Our reporters will be out and about over the next two weeks at various conferences, from Sohn in New York (check out our preview below), to SALT in Las Vegas to Morningstar in Chicago. If you happen to see anyone with a BI name tag, please come and say hi!
Last week, we sent a team of three reporters to the Milken Institute Global Conference (aka Davos of the West). Held annually in Beverly Hills, it brings together the Masters of the Universe of the finance and investing worlds for an annual celebration of capitalism, and panels on changing the world. And how are these billionaires feeling? Dakin sums it up:
One West Coast banker is telling business owners to sell their company in the next 12 months or prepare to navigate through the next recession. An Orange County money manager is advising his high net worth clients about pushing more money into alternative investments to weather a downturn. An investment manager at a sovereign wealth fund is looking to sell whatever he can.
The three execs captured one of the moods at this year’s conference: successful, but bracing for the worst.
Populism and a backlash against capitalism was another huge concern on everyone’s mind at Milken, particularly with calls from people like Alexandria Ocasio-Cortez for higher taxes on the wealthy, or New York City’s recently proposed pied-a-terre tax.
But despite those worries, the conference remains an unabashed celebration of the world’s wealthy, Dakin reports. Expensive luxury cars made by companies like Maserati, Porsche and Tesla routinely circled the Beverly Hilton’s driveway and Bombardier set up a booth to display its new Global 7500 private jet.
You can read more of our Milken coverage here:
- The global elite at Milken have zeroed in on an overlooked signal they say will determine the future of the global economy
- ‘Elevating the role of the human’: A group of powerful CEOs shares why the common wisdom about automation and robots stealing jobs is so clearly wrong
- The president of Canada Pension Plan Investment Board, one of the world’s biggest investors, explains why he’s skeptical about private equity’s buzzy ‘do good’ strategy
- The CEO of SoftBank Investment Advisers, who runs the world’s biggest venture fund, offers an inside look at how he picks which companies to lavish with billions of capital
Have a great weekend and thanks for reading!
Meet the 5 rising stars presenting their investment ideas at the world’s highest-profile hedge-fund conference
If you want to make a name for yourself in the hedge-fund game, you could start with presenting an investment idea at the Sohn Conference.
The high-profile event has been attended by thousands of investors every year for the past 24 years. This year’s headlining speakers include DoubleLine CEO Jeffrey Gundlach, D1 Capital Partners founder Daniel Sundheim, and Glenview Capital founder Larry Robbins.
But for the past six years, the conference has put rising stars on the stage as a part of its "Next Wave" series to pitch their best investment ideas. Past participants include Tourbillon founder Jason Karp and former Blue Mountain Capital portfolio manager David Zorub, who is starting his own fund.
We profiled their Next Wave class — the most diverse yet.
A private equity firm is investing $90 million in a cutting-edge anti-cheating startup a month after a college admissions scandal ensnared elite parents
Colleges’ anti-cheating measures have been largely low-tech for generations. Proctors, typically teachers’ assistants or professors, may roam classrooms looking for evidence of illicit materials, whispers, or wandering eyes.
As more students take courses and exams online, ways to cheat have expanded exponentially, but ways to monitor them have not kept pace. Enter Examity, an online proctoring platform that raised $90 million on Tuesday from private equity firm Great Hill Partners. The company uses biometrics, artificial intelligence, and live monitoring via webcams, among other oversight measures, to ensure testing security.
2 fintech startups want to help new investors do good with their money, but it’s not clear if their dollars will make a difference
A new fintech platform wants to help first-time investors get comfortable with stock markets by putting their money behind companies with themes they believe in, like clean water and gender diversity.
Do-good investing, which includes investing with an eye toward environmental, social, and governance factors, has become more standard for institutional investors, such as pension funds, and even for the ultra-wealthy. It’s just starting to take off among individual investors, who haven’t had as many options as bigger investors. But just how much of a difference they can make, and if their dollars will start moving toward new ESG products, is still up for debate.
Large exchanges made a staggering 60% profit margin. We break down how they made their money.
For all the technology, infrastructure and resources it takes to run some of the biggest trading markets in the world, exchange operators have still maintained eye-popping profit margins as their revenues continue to grow.
The average operating margin at the world’s largest exchanges in 2018 was just over 60%, according to a report by consultancy Opimas. Of US-based exchange operators included in the report, the Intercontinental Exchange (ICE), which owns the New York Stock Exchange, topped the list with a profit margin just shy of 70%.
By way of comparison, the average operating margin for investment services companies in the first quarter of 2019 was around 21%, according to data compiled by CSIMarket.
Wall Street move of the week:
- The woman who runs a $2.5 billion Fidelity fund told us about the 10-item ‘mental checklist’ she uses to choose the most promising stocks in a notoriously risky field
- Investors have rarely been this scared of a stock-market crash over the past 50 years — and that’s flashing some scary parallels to the 1987 meltdown
- A $369 billion investor lays out how the private-equity boom is supercharging a major risk in the stock market
In tech news:
- VC giant Greylock, a Dropbox and Facebook investor, just hired a new partner to staff its portfolio’s startups. Here’s the No. 1 trait she looks for in executive candidates.
- Investing in Uber? Here’s why one tech banker says not to hold your breath for big returns
Other good stories from around the newsroom:
- ‘Million Dollar Listing’ star Ryan Serhant explains how he went from broke actor to leading a real-estate team that in one year sold over $800 million worth of property
- From suicide prevention to genetic testing, there’s a widening disconnect between Silicon Valley health-tech and outside experts who see red flags
- I’ve spent nearly my entire career working on Wall Street and I’ve realized one of the most commonly used refrains is totally wrong
- Here are the executive power moves that help explain everything that’s going on in tech, fashion and consumer
- Goldman Sachs’s David Solomon says he joined Instagram because his ‘a lot funnier’ predecessor had already claimed Twitter