—— Brookfield raises $15 billion new fund; Toyota invests additional $1.3 billion in Kentucky; NYCB stock price halved in one week; Vanguard capitalizes on AI in four new funds; Adam Newman offers to buy back WeWork; UPS jumped most in two years; Top China hedge fund dump stocks ahead of sell-off
1. Brookfield raises $15 billion new fund
According to people with knowledge, Brookfield spent $7.2 billion on office properties in Germany, Belgium, and Ireland at the end of 2021. The move sparked fierce debate internally and among investors.
Brookfield is known for purchasing undervalued properties and selling at higher price. However, valuation of office building tanked during the last two years, making Brookfield one of the biggest victims.
As of now, Brookfield had defaulted on over $3 billion of US commercial mortgages, abandoning multiple office towers in Los Angeles and Manhattan.
Brookfield executives, however, is confident in company’s strategy and is raising a new fund of $15 billion to capitalize on the low valuation.
Brookfield manages $865 billion of assets, second only to Blackstone.
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2. Toyota invests additional $1.3 billion in Kentucky
Toyota Motor announced to invest an additional $1.3 billion in its Kentucky Plant, in order to prepare for the assembly of its new 3-row electric SUV.
Head of Toyota’s Kentucky Plant believes the new move signifies Toyota’s commitment to electrification and future operation in Kentucky.
Toyota has a more cautious approach than Volkswagen and General Motors, as it only offers two EV models in the U.S.
The Kentucky Factory is Toyota’s first in the U.S., it currently employes over 9,400 of non-union workers.
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3. NYCB stock price halved in one week
Last week, New York Community Bancorp. reported a surprising loss and announced to cut dividend. Its stock price had fallen more than 10% in 4 of the last 5 trading days.
Today, NYCB’s stock price tanked 17% to hit its lowest level since July of 2000. Since January 31st, company’s stock price had halved, and market cap had shrunken by $4 billion.
Last week, Moody’s Investors Service started an investigation and is considering downgrading NYCB’s stock. As a regional bank, NYCB is more affected by the valuation crash in commercial real estate market and related CMBS.
Since the start of 2024, KBW Regional Banking Index has dropped 11%.
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4. Vanguard capitalizes on AI in four new funds
Vanguard Group is known for investing in traditional index stocks and has been reluctant to ride the AI and crypto wave.
However, Vanguard finally started 4 new factor-based funds to capitalize on the growing AI and crypto fever. Executives is embracing the developments of new technologies while adapting to new market trends and changes in economy.
In 2023, the $7.8 billion Vanguard Strategic Equity Fund beat the broad market and most of its competitors. The $1.5 billion Vanguard Strategic Small-Cap Equity Fund generated 12% return.
Vanguard investing in AI and emerging technologies is a welcoming news for tech firms.
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5. Adam Newman offers to buy back WeWork
An investor group including WeWork’s co-founder Adam Newman and Third Point’s founder Dan Loeb is considering buying WeWork out of bankruptcy.
Adam has been asking WeWork for more necessary information to formulate a proper bid. However, WeWork has not been cooperating.
WeWork says the company receive buyout offers on a regular basis and would only consider offers that aligns with company’s interest. WeWork wants to stay an independent, valuable, financially strong, and a sustainable company.
WeWork’s first IPO attempt failed in 2019, Adam Newman resigned as CEO shortly after.
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6. UPS jumps most in two years
Today, UBS analyst Thomas Wadewitz upgraded UPS’s stock to buy. UPS rose as much as 5.3%, market cap increased by $5 billion.
Thomas believes that UPS will disclose more on its cost-reduction plan during investor conference on March 26th, and that UPS could save up to $2 billion annually after cutting 12,000 manager and investing more in automation.
Thomas claims that automation could potentially save UPS over 20,000 of staff on the logistic chain, which would translate into $1.1 billion of annual saving.
Analysts gave UPS an average target price of $162, which is 11% more than current price level.
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7. Top China hedge fund dumps stocks ahead of sell-off
A leading macro hedge fund, Shanghai Banxia Investment Mangement Center announced in an investor letter that it sold a significant equity stake in mid-January. The fund only holds high-yield dividend and blue-chip stocks.
Founder Bei Li apologized for the wrong strategic choices of her fund but believes that the sacrifice was needed to ensure survival. Indeed, the fund dodged a brutal sell-off last week.
Bei Li currently manages over 10 billion yuan. Last year, her hedge fund was hit with a 25% drawdown, the worst of her career.
CSI 300 Index jumped 3.5% today after regulators announced additional support for stock market
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The content of this article comes from various financial news media such as The Wall Street Journal, Financial Times, and Bloomberg.