Alternative Investing Report - December 11, 2024

*as of 12/10; Sources: S&P, BTC, FTSE, DJRE, CL50

Global M&A deals have hit nearly $3 trillion in 2024, already a 10% gain compared to 2023, and activity has surged since the election. Generally, many deals happen on Monday after details are finalized over the weekend. For example, there were more than $35 billion in deals this past Monday, led by advertising group Omnicom’s $13 billion acquisition of rival Interpublic. This follows another $35 billion Monday two weeks ago that was led by building materials giant Quikrete’s $11.5 billion acquisition of Summit Materials.

➨ TAKEAWAY: With election uncertainty out the window, the deals are starting to flow. The business world is also anticipating a friendlier approach to M&A from the incoming administration, which could set up a much bigger 2025 for dealmaking. This could be a boon for both private equity and venture capital, which have struggled to find liquidity options for investors due to IPO and M&A slowdowns.

Sotheby’s much-anticipated GOAT Collection auction saw 41 items from football legend Tom Brady’s personal collection sell for a total of just over $9 million. His game-worn college jersey from his final game at Michigan sold for $792,000, setting a new record for a college football jersey. The highest-selling lot was a Rolex Daytona Paul Newman watch that sold for $1.14 million, above the $900,000 high estimate.

➨ TAKEAWAY: The auction was a success overall, as all 41 lots sold, 24 of them for above the high estimate, while none sold below the low estimate. Many of these items, particularly the luxury watches, would have sold for high sums regardless of who owned them, but having Brady’s name attached certainly doesn’t hurt. It is no surprise that rare, desirable items with a star provenance exceeded expectations.

In the newest episode of Smart Humans, Slava Rubin talks with Nectar co-founder and CEO Derrick Barker about investing into real estate debt, how to underwrite multifamily buildings and picking the next hot real estate market.

🤖 Quantum computing: Google announced a major breakthrough in quantum computing, as its new chip “Willow” is now reportedly capable of solving a computing challenge in five minutes that would take a supercomputer 10 septillion years. Quantum computing seems to be the next technical frontier after AI, and investors may look to get in early.

🪙 SEC rejects Solana ETFs: The regulatory agency is denying the applications of multiple issuers aiming to create spot Solana ETFs, as they will not be approving any new crypto ETFs under the current administration. Expect eventual approval of Solana ETFs once the new administration and SEC chair are in place in 2025.

🚀 Legal tech booming: Total VC funding for legal tech startups has already reached $2.7 billion in 2024, an all-time high and a 170% increase over last year, as companies look to disrupt a staid and technophobic industry.

🎨 Art Basel Miami roundup: Major gallery sales from the last major art event of the year included a Yayoi Kusama for $3.5 million, a George Condo for $2.5 million, and a Mark Ryden for $1.5 million. The full list of six and seven-figure sales is a great barometer for which ultra-contemporary names are selling well - and many of the works are from 2024.

💵 Alts in 401(k)s: Scott Nuttall, the CEO of the investment firm KKR, said that private market investments should be eligible for 401(k)s, as the long-term nature of alts matches long-term planning for retirement.

🚀 NBA player’s sports tech fund: Former Laker and NBA champion Metta World Peace announced a new venture fund, Tru Skye Ventures, that is looking to raise $100 million to invest into sports tech startups, among others.

Tron has been in the news recently due to its founder Justin Sun, who bought a $6.2 million banana and then ate it, and who then invested $30 million into Donald Trump’s crypto venture. The Tron blockchain allows developers to create decentralized applications, and this year has seen a surge in stablecoins issued on its chain. While its price has dropped the most this week of any coin in the top-50 by market cap, it is still up more than 60% in the last month and more than 150% in 2024.

Advertisement Disclaimer: Alternative investments are speculative and possess a high level of risk. No assurance can be given that investors will receive a return of their capital. Those investors who cannot afford to lose their entire investment should not invest. Investments in private placements are highly illiquid and those investors who cannot hold an investment for an indefinite term should not invest. Private credit investments may be complex investments and they are subject to default risk.