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Other Peoples’ Money Gives WeWork More Life

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Shared office space dressed up in mustached men, vegan meals, and beer, might have met reality as bond investors grow cautious about WeWork Cos.’s financials. What does WeWork really do? The real estate company takes out massive leases in expensive cities, revamps them with designs and comforts, and then sells (subleases) desks and spaces to small companies and individuals.

WeWork is competing against incumbents in office flexspace like Regus and Servcorp by offering more services and brand culture. The company is also trying to lease large offices to companies like Pepsi and Salesforce. This darling of the real estate financial media press was co-founded by Adam Neumann and Miguel McKelvey. WeWork is attempting to create a lifestyle business that fits with Neumann’s mantra. The unicorn company has a no-meat policy, serving vegan foods at events, while having yoga opportunities for its employees to benefit from.

Funding

WeWork’s U.S. dollar-denominated bonds are yielding 10.5%. This is not scaring off WeWork’s prime backer Japanese telecommunications conglomerate SoftBank Group led by billionaire Masayoshi Son. The SoftBank Vision Fund, which is backed by major sovereign wealth funds like Mubadala Investment Company and the Public Investment Fund of Saudi Arabia, were a bit nervous about the fund putting too much capital into the debt-laden WeWork. SoftBank had discussed kicking in US$ 16 billion in WeWork at the end of 2018 to grab more control; however, it looks like WeWork is getting US$ 2 billion in 2019. The US$ 2 billion is coming from SoftBank itself, not the Vision Fund. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

Biogen and Eisai Battered by Markets Over Alzheimer’s Trial Fail

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Cambridge, Massachusetts-based Biogen Inc. (BIIB) took a tumble of 28% in the morning of March 21st after it announced that it would cease its Phase 3 trials of Aducanumab. The therapy was intended to slow cognitive decline in patients with early onset Alzheimer’s. Biogen continued falling on March 22, 2019. Biogen and its Japanese development partner Eisai Co., Ltd. (ESALY) shared that the decision was based on results from an analysis conducted by an independent committee. The analysis determined that the trials were not going to demonstrate that Aducanumab could slow cognitive impairment. Eisai also fell 28% on the day, though it staged a relatively modest recovery on March 22nd. Some large institutional holders of Biogen include APG Asset Management (manager of Stichting Pensioenfonds ABP), Norges Bank Investment Management (manager of Norway Government Pension Fund Global), and Swiss National Bank.

The last time a treatment for Alzheimer’s made it to market was in 2003. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Italy’s CDP Inks Deals with Silk Road Fund and Bank of China

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China is building out its Belt Road Initiative (BRI) to continental Europe. On March 23, 2019, in Rome, Cassa depositi e prestiti Spa (CDP), Snam Spa (Snam) and Silk Road Fund Co., Ltd signed a Memorandum of Understanding (MoU) aiming at exploring and evaluating common business opportunities. Under the MoU, CDP and the Silk Road Fund will facilitate cooperation by focusing on the potential investment opportunities in the following sectors: financial services, agriculture, food, technology, manufacturing, infrastructure and transportation, energy and white economy (healthcare and personal care assistance).

Originally part of ENI, Snam S.p.A. is an Italian natural gas infrastructure company. The Silk Road Fund and Snam will analyze possible collaboration initiatives in the area of natural gas infrastructure (pipelines, storage facilities, LNG infrastructure and biomethane plants) in support of the growth of the natural gas and biomethane sectors in China from a decarbonisation perspective. In its capacity of a national promotion institutions, CDP will look at co-financing initiatives that are consistent with its mission also in the fields of energy and sustainability.

Bank of China

[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Angolan Government Recovers Assets from Quantum Global Investment Management

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The State Prosecutor’s Office of Angola said that the country has control of all financial and non-financial assets. The Angolan government claims it recovered US$ 3.35 billion of assets that were under the management of Swiss-based Quantum Global Investment Management AG. Quantum Global Investment Management was essentially the sole manager of assets for the Fundo Soberano de Angola (FSDEA).[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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