Tag Archive for 'Investing'

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For Hedge Fund Investors, Brazil Is the Country of Now

Published on April 1, 2011 in Emerging Markets and International Finance. 0 Comments Tags: , , , .

Ten years ago, Goldman Sachs proclaimed that Brazil was among the new economic powerhouses. Now it is the next frontier for hedge funds. Looking to capitalise on the fast-growing region, global hedge fund managers have started to descend on Brazil. In all, hedge fund assets devoted to the region rose 75 percent, to $21.4 billion, in 2010, according to data from Hedge Fund Research.

The appeal is obvious. While many developed countries have sputtered amid weak economic growth, Brazil has continued to thrive, given its rich reserve of natural resources and growing middle class. Last year, the country’s gross domestic product increased 7.5 percent — helping catapult Brazil ahead of Britain and France to become the fifth-largest economy in the world.

“In the past five years, about 34 million Brazilians entered the middle class,” said Oscar Decotelli, a partner at Vision Brazil Investments, a $2 billion alternative investment firm based in São Paulo. “This for a population of 200 million is significant. Brazil is not just a commodity story, but a very strong domestic story.” [Source]

Cleantech 2.0 Is on Its Way

Published on February 27, 2011 in Greentech. 0 Comments Tags: , , .

A learning curve — it’s starting to happen slowly but surely for investors in the cleantech industry. That second wave — or Cleantech 2.0 — will likely be more focused on private equity, will look to scale some of the already proven innovations, and will be far more global in scale.

“We got really excited about this growth area,” said Mondre. The bulk of funding for cleantech has gone into early stage high-risk companies, and there’s been very limited capital going into helping people scale businesses once they’ve reached technological feasibility [Source].

Deutsche Boerse and NYSE Euronext Seal Deal

Published on February 15, 2011 in International Finance. 0 Comments Tags: , .


Deutsche Boerse AG and NYSE Euronext on Tuesday unveiled a widely expected merger agreement that would create an exchange powerhouse by becoming the world’s largest owner of equities and derivatives markets [Source].

The merger deal creates an unprecedented exchange powerhouse with more than $20 trillion (12.4 trillion pounds) in annual trading volume and operations in Germany, France, Britain, Amsterdam, Portugal, Belgium, and the United States [Source].

Together, Deutsche Boerse’s Eurex unit and NYSE Euronext’s London-based Liffe unit would dominate European exchange-based futures trading, with more than 90 percent overall, raising antitrust questions among market regulators. After a few years off that included the financial crisis and the beginning of a global regulatory revamp, the world’s exchange operators are back in the takeover game [Source].

“Overall, we find this transaction compelling on an operational and strategic basis,” wrote BMO Capital Markets analysts in a Monday note examining the potential tie-up between Deutsche Boerse and NYSE Euronext.

“However, we also have concerns about the deal, most of which relate to timing and likelihood of regulatory approvals, synergy realization, as well as longer-term management and cultural issues,” BMO [Source]

Intel Continues Big Spending Spree

Published on January 13, 2011 in International Business. 0 Comments Tags: , .

Intel said today it will spend $9 billion on chip factories and other capital improvements in 2011, far above the $5 billion in spent in 2010.

The company made the disclosure in its fourth quarter earnings report, which set a new record for the world’s biggest chip maker. Intel has never been timid about spending money during downturns. But now that we are in a full-blown recovery, as evidenced by the company’s strong sales of $43.6 billion in 2010.

Each huge chip factory costs Intel around $2.5 billion. The picture above shows a new chip factory that Intel built in China. Intel said it would also spend about $7.3 billion on research and development in 2011. That amount includes the research the company has to do in order to develop the manufacturing process for its newest factories.

The spending is all the more staggering when you think that Intel spent $7.68 billion to acquire security software vendor McAfee. Even with that diversification, Intel has the cash to spend on factories. Intel has $16.7 billion in cash and short-term investments [Source].

The Emerging Emerging Markets

Published on December 23, 2010 in Emerging Markets. 0 Comments Tags: , , , .

The “new” emerging markets come in two varieties: “overlooked” countries that can rival the BRICs in terms of prosperity; and “frontier” countries that are only just beginning to emerge from their chrysalises.

The biggest concentration of overlooked markets is in Africa (which is in many ways an overlooked continent). Africa’s star performers are South Africa, Egypt, Algeria, Botswana, Libya, Mauritius, Morocco and Tunisia. Collectively these countries match the average GDP per head of the BRICs. Basically there are greatly overlooked emerging giants in every corner of the world. For example in the Middle East, Turkey and Saudi Arabia will attract a lot of attention. But the biggest praise will be for Indonesia: it will be the emerging-market star of 2011, with analysts lauding its innovative companies, growing middle class and relative political stability [Source].

