- $300bn in ETFs Affected by S&P Indices Reshuffle “S&P Dow Jones Indices has tweaked the methodology for its 11 Select Sector indices tracked by $300bn in exchange traded funds in response to large market swings in the technology industry, the index provider has disclosed. The rebalance was the result of concerns within S&P regarding the continued growth of certain technology stocks such as Apple, Microsoft and Nvidia, the company noted in a September 10 article on its website. Some 42 ETFs with a combined $303.6bn in assets track Select Sector Indexes, according to data from Morningstar Direct.” (Financial Times)
- Can Evergreen Funds Ever Scale? “The private capital industry has been trying for years to democratize access to its funds. In the early 2000s, some of the largest banks, such as UBS (NYSE: UBS), set up feeder funds that aggregated client money to invest in private equity and other strategies. The aim was to attract more “core affluent” individuals to unlisted assets. But these vehicles have had limited success. In more recent times, private firms themselves have tried to scale this effort, but with limited uptake, according to HarbourVest Managing Director Simon Jennings. One reason? This crowd expects to be able to take out their money when they want.” (Mergers & Acquisitions)
- Alternative Assets: Why Governance Is Key to Strategic Advantage “Alternative assets, including private equity, hedge funds, real estate, commodities, and digital assets, have become increasingly attractive to investors for their potential to deliver higher returns and diversify portfolios. For example, critical minerals—essential to produce electric vehicles and renewable energy technologies—have seen a surge in investment. However, the complexity and diversity of their regulatory environments pose unique compliance challenges. The intricate structures and multi-layered investments inherent in alternative assets often obscure early warning signs of potential regulatory breaches, leaving asset managers, investment funds and portfolio companies vulnerable to unforeseen risks.” (World Economic Forum)
- ETFs Keep Coming for Private Markets “Last year NewVest launched an index fund that invests in actual private equity funds (though you could just call that a fund-of-funds). And then there’s ARK, which we guess kinda looks like a VC ETF if you’re drunk and squint a little. But there’s clearly more ambitious stuff in the pipeline, from both whales like BlackRock and ETF industry minnows. After all, if you can really package up privates in a non-terrible way (that’s a big caveat though) and sell them to retail investors, the opportunities are huge.” (Financial Times)
- When Will Public and Private Equity Markets Finally Converge? “Much of the current excitement around private assets surrounds closed-end vehicles like interval funds. In those structures, fund companies can create portfolios made up entirely of private companies. So, has private company equity ownership, in aggregate, helped or hurt investors in mutual funds? And what would that mean for the potential of private equity in interval funds or other closed-end vehicles? I examined those questions and more in my most recent research on mutual funds’ ownership of private company equities.” (Morningstar)
- Issuers Heeding Investor Calls for Bond ETF Innovation “While macro conditions have created an environment for fixed income to thrive, the ability to control duration exposure using the wrapper has often been lacking and something fund selectors have been calling for since it became apparent ‘bonds are back’. One recent innovation helping investors in this case was fixed maturity ETFs. The ability to remain nimble while navigating the US Treasury yield curve has been a major asset to portfolios, allowing precision when pinpointing where investors want to be on the yield curve.” (ETF Stream)
- Momentum Continues for Secondaries—With Record Year in Sight “Improving LP-led pricing, continuing adoption by both GPs and LPs, and a growing supply of capital has the secondary market poised for a full rebound—and possibly record volumes—by year-end. Indeed, bullish early-year predictions for both LP- and GP-led activity appear to be playing out, with especially high GP-led deal activity paced by strong interest in multi-asset continuation funds. William Blair’s Private Capital Advisory team outlines the state of the secondary market in its latest report, including the following topics: What drove LP-leds' first half and how improved pricing is motivating sellers; GP-led interest grows as continuation funds generate returns akin to buyout funds; Reasons to expect a strong outlook going into 2025.” (William Blair)
- Why Private Equity’s Dirty Little Secret Worries This Investment Titan “While most of us spent the past month glued to the incredible rise in China’s sharemarket, the records broken on Wall Street and the ASX, and the animal spirits on display with the AirTrunk sale and OpenAI fundraising, an extraordinary boom was under way on bond markets. A staggering 1226 issuers – governments, companies and everything in between – sold debt in September, breaking the record for that month by raising more than $US600 billion ($876 billion).” (Financial Review)
- Blue Owl Builds Infrastructure Capabilities with $1B Acquisition of IPI Partners “Blue Owl Capital is looking to build up its infrastructure capabilities with the acquisition of a digital infrastructure fund manager. The alternatives asset manager has agreed to buy the business of IPI Partners from an affiliate of ICONIQ Capital and an affiliate of Iron Point Partners for roughly $1 billion — about 80 percent in stock and 20 percent cash. The acquisition will add about $10.5 billion in assets to Blue Owl and augment the firm’s digital infrastructure strategy, which is part of real estate. Blue Owl Co-President Marc Zahr will continue to lead real estate, with IPI’s managing partner, Matt A’Hearn, heading up digital infrastructure and reporting to Zahr.” (Institutional Investor)
- Ether ETFs See Zero Flows for Second Time as Bitcoin ETFs Post Biggest Inflows in 6 Days “Ether (ETH) exchange-traded funds (ETFs) in the U.S. saw zero flows on Monday for only the second time since their listing in July, according to data gathered by SoSoValue. Bitcoin (BTC) ETFs, meanwhile, enjoyed their highest inflows since Sept. 27, adding a net $235.2 million. Fidelity's product (FBTC) led the gains with $103.7 million while BlackRock's fund (IBIT) garnered $97.9 million. In contrast, the nine ether ETFs registered zero flows in either direction. The only other time this has occurred was Aug. 30.” (CoinDesk)
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