An Introduction to Consumer Brand Private Equity

Download PDF Introduction Once seen as too unpredictable, consumer brand leveraged buyouts have grown in popularity over the past two decades. Fashion cycles and shifts in consumer preferences increase the risk of such buyouts, as cash flow generation is, in general, less certain. Yet deals such as Permira’s acquisition of Dr. Marten’s [DOCS: LON] or Carlyle’s [CG: NASDAQ], Golden Goose proved to perform well, through strong brands creating consumer stickiness and private equity firms increasing Read more…

Exploring Crypto Primitives: Perpetual Futures and Inverse Contracts

Download PDF In the past few years, cryptocurrencies have made the headlines on many different occasions and many think that they are here to stay, for better or worse. Regardless of their social impact, we believe that they have introduced interesting contrasts to traditional finance in their market microstructures. In this article, we explore some of the trading instruments that are very prominent in the crypto space but less so in traditional finance. This article Read more…

Banker’s Toolkit: US and European Sports Industry

Download PDF Introduction Commercial sports, from football to ice hockey, have captivated fans across the globe and it is no surprise that this has turned the heads of investors. The industry has seen ever-growing revenues coming from broadcasting rights, merchandising and sponsorship deals. Consequently, sports franchises have become an attractive target for various groups of investors. This November, Liverpool, Manchester United [MANU: NYSE] and a 15% stake in Paris Saint-Germain have been put up for Read more…

Dating app Grindr goes public through a SPAC

Download PDF Introduction Grindr [GRND:NYSE], an online dating app targeted towards the LGBTQ+ community, went public on November 18, 2022 after completing a merger with Tiga Acquisition Corp., a Special Purpose Acquisition Company (SPAC), at an initial post-transaction enterprise value of $2.1bn. The leading social network for the LGBTQ+ community announced its aim to go public back in March. On its first day of trading Grindr’s stock jumped from an opening price of $16.90 to Read more…

A Primer on Yield Curve Construction

Download PDF Introduction A yield curve depicts the returns of fixed income securities against their term, or time to maturity. In this article, we explain the role that the discount function and forward rates have in the creation of a yield curve and compare different methodologies to fit the yield curve, namely, bootstrapping, spline-based methods, parametric and nonparametric models. Finally, we conduct an analysis specifically on the Nelson-Siegel and Wiseman models. Discount Function and Yield Read more…

Market Recap 04/12/2022

Download PDF US The week started off with a substantial drop in the DOW Jones Index during the last hour of trading on Monday amid worries around commentary by Fed officials and reports of protests spreading in China. These worries were the main drivers of Tuesday’s markets as well with the S&P slipping 0.2%, the Nasdaq composite losing 0.6%, and the Dow gaining 0.01%. There was additional uncertainty around Fed Chairman Powell’s speech at the Read more…

Market Recap 27/11/2022

Download PDF US On Thursday, and parts of Friday, US markets were closed due to Thanksgiving. This was the driving force behind the lack of liquidity and uneventfulness of the week in both the primary and secondary markets. The Nasdaq and the Russell 3000 Growth index were the only indices to start the week on a negative note but gained ground back on Tuesday and Wednesday in order to finish the week with a 0.72% Read more…

Mired in controversy – rightly so? On FIFA, 2022 Qatar World Cup and who actually had a hand in building the $229bn landmark event

Download PDF Introduction In 2010, it was a head-scratcher as to why FIFA would pick Qatar as the 2022 World Cup host. A single football stadium, scorching heat, and a national team ranked 96th in the FIFA world ranking. FIFA’s own technical committee rated it the worst of all bids made to host the cup. A decade later, Qatar has reportedly spent over $229bn preparing for the tournament, undertaking massive infrastructure projects in due time. Read more…

The Downfall of FTX

Download PDF Introduction On November 11th, crypto trading startup FTX filed for bankruptcy protection in the US just three days after admitting to being unable to meet $5bn in customer withdrawals. Sam Bankman-Fried, a 30-year-old trader and founder of the crypto exchange, resorted to filing in a Delaware federal court after a failed rescue by rival Binance, the second-largest digital currency exchange (DCE) led by Changpeng Zhao, fell through. Binance decided to not go through Read more…

Commodity Trading Advisors and Trend-Following Strategies

Download PDF Introduction Formally, a Commodity Trading Advisor (CTA) is defined as an individual or firm registered with the Commodity Futures Trading Commission (CFTC) which gives “advice” on futures, options, and the actual trading of managed futures. CTAs are responsible for advising managed accounts and pooled investment vehicles, such as commodity pools. Commodity pools enable investors to diversify beyond traditional investments and gain exposure to managed futures that are historically non-correlated to the broader stock Read more…

Modeling Asset Correlation: Theory and Practice

Download PDF Introduction Correlation is a pervasive concept in financial markets. It is studied by investors looking for the most reliable way to hedge their exposure while financial products that offer a directional correlation exposure also became substantially more liquid in recent years. Moreover, the substantial mispricing of correlation risk in mortgage-backed securities (MBS) is seen as key trigger of the subprime crisis. In last week’s article, we discussed this year’s correlation breakdown, presented ways Read more…

Estée Lauder to acquire Tom Ford in $2.8bn deal

Download PDF Introduction The second biggest cosmetics company by revenue in the world, Estée Lauder [NYSE: EL] has announced on November 15 that it has signed an agreement to buy the fashion house Tom Ford brand for $2.8bn making it the largest acquisition within the luxury world this year. The deal is an extension of a longstanding relationship between the two firms given Estée Lauder ’s licensing agreement for Tom Ford’s extended product line including Read more…

Basel IV and its Impacts on the Markets

Download PDF What are the Basel Agreements? Financial risks have long been observed and studied, but it was only in 1974, with the failure of West Germany’s Bankhaus Herstatt, that central bankers became aware of and decided to act on settlement risk. For these very purposes, the Bank of International Settlements (BIS), a branch of the Financial Stability Board (FSB), established the Basel Committee that very same year. The aim of the newly fledged committee Read more…

Australia served one of the biggest PE deal in its history – Brookfield and EIG in for Origin Energy in a $11.8bn deal

Download PDF Introduction On November 10th 2022, Origin Energy Ltd. [ASX : ORG], received and backed an $11.8bn takeover bid from a consortium led by Canada’s Brookfield Asset Management [NYSE : BAM] and private equity firm EIG Global Energy Partners. The business is to be split up, with Brookfield acquiring the retail and energy supply business, whilst EIG will take over the company’s gas operations and its stake in the Australia Pacific LNG project. The Read more…

Thermo Fisher to Buy the Binding Site Group

Download PDF Introduction On October 31st, Thermo Fisher Scientific [TMO: NYSE], one of the global leaders in the supply of scientific instrumentation, announced that it had entered a definitive agreement to acquire The Binding Site Group, a Birmingham-based specialty diagnostics firm. European private equity firms Nordic Capital and Five Arrow Principal Investments, owners since 2011, exited The Binding Site in an all-cash transaction, valued at $2.6bn (£2.25bn). The acquisition will allow Thermo Fisher to further Read more…