Alternative Investing Report - March 21, 2025

*as of 3/20; Sources: S&P, BTC, FTSE, DJRE, 30YM

Fund managers reduced their exposure to the U.S. stock market by a record amount, according to Bank of America’s most recent Global Fund Manager Survey. The report, which covers the responses of more than 200 institutional fund managers with $477 billion of AUM, showed a decline in U.S. equity allocations of 40% over the last month. Managers are turning to international equities, with Eurozone and U.K. allocations increasing. Overall sentiment fell from 6.4 in February to 3.8 in March, a seven-month low.

➨ TAKEAWAY: There is a lot of uncertainty surrounding the current administration’s economic policies - managers’ biggest concerns surrounded the trade war and tariff policies, inflation, and the effects of Elon Musk’s Department of Governmental Efficiency. This has caused managers to adopt a risk-off position, and they are viewing U.S. stocks as the more risky bet right now. This could benefit alternative asset classes such as private credit and certain types of real estate, which are generally viewed as relatively lower risk.

Vincent founder Slava Rubin and Sacra co-founder Jan-Erik Asplund deep dive into CoreWeave, the AI cloud company on track for a $35 billion IPO as soon as next week. They talked about CoreWeave’s explosive growth, its relationships with Microsoft and OpenAI, and its upcoming IPO. This recording is exclusively available to AIR Insiders.

Private credit hauled in $197.1 billion in 2024, a 20% decline from 2023, but still enough to make it the second largest fundraising strategy in private capital markets, behind only private equity. Fund counts did drop significantly to 158 from 501 in 2022, as larger funds hold the fundraising advantage. Current direct lending AUM hit $678.5 billion, representing a 22.2% annual growth rate in the last decade, highlighting the explosive growth in the sector.

➨ TAKEAWAY: The private credit landscape has gotten much more crowded as the popularity of the asset class grows. Still, proven managers are attracting most of the activity, as the share of fundraising by emerging managers fell to just 6% last year. Competition for fundraising and capital will only benefit investors, as more funds target individuals, and will have to offer more competitive terms to secure investments.

🏡 Existing home sales jump: In a surprising result, existing home sales beat expectations and rose by 4.2% in February, though they are still down 1.2% year-over-year. The median sale price was up 3.8% year-over-year, with the Northeast seeing the biggest growth at 10.4%.

⚾ Skenes card tops $1 million: A 1 of 1 Topps Chrome Rookie Patch Autograph of Paul Skenes, the reigning National League Rookie of the Year, sold for $1.1 million, smashing the record for any of his cards in an excellent showing for the high-end baseball card market.

🪙 Kraken buying NinjaTrader: The U.S.-based crypto exchange Kraken has agreed to buy the futures trading platform NinjaTrader for $1.5 billion, allowing it to offer crypto futures and other derivatives when the transaction closes.

🏢 Office market bottom: As more companies are ending work-from-home policies, office leasing activity is rising, making the sector poised for more sales activity and a rise in valuations.

🚀 Next Insurance buyout: The German insurance company Munich RE is buying digital insurance startup Next Insurance for $2.6 billion, just above its last valuation of $2.5 billion.

🤖 AI pirating books: Court documents show that Meta downloaded a pirated trove of more than 7.5 million books and 81 million research papers to train its AI models, and that OpenAI may have done the same, opening both companies up to potential legal liability.

Monday: 🚀 Klarna IPO, 🪙 Ripple v. SEC
Tuesday: 🏡 Midwest markets, 🚀 Startup acquisitions
Wednesday: 🚀 Google buys Wiz, 🏡 Homebuilding update
Thursday: 📊 Fed rate decision, ⚾ Honus Wagner T206

Have a great weekend!