FirstFT: Investors sell stakes in buyout funds at a record pace
Good morning. Investors are selling holdings in private equity and venture capital funds this year at the fastest rate on record as the downturn in equities spreads to private markets booming on low interest rates.
Retirement and sovereign wealth funds were among the sellers of $33 billion worth of holdings in private funds in the first six months of 2022, up from $19 billion over the same period in 2021, and typically sold below face value, Jefferies said.
The sell-off follows a decade of rising allocations to private markets, which have grown since the financial crisis and involve buyout companies, venture capital and real estate funds.
The loss of stakes also casts doubt on the ability of these groups to sustain the fundraising that has transformed them into a major force in global dealmaking.
Pension funds said the shift to dumping stakes was driven in part by sharp declines in stock markets, which left portfolios too exposed to buyout funds and other private investments that have not been devalued in the same way.
Happy Monday and thanks for reading FirstFT Europe/Africa — Jennifer
Five more stories in the news
1. US Senate Approves Biden’s $700 Billion Economic Package The climate, tax and health care bill, known as the Inflation Reduction Act, was passed by a margin of 51 to 50 after an overnight marathon vote that gave President Joe Biden a major political victory just months before the midterm elections.
2. British investment fund largely supported ‘zombie companies’ The government’s £1.1bn Covid-19 venture capital fund has been largely invested in what one executive called “zombie companies”, leaving it with “a significant tail of dormant companies”, according to documents seen by the Financial Times .
3. Suspicions of Russian interference hang over the elections in Italy Italian minister Mara Carfagna defected from Silvio Berlusconi’s Forza Italia to the centrist Azione party over suspicions that Vladimir Putin played a role in the country’s political crisis in retaliation for ousted Prime Minister Mario Draghi’s tough stance on Russia’s invasion of Russia. Ukraine.
In Turkey: Western capitals are alarmed by the intensification of ties between Recep Tayyip Erdoğan and Putin, raising the prospect of sanctions if the NATO member helps Moscow evade sanctions.
4. Israel and Islamic Jihad announce ceasefire in Gaza After three days of the worst violence in more than a year, Israel and Palestinian Islamic Jihad have agreed a ceasefire. The ceasefire, which was negotiated by Egyptian officials, was set to go into effect at 11:30 p.m. local time last night.
5. European Men Struggling to Access Monkeypox Shots People are crossing the border to get vaccinations as authorities struggle to provide doses due to severe vaccine shortages and the increasing number of cases. LGBT+ groups have accused the UK Health Security Agency of not obtaining enough doses to protect at-risk groups.
the next day
Corporate Profits News Corp publishes the results for the fiscal year, while Porsche publishes the results for the first half. Quarterly results are due for AIG, NTT Group and BioNTech.
Joe Biden visits Kentucky The US president has said he will visit eastern Kentucky to visit families affected by deadly floods. At least 37 people died and hundreds were displaced in the state after record rains in July.
What else do we read
Households at breaking point Low-income people in the UK face increasing uncertainty, with rising costs of living stretching budgets to their absolute capacity. A single change in circumstances, from the end of a relationship to the death of a pet, can be enough to push them over the edge.
Kenya’s latest election push Veteran opposition leader Raila Odinga has been bolstered by the support of his former opponent, outgoing President Uhuru Kenyatta, who has transformed the former political prisoner into an established candidate. But he is neck and neck ahead of tomorrow’s poll with Vice President William Ruto, who presents himself as a political outsider.
The end of the warehouse bubble Due to the pandemic, industrial warehouses were central to commercial real estate, as they were less vulnerable to Covid-19 lockdowns than offices and retail. But now warehouses are suffering from tariff hikes and demand cooling as the global economy causes a slowdown in e-commerce.
Climate, war and inflation push reinsurers to action Claims for natural disasters and pandemic-related losses have wiped out much of reinsurers’ profits in recent years, raising the price of coverage — and diminishing options for insurers willing to pass on risk.
Why Airports Lose Your Baggage Baggage blunders at airports have increased by 17 percent since July 2019. Staff shortages and the logistical complexity of connecting flights are both the cause. Heathrow, the UK’s main airport, now has a third fewer airline ground handlers compared to pre-pandemic levels.
If you’re looking for kid-friendly electronics, check out this tech for mini maestros, gamers, and insomniacs.
Thanks for reading and remember you can add FirstFT to myFT. You can also choose to receive a FirstFT push notification in the app every morning. Send your recommendations and feedback to firstname.lastname@example.org. Sign Up here.