Markets

Reade Griffith’s Insights on Navigating Financial Markets Post-Military Experience

As past CEO of Citadel Investment Group’s European Office, Reade Griffith already brings substantial experience from the financial management industry to the hedge fund management and private equity firms he co-founded a decade ago: Tetragon and Polygon. But according to the financial mogul who today heads up investment departments in both these firms, the experience he gained in the intelligence of the military was just as important.

In this Institutional Investor video, Griffith speaks with Institutional Investor’s Editorial Director and Chief Content Officer Kip McDaniel on how his role in the infantry’s Intelligence Office in the First Gulf War helped him thrive in his current positions.

Opening the discussion with a game of ‘Risk,’ McDaniel and Griffith semi-joke about the benefits of war experience for increasing manageability of financial crisis in peacetime. Griffith had to understand enemy tactics and at all times remain responsible for forward intelligence of his units. Since complete control must be achieved under pressure (leading a unit while you’re being shot at and bombs are exploding), you learn a lot about yourself and others.

Griffith then speaks of the 2015 crisis in Europe and China (which connects them back to their game of Risk) and what his companies did vis-à-vis the ultimate failing that rippled through to America creating an illiquid market. At the end of the discussion he explained that the philosophy of his firms during this time was to “shorten the events in our portfolio; sell some of the longer-duration ones; keep the general level of risk on in the book and effectively hoped we were right.”

Again, the last part of that strategy was very much in line with what he learned from the military.

Tesla Sales Dipping?

Tesla certainly has some work to do. And that’s because the registration for Tesla Inc. vehicles in California, certainly their largest market, fell 24% in April from one year ago. This is according to data from HIS Markit.

Of course, Tesla says that this information is misleading because the deliveries vary so much from month-to-month. Sales of electric vehicles throughout the United States remain at less than 1% of total vehicle sales. In December of 2016 and January of 2017, many were getting excited as Tesla’s Chief Executive Elon Musk started working on a strategy to diversify production of other items such as storage batteries, electric commercial trucks, rooftop solar panels and more. However, Tesla shares started to fall in June with concerns that the company’s current models were having weak sales.

HIS analyst Stephanie Brinkley did caution that just looking at a single month doesn’t show the full picture. As she said, “If Tesla had an issue with its production for the month, that could explain.” However she did say that, “They haven’t changed much on the exterior or much on the package. I can certainly understand where Model S sales may be softening a little bit because it’s an older product. That could be contributing to the issue.”

Learn more about Tesla and the ups and downs they are having here.

Senior Care Sector Value Surges

Investors are setting their sights on an interesting industry: senior wellness, housing and healthcare. With businesses and organizations dotting major cities throughout the US, such as Dry Harbor Nursing Home in NYC, buyers are becoming more likely to place their funds in these institutions. According to a Norwalk company specializing in the field, the value of senior wellness M&As has increased by 600% since the last quarter due to two recent multibillion-dollar deals.

The move has brought the sector up to $9.7 billion, the highest it has been in three years. Steve Monroe, managing editor of TheSeniorCare Investor and of The Senior Care Acquisition Report says the increase “illustrates the continued investment interest in the sector and the willingness of buyers to commit significant amounts of capital despite current headwinds.”

“Each of the two largest transactions was more than double the dollar size of the largest acquisition in 2016, so it looks like the large deals are back in vogue,” he added.

Sabra Health Care REIT acquired Care Capital Properties in an almost $4 billion deal, and Hawthorn Retirement Group was acquired by Columbia Pacific Advisors for around $2.6 billion. Other major deals include the sale of Kindred Healthcare to BlueMountain Capital Management, LLC.

 

Turning a Green Eye To the US Market

Germany’s leading energy group, Innogy IGY.TG, has its eye on the US market to expand its renewable energy and electric car charging business. As Chief Executive Peter Terium said,

“We want to invest around 6.5 billion euros between 2016 and 2018.” This will include grid networks and infrastructure. It will also include wind farms in Germany, Poland and the Netherlands and an electric car charging station set to be in the US>

As Terium said, “Three weeks ago we persuaded Californian authorities to accept the German norms and standards for electric car charging stations.”

Improving the Economy and Environment

landfillsIn conjunction with Mas Energy, Republic Services has developed a renewable energy project, serving Metro Atlanta, specifically, Buford, Griffin and Winder. Focusing on landfill gas-to energy facilities at three area landfills, this has a 24.1 megawatts of electricity generating capacity.  In other words, 15,665 households can receive all the renewable energy it needs.

