As another busy week comes to a close, we examine a robust labor market, volatility looming and an interview with a family office professional...
In Light of a Contracting Economy, Demand for Labor Remains High
In the wake of rising inflation, geopolitical uncertainty and rising interest rates the labor market has remained strong. Despite the growing gap between the labor market and broader economy, job listings continue to increase while unemployment remains near economic cycle lows. On average, following economic peaks, payrolls have decreased more than 1.5%. After the recent peak in December 2021, payrolls increased nearly 2%, the most since World War II. Also worth noting, companies operating in the business service, retail and manufacturing spaces have surpassed their pre-pandemic levels, however demand for work has far exceeded their ability to hire. According to The Wall Street Journal, "job openings in transportation, warehousing and utilities have surged nearly 78% since February 2020 as Americans binged on goods. Companies in the sector have hired just 14% more workers in the same period."
“Labor demand is strong enough that workers who are losing their jobs are likely to find new ones much faster than in a typical downturn...That will largely interrupt the vicious cycle of a recession where job losses trigger cutbacks in consumer spending and less revenue for businesses, which forces additional layoffs"
Many investors are taking a sigh of relief after the VIX peaked in June. Historically, market volatility decreases throughout the summer months and increases as the fall season approaches. Market volatility is believed to be caused by a number of factors including economic news, interest rate changes and fiscal policy to name a few. Early yesterday morning, encouraging earnings reports from PayPal Holdings, CVS Health Corp. and Moderna Inc. led stocks higher. San Francisco Fed President Mary Daly believes the Fed "has a long way to go" and that it may need additional rate hikes to return inflation to its target range of 2%. While many believe that markets have found a bottom, August and September have historically been the worst performing months for the S&P 500.
“There’s a little bit of complacency in there and markets are not fully taking into account the risks...Sometimes that can make it look more exciting than it probably really is when you think about the volumes happening"
In a recent interview with Forbes, Piers Metcalfe provided a glimpse into his experiences and the challenges he faced during his time at Hawkstone, the family office of His Highness Sheikh Khalifa bin Hamed al Thani. Metcalfe stressed the need for continuous relationship building, not only with partners and colleagues but with experts across the industry. Learning to "be an enhanced google" is critical to either successfully executing on a new idea or advising against it. He also highlighted that "process is key", having a culture where questions are encouraged and debate is celebrated leads to the most effective decision making.
“One thing is though, you must be patient, because sometimes the decision maker might not be available, they might be traveling and so you have to adapt...Things will change, goals will change, sometimes they get big asset inflows through the sale of an operating business for instance and you need to know what to do next"
Kerecis, a medical equipment manufacturer, has raised $100M in its Series D funding round that included single-family office KIRKBI
Dubai, UAE-based NB Ventures has taken part in a $14M Series B follow-on deal with WebEngage, a software development customer data platform
True Capital Management engaged in a Series A investment with Players' Lounge, a social gaming platform, totaling $10.5M
Paul Allen's single-family office, Cercano Management, finalizes on a $26M Series A deal with Ozette Technologies, a biotechnology research company targeting single-cell immune data
Former Merrill Lynch Broker Accepts One-Year Industry Ban
According to a recent FINRA filing, Richard Hogan, a former top-ranked private wealth broker, has accepted a one-year industry ban and a $10,000 fine. The suspension comes as a result of Hogan's involvement with "selling-away violations" that included recommending off-platform Asian funds. Richard's customers invested a total of $630K in the funds between October 2017 and August 2018. Hogan had been ranked in the Financial Times "Top 400 Financial Advisor" in 2014, 2017 and 2018 and as a Barron's "Top 1,200 Advisor" from 2014 to 2018.
Denver, CO-based RIA Mercer Advisors has agreed to acquire Mallard Advisors LLC, a financial planning and wealth management practice that oversees 109 clients, bringing Mercer's total AUM to $37B (FA)
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