—— Citadel Investors Take Home $16 Billion; Spotify Lays Off 6% of Staff; JPMorgan Model Optimistic About Economy; Remote Work Saves Employees Over an Hour; NYC Industrial Space Booms in Q4; Qatar Sovereign Fund Increases Stake in Credit Suisse; Meridian Brokers New Flushing Building Deal
1. Citadel Investors Take Home $16 Billion
Last year, Ken Griffin’s investment firm Citadel brought in $16 billion in net profits after fees for investors, setting the largest profit figure in hedge fund history.
With $54 billion in assets under management, Citadel’s hedge funds and other products delivered a return of 38.1% last year. Although government bonds saw heavy sell-offs during the year, they also presented attractive buying opportunities for many macro trading firms.
Founded by Ken in 1990, Citadel generated a total trading profit of $28 billion last year. After investors paid $12 billion in management and performance fees, they took home $16 billion in net returns.
The exceptionally high fees show that if a fund can deliver strong performance, investors are willing to tolerate high costs.
Citadel earned record-breaking profits by betting on assets such as bonds and stocks.
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2. Spotify Lays Off 6% of Staff
According to a filing released today by Spotify, the company plans to lay off more than 600 employees, with most departments affected.
Currently, the music streaming giant Spotify has 9,800 employees. In October last year, the company fired 38 staff members from its podcast divisions Gimlet Media and Parcast.
Spotify also revealed that in this round of layoffs, Chief Content and Advertising Business Officer Dawn Ostroff will also be leaving the company.
Today, the company’s stock price rose 2.3%. Since the end of 2021, the stock has dropped by 58%. The company disclosed that although severance-related compensation will reach €45 million, its profit margins will improve.
Since 2019, Spotify has spent billions of dollars acquiring podcast companies and the rights to popular shows.
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3. JPMorgan Model Optimistic About Economy
According to a newly released trading model from JPMorgan Chase & Co., the probability of recession has fallen below 50% for 7 out of 9 major asset classes. As recently as October last year, a recession was considered almost certain.
However, global asset managers are still not fully optimistic about the economic outlook. The S&P 500 Index still faces a 73% chance of recession, though this is down from 98% last year.
JPMorgan strategist Nikolaos Panigirtzoglou stated that thanks to China’s reopening and the decline in oil prices, most asset classes are now reflecting a “no recession” scenario. The market is significantly more optimistic than it was in October.
Market expectations for a recession are much lower now than in October of last year.
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4. Remote Work Saves Employees Over an Hour
According to a new report from the National Bureau of Economic Research, remote work allows employees to free up an average of 72 minutes per day, which they mainly use for working, relaxing, and caring for children.
Over the past two years, teams of economists from Europe, Mexico, and the U.S. surveyed employees across 27 countries.
Notably, employees in China save the most time working remotely—up to 102 minutes per day. Serbian employees save 51 minutes, and American workers gain 55 extra minutes daily.
Economists noted that workers greatly dislike unpredictable commute times. Those who drive especially resent peak-hour traffic jams. For some people, saving commuting time is more valuable than a higher salary.
Surveys show that remote work in China allows employees to gain over 100 minutes for rest or family care each day.
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5. NYC Industrial Space Booms in Q4
According to a new report from CBRE, during Q4 2022, New York City leased 1.5 million square feet of industrial property—more than double the volume of Q3 and the highest figure since Q3 2020.
Meanwhile, the surge in leasing activity pushed average rent prices to $25.06 per square foot, marking a 12% year-over-year increase.
CBRE’s research director Brian Klimas said NYC industrial space remains tight, and the leasing market could remain strong through 2023.
In Q4, many industrial tenants moved into Class A buildings. The total share of leasable property on the market dropped by 1.2% to 6.3%.
In addition, new properties also attracted many tenants—10 Class A and B buildings totaling 5.6 million square feet were already 67% pre-leased before coming online.
Currently, NYC’s industrial space remains in short supply, and rents are expected to continue rising this year.
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6. Qatar Sovereign Fund Increases Stake in Credit Suisse
According to a filing submitted to the U.S. SEC last Friday, the Qatar Investment Authority (QIA) has doubled its stake in Credit Suisse, now owning nearly 7% of the company.
QIA is now the second-largest shareholder in Credit Suisse, behind only the Saudi National Bank, underscoring the importance of Middle Eastern investors to the bank. Together, QIA, SNA, and the Olayan family from Saudi Arabia hold over one-fifth of Credit Suisse’s shares.
In October last year, Credit Suisse launched a new round of fundraising, raising $4.3 billion in restructuring capital from both new and existing investors.
Since the 2008 financial crisis, QIA has been building its position in Credit Suisse and doubled its holdings last year.
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7. Meridian Brokers New Flushing Building Deal
Today, Meridian Capital Group announced that it recently helped Skyview Companies and several JPMorgan investment clients sell the leasehold rights to The Urban, a mixed-use residential and commercial building on Northern Boulevard in Flushing, Queens. The deal was valued at $86.5 million.
In addition, Meridian helped the buyer secure a $47 million acquisition loan.
The newly completed rental apartment building, The Urban, has 7 floors and a total of 103 apartment units. It also qualifies for tax abatement policies. The address is 144-74 Northern Boulevard.
Nearly half of the units in the building feature balconies and floor-to-ceiling windows. The property also includes 5,000 square feet of communal outdoor space and 177 parking spots. All 35,000 square feet of retail space have already been leased to H Mart, Bank of America, Burger King, and a beauty clinic.
Over the past 20 years, Flushing has been dominated by individually-owned commercial and residential buildings, with relatively few high-end rental apartment projects.
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This content is sourced from Financial Times, Bloomberg, and The Real Deal, among other financial news outlets.