobi recently hosted a breakfast event in London on the rapid growth of model portfolios with a good mix of DFMs and institutional asset managers represented. We summarise the themes discussed in this paper - ongoing implementation pains, continued fee compression and finding new ways to differentiate in a hotly contested space were key talking points. Shout out to our panel participants including Francis Chua (Legal & General Investment Management (LGIM), George Jecks (WTW) and Catherine Makin (FE fundinfo / Investments)... plus Chris Barnett for the feisty moderation. #modelportfolios #assetmanagement #investmentmanagement https://lnkd.in/e34rjsc9

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What does the new Labour government mean for infrastructure investment in the UK? We expect some interesting developments: * The creation of Great British Energy, a publicly-owned green power company, may crowd out some private investment (it will get £8.3 billion of Government funding) but will work in partnership with a range of public and private sector entities to deliver local power generation. * Investment in ports and supply chains (£1.8 billion), gigafactories (£1.5 billion), carbon capture (£1 billion) and green hydrogen (£0.5 billion). Many of these carry real risks to the public purse. But will they unlock investment opportunities for the private sector? * Reforms to planning laws are badly needed and Labour has promised to speed up the delivery of infrastructure. * Will we see a new and improved PFI/PPP programme (no doubt re-branded) to roll out social and economic structure? What do you think?

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Up early tomorrow to speak on location with Sílvia Amaro about financial market reaction to the #UKelection result, CNBC at 7:30am. In contrast to the situation in #France, the outcome of the snap election in #Britain was never really in doubt. What matters more for investors is what comes next. Keir Starmer has proposed measures to boost growth, but meaningful improvement may prove elusive if he keeps Britain outside the EU Single Market. We can’t help wondering if more #inflationary overshoots will be part of the mix #MultiAsset #Spikeflation #Politics

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