Goldman Sachs' Petershill unit has acquired a minority stake in Kennedy Lewis Investment Management, a credit investment firm. The deal, which is part of a trend of financial companies buying minority stakes in private investment firms, will see Petershill own about 30% to 40% of Kennedy Lewis. The majority control of the firm will still be retained by Kennedy Lewis's founders. The capital from the acquisition will be used to buy out a current stakeholder and provide cash for co-investments. This move by Goldman Sachs follows similar strategies pursued by its rivals, Blackstone and Apollo Global Management. [3d818120]
In other news, investment banks, including Goldman Sachs and Barclays, are aggressively pursuing leveraged buyout financing deals, even offering riskier subordinated debt deals and payment-in-kind options. They are also engaging in pre-capitalizations, providing financing to companies before a deal is on the market. Banks are eager to regain the generous fees from buyout deals after being outperformed by direct lending powerhouses like Blackstone and Ares Management. With the recovery of the broadly-syndicated loan and junk-bond markets, banks are able to sell debt more easily and often beat private lenders on price. Some recent wins for banks include Morgan Stanley and Goldman poaching a $5 billion deal from direct lenders to refinance Ardonagh Group's debt, and JPMorgan Chase and Goldman Sachs securing a $5 billion financing deal for KKR's purchase of a stake in Cotiviti. Banks are also pitching pre-capitalizations to companies not yet for sale, refinancing deals that were taken by direct lenders during volatile times, and offering dividend recapitalizations to private equity firms. However, banks still need M&A activity to pick up for fees to significantly increase. They face competition from private credit firms, which are cutting prices to retain deals. [c7264ef1]
Investors and lenders in the hospitality space are finding it challenging to secure loans for hotels due to the risk associated with interest rates, inflation, and concerns about the economy. Wells Fargo remains strategic and selective in its lending approach, focusing on existing strategic relationships. Private capital is becoming a popular source of financing for hotel projects, but a high debt yield or a solid story and sponsorship are necessary. Independent hotels are facing more difficulty in securing financing compared to branded hotels, as lenders perceive more liquidity in the latter. Regional banks are more likely to finance lower-leveraged deals, while credit funds are available for larger deal sizes with meaningful cash flow. The lending landscape for independent hoteliers is tough, and lenders prefer to work with those they have prior experience with. Overall, capital is available but highly selective in terms of deployment. [a6818aa7]
The economic environment poses challenges for the Bank of England as it tries to bring inflation back to its target level amidst wars, weaker growth, and soaring energy prices [62ae7a21]. Danish pharmaceutical group Novo Nordisk experiences success in the United States with its weight-loss and diabetes drugs [c397b005]. Ashmore Group sees a net outflow of funds, causing shares to plummet [0f9ab6d0]. The maker of meat alternative Quorn reports a loss due to rising costs and a slowdown in supermarket sales [467a9ff6]. The power company owned by Czech billionaire Daniel KÅ™etÃnský is ordered to pay a fine for unfairly demanding excessive payments [53d22e9b]. The City watchdog is under pressure to investigate the Barclays board over its handling of a scandal [083cc05f]. Kurt Geiger launches a design academy to address the inadequacies of the education system in preparing young people for the creative industry [0645e037]. Nobel prize-winning economist Joseph Stiglitz suggests financial support for poor countries in combating the climate crisis [226b88b9]. Corporate insolvencies in the UK increase attributed to higher debt costs and the withdrawal of Covid-era support [d21fe240]. United Auto Workers threatens to escalate strike actions [188687a0]. Lifestyle Hospitality Capital acquires a majority stake in Ireland's Dean Hotel Group [188687a0].