ROBINHOOD $8.6 BILLION VALUATION

First article, about Robinhood, now valued at $8.6 billion. They increased their series-F from $380 million to $600 million. Led by Sequoia, which put in $280 million.
This is on the back of a spike in retail trading and day trading. About 3 million new accounts have been opened on Robinhood since March 2020.
Virus fueled volatility, people staying at home and no sports to bet on have all contributed to this day trading craze and Robinhood is the major beneficiary.

The article talks about companies like Hertz, which was essentially bankrupt as well as SPACs (Special Purpose Acquisition Companies) also known as blank check companies as being recipients of the day trading craze!

Robinhood upsizes funding round to raise an additional $320 million at a $8.6 billion valuation

ENDOWMENTS WEATHER PANDEMIC BETTER THAN IN GREAT RECESSION

Second article, is about how endowments have been doing better this crisis versus the 2008/09 GFC. Article cites NACUBO, an organization that ranks endowment performance.
The average Endowment was down -13.3% in Q1 2020 versus down -22.5% for Q1 of 2009.
Interestingly, out of the 2008 crisis emerged legislation called the UPMIFA Act.

UPMIFA says that if the endowment or foundations governing body consider it prudent, they could extend spending beyond normal spending requirements.
So even if an E or F is underwater, it could spend more than they would normally. The article cites that UPMIFA has actually helped E&Fs justify (smooth out) ongoing funding since 2009.

GS:I wonder how that’s going to work in an extended COVID era?

As kids go back to college. Many of these institutions with their big buildings and overhead are not going to be able to afford the costs and maintenance. So, it’s going to be interesting to see how UPMIFA and endowments are going to deal with that and whether a University E&F crisis is looming.

Endowments Weather Pandemic Better Than in Great Recession

ARES RAISES $3.5 BILLION FOR DISTRESSED INVESTING

Ares a private equity manager out of Los Angeles, just raised a $3.5 billion dollar distressed debt fund. The fund was oversubscribed by $1.5 billion.
Steve Mayer, a USC business professor says the whole entire distressed community has been waiting eight years for this moment.
Down the road, Oaktree Capital Management is rumored to have raised a $15 billion distress debt fund. A lot of money is rushing into distress.

These strategies typically do well in DIP, debtor in possession, loans, as they finance a company through bankruptcy and emerge with cheap post reorganization equity, that’s where you do really well.

GS: With all the money flowing in, I wonder if this distressed cycle is going to be very different? Possibly elongate or maybe going to be a lot shallower than expected. We’ll have to wait and see !

Ares Raises $3.5 Billion for Distressed Investing

Distressed Debt Real Estate – listen to our interview with Chris Swan of Cygnus Capital

JIO PLATFORMS IS WASTING NO TIME AS IT HELPS CREATE THE NEW INDIA

Forth article is about a company that almost no one’s ever heard of Jio Platforms out of India. This company is worth $71 billion!
People are considering this to be the Alibaba equivalent in India.

JIO came out of an Indian conglomerate as recently as November 2019.

Spun out of Reliance Industries for a forgiveness of $15 billion in debt. RI is still going through a succession battle within the controlling family.
Essentially they spun out all the growth engines with no debt. Over the last 9 weeks Jio has raised $15.2 billion from the likes of Qualcomm, TPG, Abu Dhabi investment authority, Facebook put in $5.7 billion and Google are looking to put in $4 billion and all of this for 25% of the company! A very rich valuation.

Jio’s backbone is the telco company.

The mobile division has 400 million subscribers .The intent then is to upsell the subscribers on payment platforms and streaming, et cetera.

Jio Platforms Is Wasting No Time As It Helps Create The New India

Project Palm – watch my interview with SGI on the take-private co-investment of an Asian Conglomerate

One final item I want to tell you about my interesting interview with Fraser Rice from Pendleton Square Trust Company. Fraze provides invaluable tips for tax planning in 2020/21 – specifically trust and estates.

High Net Worth? Listen to our podcast with Trust & Estate Planning expert Frazer Rice from Pendelton Square Trust – reveals tax planning secrets for 2020/2021

COMING SOON – my interview with family office CIO Stu Caplan on how to structure a renewable Solar project for max ROI and tax credits.