Wall Street Smarts
WHY YOU SHOULD CARE
Nobody wants to get left behind on the latest smart money moves. OZY brings you four financial stories that will help you spin things forward.
Not surprisingly, the smartest guys on the Street have already moved on to the next big thing.
What is it?
The next fortunes on Wall Street are being made and maintained in a new kind of investment firm that is like the love child of private equity firms (think Mitt Romney’s Bain Capital and KKR) and hedge funds. Some in the biz refer to these firms as “alternative asset manager conglomerates,” but they really should be called “hybrid hedge funds.”
Just as with hedge funds, there are often no limits on the sectors these hybrids can invest in. Whether it’s buying gold and oil, purchasing stock or backing a new movie, hedge funds can do whatever it takes to make money.
It’s real estate’s final frontier: land in secondary-home markets. From the Outer Banks of North Carolina to the San Juan Islands in Puget Sound, Washington, developed parcels in many vacation and second-home markets still languish unsold for years — at prices slashed to nickels and dimes on the dollar from the land rush that preceded the peak.
But given the apparent, screaming deals in many markets, why aren’t individual investors snapping up the bargains? Read Chris Pummer’s analysis of the real estate market and what it may indicate for the economy as a whole.
Millennials aren’t just changing the way Americans think about work – they’re also changing the way we think about extracting value from investments. Impact investing funds that provide capital to companies with the expectation of both financial returns and positive social outcomes have become more visible over the past decade. And guess what? The majority of 176 impact funds surveyed report they expect to beat public market returns. The next challenge: reliably measuring the social benefits.
From where we stand, Isabelle Ealet is a solid bet. Currently the global co-head of Goldman Sachs’ securities division (which accounts for more than half of the firm’s revenue), Ealet also serves on several elite company-wide committees. In 2012, Ealet made Bloomberg Markets’ 50 most influential list, and last month she was named one of American Banker’s 25 most powerful women in finance. It’s still a tough road for women in the doggedly boys’ club world of banking (the top firms are all still led by men and where women still make just 55 to 62 cents for every dollar made by men), but Ealet is well-known for her confident style, no matter what room she’s in. “She was a badass,” says a former female employee.