01/01/2005
Big investors are suing some bond dealers for allegedly stripping valuable assets out of the collateralized debt obligations they managed and replacing them with weaker assets. (CDOs are bonds collateralized by pools of other bonds or loans.) Do I have any CDOs in my bond portfolio? If so, how do I know the firm that manages the collateral is acting in my best interests, rather than its own?
Private equity investments in homeland security firms got a boost in October when the trendsetting California Public Employees’ Retirement System announced that it would dedicate $25 million to a fund specializing in this sector. Does it make sense for me to follow suit?
Eliot Spitzer’s investigation of insurance brokers’ alleged bid rigging has battered the stocks of the leading firms and had some spillover effect on the share performance of insurance underwriters. What does it mean for my own access to insurance, and that of my businesses? Will it become less expensive, or more so as the costs of litigation weigh on the firms?
China’s first interest rate hike in nine years threw the financial and commodity markets into disarray. What does it mean for my investments there? Is it a precursor to liberalizing the renminbi? If so, should I invest now, or wait for uncertainty over the currency situation to ebb?
Congress’s investigative watchdog upbraided Wall Street and the SEC for failing to protect the markets from terrorism and natural disasters. The General Accounting Office said Wall Street firms’ efforts to shield themselves since 9/11 have fallen short. How would my portfolio or business be affected if one of my major financial counterparties was subject to attack?
Investment banks are piling into the private equity and hedge fund businesses at a rapid clip. Lehman Brothers is building a private equity team, and both it and JP Morgan Chase recently acquired hedge funds. Are there any advantages to investing in the funds affiliated with my private bank? Does the performance of independent hedge and private equity funds differ substantially from that of those affiliated with banks?
The quiet period may become noisier if the SEC goes ahead with plans to amend listing rules. If it does shorten the quiet period, how will it affect my ability to take my company public? Will it benefit my private equity investments by making IPO liquidity events easier to achieve?
Hedge funds must register as investment advisors in the wake of a SEC vote in October. How will this affect the funds’ businesses? Will it help or hurt funds’ performance?
Emerging-markets private equity funds have underperformed in recent years, but some surveys indicate institutional investors are gearing up to expand their developing market exposures. Is it a good time to consider putting money into emerging market funds, or will the combination of higher energy and commodity prices and higher interest rates hurt young companies’ prospects in these regions?
The currency markets believe the dollar is set to fall again against the euro. If this ushers in another period of exchange rate volatility, will my currency overlay investment strategies begin to recover and perform better than they did during the summer doldrums?