AI Raised Over $8 Billion in Funding Rounds in the US

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May was a significant month for fundraising in the US, with four rounds reaching $1 billion and AI companies securing over $7 billion.

According to a Crunchbase report, the ranking of the top ten new firms seeking growth financing was led by those implementing AI.

1. xAI

xAI, Elon Musk’s generative AI startup, officially announced its long-awaited fundraising, making it the second most valuable generative AI company in the world. The $6 billion round included investments from firms such as Valor Equity Partners, Andreessen Horowitz, Sequoia Capital, and Fidelity Management & Research, among others.

2. CoreWeave

Another significant AI-related funding round. CoreWeave, the AI cloud infrastructure startup, closed a $1.1 billion round led by Coatue, valuing the company at $19 billion.

3. Scale AI

Scale AI raised $1 billion in a round led by Accel, valuing the data annotation and evaluation startup at an astonishing $13.8 billion.

3. Wiz, $1 billion

The cloud security startup Wiz closed the largest cybersecurity round of the year so far, raising $1 billion with a valuation of $12 billion.

5. Motional, Autonomous Vehicles

Hyundai demonstrated its willingness to invest heavily in the Boston-based autonomous driving startup Motional. In May, the automaker agreed to invest $475 million directly into the startup.

6. Uniquity Bio, Biotechnology

Biotechnology also saw some significant rounds in May. The largest was for a new company launched by Blackstone Life Sciences, a unit of the private equity giant Blackstone Group, with a substantial $300 million investment.

7. Vercel, Developer Platform

Vercel, a platform that enables companies to develop web applications in the cloud, secured a Series E of $250 million with a valuation of $3.25 billion.

8. AltruBio, $225 million, Biotechnology

AltruBio secured a Series B of $225 million led by BVF Partners. The San Francisco-based startup is developing therapies for the treatment of ulcerative colitis and other immunological diseases.

9. BridgeBio Oncology Therapeutics, Biotechnology

Biotechnology experienced a significant spin-off in May when BridgeBio Pharma launched its subsidiary BridgeBio Oncology Therapeutics as its own company with $200 million in new funding.

10. Sigma, Analytics

The cloud analytics startup Sigma raised a Series D of $200 million co-led by Spark Capital and Avenir Growth Capital.

11. Zenas BioPharma, Biotechnology

Zenas BioPharma, based in Waltham, Massachusetts, raised a Series C preferred stock round of $200 million led by Delos Capital, New Enterprise Associates, Norwest Venture Partners, and SR One.

Advent International and a Subsidiary of ADIA Acquire a Minority Stake in Fisher Investments

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Fisher Investments (FI) has announced that Advent International (Advent) and a wholly-owned subsidiary of ADIA (Abu Dhabi Investment Authority) have agreed to make a minority investment in Fisher Investments, the namesake firm of Ken Fisher. According to the company, the investment by Advent and ADIA, ranging from at least $2.5 billion to $3 billion, values FI at $12.75 billion.

After the closing of this transaction, which is expected to occur by the end of this year, Ken Fisher will remain active in his current role as Executive Chairman and Co-Chief Investment Officer of FI, and the management led by CEO Damian Ornani will continue to drive the firm forward. “The investment will not affect clients, employees, or the daily operations of FI. The completion of the transaction is subject to certain approvals and the fulfillment of other customary closing conditions,” they state.

The announcement explains that this transaction was part of Ken Fisher’s long-term estate planning and allows FI, under the leadership of Damian Ornani, to continue operating as an independent wealth and asset management firm and private investment advisor. Ken Fisher, founder and Executive Chairman of FI, will sell personal stakes in FI to funds managed by Advent and ADIA. For Advent and ADIA, the deal was an opportunity for a long-term investment in one of the world’s largest investment advisors. Investors in Advent’s vehicles include funds managed by Lunate Capital Limited, Mousse Partners, and FI’s long-time largest institutional client, the National Pension Service (NPS) of South Korea. This is the first external investment in FI, as ownership was previously exclusive to family and employees. Once the transaction closes, Ken Fisher will retain the majority of effective ownership and voting shares exceeding 70%. No other FI investment transactions are contemplated. The investment in common shares does not include options or preferences over non-common shares and includes voting proportional to the effective ownership of the investors. After closing, David Mussafer, Managing Partner of Advent, will join FI’s board of directors.

