Goldman Tops Banks Betting on a New Type of Hedging - Bloomberg

Goldman Tops Banks Betting on a New Type of Hedging

By Sarah Ponczek

August 15, 2017,

Goldman has bet on 15 fintech ventures this year, report shows

JPMorgan ranks second among banks with nine investments

Goldman Leads Big Bank Push for Industry Disruptors

Goldman Sachs Group Inc. has taken to investing large sums of money into outside ventures in a bid to disrupt the financial industry. Bloomberg's Jason Kelly reports on 'Bloomberg Surveillance.' (Source: Bloomberg)

A new type of hedging is sweeping Wall Street this year.

Goldman Sachs Group Inc. and JPMorgan Chase & Co. are leading big banks in plowing record funds into outside ventures trying to disrupt their industry, a role typically dominated by venture capital firms, according to a report from Opimas, a management consultancy.

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Goldman Sachs has invested in about 15 so-called fintech firms focusing on capital markets businesses this year, while JPMorgan has bet on nine, the report shows. Altogether, banks and other established companies will probably pump a record $1.7 billion into the sector through 83 deals in 2017, Opimas wrote in its report, citing figures from CB Insights. That may turn would-be challengers into allies.

VC firms, meantime, are relatively reluctant to target the industry, despite its potential to yield a big payoff, Opimas found. Wall Street ventures drew only 2.6 percent of their funding last year, it said, citing data from Martin Prosperity Institute.

“Capital markets fintech should attract more than its fair share of venture capital and private equity investment. Instead, we see precisely the opposite,” the authors including Opimas CEO Octavio Marenzi wrote in the report. “Many VCs have shied away from these markets, since they frequently require highly specialized knowledge of markets, their micro-structure, and competitive dynamics.”

While banks have long trumpeted their technological prowess, cheap computing power and fears of losing clients to startups are ushering in a new era of automation and other tech-driven platforms. Almost 50 percent of financial services firms around the world plan to acquire fintech startups in the next three to five years, PricewaterhouseCoopers LLP said in an April report.

Still, for banks, the money they entrust to fintech ventures is a tiny slice of what they spend on tech -- most of which they keep in-house. Financial institutions are on track to dedicate more than $127 billion to technology this year, focusing on areas such as execution management, post-trade transaction processing and analytics.

The truth about whether you will become a billionaire if you work very hard - Independent

The truth about whether you will become a billionaire if you work very hard

by Justine Musk, Quora in discover

We often get told that if you put your mind to something, you can achieve anything. So it's not surprise that many people believe working hard and persevering at a business or in a particular industry will lead to financial success. When Quora users asked if someone could become a billionaire through hard work, writer Justine Musk had one simple response...

No.

One of the many qualities that separate self-made billionaires from the rest of us is their ability to ask the right questions.

This is not the right question.

(Which is not to say it's a bad question. It just won't get that deep part of your mind working to help you — mulling things over when you think you're thinking about something else — sending up flares of insight.)

You're determined. So what? You haven't been racing naked through shark-infested waters yet. Will you be just as determined when you wash up on some deserted island, disoriented and bloody and ragged and beaten and staring into the horizon with no sign of rescue?

We live in a culture that celebrates determination and hard work, but understand: these are the qualities that keep you in the game after most everybody else has left, or until somebody bigger and stronger picks you up and hurls you back out to sea. Determination and hard work are necessary, yes, but they are the minimum requirements. As in: the bare minimum.

A lot of people work extremely hard and through no fault of their own — bad luck, the wrong environment, unfortunate circumstances — struggle to survive.

How can you *leverage* your time and your work?

Shift your focus away from what you want (a billion dollars) and get deeply, intensely curious about what the world wants and needs. Ask yourself what you have the potential to offer that is so unique and compelling and helpful that no computer could replace you, no one could outsource you, no one could steal your product and make it better and then club you into oblivion (not literally). Then develop that potential. Choose one thing and become a master of it. Choose a second thing and become a master of that. When you become a master of two worlds (say, engineering and business), you can bring them together in a way that will a) introduce hot ideas to each other, so they can have idea sex and make idea babies that no one has seen before and b) create a competitive advantage because you can move between worlds, speak both languages, connect the tribes, mash the elements to spark fresh creative insight until you wake up with the epiphany that changes your life.

