Financially very, very hard 😳

As the clocks change and winter grows nearer, the head of National Grid warns that many British households would find this winter "financially very, very hard", even with government support to limit the rise in energy bills.

This statement comes at the same time as European consumers are reported to be cutting back on discretionary spending. An article by the FT shows that hotel bookings, car sales, and box office revenues are all simultaneously falling.

This week, on Zeed we're looking at how VCs make money, why makeup sales have increased during a global economic crisis, and a deep dive into what SPAC actually means.  

From our community, we're looking into why Mark Zuckerberg's investors are sceptical about the Metaverse, why UK income tax is going to be raised significantly, and why Japan is still reluctantly in an oil agreement with Russia.

This week's deal is looking into the RBC's £1.6 billion acquisition of Brewin Dolphin.

💰 How do VCs make money?

Last week we had a look into what venture capital is. This week we're showing you the top two ways they make money...

💋 The Lipstick Index

Why have global makeup sales increased during the recent economic crisis? Enter, the lipstick index...

🤔 SPAC?

The finance space loves an acronym. This video explains exactly what SPAC means...

😡 Zuckerberg's angry investors

Despite major shareholder's concerns, Mark Zuckerberg has continued pouring billions of dollars into his struggling metaverse initiative leaving investors extremely concerned.

The company continued to shake up investors last week after warning that losses for its Reality Labs division, which is building the metaverse, would “grow significantly” next year, while overall capital spending would surge to as much as $39 billion.

The disclosures, alongside another dismal quarterly report, led shareholders to vent their anger in post-earnings meetings with top Meta executives, the Financial Times reported. One source familiar with the talks said there was a palpable “sense of frustration” over Meta’s continued reckless spending.

💰 Sunak's big £50b tax rises

It was reported yesterday that new PM, Rishi Sunak, is planning years of tax rises for Britain in an effort to make up for a £50bn fiscal hole left by Liz Truss’s 45 day stint in Downing Street.

After a meeting between Jeremy Hunt and the PM on Monday, a treasury insider reported that things are going to get "rough", and the goverment are preparing to make "tough decisions".

Stealth increases in income tax and national insurance contributions are expected to be rolled out over the next few years by extending a freeze on personal tax allowances and thresholds. It's becoming clear that everyone will be paying a higher portion of tax for many years to come in order to maintain public services.

🛢 Japan needs Russian oil

Despite global tensions, Japan has decided to remain involved with the formerly Exxon-led Sakhalin-1 oil and gas project in Russia, due to its pressing need for a stable energy supply.

ExxonMobil, who held a 30% stake in the company, decided in March to withdraw from the project after Russia's invasion of Ukraine. Russia has set up a new company to take over the project under a presidential decree that has in effect forced investors to choose sides.

The Japanese consortium will make a final decision on whether to stay invested in the project after discussions with other stakeholders.

For more bite-size market updates, visit our community!

RBC acquire Brewin Dolphin for £1.6 Billion

Royal Bank of Canada (NYSE:RY)

RBC is the largest bank in Canada and one of the largest in the world by market capitalisation. They operate in a veriety of divisions within financial services – with their personal and commercial banking segment accounting for their largest revenue.

Brewin Dolphin Holdings (privately held)

Brewin Dolphin is one of the largest British wealth management firms with over 30 offices throughout the UK, Jersey and Ireland, and around 2000 employees. It provides investment management and financial planning services to individuals, companies, intermediaries and charities.

Details

• The UK presents an attractive market for wealth management as its a trillion £ industry with c.£2 trillion in defined benefit pension liabilities.
• Pre-acquisition, wealth management accounts for only 18% of RBCs total earnings and only 14% of total revenue from outside North America.
• Both RBC and RBC Brewin Dolphin will continue as separate entities until integration is completed over the coming months

Stats

• Total acquisition cost: £1.6 billion cash
• Deal completed: 22nd September 2022
• This acquisition will create one of the biggest wealth managers in the UK, with a combined £58b assets under management.

In this episode we spoke to Andrew O'Flaherty about the unconventional path he took to break into Public Equity investing without doing any internships at university.

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!

- Finance Focused Team