At the forum last week, I said that what we do at Private Funds CFO is continue the conversations attendees would be having over the next two days. I meant that these topics are constantly developing, and often there’s no one solution – the right one for a given issue depends on your firm size, culture, geography, strategy, etc.
But I’m also going to interpret my own statement literally, and post another story from the forum today (one more to go: and it’s a good ‘un. Coming up soon).
Appropriately, it’s about how no one data management strategy fits all. I’ll let the rest of the (brief) story do the talking.
The great repeal: The SEC announced it will be looking to change disclosure requirements, or “modernize and enhance” them. Among the topics for modernized disclosure are environmental, social and governance concerns. There’s a lot to unpack here, and we will soon: but the high-level issue to watch is to what extent the commission focuses on ensuring that companies and firms properly disclose climate-related risks to their assets and businesses, as well as steps taken to mitigate them. Also worth zeroing in on is the extent to which the SEC is gearing up to regulate the marketing side of ESG.
Possibly an even bigger deal in the SEC’s great repeal efforts: Five agencies including the SEC are proposing to further amend Volcker Rule restrictions, allowing banks to, among other things, take stakes in or sponsor VC firms as well as invest in certain credit funds.
Earnings: Blackstone beat expectations – against, uh expectations (Zacks predicted it wouldn’t beat earnings predictions). CFO Michael Chae said he expects to the firm to surpass $1.70 per share in fee-related earnings: “Our confidence in exceeding these original targets is very high,” he said.
Nonetheless, private equity stocks got slammed after Apollo (who also beat earnings estimates) said that some transactions unexpectedly closed in 2019, meaning net realized performance fees in the first quarter will likely be weak. Nonetheless, it sees “secular tailwinds” that will help push assets under management to more than $600 billion in the next five years.
Blackstone also increased its permanent capital, an Elysian Field of fees, by 43 percent year-on-year. Apollo (which initiated this whole permanent capital trend) has half of its $331 billion in assets in permanent capital. The trend of PE firms becoming banks, asset managers and everything else continues.