The world doesn't throw a billion dollars at a person because the person wants it or works so hard they feel they deserve it. (The world does not care what you want or deserve.) The world gives you money in exchange for something it perceives to be of equal or greater value: something that transforms an aspect of the culture, reworks a familiar story or introduces a new one, alters the way people think about the category and make use of it in daily life. There is no roadmap, no blueprint for this; a lot of people will give you a lot of advice, and most of it will be bad, and a lot of it will be good and sound but you'll have to figure out how it doesn't apply to you because you're coming from an unexpected angle. And you'll be doing it alone, until you develop the charisma and credibility to attract the talent you need to come with you.

Have courage. (You will need it.)

And good luck. (You'll need that too.)

How CEOs Decided Trump Is a Bad Investment - Fortune

How CEOs Decided Trump Is a Bad Investment

Robert Strand

16 August, 2017

CEOs have been rapidly fleeing President Trump’s business councils. The CEOs of Merck, Intel, Under Armour (UAA, -0.22%)—and now 3M (MMM, +0.36%) and Campell’s Soup (CPB, +0.48%)—are all gone.

I just got up to get a cup of coffee. Did I miss anything? Oh, the president disbanded the business councils altogether. Hold on—another update: United Technologies (UTX, +1.76%) CEO Greg Hayes just resigned from the council. Sorry Greg, you’ve got to move a lot faster than that to stay ahead of the perpetual turmoil that is Donald Trump.

In the face of this remarkable chaos, let’s reflect for a moment on business councils themselves, along with the CEOs and other business leaders who decided to join them. The question many of us rightfully have is: Should these prominent business leaders have joined these councils in the first place? And where do we go from here?

Socially responsible investing (SRI) strategy provides us a useful lens through which to consider these questions.

Imagine Donald Trump as a publicly traded corporation: a self-interested, profit-maximizing-at-any-cost, global corporation (that’s not too much of a stretch, is it?). And consider American business leaders as socially responsible investors who could elect to invest their time and reputation in Trump Inc. Like SRI investors, these business leaders desired a return on their investment that would benefit themselves and their organizations and, presumably, have some greater social benefit that extends beyond themselves.

SRI investors have traditionally followed a few straightforward strategies: negative screening, engagement, and divestment.

IBM CEO: This Is Why Trump’s Advisory Forum Disbanded

Negative screening is a practice first implemented by Quakers who did not want their financing to support the slave trade. With negative screening, criteria for “bad” are established and a firm deemed in the zone of “bad” is screened out.

Presumably a number of business leaders deemed Trump Inc. as “bad” from the get go and “screened out” any possibility of investing. We do not currently know the list of CEOs who declined, as this would have been done in private. But for others, Trump Inc. did not initially hit the negative screen zone, and the CEOs from the likes of GE (GE, -0.12%), Merck (MRK, +0.32%), Intel (INTC, -0.53%), PepsiCo (PEP, +0.11%), and a number of others chose to invest. This commonly occurs in SRI investing, where well-intentioned investors have differing criteria and assessment processes to negatively screen.

Now we move into the strategy of engagement, where an investor believes they can make positive change by engaging. Don’t like something going on with Trump Inc.? Invest, engage, and change. Johnson & Johnson’s (JNJ, +0.59%) CEO Alex Gorsky previously said he was staying onboard because he “must engage if we hope to change the world and those who lead it.”

That is a reasonable SRI investing approach, and one that is followed by a number of major investors in the world. But it is a strategy that calls for a demonstration of sincere change on the part of the company.

Donald Trump Blames Both Sides for Violence in Charlottesville… Again

Donald Trump once again blamed both sides for the violent clashes in Charlottesville, VA.

And this brings us to the final strategy: divestment. Trump Inc.’s remarkably awful comments following the tragedy in Charlottesville, Va.—and reinforced in Tuesday’s press conference—exposed for a number of the investors that Trump Inc. did not desire sincere change. This was simply a bad company that was never going to change.

The result: a divestment en masse from Trump Inc. This was the right investment decision.

So what do we do going forward? Business leaders everywhere should cease engagement with Trump Inc. and work to ensure a different investment opportunity for 2020. We would all profit from a portfolio screened of Trump Inc.Dr. Robert Strand is Executive Director of the Center for Responsible Business at the University of California-Berkeley Haas School of Business and Associate Professor at the Copenhagen Business School Centre for Corporate Social Responsibility.