Alternative Investing Report - September 27, 2024

_{*as of 9/26}

The U.S. dominated the list of the best startup cities in the world, as San Francisco once again ranked #1, followed by New York, Los Angeles and Boston. The rankings look at deal values, deal count, exit activity, and fundraising, among other factors, and are meant to offer founders, operators and investors a framework to decide where to locate operations. The top international markets are Shanghai, London, and Tokyo, but the U.S. still holds 11 of the top 21 spots.

➨ TAKEAWAY: The decline of San Francisco has been a common story since the pandemic, but it still remains the center of the venture capital world. Just last week, OpenAI announced plans to expand its San Francisco campus and signed a separate office lease, the biggest in the city this year. Additionally, it came out that former Speaker Nancy Pelosi’s husband has been investing into commercial real estate in San Francisco, generally a bullish sign.

On September 30 at 1 PM ET, join SkyBridge Capital’s Anthony Scaramucci and Vincent co-founder Slava Rubin as they discuss the upcoming election and what you need to know as an investor. Get the opportunity to have the experts answer your questions on the election and investing. Don’t miss out!

The fall art auction season kicked off with Christie’s 20th-21st Century Evening Sale in Hong Kong, which saw $133 million of sales, near the mid-point of the pre-sale estimate of $110 million - $170 million. The most prominent lot, a Van Gogh work, saw a mildly disappointing result, selling for $27.6 million after some hope of hitting the $50 million mark, which would have set an Asian auction record.

➨ TAKEAWAY: While the results at the top end were a little soft, overall the auction saw solid results, with 40 of the 43 lots selling, and 13 exceeding estimates versus only 2 that fell short. Of particular note was a Ronald Ventura (born 1973) painting that sold for $4.6 million against a pre-sale estimate of just $230,000 - $360,000 and a Lucy Bull (born 1990) painting that sold for $2.4 million against a pre-sale estimate of $640,000 - $1 million. Both are contemporary artists, so those results are promising for a category that has struggled recently.

🤖 OpenAI restructuring: The ChatGPT creator is reportedly switching from its non-profit structure to become a for-profit corporation and giving founder Sam Altman 7% of the company, which represents around $10 billion worth of shares. This comes after Altman has repeatedly said it was better for him not to have a stake in the company and that he doesn’t need more money. This decision may also be related to this week’s resignation of Mira Murati, the company’s CTO.

💵 Citigroup & Apollo: The two financial titans are partnering for a $25 billion private credit and direct lending program, in yet another example of a traditional bank partnering with a non-bank lender to get private credit exposure.

🏡 Climate risk: More new property listings than ever are classified as having a “major climate risk” such as extreme heat, flooding and wildfires. Over 80% of potential buyers are now considering climate risks when buying a home, and locations with lower risks could make for better investments.

🪙 Polymarket token: The popular crypto-based prediction platform, which has taken almost $1 billion in wagers on the upcoming election, is considering launching a token as part of an effort to raise $50 million in capital.

🤖 Anthropic’s next raise: The AI startup is reportedly looking to raise a new funding round at a valuation of $40 billion, more than double its previous valuation of $18.4 billion in March.

👛 $1 million colonial coin: One of only two known New England Threepence coins from 1652 is going to be auctioned off in November at Stack Bowers Galleries and carries a possible $1 million price tag.

🚀 Hone Capital probe: The Palo Alto-based venture firm is being investigated by the FBI for possibly leaking sensitive data to the Chinese government.

Monday: 💵 Private credit ETFs, 📊 Family office survey
Tuesday: 🏢 CRE & rate cut, 🪙 Kamala talks crypto
Wednesday: ⚾ “Holy Grails” auction, 🏡 Housing prices update
Thursday: 🎨 Art market’s worst season, 🚀 Women in VC

Have a great weekend!