Nick Dignam from Fortitude Investment Partners shares insights with Lachlan Maddock from Fortitude Investment Partners on how a diversified portfolio in mid-market private equity is structured. The Inside Adviser
The world of alternative investments is at a crossroads. As markets defy expectations and liquidity concerns take centre stage, investors find themselves forced to rethink how they deploy capital in an increasingly complex environment.
Charter Hall (ASX:CHC) and Centuria (ASX:CIP) continue to acquire
ASX up and running, to open weaker, Charter Hall (ASX:CHC) and Centuria (ASX:CIP) continue to acquire
The ASX (ASX:ASX) managed to open on time Tuesday after significant issues to begin the week, though management flagged some ‘settlement’ issues had also arisen, sending the share price 1.5% lower.
In terms of the ASX200 (ASX:XJO) it was more of the same, finished 0.2% higher despite great news regarding the Moderna (NASDAQ:MRNA) vaccine, the key beneficiaries being the banking and energy sectors.
The financials were led higher by the National Australia Bank (ASX:NAB) which improved 1.6%, with an improving global outlook pointing a more positive future.
The traditional banking model relies on management delivering a consistent or growing ‘net interest margin’ reflecting the difference between the cost of their borrowings (our bank balances) and the interest they charge.
Obviously, interest rate near zero make this incredibly difficult, so signs of a vaccine suggest higher interest rates and improving profits ahead; that said, it’s unlikely dividends will return to previous levels overnight.
The strong get stronger, CHC and CIP on the prowl, energy rally is pushing oil past fair value
As highlighted yesterday, the energy sector led the way on Tuesday, with the hope of a vaccine sending the oil price sharply higher.
Oil Search Ltd (ASX:OSH) added 5.1% for the session alone, however, the likes of Macquarie are now suggesting that many companies in the sector maybe trading above fair value and ahead of a sustainable level for the oil price.
All the action was in the property sector, with Centuria Industrial REIT (ASX:CIP) and Charter Hall Group (ASX:CHC) both on the acquisition trail.
CIP announced a $125 million capital raising to fund the acquisition of three cold storage distribution facilities for $171 million.
CHC on the other hand entered a deal to purchase $353 million worth of Bunnings stores in partnership with VFMC and Telstra Super, the deal was done at a yield of 4.63%; CHC shares finished 5.9% lower.
Crown Ltd (ASX:CWN) has buckled to regulatory pressure, banning junket operations to Australian casino’s following anti-money laundering issues, shares added 1.5% on the news, but there is a difficult period ahead for the travel reliant sector.
Tesla (NASDAQ:TSLA) joins the S&P 500, markets weaker on virus surge, Airbnb IPO ahead
US markets will offer a weaker lead to the ASX today, with the S&P500 and Nasdaq down 0.5% and 0.2% respectively.
The weakness has stemmed from an incredible spike in COVID-19 cases and responses in many states across the country aimed at once again restricting movement. Investors are being forced to weigh up the short-term economic damage with the eventual recovery should a vaccine become available.
Tesla Inc. (NASDAQ:TSLA) was the highlight rallying 8.2% after it was finally added to the S&P500 index which will require passive funds and ETF’s to buy up shares before December 2021.
Amazon Inc (NASDAQ:AMZN) continues to flex its muscles announcing a potential entry into the highly profitable pharmaceutical sector, sending companies like CVS (NYSE:CVS) and Walgreen’s (NYSE:WBA) down over 8% each.