Meanwhile, a report from the Lawrence Berkeley National Laboratory and National Renewable Energy Laboratory found that for every wind energy based megawatt-hour causing zero-emission (which is typically the amount produced by a turbine in just over an hour) the result is a gain of $75 in human health and environmental air pollution benefits.  This translates into more than treble the cost of the $23/MWh federal production tax credit.

Of the company’s new renewable energy project,  Area President of Republic Services Jamey Amick, said that Republic Services feels that it needs to “lead by example in everything [it does]. The modern landfill presents new opportunity to harness energy from yesterday’s waste and convert it to meet tomorrow’s energy needs. We are proud to partner once again with Mas Energy to generate a renewable energy source that makes a meaningful and lasting environmental difference in the state of Georgia.”

Given that Republic Services seeks to “make [the] world and our planet better,” this project is in line with its overall mission to “provide reliable and responsible recycling and waste disposal services.”

Walgreens Buying Rite Aid Corp.

Next time that you enter the Rite Aid Corp. drugstore chain,  you just might find that it’s no longer a Rite Aid. That’s because Walgreens Boots Alliance Inc. said on Tuesday that they will be acquiring Rite Aid for $9.4 billion. The goal for Walgreens is to increase their footprint in the United States by half. They also hope to be able to negotiate for low drug prices.

Walgreens hopes that the transaction will close in the second half o 2016.

Analysts believe that the deal will increase Walgreens’ presence in the Pacific Northwest and make it in a better position to take on CVS Health Corp.

Walgreens currently has 13,200 stores, 60% of which are in the US. They generated $76.4 billion in sales during the year that ended on August 31, 2014.

 

 

 

 

 

Phoenix Ancient Art at PAD London

Phoenix Ancient Art rancient-artecently participated in PAD London 2015. The Pavilion of Art and Design took place in London’s Berkeley Square and was attended by art collectors from all around the world. This year, Phoenix Ancient Art was just one of 62 galleries that had a booth at the four day event.

PAD offers an ambiance of artistic culture, with galleries presenting design, modern art, photography and more from throughout Asia, Europe and North America. This event therefore “offer[s] an exceptional panorama of the most coveted and iconic works available on the market today.” It is a place for investors in the market to find something unique to add to their collection to “acquire pieces of museum quality with a distinct history.”

Business wise, the PAD Fair in London has become quite the impressive event. Indeed, according to Sallie Brady of Arts & Antiquities, “PAD London’s Berkeley Square location is pure gold, with a steady traffic of hedge-funders, international bankers and Mayfair millionaires.” And as Caroline Roux of The Financial Times, pointed out, “PAD’s London edition is becoming one of the best places to sell their unique and limited edition pieces.”

Tickets for the event were sold at £20 for adults, £10, for students and were free for those under 15 years of age.

 

HP Job Cuts on the Horizon

 

 

 

Agiliance Inc. Wins Stevie Awards

Agiliance®, Inc., the Big Data Risk Company™ and a provider of integrated solutions for Operational and Security Risk programs has recently announced that they received four Stevie Awards during the 2014 American Business Awards competition. They received the Gold Award for being the Most Innovative Tech Company of the Year (with up to 100 employees). They also received three other honors for its product called RiskVision™. They were named as the Gold Award winner for Best Governance, Risk, and Compliance Software Solution. They also received the Bronze Award for Best Software Security Solution and for Best Big Data Software Solution.

As Torsten George, the VP of worldwide marketing and products for Agiliance, said,

“In 2014, Agiliance has received more than two dozen industry accolades. These Gold and Bronze Stevie Awards are especially gratifying for the company, its employees, and our partners. The American Business Awards is the nation’s premier business competition – it can’t get any bigger. In 2014, Agiliance has received more than two dozen industry accolades. These Gold and Bronze Stevie Awards are especially gratifying for the company, its employees, and our partners.”

Obama Pledges Large Sum to Africa

Certainly, when Obama talks, others listen. And this is definitely true when he talks about $14 billion. Obama pledged to invest more than this amount in Africa while speaking at a meeting of African leaders recently. His remarks came during the US-Africa Business Forum. Speakers and attendees included former president Bill Clinton, Wal-Mart president and chief executive Doug McMillon, MasterCard president and chief executive Ajay Banga and World Bank President Jim Yong Kim.

Officials want to strengthen financial and trade ties between African countries and the US. As Obama said in his speech, “We want to do business with these folks.”

 

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