Chanel heir assembles team for luxury goods-focused PE venture

1686 Partners, the private equity firm launched last year by Chanel heir David Wertheimer, has added Andreas Ernst as a partner, Jonathan Farrugia as as PE investment director, Julien Erbrech as operations manager and Jeremie Lotti as head of partnership and strategy, according to a report by Bloomberg. 

Based in Luxembourg, 1686 Partners has already raised over $110m as of December. According to its website, the newly appointed team will operate across Europe and Asia, with more information to be revealed later this year. 

Ernst joins from Skopos Impact Fund, according to her LinkedIn profile. 

1686 Partners initially invested in a European ski clothing brand, a luxury watch retailer and a company specialising in stock management and demand forecasting for brands and retailers, though Wertheimer has not disclosed the specific companies. The firm focuses on jewelry, gourmet food, ready-to-wear fashion and fragrances.   

Since 2020, Wertheimer — whose family is among the wealthiest in the luxury goods sector, according to the Bloomberg Billionaires Index — has also helped manage Mirabaud Asset Management’s Lifestyle Impact and Innovation fund, whose targets are similar to those of 1686. Mirabaud’s investments include lab-grown diamond producer Diam Concept, electric bicycle brand Mate and sneaker maker Cariuma. 

In a December statement, Wertheimer described 1686 Partners as his own franchise of the Mirabaud fund. 

Stocks making the biggest moves premarket: La-Z-Boy, NextEra Energy, Kroger, Lennar and more

Go your own way: departures pose new challenges for CFTC

Breaking up, as the song goes, is hard to do. And when the relationship in question is crucial for the smooth issuance of derivatives regulations, the estrangement is harder still.

This month, Risk.net examined the current state of the Commodity Futures Trading Commission (CFTC) and drew attention to what our sources – including 12 current and former officials and commissioners – described as an agency paralysed by a divided majority.

The divisions are between chairman Rostin Behnam and his fellow Democratic commissioners, Christy Goldsmith Romero and Kristin Johnson. The resulting frictions may help explain why the pace of rulemaking and routine business at the CFTC have slowed in recent years.

Last week, US President Joe Biden announced his intention to appoint the two dissenters to new positions: Goldsmith Romero as chair of the Federal Deposit Insurance Corporation (FDIC) and Johnson as assistant secretary for financial institutions at the Department of the Treasury. 

However, it is not clear that suitably screened replacements are waiting in the wings to take over from them at the CFTC.

In March, Behnam set himself the goal of holding votes on all outstanding rule proposals. The developments of recent weeks therefore have the potential to create deadlock ahead of November’s general election. Republicans on the commission would have an effective veto over the chairman’s agenda if Goldsmith Romero and Johnson were confirmed in their new posts while their seats on the CFTC remained unfilled. If there were a 2-2 split on the committee, the chairman’s proposals would not be adopted.

Every now and then we fall apart

The best scenario for Behnam would be for Goldsmith Romero, Johnson and their replacements on the CFTC to be confirmed as a single package. That way, the new commissioners would be able to take over immediately and business could continue with a revitalised Democratic majority.

Yet it is by no means certain that the departing commissioners will be swiftly confirmed in their new roles. If their nominations are presented at a July hearing of the US Senate, proceedings would need to move quickly for them to be confirmed before the Democratic-controlled upper house goes into recess the following month.

Christy Goldsmith Romero

Goldsmith Romero’s nomination is likely to be a priority for the Senate, given the urgent need to find a new FDIC chair. The current chair, Martin Gruenberg, announced his resignation last month after an independent investigation found

Visualizing the Wealth of Americans Under 40 (1989-2023)

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June 18, 2024 Graphics/Design:

See this visualization first on the Voronoi app.

Visualizing the Wealth of Americans Under 40 (1989-2023)

This was originally posted on our Voronoi app. Download the app for free on iOS or Android and discover incredible data-driven charts from a variety of trusted sources.

Millennials have been often referred to as a “broke generation.” Whether in conversations or on the news, it is common to hear how those born in the 1980s or 1990s are struggling in today’s economy, particularly when it comes to entering the housing market or saving for retirement.

However, data shows that the wealth of Americans under 40 years old has hit historic highs after the COVID-19 pandemic, suggesting that millennials have accumulated more wealth by their 40s than previous generations.

To illustrate this, the graphic above shows the average wealth per household, adjusted for inflation, for Americans under 40 years old from Q4 1989 to Q4 2023 (in December 2023 dollars). The data is sourced from the Federal Reserve and accessed via the Center for American Progress.

Post-Pandemic Recovery

Data indicates that younger Americans have reaped the most benefits from the strong economic recovery after the pandemic, enjoying low unemployment rates and rapid wage growth.

The average wealth of U.S. households under 40 was $259,000 in the fourth quarter (Q4) of 2023, compared to $164,000 in Q4 1989 and $182,000 in Q4 2000.

QuarterAverage Wealth for Those Under 40 (USD) Q4 1990152K Q4 1995146K Q4 2000182K Q4 2005184K Q4 2010100K Q4 2015148K Q4 2020231K Q4 2023259K

Looking specifically at millennial households, inflation-adjusted wealth has more than doubled during the same period.

