Sand Hill Exchange

Power To The Venture Capitalist People

The Financial Times says there “is a sense among many in the industry that private equity is no longer at the leading edge of investment, with that mantle having moved on to the venture capital world (alt)…Quietly, firms including Blackstone, Carlyle and KKR have looked at acquiring venture capital firms…several of the private equity firms are shifting their pitch to investors.  Rather than emphasising the big (and often disastrous) buyouts of the last cycle, they refer to their interest in providing growth equity to much younger companies.  Being masters of smaller alternative universes has suddenly become the new, new thing.”  Meanwhile, Sand Hill exchange “is offering anyone who wants to deposit money with the firm the chance to buy and sell synthetic derivatives linked to unlisted tech companies…The ‘contracts’ that make this possible are British-style contracts for difference — Cfds.  Rather than owning the asset outright, you enter into a contract with a counterparty to cash settle any subsequent moves in the price of that asset… But Cfds specifically are illegal in the US…What Sand Hill appears to have done is to simply sidestep the entire 40-year old edifice of the CFTC by using the blockchain, that bit of the Bitcoin infrastructure that acts as a distributed public ledger, for transactions.”  Meanwhile, according to the city of Orlando, “nerds love Orlando.


Investable Asset Classes

“If U.S. investors have learned one thing since the bull market started six years ago, it is don’t bet against central banks’ easy-money policies…According to Lipper, U.S. stock funds have seen $5 billion in outflows so far this year, while European equity funds have collected $4 billion in assets and those in Japan have gathered a little over $1 billion in 2015.  Returns in 2015 have already paid off for those invested in foreign markets.  Across the pond, Europe is higher by 15%, while Japan has risen 8%.  At home though, the S&P 500 is up only 1% this year even as the U.S. economy improves and jobs growth is the strongest it’s been in over a decade.”  Meanwhile, “euro-denominated corporate bonds have gained 1.4 percent this year,” unless your passport has an eagle on it, in which case euro-denominated corporate bonds have lost 9 percent this year.  “With yields at record lows, that means this trade is as much a bet on the euro as anything else.  And that’s a huge problem given the euro’s 10 percent drop against the greenback this year.  The average yield of less than 1 percent on European investment-grade corporate bonds isn’t enough to offset that currency move.”  “Although ECB QE is expected to boost demand for euro-area assets, that may not buoy the currency…Many of the bonds the ECB buys are likely to come from foreign investors, according to David Woo, a strategist at [Merrill Lynch].  That could lead to as much as €10 billion worth of euro selling against other currencies every month, he said.  QE has already drawn overseas investors to eurozone equity markets.  But most foreign buyers are hedging their currency exposure, negating any upward pressure on the euro.”  Meanwhile, here’s what “don’t bet against central banks’ easy-money policies” looks like.  Also, Europe’s central banks are still playing hot potato with the expected losses from negative yields.


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Also, is art an asset class?


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