The frontier markets are poorer and riskier than the overlooked ones. They include Sri Lanka, Bangladesh and Pakistan in Asia, as well as Kenya, Nigeria and Rwanda in sub-Saharan Africa. You will hear a great deal about the unexpected merits of frontier economies in 2011. Nigeria, home to the tenth-largest oil reserves in the world, has stabilised its politics. The World Bank listed Rwanda as its champion pro-business reformer in 2010. Analysts will develop a special enthusiasm for Vietnam, which is well-placed to steal outsourcing jobs from China [Investors Explore the Frontier Markets].

VCs say they’ll invest, hire and sell more in 2011

Published on December 20, 2010 in International Business. 0 Comments Tags: , .

Venture capitalists say they will invest more in 2011 as hiring in the sector heats up and selling begins to shake off the lingering woes of the financial crisis, according to a study released today by the National Venture Capital Association (NVCA) and Dow Jones VentureSource.

Still, despite the initial upbeat nature of the report, it is clear that many venture capitalists remain worried about a bubble developing in Silicon Valley and are divided about how fundraising will shape up over 2011 [Source].

Chinese I.P.O. Bubble?

Published on December 14, 2010 in International Finance. 0 Comments Tags: , .

China-based companies have gone public on the U.S. market in record numbers in 2010. Last week, shares of Youku, called the YouTube of China, rose 161 percent in the first day of trading on the New York Stock Exchange. E-commerce China Dangdang, an online retailer heralded as the Chinese Amazon.com, popped 87 percent after its initial public offering the same day.

Amid a sluggish I.P.O. market, companies from China are finding a home in the United States. Last week, six Chinese stocks started trading on the New York Stock Exchange and Nasdaq, the most ever in a single week. The 35 Chinese offerings so far this year have accounted for 23 percent of I.P.O.’s in the United States, up from 1 percent in 2000, according to Thomson Reuters.

The trick for investors— as in the late 1990s dot-com bubble — is separating the future Amazons from the Pets.coms. While I.P.O.’s can make investment bankers and founders rich, regular investors who do not get the initial price rarely make the same returns.

[Source 1] [Source 2]

Gearing Up for the Coming Tech Boom

Published on November 30, 2010 in Real-Time Web and Social Media. 0 Comments Tags: , , , , , , .


Amongst others, VC firm, Kleiner Perkins Caufield & Byers, is gearing up for the coming tech boom. That’s one of the reasons they hired famous Morgan Stanley analyst Mary Meeker as a new partner on Monday [Source].

Meeker said: “We’re at the beginning of another great wave of tech innovation and I am incredibly excited by the opportunity to help the next generation of Internet technologies and leaders.” [Source]

Gordon (partner @ Kleiner) said he sees a big boom coming, not a bubble, much like Kleiner’s managing partner John Doerr, who said that we’re in the midst of yet another boom for internet investments at the recent Web 2.0 Summit. The reason is that he sees a lot of technologies that are changing the way we live.

“The world of digital media is being transformed,” Gordon said. “A bunch of new businesses can be reinvented, thanks to social graphs, the mobile internet, and the new shopping habits of the young. Those are going to create a whole generation of cool new companies.” [Source]

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Another Technology Bubble?

Published on November 24, 2010 in International Business. 0 Comments Tags: , , , .

Is the world ready for another Internet bubble?

Ready or not, it appears to be coming. In fact, it may already be here. And it seems to look, not surprisingly, like the last Internet bubble [Source].

First, there’s plenty of deal flow. Dealogic data shows that the number of technology deals — more than 5,100 so far this year — is at its highest point since the year 2000. Back then, in the peak year for Internet deal-making, there were 7,007 technology mergers and acquisitions.

At the Web 2.0 Summit, Venture capitalists John Doerr said technology was in the middle of a third wave of innovation. (The previous two waves were the PC revolution in the 1980s and the Internet boom in the mid-1990s.) The current wave, he said, is focused on smartphones and social networking — or “social graphs” as he called them.

Doerr: I prefer to think of these bubbles as booms. I think booms are good. Booms lead to overinvestment, booms lead to full employment, booms lead to lots of innovation. You know, there was a boom when they started the railroads. We’re in another bubble — or boom — and it’s an exciting time [Source].

Newfound Strength in Frontier Markets

Published on November 15, 2010 in Emerging Markets. 0 Comments Tags: , , .

Frontier investing is a new-enough phenomenon that professionals disagree on which countries make up the sector. Different managers and index providers include different names. The Guggenheim Exchange Traded Funds (ETF), for example, has Chile and Poland among its top five holdings, though neither is part of the MSCI Frontier Index. The index includes such diverse countries as Argentina, Romania, Kenya and Kazakhstan. See also this post.

Even if you believe that frontier countries will grow far faster than the developed world, you have to deal with the practicalities, including cost, of investing in them, he said. Frontier funds tend to be more expensive than average and have short records.

Almost everyone, including MSCI, puts Nigeria in the frontier category. “I get people asking, ‘Who’s the next Brazil?’ “said Adam J. Kutas, manager of the Fidelity Emerging Europe, Middle East and Africa fund. “I answer without hesitation that it’s Nigeria,”.