(Bloomberg) — Morgan Stanley Investment Management is seeing fertile ground for putting capital to work in certain pockets of private markets where mid-sized firms are facing a liquidity squeeze.
“Companies that have had some disruption but are fundamentally sound are looking for creative capital — could be debt-like, could be equity-like,” said David Miller, head of the firm’s private credit and equity business, at a Thursday virtual panel. “So credit opportunity broadly is the most attractive it’s been in a decade and that’s going to continue well into 2021.”
A “big need for rescue capital” is likely to continue into next year, he said.
Mid-sized companies have been mostly shut out of the liquid credit markets, which larger firms have been able to tap due in large part to action taken by the Federal Reserve. Their need for funding is an opening for managers sitting atop piles of cash, and an opportunity to capitalize on dislocations and undervalued assets.
“Putting aside some of the chop today, it’s been really strong based on the Fed, just based on the markets working, but the private and the middle market are a little bit different,” Miller said.
A similar dynamic is emerging in real estate investing.
“In private real estate, we’re seeing wide dispersion in both operating performance as well as the pricing across asset classes,” said Lauren Hochfelder Silverman, deputy chief investment officer of Morgan Stanley Real Estate Investing.
Silverman said there’s “significant stress” in certain sectors of the industry, such as retail and hotels, as well as meaningful shortfalls in cash flows. However there are areas, such as those tied to e-commerce, that present more lucrative opportunities.
In the private debt market, Miller sees a much more “accommodative” market place when it comes to stress than in the last crisis. Lenders have largely been flexible with borrowers that have been hammered by the pandemic, agreeing to amendments, sometimes in concert with sponsors kicking in more equity.
“By and large balance sheets were much better than before the last crisis, there is more equity invested, people are more prudent,” he said. “And so there was a little bit more flexibility and frankly, more liquidity.”
Morgan Stanley Investment Management had $665 billion in assets under management, with $17 billion specifically for private credit and equity, and $49 billion for real assets, as of June 30, according to the firm’s website. The unit had $715 billion in overall assets under management or supervision as of Sept. 30.
(Adds unit’s assets under management as of Sept. 30 in final paragraph.)
©2020 Bloomberg L.P.
Sandpiper Increases Investment in Artis REIT to 10% – Canada NewsWire
VANCOUVER, BC, Dec. 2, 2020 /CNW/ – Sandpiper Group (“Sandpiper”) announced today that on December 2, 2020, it acquired, through Sandpiper Real Estate Fund 4 Limited Partnership (the “Fund“), an aggregate of 100,000 units (“Units”) of Artis Real Estate Investment Trust (“Artis” or the “REIT”) (TSX: AX.UN) in the open market through the facilities of the Toronto Stock Exchange at an average price of $11.10 per Unit or $1,110,000 in the aggregate (the “Acquisition”).
As a result of the Acquisition, Sandpiper owns and exercises control and direction over an aggregate of 13,612,584 Units, representing approximately 10.07% of the 135,221,252 Units issued and outstanding as reported in Artis’ Monthly Cash Distribution Announcement dated November 16, 2020. Prior to the Acquisition, Sandpiper owned and exercised control and direction over 13,512,584 Units, representing approximately 9.99% of the issued and outstanding Units.
The Units were acquired for investment purposes. Sandpiper believes that the Units of Artis are undervalued and represent an attractive investment opportunity.
“Our increase in our ownership in Artis further confirms our long term commitment in this investment,” said Samir Manji, CEO of Sandpiper. “We believe Artis has significant near term and longer term potential with an attractive, undervalued asset base. We look forward to working with the trustees and management at Artis to identify avenues and opportunities that will maximize value for all unitholders.”
Sandpiper and its affiliates may, from time to time, depending on market and other conditions, increase or decrease its beneficial ownership, control or direction over the securities of Artis through market transactions, private agreements, or otherwise.
Artis’s head office is located at Suite 600 – 220 Portage Avenue, Winnipeg, Manitoba, R3C 0A5
Sandpiper’s head office is located at Suite 1670, 200 Burrard Street, Vancouver, British Columbia, V6C 3L6.
An early warning report will be filed by Sandpiper in accordance with applicable securities laws. For further information and to obtain a copy of the early warning report filed by Sandpiper, please contact Alyssa Barry, Vice President, Capital Markets and Communications, Sandpiper at (604) 558-4885.
ABOUT SANDPIPER GROUP
Sandpiper is a Vancouver-based private equity firm focused on investing in real estate through direct property investments and public securities. For more information about Sandpiper, visit www.sandpipergroup.ca.
SOURCE Sandpiper Group
For further information: Alyssa Barry, Vice President, Capital Markets and Communications, Sandpiper Group, Phone: 604-558-4885, Email: [email protected]
"Tectonic forces" could cause economic upheaval: Poloz – Investment Executive
This could lead to many different inflationary scenarios from a return to the 2% inflation target to an inflation outbreak, or to stagflation or deflation.
“Personally, I would not weight them equally, but I would attach a meaningful weight to each of them and suggest that [investors] think about ways to preserve [their] capital should any of them arise,” said Poloz who is a special advisor with Osler, Hoskin & Harcourt LLP.
“We should not fall in love with the high probability scenario where inflation just returns to 2% and remains there.”
One driver of high interest rates in recent decades was the population surge of the post-war baby boom. As this generation now moves into retirement, Poloz believes that the high real interest rates of the past “were an aberration” and should not be expected to return.