“This transaction provides us with an independent track with truly exceptional institutional investors who can bring their wisdom, value our unique culture and goals, and want us to keep doing what we have always done, bigger and better, while pioneering never-before-implemented solutions to benefit our clients and employees,” stated Damian Ornani, FI’s long-time CEO.

Ken Fisher added, “This transaction addresses both estate and tax planning, while ensuring that FI will maintain its traditional culture, growth evolution, and dedication to exceptional client service. FI has been my life. While my health is excellent, this transaction with an atypically long holding period for a private equity transaction will ensure FI’s independence and private culture long-term in case something adverse happens to me. And we will have the support of world-class partners who understand us operationally and culturally and value who we are and will be.”

Regarding the transaction, David Mussafer, Managing Partner of Advent, declared, “We are excited to support one of the leading financial services brands that clients trust for their personalized approach to wealth management. Ken, Damian, and the rest of the management team have built a tremendous organization over the past 45 years. We are honored to partner with them to support the next phase of FI’s growth while upholding the unique culture that is fundamental to its success.”

JP Morgan Securities LLC and RBC Capital Markets acted as joint financial advisors, and Paul Hastings acted as legal advisor to FI in this transaction. Ropes & Gray served as legal advisor to Advent. Gibson Dunn served as legal advisor to ADIA.

Blackrock Launches Five New iShares Msci Climate Transition Aware UCITS ETFs

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BlackRock expands investor options with five new iShares MSCI Climate Transition Aware UCITS ETFs. According to the asset manager, this launch aims to provide access to leading companies in the transition to a low-carbon economy. It focuses on investing in companies based on their greenhouse gas emissions intensity relative to the sector and the measures they take to reduce emissions. Their expectation, based on their own survey, is that 56% of global institutional investors plan to increase their allocations to transition strategies in the next three years, with nearly half stating it as their top priority.

The range of funds offers investors tools to build equity portfolios that seek sector neutrality, using global and regional building blocks, while mitigating risks and capturing opportunities associated with the transition to a low-carbon economy. BlackRock believes this transition is a mega force affecting markets. In their view, the transition to a low-carbon economy involves profound changes unfolding over decades, reshaping production and consumption, and stimulating significant capital investment. BlackRock Investment Institute has identified several mega forces reshaping markets, including technological innovation, geopolitical fragmentation, and aging populations. BlackRock provides investors seeking to incorporate transition-related considerations into their portfolios with a broad range of options, both in active and index solutions.

“Innovation is central to BlackRock’s approach to developing products and solutions for clients as investors become more sophisticated in their investment goals. The transition to a low-carbon economy is set to drive significant capital reallocation as energy systems and technologies continue to evolve and develop. With the launch of the Climate Transition Aware range, we are expanding the variety we offer to clients seeking to mitigate investment risks and capitalize on the opportunities of this transition,” said Manuela Sperandeo, Head of iShares Product for EMEA at BlackRock.

The MSCI Transition Aware Select Index methodology includes companies that meet at least one of the following selection criteria: Science-based targets: Companies are selected if they have set one or more greenhouse gas emission reduction targets approved by the Science Based Targets initiative (SBTi). Green revenues: Companies are selected if they derive 20% or more of their revenue from green revenues. Emissions intensity: The index methodology ranks companies based on their greenhouse gas emissions intensity, provided they have published emission reduction targets. Subsequently, the index aims to select the top 50% of companies by sector.

