Capital Markets Corporate

April 9, 2021

Our Weekly Newsletter

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Across Instinctif Partners’ Financial Services team, we are always keeping an eye on the key developments taking place across the sector to evaluate their impact on the many businesses we work with. Here we share our picks of the week’s most interesting news, and our expert views.

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Fintechs look beyond survival after pandemic battering 

The pandemic forced Britain’s three largest digital banks – Revolut, Monzo and Starling – to cut costs and find new income streams after years of investor enthusiasm. Last April, revenues at Revolut and Monzo both dropped by around 40% as card transaction fees, particularly from foreign travel, dried up. However, since February, Starling Bank and Monzo have raised fresh cash to fund expansion, while Revolut has rolled out its regulated banking service in 10 new countries and applied for a further banking licence in the US. (From Financial Times, 6 April 2021)

£1bn pulled from UK equity funds in February 

£1bn was pulled from UK equity funds in February 2021, making this region the worst hit for net retail sales. According to the Investment Association (IA), while investors shunned UK equity funds, demand for equities generally was still strong, with £969m allocated to global equity funds and Asian equity funds receiving £638m. Chris Cummings, CEO of the IA, comments that the preference for Asian equities continues as the opening up of Asian economies following the pandemic advances ahead of Europe and the US. (From FT Adviser, 1 April 2021)

Solidarity tax could help tackle pandemic-induced wealth inequality, IMF

High earners who have seen their finances improve and firms who have prospered during the pandemic should be subjected to a solidarity tax to help mend the damage the response to the pandemic has inflicted on countries’ public finances, according to the International Monetary Fund. The levy could be used to tackle wealth inequalities exacerbated by the reduction in economic activity to help curb the spread of coronavirus globally, states the Fund. (From The Guardian, 7 April 2021)

First time buyers rejoice at return of 95% LTV mortgages  

Product offerings in the lower segment of the property market are starting to return following a sharp pull back from banks and mortgage providers since the onset of the pandemic. 34 95% loan-to-value (LTV) mortgages are now available to choose from for prospective homeowners. The increase in supply of high LTV mortgages will mainly benefit first time buyers as this group tends to have access to lower value deposits, meaning they often have to borrow more to fund house purchases. (From The Times, 3 April 2021)

Family offices seek to tap private equity talent  

Family offices are restructuring incentive schemes to attract talent from private equity firms. Greater receptiveness to increase benefits for employees among family offices is being partly driven by these firms seeking to tap top talent with experience in investing in high growth, privately held companies. Workers are reportedly being offered greater freedom to manage their portfolios without management oversight and improved work-life balance. (From Private Equity News, 1 April 2021)

 

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