While there is an expectation for interest rates to normalize along with inflation targets, Poloz notes there is growing concern that inflation could get out of control as governments borrow a “staggering amount of money.”
The former central banker said that today’s central banks are well-equipped to keep inflation in check via monetary policy.
However, three of the tectonic shifts mentioned could disrupt central banks in their policy goals: growing indebtedness, technological progress and rising inequality.
Global indebtedness was on the rise long before Covid-19 hit, said Poloz.
As a result of monetary and fiscal policies that have prevented recessions, individuals and companies are not retrenching and rebalancing their finances as they might have done in the past. From an investor point of view, this leads to the danger of “zombie firms” that are not “washed out of the system” as they might have been.
In the case of technology, progress generally means more efficiency and lower costs for companies over the long-term, said Poloz. But, that same progress can have serious economic consequences in the short term in the form of economic depressions and disruption.
The world is currently experiencing a fourth industrial revolution as the economy becomes digitized through artificial intelligence — which is leading to fears within workforces that a few large firms will scoop up all the economic benefits, leading to growing income inequality.
“People believe and expect that economic growth is like yeast, it spreads everywhere, so everybody benefits,” said Poloz. “But the reality is more like mushrooms that pop up here and there and single firms can reap most of the benefits.”
Climate change is also having a seismic effect on the economy as more companies try to shift their businesses to environmentally-friendly processes. The problem, noted Poloz, is “markets are really bad at distinguishing between shades of green. They’re essentially only able to tell the difference between green and not-green.”
Firms will have to move towards “full carbon transparency,” which will require significant investments in analytics or consultancy work. And, “firms who invest in this early deserve your attention,” said Poloz.
With these forces in play, “volatility beyond the norm is now a given,” said Poloz. A firm’s risk management for these factors will be key to creating shareholder value and will likely be “the next channel of intangible investment.”
Canadian General Investments: Investment Update – Unaudited Toronto Stock Exchange:CGI – GlobeNewswire
TORONTO, Canada, Dec. 02, 2020 (GLOBE NEWSWIRE) — Canadian General Investments, Limited (TSX: CGI, CGI.PR.D) (LSE: CGI) reports on an unaudited basis that its net asset value per share (NAV) at November 30, 2020 was $47.40, resulting in year-to-date and 12-month NAV returns, with dividends reinvested, of 30.9% and 33.8%, respectively. These compare with the 3.8% and 4.3% returns of the benchmark S&P/TSX Composite Index on a total return basis for the same periods.
The Company employs a leveraging strategy, by way of preference shares and bank borrowing, in an effort to enhance returns to common shareholders. As at November 30, 2020, the combined leverage afforded by both forms of leverage represented 17.7% of CGI’s net assets, down from 22.7% at the end of 2019 and 23.2% at November 30, 2019.
The worldwide spread of novel coronavirus (COVID-19) and its impact on such factors as business operations, supply chains, travel, commodity prices and consumer confidence, and the associated impact on domestic and international equity markets and fixed income yields, is expected to continue to have a significant influence on the equity markets and could significantly impact the value of investments held by CGI. Morgan Meighen & Associates Limited, the manager of the Company, will maintain its consistent, steady, long-term approach of holding diversified, appropriate investments, while pursuing selective new opportunities.
The closing price for CGI’s common shares at November 30, 2020 was $32.20, resulting in year-to-date and 12-month share price returns, with dividends reinvested, of 26.8% and 36.7%, respectively.
The sector weightings of CGI’s investment portfolio at market as of November 30, 2020 were as follows:
|Cash & Cash Equivalents||0.7%|
The top ten investments which comprised 37.2% of the investment portfolio at market as of November 30, 2020 were as follows:
|Canadian Pacific Railway Limited||4.1%|
|First Quantum Minerals Ltd.||2.8%|
|Lightspeed POS Inc.||2.7%|
FOR FURTHER INFORMATION PLEASE CONTACT:
Canadian General Investments, Limited
Jonathan A. Morgan
President and CEO
Phone: (416) 366-2931
Fax: (416) 366-2729
Hong Kong media tycoon Jimmy Lai denied bail on fraud charge – The Globe and Mail
Report: Steelers believe Dupree has torn ACL – TSN
Verizon’s Galaxy S20 models are the first to get Android 11 and One UI 3.0 – The Verge
Silver investment demand jumped 12% in 2019
Iran anticipates renewed protests amid social media shutdown
Galaxy M31 July 2020 security update brings Glance, a content-driven lockscreen wallpaper service
Tech17 hours ago
Amazon customers with missing consoles offered new PS5 stock – Eurogamer.net
Tech21 hours ago
Sony takes drastic action: Why thousands of PS5 owners are banned – haveeruonline
Sports11 hours ago
Pascal Siakam and Paul Watson Jr.'s L.A. offseason sessions – The Athletic
Tech13 hours ago
The One Thing About PS5 That Is Worse Than PS4 – Forbes
Art7 hours ago
Expanding the arts and culture sector in Newfoundland and Labrador – TheChronicleHerald.ca
Art13 hours ago
Stephenville’s Jesse Renouf finds a story behind the art
Health11 hours ago
How to Find Personalized Addiction Treatment in Canada
Sports18 hours ago
NFL Odds & Picks for Ravens vs. Steelers: Sharps Finding Betting Value in Wednesday Afternoon’s Spread – The Action Network