Jul 12, 2024

I recently heard about the trial of the decade on Wall Street, where Bill Hwang, the founder of Archegos Capital Management, was found guilty of criminal charges stemming from his firm’s 2021 collapse. The case unraveled the mad scramble of Archegos’ last three days, based on evidence including tapes, internal chats, and emails. In other news, Goldman Sachs has warned that there’s a very short window to bet against the dollar, which could have significant implications for the financial markets. Additionally, the venture capital market is under pressure, with U.S. startups receiving significantly more venture capital funding in Q2 2024 than in the prior quarter or in Q2 2023, but the number of startups receiving such funding was significantly lower, reflecting the current challenges in the venture market. Lastly, there have been several major fundraising, private equity deals, public offerings, and liquidity events in the financial industry, indicating a dynamic and evolving landscape within the sector.

Today in the financial news, several venture capital and private equity firms have announced new funds and key personnel moves. Booom raised €17m for its debut fund, which will focus on backing angel-through-seed rounds for European B2B software startups. Kearny Jackson, an early-stage VC firm, raised $65m for its third fund. Additionally, RCP Advisors of Chicago is raising up to $800m for its fifth PE co-investment fund, with $116m already committed. Shield Capital, a national security-focused VC firm, has secured $116m for a $350m-targeted second fund. In terms of personnel, Brad Fischtrom joined Altamont Capital Partners as an operating partner focused on P&C; insurance investments, and Andrew Hewlett joined Bailey & Co. as a managing director of health care investment banking. Carlos Pinto, previously with RBC and Morgan Stanley, joined XMS Capital Partners as a London-based managing director focused on fintech and financial services.

In other news, Vista Outdoor’s sale of its ammo business to Czech arms company Czechoslovak Group faced a surprise twist when Institutional Shareholder Services reversed its support for the sale. The shareholder vote on the ammo unit sale to Czechoslovak Group is scheduled for July 23. Meanwhile, Citadel Securities is working on a new strategy to handle more of Wall Street’s trading, aiming to offer a white-label trading service to banks and brokerages to help them manage their trading desks more efficiently. This move comes as banks and brokerages face increasing pressures to lower fees and make costly upgrades. These developments reflect the evolving landscape of the financial industry, with firms seeking new strategies to navigate changing market dynamics and regulatory environments.

In recent news, there have been increased restrictions on banks, leading to a decrease in their interest in risk-taking and their ability to take big trading positions. This has shifted the capacity for big trading positions to entities such as hedge funds, proprietary trading firms, and alternative asset managers.

Another headline involves Bill Hwang, who was convicted of market manipulation after his family office, Archegos Capital Management, bought a large amount of shares with the intention of pushing their prices up. Despite having paper profits, Hwang did not have a clear plan to make money from these actions, which is a cause for concern.

Stay Well!