May
JPMorgan is negotiating with investors to share the risk associated with $4b of net-asset-value loans made to private equity firms & other investment funds in Europe, Middle East & America.
Net asset value loans use a fund portfolio of assets, not investors’ cash, as collateral.
HSBC, has reported losing $400m in the collapse of private lender MFS. MFS providing short-term loans at premium rates to homeowners so they could buy a new property before an old one sold.
It was revealed that it had pledged the same assets as collateral to several creditors.
Defence contractor Anduril, which specializes in making drones, has closed a $5b funding round that values the nine-year-old company at $61b, about double its most recent valuation of just over $30b last June, the FT reported.
New round led by Andreesen Horowitz & Thrive Capital.
May 19
Value of Samsung Electronics reached $1 trillion on 6 May. Samsung is only the second Asian company to achieve a 13-figure valuation, behind Taiwan Semiconductor Manufacturing Co.
Its market capitalization has risen fivefold over the past year with the surge in AI investment.
Since 1 Apr, S&P 500 has risen 12%, largely on a sustained faith in the promise of the boundless riches that AI will produce.
This has been powered by the smallest number of stocks on record, a handful of Big Tech issues, raising concerns over the current market’s fragility - FT.
Lazard, the 178-year-old U.S. investment bank, is taking over Campbell Lutyens, a British counterpart specializing in fundraising, secondary transactions, private equity, and M&A advisory services.
The private equity industry is set to rebound after two years of muted activity.
For this year’s first quarter, cloud service providers Amazon, Google, Microsoft & Meta reported a record $130.65b in capital expenditures, mostly on AI infrastructure, according to their financial disclosures.
The figure is 71% more than what the companies spent in the same quarter last year.
Stablecoins denominated in U.S. dollars are increasingly being used as the medium of exchange in int'l trade – a shift that risks the “dollarization” of emerging economies, weakens their ability to control their money flows, Bank for International Settlements (BIS), said.
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AI skills made up about 7% of positions advertised last year by the “Big Four” accounting firms, the FT reported.
In 2022, before ChatGPT made its debut, the number of spots mandating AI skills advertised in English-speaking countries by Deloitte, EY, KPMG & PwC accounted was 2%.
Investors around the world are fleeing bonds, fearing that central banks will raise interest rates.
Higher interest rates reduce the face value of bonds.
The exit from bonds began in Japan & the U.S. but spread on 15 May to Australia, Germany, Spain, New Zealand & other countries.
Ares Capital Corp. & Golub Capital are among the private lenders that have shrunk their net assets values after discounting the worth of many of their loans in this year’s first quarter, The WSJ reported.
Apollo Global Management, Blackstone & Blue Owl also posted lower returns.
AI chipmakers & cloud companies are looking for bargains further back in the AI supply chain.
Corning’s share price shot up 12% after Nvidia announced it will invest $500m in the old company to expand the production of fibre optic cables, the lifeline connecting servers in AI.
European private equity firm Astorg is buying Thermo Fisher Scientific’s microbiology operation for $1.075 b. The business makes safety testing supplies for the food, medical, & pharmaceutical industries.
It earned about $645 m in revenue last year & has 13 sites worldwide.
JPMorgan Chase, Morgan Stanley, SMBC, and other major banks that have made gigantic loans to cloud service providers such as CoreWeave and Oracle are trying to entice other lenders to share the risk but having trouble persuading them, people familiar told the Financial Times.
On 1 May, the NASDAQ and Standard & Poor’s 500 index closed at record highs yet again on strong earnings, gains in tech, and lower oil prices. Both booked a sixth consecutive week of gains, the longest such stretch since October 2024, and closed their best months since 2020.
Investors as well as lenders have noticed. The cost of credit default swaps – the market’s way of insuring against Oracle defaulting on its loans – has more than tripled since last September.
The company’s share price has dropped 30 percent in the past six months.