The index methodology also excludes companies with “very severe ESG controversies” according to MSCI and those not complying with the United Nations Global Compact (UNGC) Principles. Companies involved in controversial weapons, tobacco, thermal coal mining, thermal coal power generation, and unconventional oil and gas extraction are also excluded. Within the Energy, Materials, Industrials, and Utilities sectors according to the Global Industry Classification Standard (GICS), additional exclusions are applied based on emissions intensity and those without targets or reporting. The exclusions of the fund range comply with the EU Climate Transition Benchmark (CTB) exclusion criteria.

Finally, Sebastian Lieblich, Managing Director and Head of Index Solutions EMEA at MSCI, added: “Investors are increasingly seeking data and tools to help them adapt their strategies to better manage the challenges and opportunities arising from the transition to a low-carbon economy. Clarity on companies’ commitments to reducing their carbon footprint through published targets, as well as their revenues from green businesses, is key in this process. The MSCI Transition Aware Select Index methodology can play a central role for investors looking to incorporate these parameters into their decision-making.”

Santander Private Banking Strengthens Its Dubai Office With Four New Hires

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In December 2023, Santander Private Banking revealed, through an internal memo, the opening of an office in Dubai led by Masroor Batin, the former Head of Middle East and Africa at BNP Paribas Wealth Management, in line with their interest in expanding their business in the United Arab Emirates. In this context, the entity has strengthened the Dubai team with the hiring of four new professionals over the past month: Jacques-Antoine Lecointre, Kamran Butt, Mustafa Asif Mahmood, and Fady E. Eid.

The most recent addition is Jacques-Antoine Lecointre, who joins the team as Operations Director at the Dubai International Financial Centre branch. Lecointre, with over 20 years of industry experience, comes to Santander from Swyt Solutions, a firm he co-founded. He has also held positions at BNP Paribas Wealth Management as Chief Operating Officer – Middle East, Bank of Singapore, and Barclays Wealth Management.

Other new hires include Kamran Butt as the new Head of Products and CIO for the Middle East, joining from HSBC Private Banking, and Mustafa Asif Mahmood as the new Executive Banker for Global NRI and International Clients. Like Lecointre, these two professionals join the branch at the Dubai International Financial Centre as part of the Santander Private Banking International team.

Lastly, a month ago, Fady E. Eid joined Santander Private Banking as the Head of Market for the Gulf Cooperation Council (GCC) region. “Delighted to join Banco Santander International SA (DIFC Branch) as Market Head GCC, based in Dubai. I look forward to working with Alfonso Castillo, Antonio Costa Ortuño, and Masroor Batin, and thank you for the warm welcome,” he stated on social media following his joining the entity. Eid, who began his professional career in 1990 at Merrill Lynch as First Vice President Investments, comes to Santander from Opto Investments, where he was CEO Middle East.

The Spanish entity’s interest in this region goes beyond Dubai. In March of this year, it announced its entry into the Qatari market with a representative office in Doha, led by Ziad El-Saigh, who joined the bank from Credit Suisse. “In Private Banking, we already have a leading global platform in investment flows between Latin America, Europe, and the United States. Looking ahead, we are developing key growth opportunities to expand our presence, such as in the U.S. domestic market and the Middle East,” the entity stated in its first-quarter 2024 earnings report.

Central Banks Are Gradually Moving Away From the Dollar, but the Process Will Be Very Slow

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The US dollar continues to lose ground to non-traditional currencies in global foreign exchange reserves, but it remains the global reserve currency and will not abandon this role in the short and medium term.

Economists Serkan Arslanalp, advisor in the office of the director-general; Barry Eichengreen, researcher in international economics; and Chima Simpson-Bell, economist in the Africa Department, all from the International Monetary Fund (IMF), released an analysis on the role of the dollar in global markets and the economy.

The predominance of the dollar stands out as the strength of the US economy, a tighter monetary policy, and increased geopolitical risk have contributed to a higher valuation of the dollar.

