Alternative Investing Report - September 23, 2024

_{*as of 9/22}

Two more companies, Virtus and BondBloxx, have filed to create actively managed private credit ETFs, just days after Apollo and State Street’s proposed ETF became known to the public. Virtus is a Connecticut-based asset manager with $173.6 billion in assets under management and already operates 18 ETFs. BondBloxx is purely an ETF issuer and manages $3.3 billion over 24 ETFs.

➨ TAKEAWAY: Retail investors are increasingly looking for private market exposure, and these companies are attempting to service that need. The winner in this race to be the first to launch an actively managed private credit ETF is likely to see considerable inflows. However, the real winners will be investors, as there will soon be more options to gain exposure to the private credit market.

Citi’s Global Family Office Survey found that 97% of family offices expect positive returns in the next year, with nearly half expecting double-digit gains. This is the most optimistic outlook in the five years that the survey has existed. Family offices are also allocating 40% of their portfolios to alternative assets, with private equity, real estate and venture capital most popular. Meanwhile, only 17% of all family offices hold any digital assets, with those holdings making up less than 1% of their portfolios.

➨ TAKEAWAY: Family offices anticipate a bull market, and 2025 is shaping up to be a big year for private markets. Family offices have long-term horizons, so it makes sense that they would gravitate towards asset classes like real estate and venture capital that take a while to mature and have low liquidity options but offer strong returns.

With the election fast approaching, market watchers are bracing for impact. On September 30 at 1 PM ET, join CEO of SkyBridge Capital - and former White House communications director - Anthony Scaramucci along with Vincent co-founder Slava Rubin as they discuss the upcoming election and what you need to know as an investor. You won’t want to miss it!

🤖 OpenAI’s record-breaking round: The Generative AI startup is reportedly going to raise a $6.5 billion funding round, which would be the biggest venture capital round ever, beating the $6 billion war chest that xAI raised earlier this year.

🏡 Existing home sales down: Sales of existing homes fell by 1% monthly and 3.1% year-over-year, to the lowest level since the pandemic, while pending sales also dropped by 1.9% monthly and 2.4% year-over-year. The decline in mortgage rates and the recent Fed cut give investors hope that these numbers have hit bottom.

🚀 Fed cuts and exit activity: Over the last ten years, after a Fed rate cut venture-backed software exit activity has increased by between 10% and 65% in the following twelve months.

🏀 New Wemby set: Topps’ first “Mercury” branded single-player set is being released on October 9, and will feature NBA Rookie of the Year Victor Wembanyama, one of the hottest prospects in recent memory. Boxes will contain 8 cards, including two autographs, and will retail for $8,000.

🪙 $230 million crypto heist: The Feds arrested two men who are accused of stealing $230 million from a single person last month in a targeted social engineering hack and then buying luxury vehicles, watches, jewelry, handbags and rental homes in Los Angeles and Miami.

🎨 Michael Jackson’s artwork: A collection of 76 signed works of art, supposedly created by the late King of Pop, are going to be auctioned in October as a single lot, with a estimated value of between $12 million to $30 million. However, the Estate of Michael Jackson disputes the authenticity of the collection, making the results an interesting test of the importance of provenance.

🏢 Waterton’s multifamily fund: The national real estate operator announced a $1.73 billion fund to be focused on multifamily buildings, where they see “significant opportunities” due to the recent downturn in property values.

This week: The U.N. General Assembly continues in New York.

Tuesday: S&P Case-Shiller Home Price Index; FHFA House Price Index. Caroline Ellison of FTX will be sentenced.

Thursday: Christie’s 20th/21st Century Evening Sale, headlined by a Van Gogh and Monet, each expected to sell for more than $20 million.

Friday: Christie’s 20th and 21st Century Day Sales, featuring four high-profile Yayoi Kusama works; Sotheby’s Contemporary auction, headlined by a Ruth Asawa sculpture with an estimated $2 million - $3 million price tag.

Saturday: Goldin Elite Auction, featuring a 1 of 1 2004 LeBron James signed game-used patch card.