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As bitcoin tumbles, Vancouver fund InvestX offers cryptocurrency holders easy exit

Managers of a new investment fund have a message for those who made staggering gains from Bitcoin before the recent selloff: diversify and avoid the fate of early dotcom believers who were wiped out when tech crashed. Find full article on BNN.  “They need to diversify — take a portion of the profits and do … Continue reading As bitcoin tumbles, Vancouver fund InvestX offers cryptocurrency holders easy exit

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Managers of a new investment fund have a message for those who made staggering gains from Bitcoin before the recent selloff: diversify and avoid the fate of early dotcom believers who were wiped out when tech crashed. Find full article on BNN. 

“They need to diversify — take a portion of the profits and do what Mark Cuban did,” says Marcus New of InvestX Financial (Canada) Ltd., referring to the billionaire who made his fortune in the early days of the Internet. “What we’ve tried to do is to make it really easy for them.”

While a slew of funds already accept cash to invest in virtual currencies, New believes his fund may be the first to do the opposite: take cryptos to invest in a traditional asset class, in this case private companies about to go public. There’s a reason most of the money has been going the other way. Nine funds buying digital currencies tracked by Eurekahedge Pte soared 1,167 per cent in 2017, trouncing the 8 per cent returns of hedge funds globally.

Vancouver-based InvestX says it’s selling prudence, not the biggest returns, with its new fund that launches Thursday for U.S. and international investors, with a target to raise US$100 million.

“Many of the people in cryptos are long-term believers that this asset class is going to make them hundreds of millions of dollars so they’re shifting from bitcoin to other alternative coins,” said New. “I heard the exact same thing being said in the dotcom era except ‘alt coins’ was ‘dotcom stock.”’

Whether InvestX can convince the crypto nouveau riche to cash out remains to be seen.  Bitcoin investors face challenges monetizing their wealth: sellers can wait days to convert digital coins into regular cash, while the costs are too high for everyday transactions. True believers have an ideological aversion to selling out as they see a remaking of the global financial system.

The recent plunge in Bitcoin and other currencies may be changing those views of course. Bitcoin tumbled below US$10,000 Wednesday, bringing its loss to more than 50 per cent from a record set only a month ago, as increased scrutiny from regulators around the world weighs on the digital-coin craze.

InvestX will accept cryptocurrencies for investment in private companies headed for initial public offerings. Notably, the structure may also offer investors tax benefits as governments seek to take a share of the profits made from virtual currencies.

Investors can use Bitcoin, Bitcoin Cash, Ethereum, Litecoin and Dash to buy units in the fund by transferring the digital coins directly into InvestX’s digital wallet. InvestX will convert the cryptos at spot rates into U.S. dollars. The fund will invest in 12 to 15 private companies, each valued at at least US$1 billion, with an average targeted growth rate of at least 40 per cent. The companies must also show evidence of a “liquidity event” — an initial public offering, merger or sale — within 12 to 36 months, said New, who estimates only about 50 companies globally meet that criteria.

“Crypto investors in general are very global and so are these late-stage companies — most investors would be familiar with them,” he said.

“Odd Lot” Access

The fund will give them access to late-stage private equity and venture capital deals typically unavailable to individual investors — something InvestX specializes in. Since 2014, accredited retail investors have used the company’s online platform to buy shares in companies including Dropbox Inc., Spotify Ltd. and Pinterest Inc. A total of US$35 million has been invested to date.

InvestX gets access to those deals by tapping into “odd lots” — less than US$25 million investments in private placements that are too small for institutions but provide an exit for early investors.

“There’s a really great sweet spot of investing in these companies three years prior to a liquidity event, where we buy them in a very inefficient market,” New said.

So-called “growth equity” companies have been among the best-performing traditional asset classes, returning 15 per cent annually over the last 25 years, compared with about 10 per cent for the S&P 500, according to Cambridge Associates.

Tax Benefits

The Delaware-registered fund will be open to U.S. and international investors. The minimum investment is US$100,000 with a four-year lock in. Because the fund will buy stakes in private companies, there is limited liquidity until an exit, InvestX says.

“The psychology of this investor is very different than a traditional investor,” acknowledges New, who says he spent months imploring one crypto baron to diversify beyond digital coins.

“Diversify it — whether you put it in a fund or into real estate or into an ETF,” says New. “But please, please take some of your profits and put it somewhere else.”

Find full article on BNN. 

Source: https://blog.investx.com/2018/01/18/as-bitcoin-tumbles-vancouver-fund-investx-offers-cryptocurrency-holders-easy-exit/

Private Equity

Boston startups expand region’s venture capital footprint

This year has shaken up venture capital, turning a hot early start to 2020 into a glacial period permeated with fear during the early days of COVID-19. That ice quickly melted as venture capitalists discovered that demand for software and other services that startups provide was accelerating, pushing many young tech companies back into growth […]

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This year has shaken up venture capital, turning a hot early start to 2020 into a glacial period permeated with fear during the early days of COVID-19. That ice quickly melted as venture capitalists discovered that demand for software and other services that startups provide was accelerating, pushing many young tech companies back into growth mode, and investors back into the check-writing arena.

Boston has been an exemplar of the trend, with early pandemic caution dissolving into rapid-fire dealmaking as summer rolled into fall.

We collated new data that underscores the trend, showing that Boston’s third quarter looks very solid compared to its peer groups, and leads greater New England’s share of American venture capital higher during the three-month period.