However, economic fragmentation and the potential reorganization of global economic and financial activity into separate, non-overlapping blocs could encourage some countries to use and maintain other international and reserve currencies.

Thus, recent data from the IMF’s Currency Composition of Official Foreign Exchange Reserves (COFER) points to an ongoing gradual decline in the dollar’s share of foreign exchange reserves allocated by central banks and governments.

Surprisingly, the reduction in the influence of the US dollar over the past two decades has not been accompanied by increases in the shares of the other “big four” global currencies: the euro, the yen, the Swiss franc, and the British pound.

Rather, according to the researchers, this decline of the dollar has been accompanied by an increase in the proportion of so-called non-traditional reserve currencies, including the Australian dollar, the Canadian dollar, the Chinese renminbi, the South Korean won, the Singapore dollar, and the Nordic currencies.

“These non-traditional reserve currencies are attractive to reserve managers because they provide diversification and relatively attractive returns, and because they have become increasingly easy to buy, sell, and hold with the development of new digital financial technologies,” explain the experts.

This recent trend is even more surprising given the strength of the dollar, indicating that private investors have opted for dollar-denominated assets. Or so it would appear from the change in relative prices.

At the same time, this observation reminds us that exchange rate fluctuations can have an independent impact on the currency composition of central bank reserve portfolios.

Dollar reduces its influence

From a broader perspective, over the past two decades, economists conclude that the fact that the value of the US dollar has remained virtually unchanged, while the dollar’s share of global reserves has declined, indicates that central banks have indeed been gradually moving away from the dollar.

“However, statistical evidence does not indicate an accelerated decline in the proportion of dollar reserves, contrary to claims that US financial sanctions have accelerated the shift away from the dollar,” they state.

The researchers also found that financial sanctions, when imposed in the past, induced central banks to modestly divert their reserve portfolios from currencies at risk of being frozen and redistributed in favor of gold, which can be stored domestically and thus is free from sanction risk.

In summary, the international monetary and reserve system continues to evolve. The pattern indicating a very gradual move away from dollar dominance and an increasing role of non-traditional currencies from small, open, and well-managed economies, enabled by new digital trading technologies, remains in place, concludes the IMF experts’ analysis.

Zest and Brazilian Company XP Sign a Strategic Alliance for the Latin American Market

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The investment company Zest announced a strategic alliance with XP Wealth Services, aiming to expand investors’ access to international products and strengthen a new business line targeting high-net-worth clients, Zest announced in a statement.

“This partnership marks an important milestone as it is the first time the XP Wealth Services platform has closed a deal to drive growth in Latin America,” the statement added.

María Noel Hernández, who assumed the position of Director of Wealth Management at Zest Group, will be responsible for driving the growth of the new business unit.

After eight years at Criteria as Executive Director, CEO for Uruguay, and Head of Sales, María Noel Hernández begins a new chapter. Prior to her work at Criteria, she worked at TSS Services as Sales Leader, was Director at Open Publicity, Financial Advisor at Puente, Relationship Manager at Pro Capital SB, and Financial Advisor at Montaldo Sociedad de Bolsa, among other positions.

Objective: Reach $5 billion in assets

“Zest has a business proposition very similar to what we developed in Brazil, with technology, financial education, and qualified professionals as fundamental pillars to revolutionize the local investment industry. We are confident that we have chosen the right partner, especially regarding Zest’s executives, and we see a great opportunity to drive business growth in the Latin American market using the strong investment platform of XP Wealth Services US,” explained Rodolfo Bastos, International Director of XP US.

Zest, founded in 2016 by Arthur Silva, a Brazilian resident in Peru, aims to promote financial education among local investors and lead the development of investment professionals in the country. The company plans to expand by opening branches in Uruguay, Chile, and Colombia with the support of XP Wealth Services US, aiming to reach $5 billion in assets over the next three years and double its team.