The increase in younger Americans’ wealth is not concentrated in a single area. Average housing wealth—house values minus mortgage debt—rose by $22,000 from 2019 to 2023. Younger Americans also saw gains in liquid assets, such as bank deposits and money market mutual funds, business ownership, and financial assets, mainly stocks and mutual funds.

Additionally, non-housing debt, such as credit card and student loan debt, fell for this age group after the pandemic.

10-Year US Treasury Yield ‘Fair Value’ Estimate: 18 June 2024

The US 10-year Treasury yield continues to defy The Capital Spectator’s ‘fair-value’ estimate by trading at a premium to this model, but the relatively wide gap still appears to be a constraint to the upside for this key market rate.

As discussed in recent months, it’s the view on these pages that without a material upside change in the fair value estimate, the 10-year yield will likely face headwinds to rising further. Recent market activity for the 10-year rate is starting to fall in line with this view.

Consider that the 10-year yield has been trending down for much of the past two months, closing at 4.29% on Monday (June 17) – near the lowest level since late-March.

Earlier this year the market premium for the 10-year yield increased to an unusually high but not unprecedented level. That’s been a sign that the degree of market premium is near a peak–a forecast that’s starting to resonate via market data.

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For some perspective, start with the history of the average fair-value estimate (based on three models) vs. the market yield. Using monthly data, the current average fair-value estimate is 3.34% for May, the first dip this year. Meanwhile, the market yield remains more than 100 basis points higher at 4.48% as of last month, although here too the market rate ticked lower for the first time in 2024.

For a clearer view of the relationship, the next chart tracks the market rate less the average fair-value estimate. This spread has fallen modestly from its recent peak. If history is a guide, the market premium will ease further in the months ahead.

A lesser spread implies the market rate will fall, the average model estimate will rise, or some combination of both. Short of a relatively dramatic run of reflation in the US economy and/or a strong acceleration in economic growth relative to recent history (neither of which looks likely at this point), the path ahead seems to favor a lower spread.

Greenbrook promotes four and adds two

Greenbrook, a communications advisor to the investment industry specialising in private equity, private credit, hedge funds, debt restructuring and special situations, has added Cecilie Oerting as a director and Natasha Bragoli as a consultant. 

Oerting was most recently at international PR and corporate communications agency Brunswick Group in Singapore and London, where she advised multinational companies across finance, technology and consumer, on corporate reputation.  

Bragoli has previously worked in strategic and corporate communications, most recently at communications consultancy Powerscourt. 

Greenbrook also made four promotions: Peter Hewer, who joined the firm in March last year, to Partner; Teresa Berezowski, who will continue advising clients across M&A, special situations and sovereign debt restructurings, to Director; and Hanne Mortazavi and Long Tran, who both joined last year and work with private equity, private debt and hedge fund clients, to Senior Associate. 

UK grocery inflation drops to lowest rate since October 2021

According to retail researcher Kantar, supermarket prices were 2.1% higher than a year ago in the month leading up to 9 June, 0.3 percentage point lower than the 2.4% recorded in May.  Kantar also noted that prices were falling in almost a third of the groceries it tracks, such as toilet tissues, milk and butter. Fraser McKevitt, head of retail and consumer insight at Kantar, said : “The sixth wettest spring on record has not just dampened our spirits leading into summer, it is made a mark on the grocery sector too as it seems Britons are being put off from popping to the shops.” C…

Ashoka WhiteOak Emerging Markets outperforms benchmark in first year of trading

In its annual results published today (18 June), AWEM reported a net asset value total return of 11.8% for the period between its listing on 15 March 2023 and 31 March 2024. This compared to a 7.9% return from its benchmark, the MSCI Emerging Markets index. Chair Martin Shenfield commended the trust’s investment manager, Acorn Asset Management, for its bottom-up stock selection approach which has been a “key driver of performance”, despite the challenges faced by emerging markets over the period. He explained the approach supported the manager’s “overweighting of mid- and small-cap st…

Tatton sets £30bn AUM target following 13.9% rise in revenue

In its annual results published today (18 June), Tatton’s AUM reached £17.6bn in the year to 31 March 2024, marking a 26.9% increase from the previous year and surpassing the £13.9bn recorded in 2023. According to Tatton, the company exceeded its three-year “Roadmap to Growth” strategy, which set a target of £15.0bn AUM/AUI by 31 March 2024. Tatton assets jump nearly 8% on the back of £900m inflows In addition, the group’s revenue rose 13.9% to £36.8m, while adjusted operating profit was up 12.9%, reaching £18.5m. Similarly, organic net inflows were £2.3bn, compared to £1.8bn in 20…

Eric Sturdza Investments launches US-focused small and mid-cap strategy

Boston-based Crawford Fund Management will manage ESI’s Strategic US Opportunities fund, which will hold between 20 and 50 stocks. At present, most of owner operated firms in the small and mid-cap space represent between 10% and 15% of the publicly traded equity universe in the US. Management teams from owner operators tend to generate their income primarily from equity value creation rather than from their salaries and bonuses, the firm explained. Eric Sturdza poaches veteran portfolio manager from Unigestion Christoper Crawford, chief information officer at Crawford FM, said: “We…