The alternatives sector is unique in that it’s largely defined by what it’s not. Accordingly, how you fit alternatives within your existing asset class structure will depend on relativity, and how the investments interact with the other asset classes according to Atchison’s Kev Toohey.
The private markets juggernaut is one that has also thrown up a wealth of data that other players can use to sharpen up due diligence when making their own investment decisions – especially in the growing secondaries market.
ASX falls, Coca-Cola Amatil (ASX:CCL) under offer
ASX falls, Coca-Cola Amatil (ASX:CCL) under offer, IPOs now falling flat
The ASX 200 (ASX:XJO) weakened 0.2% to start the week, with the announcement of a release of Victorian Stage Four restrictions not enough to trigger a rally.
The IT and Banking sectors lead the market lower, with Westpac Banking Corporation (ASX:WBC) falling 0.4% after announcing another $1.2 billion write-down centred on ‘software costs’ and their insurance division.
The news of the day was the unexpected (on Friday at least) $9.3 billion bid for Coca-Cola Amatil (ASX:CCL) by Coca-Cola European Partners.
The $12.75 per share offer sent shares 16.3% higher, to $12.50 with very little likelihood of a secondary bidder.
Following on the from the bid for Link Administration Services (ASX:LNK) this is highlighting the global search for growth that is occurring.
Cashed up global businesses are using the opportunity to diversify and add alternative growth streams at a time when debt has never been cheaper; which can make even mature businesses like CCL attractive.
Private equity upgrades offer for LNK, IPO bubble at risk of deflation
As flagged last week, private equity giant Carlyle Group increased their offer for LNK, sending shares 0.8% higher to $4.95 but well below the revised $5.4o offer price.
The acquirers also flagged the support of 14% of the share register including asset manager Bennelong, suggesting they are serious on closing the deal.
As part of the proposal Carlyle are offering investors a number of options, including the opportunity to retain shares in the fast growing PEXA property settlement platform, an asset I have been keen on for some time.
The board are yet to approve formal due diligence, but will hopefully do so this week, which should see the discount reduced.
Elsewhere it seems the froth is coming out of the IPO bubble, Adore Beauty (ASX:ABY) falling 16.2% and now well below its float price and the latest BNPL group Zebit (ASX:ZBT) falling over 20% on listing.
US markets fall most in a month, technology heads lower, economic weakness growing
US markets have fallen the most in a month overnight, the S&P 500 and Nasdaq down 1.9% and 1.6% respectively.
Alphabet (NASDAQ:GOOGL) is set to announce earnings after the market close but is sitting 3.6% lower in advance.
Cyclical business, including cruise liner Carnival Corp (NYSE:CCL) were the worst performers as US Coronavirus cases hit a new high of close to 70,000 overnight, increasing the risk of further economic shutdowns and a stalled economic recovery.
This has been exacerbated by the now very unlikely introduction of a much-needed fiscal stimulus package.
SAP SE, Europe’s most valuable technology firm and specialist software and systems designer fell the most in 24 years, down 21.9%, after flagging a 20% cut to full year earnings.
Despite the companies huge demand as the digital transformation gathers steam, European restrictions are starting to bite.
It’s a big week ahead for markets, with Australian banks offering quarterly updates, inflation figures due and each of the FANG stocks set to report.
I’m expecting a negative finish to the month.
