10/01/2005
Speculating on property values just became easier in Europe with the debut of commercial property derivatives, which are products that pay an investor the yield on a property index in return for his paying a set spread over the London Interbank Offered Rate. Will these types of products come to the U.S. market? If so, will they be appropriate for my portfolio?
Companies that offshore are beginning to regret it as quality control and intellectual property theft become significant problems. Are any of the companies in which I invest—directly or through my private equity funds—subject to these problems? What does it mean for offshoring in general?
“Blank check” initial public offerings are the new rage; a number of shell companies, set up to acquire other companies or assets, have recently tapped the public equity markets. How can I determine if a blank check company has potential? Does this type of investment make any sense at all, or is it best to stick to traditional private equity vehicles?
The bribery scandal enveloping President Luiz Inácio da Silva’s Workers’ Party in Brazil is shaking investor confidence in the erstwhile emerging market darling. (“Lula” is not implicated, and he remains the favorite for the 2006 election.) Is this an opportunity to invest at attractive valuations in Brazil, assuming they will rise when the scandal blows over, or should I take a wait-and-see approach?
Will resistance to Chinese acquisitions of U.S. companies, as seen in Haier’s abandoned bid for Maytag and Cnooc’s uphill battle to purchase Unocal, mean that U.S. shareholders will not get the best value for their stakes? How could this affect the liquidity event prospects for my own company? For my stock portfolio?
Will the slightly revalued yuan give a 2.1 percent
boost to the returns on my Chinese investment fund’s yuan-denominated assets,
and if so, can the fund managers use that (and the effect of any further
currency appreciation) as credit toward its minimum return bogey for the year?
Can they take 10 (or 20) percent of the gain?
Strategic buyers are once
again giving private equity funds a run for their money in the middle-market
acquisition arena. Leading companies such as Home Depot are retooling their
corporate development teams to better compete with cash-bloated financial
sponsors for attractive assets. Is this trend a problem for my middle-market
private equity funds, or will they still find attractive targets at reasonable
valuations?
Venture capital fund-raising hit a five-year high in the second
quarter, but the pace and volume of VC investments continued to slide. VC funds
raised $6.1 billion but only invested $5.39 billion—continuing a downward trend
in deal flow and size, according to data from Thomson Venture Economics and Dow
Jones’ VentureOne subsidiary. What does this mean for my VC investments? For my
ability to obtain VC financing for my own company?
Private equity fund
managers fell off the wagon in July after three months of relative sobriety,
during which they apparently foreswore company-crippling leveraged recaps in
response to worries from the debt markets and ratings agencies. A new spate of
dividend recaps were in the pipeline as Worth went to press. Are any of my funds
relying on this take-the-money-and-run strategy to enhance their
returns?
Silver bulls will soon have a new way to invest in the metal.
Barclays Global Investors plans to roll out an exchange-traded fund that will
track the price of silver. But the metal is often seen as less attractive as a
straight commodity play, or as a currency hedge, than gold—for which there are
at least two ETF vehicles. Will the silver ETF be of any use?