For our October look at Boston and its startup scene, let’s get into the data and then understand how a new cohort of founders is cropping up among the city’s educational network.

A strong Q3, a strong 2020

Boston’s third quarter was strong, effectively matching the capital raised in New York City during the three-month period. As we head into the fourth quarter, it appears that the silver medal in American startup ecosystems is up for grabs based on what happens in Q4.

Boston could start 2021 as the number-two place to raise venture capital in the country. Or New York City could pip it at the finish line. Let’s check the numbers.

According to PitchBook data shared with TechCrunch, the metro Boston area raised $4.34 billion in venture capital during the third quarter. New York City and its metro area managed $4.45 billion during the same time period, an effective tie. Los Angeles and its own metro area managed just $3.90 billion.

In 2020 the numbers tilt in Boston’s favor, with the city and surrounding area collecting $12.83 billion in venture capital. New York City came in second through Q3, with $12.30 billion in venture capital. Los Angeles was a distant third at $8.66 billion for the year through Q3.

Source: https://techcrunch.com/2020/10/23/boston-startups-expand-regions-venture-capital-footprint/

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Private Equity

Alternative Investments/Real Estate: Housing Market Demand Is “Insane”

Speaking to CNBC on Power Lunch, Glenn Kelman, CEO of real estate brokerage Redfin (NASDAQ: RDFN), said he expected the current boom conditions in the housing market to last well into next year. He attributed the high demand to affluent professionals looking for remote homes as well as low interest rates. Also, he thinks some sellers will put their properties on the market only after the presidential election.

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Alternative Investments/Real Estate: Housing Market Demand Is “Insane”

https://platodata.net/wp-content/uploads/2020/10/alternative-investments-real-estate-housing-market-demand-is-insane.jpg

Redfin CEO Glenn Kelman says the boom could last into next year.

Speaking to CNBC on Power Lunch, Glenn Kelman, CEO of real estate brokerage Redfin (NASDAQ: RDFN), said he expected the current boom conditions in the housing market to last well into next year. He attributed the high demand to affluent professionals looking for remote homes as well as low interest rates. Also, he thinks some sellers will put their properties on the market only after the presidential election. (CNBC)

Kelman: Too good to last forever

“This level of demand is absolutely insane. I would expect it to last into 2021, at least,” Kelman said.

Recent data from the National Association of Realtors shows up the strength in the housing market.

Existing home sales shot up 9.4% in September beating expectations. Even though the median purchase price of a home rose approximately 15% year over year, there is just a 2.7-month supply of for-sale homes, showing tight market inventory conditions.

The 30-year fixed-rate mortgage averaged 2.80% for the week ending Oct. 22, down from 2.81% in the previous week and 3.75% a year ago, according to the Freddie Mac Primary Mortgage Market Survey. Therefore, mortgage rates crept even lower in the latest week.

However, “there’s no way it can last forever,” Kelman warned of the bullish conditions.

Canada: Off the charts

Meanwhile, at the northern neighbor, home sales activity in September is described as “off-the-charts.”

Housing data released by the Canadian Real Estate Association (CREA) last week showed a nationwide year-over-year increase in sales of 45.6%.

This was a new all-time monthly record for the third month in a row.

“This is starting to sound like a broken record (about records being broken), but Canadian home sales and prices set records once again in September … as they did in July and August,” said Shaun Cathcart, senior economist at CREA, in a statement.

Real Estate ETFs in the U.S.

The year-to-date performance of some real estate ETFs is shown below:

iShares U.S. Home Construction ETF (ITB)              +24.61%

SPDR S&P Homebuilders ETF (XHB)                          +20.83%

Vanguard Real Estate Index Fund ETF                      -13.91%

It may be noted that despite the boom conditions in housing, real estate ETFs and stocks have declined in recent days.

According to Barron’s, this may be due to yields on the 10-year and 30-year Treasuries moving higher in recent weeks.

Other reasons could be fears of inflation ticking up in the future amidst an improving economic situation.

Nevertheless, the view is that interest rates are likely to remain low for longer. So demand may remain strong.

“Part of what is fueling this boom is that the economy has just split into two and rich people are able to access capital almost for free, so, of course, they’re going to use that money to buy homes,” said Redfin’s Kelman.

Related Story:   Mortgage Rates Set Another Record Low; Real Estate ETFs Could Benefit

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Source: https://dailyalts.com/alternative-investments-real-estate-housing-market-demand-is-insane/

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Private Equity

Asda’s new owner EG Group seeks new leadership ahead of IPO – report

EG Group is owned by the billionaire Issa brothers and the private equity firm TDR Capital, who teamed up for a £6.8 billion takeover of Asda last month

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UK grocer Asda Group’s new owner EG Group is looking for a new chairman and independent directors as it prepares for a £10bn initial public offering, The Timesreports.

EG Group is owned by the billionaire Issa brothers and the private equity firm TDR Capital, who teamed up for a £6.8 billion takeover of Asda last month.

The move comes after Deloitte resigned last week as the company’s auditor because of concerns over the group’s governance and lack of internal controls, according to the publication.

A decision on candidates will be taken before the end of this year, although roles haven’t been finalised yet as the company is in the process of deciding whether to float in the UK or the US, The Times reports.

Write to Barcelona editors at barcelonaeditors@dowjones.com

From Dow Jones Newswires

Source: https://www.penews.com/articles/asdas-new-owner-eg-group-seeks-new-leadership-ahead-of-ipo-reports-20201023

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