Weekly Market Update - 22 April 2024
Tapping Toyko
Activist investors are exposing the huge gap between how companies value their Tokyo real estate holdings on their books and the prices those properties would fetch in the current market. Mitsui Fudosan Co. last week announced it would aim to sell off 2 trillion yen ($13 billion) in real estate assets over the next three years — just two months after news that New York-based activist hedge fund Elliott Management Corp. had built a stake in the company. Elliott is partly focused on realizing the value of Mitsui’s properties by selling them off, a point the investment firm has discussed with the developer, according to a person familiar with the matter. It’s a strategy that more activist funds could turn to this year, as they work with Japanese corporations under pressure to increase value.
Source: Bloomberg
Private Credit Warning
Moody’s Ratings this week gave investors greater reason for concern about credit quality in the $1.7 trillion private credit sector. The ratings firm reduced its outlook for direct lending funds managed by BlackRock, KKR, FS Investments and Oaktree Capital Management to negative from stable. These funds, which manage over $20 billion in assets, have seen an increase in loans on non-accrual status, indicating potential financial losses. While the funds retained their investment grade rating, the change to a negative outlook marks the first such move by Moody's in private credit since 2020.
Source: Bloomberg
Tax The Super-Rich
Brazil believes it has found a way to pay for the fight against climate change and world hunger: Tax the super-rich. As president of this year’s Group of 20 nations, Brazil has made implementing a global minimum wealth tax on billionaires its cause celebre. It’s touting the levy as a means to fund efforts to combat rising temperatures and poverty in low- and middle-income countries — and is attempting to drum up support for the idea, long popular in progressive circles, on the world stage. “You can use these resources to start decarbonization in the poorest countries, which would increase investments in these places with humanitarian benefits,” Brazil’s Finance Minister Fernando Haddad said Thursday in an interview on the sidelines of the Spring meetings of the International Monetary Fund and World Bank in Washington.
Source: Bloomberg