Do you hear the people sing? Singing the song of angry men? It is the music of the people, who will not be slaves again!” These stirring words from the musical, Les Miserables, were in Spy’s head as the voters go to the polls in the UK and France this week. It seems the Brits and French are sick of their current lot of leaders and are going to give them a thoroughly good kicking. Meanwhile, in America, the Democrats are in full panic mode, having little to cheer about on their 4th July, Independence Day celebration, as President Biden stumbles about incoherently. Luckily for investors, the rumblings of day-to-day politics seldom have much of an impact on markets in the long term. Elections may provide dinner table talk and much amusement as hubris brings down once loved, now despised, politicians but businesses and their leaders invest and create regardless. Get out the popcorn, but don’t panic.
The S&P 500 is sitting at a record high, which is rather nice for everybody reckons Spy. And then comes along a little fact that makes Spy go, hmm. It seems that insiders are taking the chance to lock in some of their juicy gains. For example, Jensen Huang, the CEO of Nvidia, sold shares worth nearly $169m in June. That happens to be the most he’s netted in a single month. Company executives and directors at the chip firm have unloaded more than $700m of shares in the first half of the year. In dollars, that amount is larger than any other period in the company’s history. Furthermore, Jeff Bezos, the founder of Amazon, has announced he is selling just under $5bn dollars’ worth of the retail and cloud giant. Nothing wrong with locking in a profit, of course…
The news broke this week, that BNP Paribas IM and Axa IM may be combined into a single firm. Spy hopes, if the plan goes ahead, that the French are better at mergers than their Scottish counterparts. Aberdeen Investments and Standard Life Investments, a few years ago, seemed the perfect match with shared country heritage. We all know how that turned out in the medium term. If the French firms do merge, they will create a $1.4trn AUM firm. That will still be less than Amundi, their larger French rival, with about $2.16trn of assets. Spy has been hearing the words “scale” and “efficiencies” bandied about. Spy hopes that management also remembers “culture”, “talent” and “technology”, too.
Talking of mergers, BlackRock surprised everybody by snapping up private markets data provider, Preqin this week in a £2.55bn ($3.26) deal. The size of the transaction seemed to surprise everyone, but Spy suspects BlackRock knows exactly what it is doing. Data is utterly crucial to the investment world and private markets have remained too opaque for truly mass market adopt adoption, to date. Preqin has specialised in gathering this hard-to-find information and built a reliable reputation for doing so. BlackRock estimates that by the end of the decade, private markets will hold $40 trillion in assets. That seems like a growth area, when it already has more than $10trn largely in public markets. This deal may help unlock that growth.
Talking of mergers, BlackRock surprised everybody by snapping up private markets data provider, Preqin this week in a £2.55bn ($3.26) deal. The size of the transaction seemed to surprise everyone, but Spy suspects BlackRock knows exactly what it is doing. Data is utterly crucial to the investment world and private markets have remained too opaque for truly mass market adopt adoption, to date. Preqin has specialised in gathering this hard-to-find information and built a reliable reputation for doing so. BlackRock estimates that by the end of the decade, private markets will hold $40 trillion in assets. That seems like a growth area, when it already has more than $10trn largely in public markets. This deal may help unlock that growth.
After some initial scepticism over AI, Spy is increasingly impressed with the tools being developed. This week Abrdn announced that is it working with Edinburgh University to develop a generative AI tool named Statistical Brain. Apparently, scientists from the Scottish university’s schools of mathematics and statistics are investigating how LLMs can be modified and augmented to “synthesise the huge amount of data needed to make investment decisions”. If an AI LLM is able to make better active decisions for its portfolio managers, who will get the credit (and annual bonus) if a fund performs well, Spy wonders?
Spy continues to be amused by traders (gamblers?) flocking to single stock ETFs, but the money involved is no longer a trifle. Assets in single-stock ETFs have doubled this year to more than $5bn.
Singapore played host to Taylor Swift’s Eras tour, raising a few eyebrows at the time for exclusively using the Lion City as her single Asian residency. Spy notes a town in Germany has now taken the unusual step of renaming itself for the duration of her visit later this month, adding another unusual marketing angle to her world tour. Gelsenkirchen, has renamed itself “Swiftkirchen” — at least temporarily — to welcome the tens of thousands of fans who are expected to come for her shows on July 17, 18 and 19, German news agency DPA reported. The day a town renames itself for an investment conference, Spy will eat his hat.
Spy’s quote of the week comes from the Russian literary master, Fyodor Dostoevsky, “The man who lies to himself and listens to his own lie comes to such a pass that he cannot distinguish the truth.” This line from the Russian’s masterpiece, The Brothers Karamazov, sprung to mind when yet another spam “get rich quick” email landed in Spy’s in box this week.
Until next week…
