361 Days Until NYE
We have exciting things in the works for this year, and we can't wait to share them with you! But one thing we can say for certain is that we plan to bring you content every single day across our various platforms - keeping you informed about finance.
As always, if you want to join our team or have any feedback, please drop us a message.
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For this week's highlights, we look forward to what 2022 could hold with a bull and bear case written by fund manager Nicklas Gustafsson on our community. We also feature a fund report produced by our team on Perella Weinberg Partners, $PWP. We cover BMO's acquisition of Bank of the West in our M&A Deal of the Week and in our latest podcast, we speak to Mathias De Nil, an Investment Associate at Citadel.
Do you think 2022 will be bullish or bearish? Vote in our poll now!
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📈 The 2022 Bull Market Case: Continued Growth
Recently, the US Institute of Supply Management (ISM®) issued its semi-annual forecast and it indicates expectations of continued strong economic growth despite renewed virus risks and threats. Production capacity, capital expenditures, revenues and employment are all expected to increase in 2022.
📉 2022 Bear Market Case: 1930s Style Crash
Recently, Jim Rickards, a former CIA advisor issued a warning for a major crash - worse than 2008 for investors with stocks predicted to fall -80%. Warren Buffet agrees with him. Jim Rickards is worth listening to because he correctly predicted the 2008 crash, the coronavirus recession, the election of Donald Trump as well as Brexit.
💰 Selfridges Sold!
Luxury British store chain Selfridges is being sold to a Thai retailer and an Austrian property company in a deal that a source close to the matter said was worth around $5.37bn.
For more bite-size market updates, visit our community!
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BMO Acquires Bank of the West from BNP for $16.3bn
Acquirer: BMO Financial Group (Bank of Montreal)
- Serving customers for 200 years and counting, BMO is a highly diversified financial services provider - the 8th largest bank, by assets, in North America.
- With total assets of $988 billion as of October 31, 2021, BMO provides products and services to more than 12 million customers and conducts business through three operating groups: Personal and Commercial Banking, BMO Wealth Management, and BMO Capital Markets.
Target: Bank of the West (a subsidiary of BNP Paribas)
- Headquartered in San Francisco, Bank of the West operates more than 500 branches and offices in 24 states (primarily in the Western and Midwestern parts of the United States), employs more than 9,000 team members, and serves nearly 1.8 million customers.
- As of June 2021, Bank of the West has a deposit market share of approximately 3% in the top three states (California, Colorado, and Oregon), which account for over 80% of its deposits.
Rationale
- The acquisition will bring nearly 1.8 million customers to BMO and will further extend its banking presence through 514 additional branches and commercial and wealth offices in key U.S. growth markets.
- Post-closing, BMO will have a strong position in 3 of the top 5 U.S. markets, a footprint in 32 states, expanded national commercial businesses, and a digital banking platform gathering deposits in all 50 states.
- With approximately 70% of Bank of the West's deposits in California, BMO is making a scaled entry to a market with a population of approximately 40 million people producing US$3.1 trillion of GDP – which, if considered as a country, would rank as the world's 5th largest economy.
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This week we are joined by Mathias De Nil, an Investment Associate at Citadel.
This episode covers:
- Life at one of the world’s largest hedge funds
- Coverage of the automotive sector and the biggest drivers in the sector
- The different types of investment strategies that are used by top hedge funds
- Tips before beginning your own investment journey
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🏦 $PWP - Perella Weinberg Partners
Perella Weinberg Partners (PWP) is an independent investment advisory business spawned out of London and New York City 15 years ago. The company now has 10 offices in 5 countries that service over 900+ clients and is recognised as a global premium advisory brand.
Growth potential through scaling into existing and new verticals - PWP is at the point of critical mass, having signed 5+ clients in the last 6 months (above $2bn) and is positioned to grow in restructuring as copious amounts of debt have been raised during the pandemic
Value-play relative to peers - PWP is trading at a P/E multiple of 11.12x and a forward P/E of 10.99x which is significantly below averages across the industry, suggesting that it may be undervalued
Catalysts - 2021 Annualised Results, focus on growth in revenues and associated cost control.
Risks - Tapering of stimulus and expected hikes of rates in 2023 are set to make the cost of borrowing higher and erode growth potential for all industries, which could spell a decline in boutique activity without loan functions.
For in-depth analysis, price targets, financial metrics, and valuation see our full report below.
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We'll catch you again next week, until then, make sure you're signed up to our community, and follow us on LinkedIn, Instagram, and Twitter! If you have any feedback or want to join our team, send us a message!
- Salman @ Finance Focused