Inside Brex — stock rally shows cracks — distressed opportunities

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After weeks of stock-market gains, there were signs of cracks in the rally in recent days. And Federal Reserve policymakers made clear they expect to hold interest rates near-zero through 2022 – and that they see a long path to economic recovery.

Major US stock indexes logged their biggest one-day losses since mid-March on Thursday before clawing back some ground in volatile trading the next day. As Bradley Saacks reports, some big investors have been calling for a reckoning, or at least, pointing out that very little in the markets makes sense to them right now.

Billionaire Paul Tudor Jones had to eat some “humble pie” as markets surged, and said the pandemic has thrown off economic models so much that people would “be better off getting financial advice from TikTok.” (This was on a Zoom call where he had a background of a starry night because he felt like he’s in “The Twilight Zone” or “Lost in Space.”) And $US135 million Aristides Capital told investors that “the cognitive dissonance is overwhelming at times,” while predicting a dot-com-style crash and saying unprofitable growth stocks are “one step above a Ponzi scheme.”

As Dakin Campbell reports, life-insurance giant Transamerica has told all its salaried workers they need to take a one-week unpaid furlough in what the company called a “responsible step” given the economic impact of the pandemic. Dan Geiger meanwhile revealed that financial firms are among a group of big names looking to ditch chunks of office space via subleases.

And Dan DeFrancesco took us inside corporate charge-card unicorn Brex, which counts Airbnb, ClassPass, and Carta among its customers, to learn more about the run-up to its recent layoffs. Current and former employees described a fast-growing startup that was already grappling with employee turnover and falling short of aggressive internal financial targets before the pandemic hit.

Read the full story here:

The inside story of how $US3 billion Brex went from raising $US150 million to slashing staff in just 10 days. Here are the execs who are out, and what’s next for the fintech.

Keep reading for a look at how wealth managers are meeting client demand for access to the private markets, fintechs that are already focused on Gen Z, and a roundup of real-estate and legal news.

Have a great weekend,

Meredith

Wealth managers open the door to private markets

Private markets

Rebecca Ungarino took a look at a recent wave of activity at the intersection of private markets and the wealth-management industry.

She explained why, between new products and internal efforts at places like UBS Wealth Management and Citi Private Bank to bolster their menus of offerings, firms in the business of managing investors’ financial lives are looking to boost access to segments once exclusive to institutions like pensions and endowments.

Read the full story here:

The ultra-rich are clamoring for access to private markets. Here’s how firms like Citi and UBS are gunning to capture an opportunity worth trillions.

Fintechs go after Gen Z

Greenlight

Generation Z, those born between 1996 and 2010, is coming of age. There are 68 million Gen Z-ers in the US, and in the coming years they will replace Millennials as the newest generation of workers and consumers.

As the oldest members of Gen Z are starting to graduate from college and enter the workforce, fintechs and banks alike are vying for their business. Shannen Balogh rounded up seven fintechs – with offerings like parent-monitored allowances paid to digital wallets and loans for college students – that are looking to cash in.

Read the full story here:

From virtual piggy banks to gamified savings, meet 7 fintechs trying to tap the $US143 billion Gen Z market as they come of age

Distressed opportunities

Marc lasry michael jordan bucks

Distressed-debt investors have been aggressively raising money since the effects of the pandemic on the global economy became clear in the spring. As Bradley Saacks reports, at least one big investor thinks that there could be between $US500 billion and $US1 trillion in opportunities in distressed companies.

“The biggest opportunity today is investing in companies that are in bankruptcy or going through a restructuring,” said Marc Lasry, the billionaire founder of $US9.7 billion Avenue Capital, on a SALT Talks webinar with SkyBridge Capital managing director Anthony Scaramucci.

“If I could get in at the liquidation level every time today, I would,” he added.

Read the full story here:

Billionaire investing legend and Milwaukee Bucks owner Marc Lasry said there could be $US1 trillion in opportunities over the next year in distressed companies

On the move

Alfred Spector, the computer scientist who had been Two Sigma’s chief technology officer for five years, is retiring, according to the $US60 billion fund. Taking his place is Jeffrey Wecker, who was a partner at Goldman Sachs and the bank’s first-ever chief data officer.

Deals


Hedge funds and investing

Real estate

Fintech

Law