“We are investing in democratizing access to capital markets and offering increasingly sophisticated offshore solutions to our clients. There is a flow of tens of billions of dollars from Latin America, mainly invested in the US, and our expansion plans aim to capture these opportunities with a team of qualified specialists. The partnership with XP Wealth Services US comes at a key moment to drive our business and provide us with the necessary technological tools to strengthen Zest’s service,” commented Arthur Silva.

“In markets like Peru, Chile, and Colombia, there are no quality international investment platforms, especially for a clientele with assets between $500,000 and $10 million. These clients seek offshore investment to diversify their portfolios and protect themselves from market fluctuations and political instability with quality service, technology, and business vision,” explained Rafael Pina, Head of Wealth Services at XP in the United States.

Zest Group is a Latin American financial holding company seeking to democratize access to the international capital market for Latin American investors and financial advisors. It currently manages over 5,000 clients and 80 financial advisors. The group’s business approach focuses on financial education and high-tech solutions to meet the needs of both affluent and high-net-worth clients.

XP Inc. is one of the largest investment platforms in Brazil, owning brands such as XP, Rico, Clear, XP Educação, InfoMoney, among others. XP Inc. has 4.6 million active clients and more than R$ 1.1 trillion in assets under custody.

The Assets of the Global ETF Industry Reached 12.89 Trillion Dollars in May

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New record for the ETF industry. The assets of these vehicles worldwide reached 12.89 trillion dollars at the end of May, according to data compiled by ETFGI, an independent research and consulting firm specializing in ETFs. A snapshot of the global ETF industry in May 2023 shows there are 12,313 products, with 24,729 listings, from 752 providers listed on 80 exchanges in 63 countries.

“The S&P 500 index increased by 4.96% in May and has risen by 11.30% so far in 2024. The index of developed markets excluding the U.S. increased by 3.62% in May and by 6.09% so far in 2024. Norway and Portugal saw the largest increases among developed markets in May. The emerging markets index increased by 1.17% during May and has risen by 4.97% so far in 2024. Egypt and the Czech Republic saw the largest increases among emerging markets in May,” notes Deborah Fuhr, managing partner, founder, and owner of ETFGI.

In terms of flows, during May, there were 126.32 billion dollars in inflows, bringing the total inflows to 594.19 billion dollars during the first five months of the year. Equity ETFs reported inflows of 64.73 billion dollars, and fixed-income ETFs reported inflows of 32.93 billion dollars during May. Commodity ETFs also stood out, reporting inflows of 768.14 million dollars.

Active ETFs, which have gained great popularity in both the U.S. and European markets, captured 27.53 billion dollars in May, accumulating 125.11 billion so far this year, a new record compared to 2023.

“The substantial inflows can be attributed to the top 20 ETFs by new net assets, which collectively gathered 51.59 billion dollars during May. Leading this ranking is the SPDR S&P 500 ETF Trust (SPY US), which gathered 8.99 billion dollars, the largest individual net inflow,” notes ETFGI. Vanguard S&P 500 ETF, iShares Core S&P 500 ETF, Invesco QQQ Trust, and iShares iBoxx $ High Yield Corporate Bond ETF complete the top five positions in this ranking.

Lakpa Expands Its Network in Mexico Through an Alliance With Banorte

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(SU WEB) Grupo Financiero Banorte

About five months after debuting in the first-tier banking segment in Mexico, Lakpa continues to expand its networks in the country. The newest addition is Banorte Casa de Bolsa, with which the fintech recently signed a commercial alliance aimed at strengthening its offerings.

According to Matías Correa, founder and CEO of the tech firm, this agreement gives Lakpa’s clients access to the investment products and platform of the Mexican brokerage firm, part of the prominent Grupo Financiero Banorte. Additionally, they will have access to the products the bank can offer.

The executive highlights that the alliance enhances the proposal of the Chilean-origin fintech, offering more investment alternatives for its clients. On the flip side, he adds, “We expect to bring clients to Banorte,” which he describes as “a highly recognized group at the national level.”

