Wall Street Insider: The Mooch's leaked memo to Merrill — Boutique bank exits — Hackers target PE

 

Welcome to Wall Street Insider, where we take you behind the scenes of the finance team's biggest scoops and deep dives from the past week. 

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Dealmaking activity has fallen off a cliff this year, as executives focus on steering their existing businesses through the havoc caused by the coronavirus crisis instead of seeking out new deals. Data from Refinitiv released this week showed that the drop in activity was more pronounced for bigger M&A transactions, with the overall value of deals worth more than $5 billion down 53% year-on-year.

As Alex Morrell reports, the fading memories of the megadeals of the last few years are hitting boutique banks. Independent investment bank Perella Weinberg Partners was ramping up its footprint after an explosive start in 2016, landing one of the largest mergers in history — AT&T's $100 billion deal for Time Warner. 

But since then, deals have been scarce for Perella's media and telecom team, and the group has been gutted by departures in 2020. Alex dives into how experienced media and telecom bankers have been laid off, quietly asked to leave, or departed for other firms.

Read the full story here: 

After flashy hires and a big buildout, Perella Weinberg's media and telecom team has been gutted. We tracked the exodus — and what it says about the landscape for blockbuster M&A deals.

Over in the world of real estate, big office deals are stalling as banks grow cautious about extending debt over concerns about the future of the workplace. Dan Geiger reports on how this is especially perilous for real estate investors who have pledged hundreds of millions of dollars to enter into contracts for buildings like the Transamerica Pyramid in San Francisco. 

Despite the uncertainty of when or how people will occupy spaces like they did in the pre-pandemic era, there are real estate players looking far into the future. As Dan reports, a Las Vegas landlord, which owns some of the strip's biggest casino resorts like Caesars Palace, is plotting the city's next mega-project. Recruiting for executives to lead new projects is also picking up, reports Alex Nicoll, who spoke to four recruiters on the roles they're looking to fill.

Keep reading for a look at how private equity and hedge fund firms are ramping up their efforts in impact investing; some due diligence drama between Anthony Scaramucci and Merrill Lynch Wealth Management; and the story behind a JPMorgan trading team's hot streak. 

Have a great holiday weekend, 

Michelle Abrego

(Meredith is on vacation and will be back next week.)

PE goes ESG

The coronavirus pandemic and the ongoing reckoning of racial justice and equity in the workplace have put ESG investing at the forefront of the conversations in the asset management business.

As Casey Sullivan and Bradley Saacks report, some private-equity firms and activist hedge funds are committing resources and capital to ESG and impact investing.

Read the full story here: 

Big investors like Apollo and Carlyle are clamoring for a piece of the $30 trillion ESG space. We spoke to 15 insiders about how they're ramping up hires, raising money, and striking data-driven deals.

The Mooch vs. Merrill 

SkyBridge founder Anthony Scaramucci sent a 6-page, strongly-worded memo to Andy Sieg, the president of Merrill Lynch Wealth Management, on Thursday after the company downgraded its flagship fund, Meghan Morris reveals. 

In a leaked memo seen by Business Insider, Scaramucci said Merrill Lynch published an inaccurate due diligence report. He called the firms' relationship "yet another casualty of the pandemic," writing that the report "reflects a breakdown in communication" between the firms – one he didn't think would happen if executives had met in person.

Read the full story here:

LEAKED MEMO: Anthony Scaramucci mourns his relationship with $2.2 trillion Merrill Lynch after it downgraded SkyBridge's main fund

Victorious volatility trades

Markets have produced bizarre and historic results in the first half of 2020, creating stark swings and diverging fortunes for traders.

As Alex Morrell reports, that's especially true in the world of equity derivatives and the traders that bet on volatility, where some investment funds have flamed out spectacularly while many Wall Street banks have minted hundreds of millions in revenues.

Read the full story here: 

JPMorgan volatility traders raked in $700 million through June — 3 times what they brought in for all of 2019. Here's how they outpaced Goldman Sachs and Morgan Stanley on the hottest trade of the year.

Hackers are targeting private equity firms 

Cyberattacks have been on the rise in 2020 due to the pandemic, with financial services targeted the most.

Private equity, in particular, has been viewed as a viable new opportunity for cybercriminals as they have deep pockets and wire large sums of money, reports Dan DeFrancesco. While bigger PE firms have the resources to dedicate to cybersecurity, the process at small to mid-size shops remains a work in progress.

Read the full story here:

Cyberattacks against financial firms are up 238%. Experts explain why deep-pocketed private equity firms are most at risk.

The future of fintech is infrastructure  

As Shannen Balogh reports, fintechs are looking for ways to reimagine and disrupt core banking services that have been long dominated by infrastructure giants like FIS and Fiserv.

"They are all, as it currently stands, very good businesses with large customer bases who trust them, but the fact of the matter is they've fallen behind on technology," Tripp Shriner, partner at Point72 Ventures told Shannen.

Shriner isn't alone in his prediction. Goldman's investment banking head of fintech also says that the next trend to watch in fintech is players that focus on banks' core, often dated, infrastructure. 

Read more:

Business Insider events

One-click checkout startup Fast raised its $20 million Series A from investors including Index Ventures and buzzy fintech Stripe in May as it looks to take on Apple Pay to solve pain-points around password management and online checkout.

Join Business Insider reporter Shannen Balogh on Tuesday, July 14 at 1:30 p.m ET when she will speak with Domm Holland, Fast's co-founder and CEO, and Jan Hammer, general partner at Index Venture. They'll discuss how Holland came up with the idea for Fast, how to build a pitch deck, and what it takes to win over investors.

If you're a Business Insider subscriber, you can sign up here.

You can also join Business Insider on July 8 at 12 p.m. ET for "Planning for the Future in Uncertain Times," a free digital event and part of the Master Your Money series. Presented by Fidelity, it will explore components of a strong financial plan and how to adjust it given recent events. 

Click here to register for the Master your Money event.

Real estate

  • Vacancy rates are soaring above 15% in Washington DC's normally recession-proof office market. Here's why some industry players are still optimistic.
  • Meet Material Bank, a Bain-backed logistics startup disrupting the architecture industry. Here's a look at its vision for becoming the Amazon of design.

Careers

  • How a Bank of America exec is partnering with a non-profit training program to tap into a diverse and underserved talent pool for Wall Street tech jobs

Wealth management & fintech

  • Morgan Stanley financial advisers are starting to head back to offices around the country. Here's what they can expect when they return.
  • An app helping families save for college used this pitch deck to raise $9 million from investors like Anthos Capital and NBA all-star Baron Davis

Going public

  • A 179-year-old data shop just raised $1.7 billion in an IPO. Dun & Bradstreet's president walked us through its quick return to public markets and why the company's in high demand.

Banking

Read the latest banking news and featured articles:
– Banking Industry Trends
– Future of Banking Technology
– Mobile Banking Market
– Banking as a Service Explained
– Digital Banking
– Open Banking & Bank APIs
– Alternative Lending & Nonbanks
– US Neobank Market

Exclusive FREE Slide Deck: 10 Up and Coming Fintechs by Insider Intelligence

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