2 Months Ago

Imagine 2019 is 1999  

What do you remember? The dotcom boom perhaps?  https://en.wikipedia.org/wiki/Dot-com_bubble. Technically, the dotcom boom began in 1994 and finished in the year 2000. I was 30 years old in 1994, and 36 in the year 2000.
You may also remember in 1999 several Initial Public Offerings (IPOs) https://www.marketwatch.com/story/ipos-shatter-records-in-1999. A record number (510 companies) launched themselves and their equity on the stock market raised, back then, a staggering $66bn. I wonder where they are all now? This is worth studying, as the dotcom failure rate is close to 99%.
When we jump back to 2019, we see already more than 500 IPOs in the worldwide market:
https://www.ey.com/Publication/vwLUAssets/ey-global-ipo-trends-q2-2019/$FILE/ey-global-ipo-trends-q2-2019.pdf , and record amounts of new capital being raised to back these new platforms and ideas.
So, what is happening here? The news makes us wonder
https://www.cnbc.com/2019/06/28/ipos-have-their-best-quarter-in-years-in-terms-of-performance-and-capital-raised.html
Is there something familiar happening? Have we seen all this before? Is history repeating itself or, at least, rhyming? None of us knows, but many of us sense that something equivalent to back then (1999) is happening once again. The ‘Power of Weak Signals’:
https://sloanreview.mit.edu/article/how-to-make-sense-of-weak-signals/
Dotcom is no longer the phrase of the moment, now that we have AI, Bitcoin, Blockchain, Climate Change, Crypto, Cybersecurity, FinTech and SaaS. Even social media is a passé phrase today. Most of these new buzzwords, few of us understand. Alongside these new ideas, platforms and start-ups we have a new workplace, which many of the millennials hold in their hearts as a place to aspire to work - namely WeWork, itself with more than 500 locations worldwide: https://en.wikipedia.org/wiki/WeWork
But somehow, we know something is wrong at WeWork, which is a property company painted with ‘go-faster’ technology stripes. It’s not a tech company but thinks it is.
https://www.bbc.co.uk/news/business-49723246
WeWork’s valuation has fallen 80% since January and whilst $47bn is way too high, is $10bn too low? The more you study the WeWork S1 filing for its IPO, the more you think something just doesn’t seem right here:
https://www.sec.gov/Archives/edgar/data/1533523/000119312519220499/d781982ds1.htm, and here: https://www.theverge.com/2019/8/15/20806366/we-company-wework-ipo-adam-neumann
So, if we return to 1999, everything was ‘rosy’ with dotcom and everyone was to be a millionaire - compared with 2019 when everyone is to be a billionaire!
Let’s look back then at when the UK market peaked (30th, December 1999) with the FTSE100 reaching 6950 -  https://www.telegraph.co.uk/finance/markets/11432504/FTSE-100-breaks-1999-record-to-hit-all-time-high.html
A number not to be seen again until 2015. Did it take the FTSE100 fifteen years to recover from the dotcom crash? Perhaps.
The FTSE100 is primarily an international index of companies where 75% of income comes from global markets outside the UK. This makes it a good average, a good yardstick to feel where global markets reside. With more than two trillion pounds of market cap it represents a fair share of the £67 trillion global GDP market, at almost 3%:
https://www.hl.co.uk/shares/stock-market-summary/ftse-100
 So, where does all this leave us with 2020 fast approaching? Is there some kind of tech correction coming? When we examine Bitcoin 2009, is this the equivalent of World Wide Web 1989 by Sir Tim Berners-Lee? Was the Ethereum 2015 ICO like the Netscape IPO 1995?
In 1998, Amazon stock collapsed at 90%: https://www.cnbc.com/2018/12/18/dotcom-bubble-amazon-stock-lost-more-than-90percent-long-term-investors-still-got-rich.html.
In 2018, the so-called Cryptos...


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#DotCom
#Future
#Cryptos

3 Months Ago

Elwood Asset Management, which is owned by one of the UK’s wealthiest and most successful fund managers, Alan Howard, is planning to launch a $1 billion fund to invest in Cryptos.

Alan Howard, who set up Brevan Howard asset management, has not had it all his way having seen assets under management fall in 2008 from over $40 billion. In 2008 he was seen as one of the ‘movers and shakers’ globally but, by 2018, funds had fallen to $3.6 billion. However, at age 55, Howard has a wealth of experience and contacts to call on, so his latest foray into Digital Assets will be followed closely by many traditional investment houses around the world.

 

PWC and Elwood published a report earlier this year looking at the 100 largest Crypto Hedge funds and ascertained that:


  • the funds managed a total of $1 billion

  • 64% of the asset management firms are based in the USA, with 55% of the funds located in the Cayman Islands

  • average fees are 1.74% management and 23.5% performance fee

  • only 34% use leverage 

  • 60% have less than $10 million under management – this size of fund would not normally be even considered by a fund of fund managers 

  • 90% of funds do not use third party research –  Coinmetrics, Tokenanalyst, Vision Hill and Glassnode do offer research on Digital Assets 

  • 25% of the funds have independent directors - for hedge funds, it is the norm to have independent directors 


Elwood Asset Management is building a platform which will design portfolios of Digital Assets for institutional investors. This will enable these investors to take account of factors such as the level of risk, their expectations on returns, and the liquidity. The intention is to be able to calculate the relationships with other assets they own, to customise portfolios for their clients to invest in.


Howard has already invested directly into crypto assets, including EOS developer, Block.one and the ICE-owned digital assets platform, Bakkt.


An announcement like this just had to come and is arguably strong evidence for the time now being right. The infrastructure is robust enough and developed sufficiently for the ‘Big Guns’ with which the fund management world to engage. Other evidence of such a claim is further supported by looking at BNY Mellon (one of the world’s largest custodians and third-party administrators) whose home page of its website has a link: “Tokenisation: Opening Illiquid Assets to Investors”.

#FrontierInsights
#Cryptos
#Investment