Source: Is A Leverage Reckoning Coming? (McKinsey & Company)
(McKinsey & Company) Despite rising corporate-debt levels, research shows companies can cover their obligations for now. But they should prepare for a possible downturn by stress-testing their capital structure.
(Walls Street Journal) The rise of megafunds reflects the growing demand for private equity from large investors, the industry’s historical reputation for 20%-plus returns, is appealing—even if it means paying higher fees and having money locked up for long periods. The problem is that the largest funds haven’t always lived up to the hype. Taken together, private-equity funds of $10 billion or more posted 14.4% five-year annualized returns net of fees as of the end of last September, barely edging past the 14.1% return for the S&P 500, according to data from investment firm Cambridge Associates.
(Andreessen Horowitz) An emerging trend to now pay attention to is tech companies doing a Direct Listing instead of a traditional IPO as a route to the public markets. Spotify started this last year, and Slack just did it last month. Both of these companies debuted on the New York Stock Exchange (NYSE), and so had all the outward trappings of an IPO. However, in a Direct Listing, no shares are sold by the company itself, and therefore no capital is raised. So why would a company do a Direct Listing?
(Bloomberg Businessweek) Where there’s a jet, there’s a data trail, and several “alternative data” firms are keeping tabs on private aircraft for hedge funds and other investors.
(Harvard Business Review) To lead effectively — really, to live effectively — you must be confident in yourself, connected to others, committed to purpose, and emotionally courageous. Most of us are great at only one of the four. Maybe two. But to be a powerful presence — to inspire action — you need to excel at all four simultaneously.