FINTRX Private Wealth Weekly Roundup | 9.29.22 | Volume 25

Volume 25

09/29/2022 (4 Min. Read)

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Russian Gas Poses Risk to Europe, China Reconsiders its Lending Practices and Credit Suisse Launches a SFO Index in this week's edition...

Take a Lap Around the Industry

• Morgan Stanley Deems Ferrari "Recession Proof"?(Bloomberg)
• U.S. Housing Prices Fall for First Time Since 2012?(Bloomberg)
• ESG Firm, Wave Equity fined by the SEC?(WSJ)
• Fed Study Shows Remote Work Drove Housing Price Increase?(Bloomberg)

Russia's Gas Shutdown Pushes Europe Toward a 2009-Like Recession

Due to the war in Ukraine, Russian gas flow to the rest of Europe has come to a halt. According to the?BBC, Russia has supplied some European countries with as much as 40% of their natural gas imports, with Germany and Italy as the group's largest importers. More recently, the pipeline experienced a break, causing massive amounts of methane to be released into the atmosphere and posing as a severe climate issue. In addition to an ongoing energy crisis that could leave many homes without heat for the winter, the continent may be on the cusp of a "deep recession". Economists predict that a combination of bad policy, disappointing GDP and inflation estimates could send Europe into a contraction that matches the likes of 2009. Adding to the pressure, the European Central Bank (ECB) is squeezing the economy faster than ever before in an attempt to corral inflation.

"If consumer behavior proves sticky and unity between EU countries begins to break down, gas prices could spike above 400 euros, inflation could approach 8% next year and the economy might contract by almost 5% this winter."

Maeva Cousin, Bloomberg

Private Funding Pulse Check

• Hume , a web3 record label company, has closed on a $11.7M Series A round that included New York, NY-based Single-Family Office Winklevoss Capital Management
• Anheuser-Busch Founder's Family Office, Verlinvest has participated in a Series B round that totaled $80M for?Not So Dark , a food tech company that creates virtual food brands
• IAG Capital Partners engaged in a Series A investment with?Leuko , a medical equipment manufacturing company of non-invasive white blood cell devices, totaling $5M
• NB Ventures took part in a $1.2M Debt financing deal with?ElectricPE , India's leading electric vehicle charging platform

https://www.fintrx.com/

China Considers Reorganizing its Belt and Road Program

In 2013 China implemented its Belt and Road Initiative (BRI), the strategic plan aimed to invest in nearly 150 countries and international organizations across Asia, Europe, Africa and the Middle East. Widely considered to be the centerpiece of Chinese leader Xi Jinping's foreign policy, the BRI extended tens of billions in loans to cash-restricted countries that have since defaulted, leaving China wondering what is next. Economists and foreign politicians have criticized China for its "debt-trap diplomacy", extending lines of credit to a myriad of unreliable partners. To combat ongoing pressure from creditors and world leaders, Chinese officials have begun to explore alternative methods to make the BRI more sustainable and less predatory. Potential solutions include lending at below-market interest rates and forming public-private partnerships to reduce risk.

"If Belt and Road is going to retain its importance in expanding Chinese influence, China may need to find a new way... such as moving away from lending in favor of giving grants and other aid."

Brad Setser, Council on Foreign Relations

Barron's Releases its Top RIA Firm Rankings

In a recent release by Barron's, the company has announced its Top Ranked RIAs, based on a combination of assets, revenue and quality of practice. Edelman Financial Engines topped out the list, reporting over 1.3M clients serviced by 452 advisors. The 2022 edition of the rankings brought plenty of surprises, with SignatureFD advancing 27 spots to round out at 59th overall. In addition, Cresset made a significant jump, moving 20 spots to 12th overall that was largely fueled by the firm's merger with Meristem Family Wealth that brought their AUM to $5.4B. On the flip side, CV Advisors fell the farthest, dropping 40 slots to 99th overall.

Credit Suisse Launches the First of its Kind, Single-Family Office Index

According to multiple reports, Credit Suisse has launched the Credit Suisse Single Family Office Index, which aims to track the performance of over 300 SFOs across Asia, Europe and the Middle East. In addition to tracking the offices by region, the index is also filtered by AUM size, with small SFOs defined as those with less than $100M, medium between $100M and $500M, and large over $500M. Driving forces behind the creation of this index include the desire to understand and visualize key issues that family offices face and the factors ultimately driving their investment decisions. Referencing the July statistics, the index has found that on average SFOs have invested 47% of their AUM into equities, 29% into bonds and 17% into alternative assets.

"Two of the most common questions from SFOs are what and how are other SFOs doing. We believe the Credit Suisse SFO Index will help SFOs around the world to gain insight into their peers’ asset allocations and performances by geography and size."

Nannette Hechler-Fayd'herbe, Credit Suisse

https://fundselectorasia.com/credit-suisse-launches-family-office-index/

Industry M&A Wrap Up

• California-based RIA EP Wealth Advisors has announced its acquisition of Minot Wealth Management, adding roughly $1.1B to their AUM?(WM)
• MAI Capital Management, a Cleveland, OH-based RIA has acquired Prime Investment Advisors, expanding its Maryland presence and Mid-Atlantic footprint?(BW)
• Raymond James has decided that it will part ways with Concurrent Advisors, a Tampa, FL-based asset manager who oversees roughly $13B in assets?(AH)