FINTRX Private Wealth Weekly Roundup | 10.27.22 | Volume 29

Family Office & RIA Weekly Roundup?

Volume 29

10/27/2022 (4 Min. Read)

Inflation Causes Confusion, Central Banks Globally Prep for Hikes and Crypto Legislation Provides a Boost in this week's edition...

Take a Lap Around the Industry

• Marqeta Introduces Seven New BaaS Products?(Insider)
• NorthWestern Mutual Survey Reveals Retirement Requirements Rise?(WSJ)
• Musk Eases Twitter Advertisers Concerns?(ABC News)
• Corona Heir Hires Goldman Sachs Exec to Lead Family Office?(Bloomberg)

Inflation is Here to Stay, Finding the "True" Rate Poses a Challenge

For the past year inflation reports, predictions and commentary have dominated headlines. Economists and columnists have tried to explain and rationalize the historic increase in prices experienced by the United States over time. However, there remains one simple question that many experts seem to have a difficult time answering, "What is the true rate of inflation?". There exists an unclear distinction between "underlying inflation" and "headline inflation", the former driven by macroeconomic factors and the latter by a number of temporary microeconomic influences. Initially, the Federal Reserve used a Core Consumer Price Index that excluded volatile goods like food and energy. Yet this reading can also be swayed by "one-off" changes in sales taxes or even cellphone rates. Ultimately what we are left with is a myriad of nine indexes, ranging in prediction from 4.7% and 7.3%, a long ways away from the Fed's 2% target.

"Covid-19, lockdowns, supply-chain snarls, extreme weather and war might have disrupted so many sectors that even these carefully constructed indexes have been distorted. For example, health-insurance premiums were artificially elevated when people stayed away from doctors and hospitals early in the pandemic. Because of lags, that effect is only now about to reverse."

Greg Ip, The Wall Street Journal

Private Funding Pulse Check

• Navitas Capital and Crow Holdings have each participated in a Series A funding round for?SwiftConnect, an access control infrastructure platform whose funding totaled $17M
• Alto Neuroscience, a biotechnology research company, has finalized on a $35M Series B round that was led by co-investors Apeiron Investment Group and Sobrato Family Office
• The Ryan Family's Schooner Capital engaged in a Series B investment with?Breezeway, the leading property operation and services platform for short-term rentals, totaling $15M
• DNS Captial took part in a $100M Series D deal with?Jetti Resources, a mining company that specializes in copper mineral ore

https://www.fintrx.com/

Major Central Banks Return to the Spotlight as More Hikes Loom

Global Central Banks have had a busy 2022, with many having to raise the cost of borrowing capital in an effort to put a stop to rampant inflation and overheating economies. The Central Bank of Canada is set to announce an additional hike while the banks of Brazil and Japan are preparing to stand pat. In the case of Brazil, its key rate sits at 13.75%, the highest level it has been since 2017. Meanwhile, Bank of Japan's Governor Haruhiko Kuroda refuses to capitulate to political and market pressures, the country remains as the last negative interest rate economy. Finally, with Europe on the brink of an energy-driven recession, the European Central Bank is expected to announce another 75 basis point hike.

Survey Finds Regulation Makes Cryptocurrency More Attractive

Following years of a "wild west" atmosphere in the cryptocurrency space, federal regulation is finally coming to crack down on the industry. However, industry experts predict that instead of a net-negative movement, SEC oversight could actually be a boon for the asset class and companies with exposure to it. In a survey conducted by MLIV Pulse, nearly 60% of 564 respondents shared a view that governmental involvement was positive. The group of positive respondents pointed to a number of driving factors that included increased professional involvement, a decreased number of fraud schemes, a stronger tie to "traditional investing" and overall lower levels of volatility.

"Our investors recognized and the market recognized that the decentralized protocols have unique advantages that not only can benefit crypto markets, but also traditional markets more broadly."

Mary-Catherine Lader, Uniswap Labs

Investcorp and Fung Capital Band Together to Form $500M Fund

The Middle East's largest alternative asset management firm, Investcorp has agreed to partner with San Francisco, CA-based Fung Capital, the private equity arm of the Fung Brothers' family office. The pair have joined forces to begin the capital raising process for a $500M fund that aims to invest in mid-cap companies that operate predominately across China's Greater Bay Area. The region spans the Chinese cities of Hong Kong and Macau, economic hubs that have recently reopened their borders. Fund organizers have stated that it will not be sector-specific but instead will invest in companies "with proven profitability and strong growth potential". The pair of companies join HSBC Holdings in starting funds that aim to take advantage of the ripe economic region.

"The Greater Bay Area’s role as one of the main economic engines of China has never been more important as the country looks to rebalance its economy."

Mohammed Alardhi, Investcorp

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https://www.bloomberg.com/news/articles/2022-10-26/investcorp-fung-capital-to-start-500-million-greater-bay-fund?utm_medium=social&utm_source=twitter&utm_campaign=socialflow-organic&cmpid=socialflow-twitter-business&utm_content=business&sref=l3FEFSDd

Industry M&A Wrap Up?

• Mercer Advisor has announced that it is acquiring Cincinnati-based The Asset Advisory Group which oversees $370M in assets for around 160 clients?(WM)
• Newport Beach's Pacific Insurance Co., announced the sale of its Pacific Asset Management LLC to Aristotle Capital Management, adding roughly $20.7B in AUM?(OCBJ)
• Mercer has continued its active year of M&A by announcing the acquisition of Goldstein Munger + Associates, a San Ramon, CA-based firm with $1B in AUM?(WM)