How fast should an Asia-focused bank grow? There’s no right answer, but the long-term number probably ought to be higher than the 3% compound annual revenue increase that analysts are pencilling in for $200 billion HSBC between 2025 and 2027. New CEO Georges Elhedery announced a broadly sensible strategy for the lender on Wednesday, while implicitly acknowledging that the growth question is partly out of his hands. It makes a further valuation boost unlikely. The centrepiece of Elhedery’s announcement was a $1.5 billion annual cost-cut target by 2027, helped by closing bits of its U.S. and European investment bank. The move makes sense, but

Per Franzén is taking charge of EQT at a pivotal moment. The Swedish buyout shop is big, with about $140 billion of fee-paying assets under management, but it’s not in the same league as U.S. giants like Blackstone and KKR. The $40 billion company’s biggest gap lies in the racy world of private credit, which EQT quit several years ago. Franzén’s legacy might be defined by whether he manages to reverse that historic decision. The EQT veteran, who currently runs the firm’s main investing businesses in Europe and North America, will take over in May from boss of six years

What is a digital currency worth? If it has President Donald Trump’s name on it, the answer right now is more than $7 billion. Despite years of shouting about a decentralized revolution, it’s a reminder that frothy and baseless memes keep flourishing. Even BlackRock boss Larry Fink, steward of a $60 billion bitcoin ETF, is getting bullish, telling the Davos crowd that the OG cryptocurrency could more than quintuple in value if big sovereign wealth investors pile in. It’s a fine line to be treading. In their 2025 outlook, Goldman Sachs strategists put it bluntly: Bitcoin is “a speculative digital asset more suited to gambling than

Today (September 3, 2024) I have attended an investment conference at which the integration of artificial intelligence (AI) in the portfolio management processes was one of the topics discussed by a fund manager. After seeing the launch of generative AI within the wealth management business of some big banks in the U.S., the review of today’s presentation might be a good reality check with regard to the integration of AI in portfolio management processes. The manager runs three portfolios with the help of artificial intelligence. While two of these portfolios are totally relying on the decisions from AI, the AI

Warren Buffett has dropped so much investment wisdom over the past six decades, it would be amazing if even he could keep it all straight. For example, he has scoffed at the idea that cash is king. And yet his conglomerate Berkshire Hathaway now sits on a war chest bulging with some $275 billion of it. It should be helpful as stock markets wobble. The logic of the Nebraska billionaire’s aversion to excess cash is hard to dispute. It’s “always a bad investment,” he said in 2009, because inflation erodes its value over time. As recently as February, he conceded that Berkshire had more of it

A lot has been said about the future perspective for portfolio managers with the increasing possibilities of artificial intelligence (AI). Sometimes I get the impression that AI will replace more or less everyone in asset management and especially in portfolio management. But can such an assumption pass a reality check? It is true that a lot of work in portfolio management can be taken over by AI, but I don’t think that AI will replace portfolio managers at all. In fact, the fund management industry has been using algorithms for decades to determine valuations of markets and securities. These algorithms

Not even the mighty Blackstone can defy the economy. At present that’s a good thing. The $1 trillion asset manager broke a five-quarter run of declining earnings in the fourth quarter. Money deployed for deals and cash flowing into its funds also increased year-on-year after a similar-length dry spell. Boss Steve Schwarzman says 2023 was the industry’s nadir, which means what comes next is the bounceback. Everything is going as a Blackstone investor might hope – except for one precious piece of the puzzle. Like his peers, Schwarzman had a rough 2023. Private equity firms couldn’t easily find cheap credit to fund

Alternative asset managers and U.S. insurers have come together to create a highly profitable version of pass-the-parcel. Regulators, bank executives and investors warn that this fast-growing alliance could be the source of the next financial crisis. Are they right? Insurers have plentiful safeguards to stop them going off the rails. The problem comes when the market evolves rapidly but rules that keep it in check do not. Apollo Global Management and KKR are among the buyout firms that have wedged themselves into the stodgy world of writing policies by buying control of insurers. KKR said on Wednesday it would buy

The Lipper Large-Cap Growth Funds classification encompasses funds that, by portfolio practice, invest at least 75% of their equity assets in companies with market capitalizations (on a three-year weighted basis) above Lipper’s U.S. Diversified Equity Funds large-cap floor. Large-cap growth funds typically have above-average characteristics compared to the S&P 500 Index. The Lipper Leaders Rating System is a toolkit that helps guide investors and their advisors in selecting funds that suit individual investment styles and goals. According to LSEG Lipper, “Each fund is ranked against its peers based on the metric used (such as its flagship risk-adjusted return measure, Consistent

Steve Schwarzman promised shareholders in Blackstone that his firm would reach $1 trillion in assets under management. On Thursday he hit that target – a little later than planned. But there is no rest for the wicked, or the successful. Investors could use a new goal to help value the next phase in its transformation. While Blackstone’s hoard crossed the 13-figure line in the second quarter, it also demonstrated the same slowdown that is affecting the investment industry writ large. Assets under management ticked up only 6% compared with the same period last year. That isn’t in itself surprising. Blackstone is reaching the

Credit Suisse’s underwriters are still several stops short of panic stations. A 20-strong consortium led by Deutsche Bank, Morgan Stanley, Royal Bank of Canada and Société Générale could end up holding a chunk of the stricken lender’s stock if its 2.2 billion Swiss franc ($2.4 billion) rights issue fails. Yet they have a margin of safety, while Chair Axel Lehmann probably has a few fallback options up his sleeve. Shares in the Zurich-based lender have fallen 40% since Oct. 26, the day before it unveiled a new strategy including plans to raise fresh equity. A selloff is normal ahead of a rights

Credit Suisse updated investors on its efforts to offload a chunk of its investment bank on Tuesday, even though it didn’t have much to say. Yet one word in an otherwise fuzzy statement – “premium” – shows that the whole exercise was probably worthwhile for Chief Executive Ulrich Körner. The $12 billion Swiss bank said that it was offloading about $55 billion of assets in its securitised products unit, chiefly to Apollo Global Management, as part of a wider plan to shrink the bits of investment banking that don’t help its core wealth business. But it remained silent on key financial details, including the