With this signing, the company now has six commercial alliances in the Latin American country. In January of this year, they sealed their first agreement with a first-tier bank by signing with Scotia Wealth Management. They also have partnerships with Actinver, GBM, Invex, and Finamex.

Correa moved to Mexico in 2022 to lead the expansion of the Chilean firm in the country, which has been growing since then. Now, the executive reports that the fintech is on track to close its first year of operations there with 150 million dollars in assets under advisement. Additionally, he adds, they expect to increase the number of investment advisors and referrers from the current 18 to 30 by the end of the year.

European Football: Strong Investments From Funds Provoke Suspicion

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The Euro 2024 kicks off today, June 14, with the opening ceremony and the inaugural match between Germany and Scotland. But the beautiful game will be in the spotlight not only for the goals but also for the significant investments it attracts. In short, many things are happening in football both on and off the field, according to an analysis by Preqin.

While the ball rolls in Germany, Manchester City, the champion of England, has taken legal action against the English Premier League (EPL) over rules concerning clubs’ commercial deals with companies linked to their owners. This move could “drastically alter the landscape of professional football,” according to a recent publication by the London Times. Manchester City is owned by Sheikh Mansour of Abu Dhabi through his City Football Group, in which the international private equity firm Silver Lake also has a significant stake.

In an era where fund managers have become key players in sports, complex financial ties are increasingly common. However, external ownership is not welcome everywhere.

Last year, Advent International, Blackstone, CVC, and EQT were interested in buying a €1 billion stake in the broadcasting rights of the German Bundesliga. But the DFL Deutsche Fußball-Liga abandoned the deal in February amid widespread fan protests that included chocolate coins and fireworks tied to remote-controlled cars. CVC already owns a stake in the broadcasting rights of France’s Ligue de Football Professionnel.

Germany remains an outlier, partly because its clubs are protected from full shareholder takeovers. In England, Clearlake Capital holds a stake in Chelsea. Newly promoted to the EPL, Ipswich Town received £105 million for 40% of its capital from Ohio-based Bright Path Sports Partners in March.

Everton, a Premier League club, recently saw a potential deal with 777 Partners fall through. This Miami-based company’s investments in European football include Genoa, Sevilla, and Standard Liège.

RedBird Capital Partners (AC Milan, Toulouse, and Liverpool), based in New York, recently raised $4.7 billion to invest in sports, media, and financial services. Like the 24 national teams competing in the Euro 2024, their goal is to succeed in the world’s greatest sport.

Tiffani Potesta Joins Voya IM as the New Head of Distribution

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Voya Investment Management (Voya IM) has hired Tiffani Potesta as the new Head of Distribution, who will join the company on July 8. She will be based at the New York headquarters and will report to Matt Toms, CEO of Voya IM.

In her role, she will be responsible for overseeing all aspects of distribution for Voya IM’s institutional and intermediary businesses, including defining the strategic direction in national and international sales, distribution strategy, product positioning, client service, and relationship management.

“We are pleased to announce that Tiffani will be joining Voya IM to lead our Distribution team. Tiffani brings a wealth of experience across multiple facets of the industry, and I am confident that her expertise will benefit both our clients and Voya. We look forward to Tiffani’s leadership as we continue to strengthen our distribution of investment products and services globally across institutional, sub-advisory, and intermediary channels,” said Matt Toms, CEO of Voya IM.

Potesta has over 20 years of experience in the asset management industry, where she spent most of her career designing and implementing business and distribution strategies, ensuring asset longevity, mitigating risks, and fostering revenue and client diversification. She joins Voya IM from Schroder Investment Management North America, where she held various leadership positions, most recently as Chief Strategy Officer and Head of Distribution. Previously, she held account management roles at Deutsche Bank, First Eagle Funds, and Allianz Global Investors.