Opportunities exist despite a dim outlook for the global
economy
Despite increasing concerns
about the solvency of some of the world’s largest economies, a
festering European sovereign debt crisis and slowing global growth, the
current risk environment continues to provide opportunities that stand
out from the dark outlook. Last year 2011 the winning sectors were
those traditionally thought of
as "defensive" – utilities, consumer sStaples, and health care are
often among the best havens in a weak economy. Will 2012 be the same?
There some clues to how the year might develop. Utilities had a big
rally in the end of last year. Once the calendar turned, buying
interest dried up and the utilities sector fell. Health Care, on the
other hand, has shown much steadier recent results. We should expect
that health care will continue to outperform. The current period of
deleveraging (paying off existing debt on the
balance sheet) will lead to weaker economic growth and, resulting to
slower growth or contraction in corporate revenues and earnings.
Safety first
The
European debt crisis and slowing global growth are poised to be the
principal drivers of return in the fixed income markets. Investors will
look for high-quality fixed income assets and long-dated debt that
feature superior market liquidity. The fundamentals are solid balance
sheets, strong liquidity and managements seeking to pay down debt and
raise the credit ratings.
Commodities
Major investment
bankers like the long-term outlook for gold. With major central banks
engaged in unprecedented and experimental money base expansion, the
fixed supply of gold is a relative advantage. With economic growth
slowing in the emerging world, food prices and industrial metals may
well continue to underperform in 2012.
Changing landscape of venture capital
The
way companies are getting financed is changing, from start to finish.
There are many new financing options for growing companies that weren't
available a decade ago. Crowdfunding and accelerators are helping
companies get off the ground. The venture capital it is completely
reconfiguring and will help the entrepreneurial companies grow up.
Companies
are delaying their IPOs, which has led to a new kind of late-stage
venture investing, and the rise of secondary private markets. The trend
is that they make their investments in more mature private companies.
Therefore these investments have all the upsides of IPOs in terms of
capital raising, dilution, control and liquidity, without the downsides
of regulatory compliance costs and unwanted transparency. Mega-funds
are therefore basically turning into hedge funds. In its turn this has
led to the rise of secondary markets. These markets are not very
regulated, but are her to stay.The necessity of secondary markets for
private company shares is real as companies stay private longer. Some
companies may opt to stay private for a longer time, and as the IPO
window narrows ever further. Overregulation has certainly played a
role, since the compliance costs are unproportionally high. Many
entrepreneurs don't want to go public, due to enforced transparency and
fear being shoved around by short-term-focused Wall Street.
Venture capital outlook
The
outlook for venture capital this year has its bright and dark spots,
according to National Venture Capital Assn. president Mark Heesen. VC
backing of new life science startups is in decline due to an uncertain
regulatory climate, according to Heesen. First-funding deals in the
sector fell by nearly 43% last year, to 153 deals from 268 in 2006.
More and more companies are setting up their own in-house VC shops.
Bryan
Pearce and Dr. Martin Haemmig believe that the venture capital model is
not fundamentally broken – it continues to be an essential source of
funding and a catalyst for the innovation, entrepreneurship, job
creation and economic growth needed to lead the world economy into
recovery.
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Business Plans
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