A Heated Election Year Keeps Wall Street Awake

There’s a camp on Wall Street that believes Joe Biden can be friendly to corporations. And there’s another concerned that taxes will rise if he becomes president. Bankers, meanwhile, expect investors to make some big moves before November.

“You’ve got a pretty quick window to jump through between now and election time,” Brad Miller, head of equity capital markets in the Americas at UBS Group AG, said in an interview.

August is typically a quiet month, when dealmakers and clients get some reprieve before the post-Labor Day rush. This year, there’s an expectation that stock listings will pick up and asset sales will resume as private equity firms fear greater taxation on carried interest. There’s also a chance that investors will face bigger levies on capital gains.

There’s also the fact that the market has recovered -- and that no one knows how long it will stay that way.

“Some of these private equity funds have been holding portfolio companies for a longer period of time,” Miller said, citing vintages from 2008 to 2010. “Sometimes volatility causes action.”

There’s also been more than $25 billion raised in the U.S. this year by blank-check companies, which have about two years to pursue takeovers. Deals, meanwhile, are starting to slowly pick up again, with NYSE owner Intercontinental Exchange Inc. agreeing this week to buy a Thoma Bravo-backed mortgage-lending platform for $11 billion. It’s a quick turnaround for the private equity firm, which bought Ellie Mae in early 2019 for less than $4 billion.

And speaking of exits...

Rocket to Riches

The IPO of the parent company of Quicken Loans has unveiled Dan Gilbert as one of the 30 richest people in the world, according to my colleagues. At a net worth of about $34 billion, he has the majority of the voting rights for a company that’s surpassed Bank of New York Mellon and Ford by market capitalization.

Rocket’s offering was supposed to be the year’s biggest in the U.S. It was downsized, raising $1.8 billion instead of the $3.3 billion targeted earlier. It then rose more than 19% on its first day of trading.

I spoke to Rocket CEO Jay Farner for Bloomberg Television. He told us he sees more clients looking to buy homes in the wake of the Covid-19 pandemic, especially along the coasts.

More on Wall Street

• Across the finance industry, Blackstone’s Steve Schwarzman single-handedly accounts for the bulk of reported contributions to President Trump’s re-election efforts. Bloomberg’s Shahien Nasiripour and Hema Parmar break down the contributions across the industry.
• Guggenheim’s Scott Minerd gets vocal about Trump’s proposed payroll tax cut in a more-than-1,100-word piece to clients advocating for the measure that’s meeting resistance among Democrats and Republicans alike. (This story is for terminal clients only.)
• One hedge fund manager is getting some inspiration from an unlikely source: the Robinhood crowd. After riding the waves of the hedge fund industry, once shuttering a fund and facing a lawsuit, Adam Sender says he now feels vindicated in his best year ever.

If you’re stuck inside because of the storms, you take take comfort in knowing that this is the case for billionaire sports team owners too. Mark Cuban, who’s shooting the next season of his television show starting at the end of September, says he’s “in a ‘Shark Tank’ quarantine.”

“We have two days off and we aren’t allowed to see anyone or go anywhere outside our rooms,” Cuban says says by e-mail.

I hope you have your power back, and to talk to you soon. Tips and ideas welcome at [email protected] -- have a great weekend in the meantime.