Investing

The big difference between bonds and equities is that cash flows in bonds are fixed in advance. It makes inflation the great enemy of bonds. With equities, the effect of inflation is more complex. Companies that raise prices often realise higher sales as a result. But with a lag, inflation, in the form of rising wages and rising interest rates, creates margin pressure, as do rising energy prices.

The EU’s sustainable finance framework is widely recognised as immensely complex. For private equity firms, it’s even more so, especially now that more and more investors demand that their investments are made in funds with sustainable assets. 

Luxembourg-based Cube Infrastructure Managers has agreed to acquire Firstcolo Datacenters GmbH, a Frankfurt-based data centre business providing colocation, dedicated servers, managed services and private cloud solutions, for an undisclosed amount.

Firstcolo owns two-state-of-the-art “Tier III+” data centres in Frankfurt (photo), both of which are powered by green electricity. 

The private loan market is being revalued. Risks are becoming more expensive and coupons are shooting up. Positive for pension funds and insurers that stay put until maturity, but investors in this category also sometimes have distressed moments. 

Equity markets are still overvalued despite the deep declines we have seen this year. That is the view of Andrew Balls, CIO of Pimco, world’s largest active bond investor. According to him, both a mild recession, and falling earnings expectations are not yet sufficiently priced in.

The ISM Manufacturing Index is not only an important indicator of future growth, but is also highly correlated with market returns. What many investors overlook: it’s not just correlated with equity returns, but also bonds.

By using indicators that say something about the direction of the ISM Manufacturing Index to define different ISM scenarios, you can derive implied returns for each asset class.

Global investment solutions provider Russell Investments on Thursday announced the launch of a Luxembourg-domiciled global unlisted infrastructure fund. The open-ended private markets fund aims to invest in opportunities that address the need for new infrastructure solutions to meet evolving social and economic demands. 

The Luxembourg Private Equity Association hosted its Insights conference on fundraising and investor relations on Thursday. It became clear that, in order to remain competitive, Luxembourg needs to lower its minimum entry threshold for investors in private equity without waiting for new European Union AIFMD rules to emerge.

Many investors are on the fence about re-entering the badly battered bond market when the bottom may be near. The smart ones will want to enter the market well before interest rates hit their peak, says Michael Gitlin, partner and head of fixed income at Capital Group.

Marguerite II, a pan-European infrastructure fund in Luxembourg, said it has acquired full ownership of Red de Calor de Cuenca (RCC), a project company which will build and run a a greenfield heating network in Cuenca, a Spanish city in the Castilla La Mancha region.