The next wave of restructuring —  Quant power players — Meet Carlyle's Kewsong Lee

 

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With coronavirus cases still spiking in areas throughout the country, and the US this week reporting a record second-quarter GDP slump, there's a growing concern among borrowers and private-equity firms that cash raised in spring won't be enough to ride out the economic fallout.

And Houlihan Lokey, Wall Street's top adviser to distressed companies, has changed up its outlook: Instead of the sharp but quick downturn the firm initially anticipated, it's now predicting a deeper, prolonged crisis that takes three to five years and pushes many more firms to bankruptcy.

"This pandemic is not a short-term blip, and it's going to be something much longer and probably more damaging to the economy," Houlihan CEO Scott Beiser said on an earnings call this week. And as Alex Morrell writes, companies that piled on debt in the early stages of the pandemic may have set themselves up to struggle as the crisis drags on. 

Read the full story here: 

A veteran restructuring banker that a corporate debt binge during the pandemic may result in a years-long economic nightmare

Keep reading for a look at 24 quant power players; WeWork's new strategy to fill space; must-know financial adviser recruiters; and an interview with Betterment's president of that sheds light on how the robo is thinking about the Robinhood effect. 

Have a great weekend,

Meredith 

What's next for Carlyle

Kewsong Lee became sole CEO of The Carlyle Group last week after two-and-a-half years running the $221 billion private-equity firm alongside Glenn Youngkin.

Casey Sullivan and Meghan Morris spoke with 20 people who have worked with him, and they painted a picture of a change agent who is unafraid to challenge conventional thinking. During his seven years at Carlyle, he's wound down underperforming strategies, revamped pay for some execs, and built up new businesses.

Read the full story here:

Meet Kewsong Lee, the private-equity exec who's now running the show solo at Carlyle. 20 insiders lay out why the move signals a big transformation at the firm.

Must-know financial adviser recruiters

Financial adviser moves in the wealth-management industry haven't slowed during the pandemic — recruiters and consultants say it's just the opposite.

"When you look at the numbers, it's really during tougher times that we see the most movement," one San Diego, California-based recruiter said. Rebecca Ungarino rounded up nine US-based recruiters who are at the center of all the action. 

Read the full story here:

These are 9 top recruiters financial advisors should know right now if they're looking to make a move

Quant power players

Quants have gone from a niche practice to a dominant player: the largest and most important hedge funds in the world are heavily influenced by, or completely committed to, computer-run strategies. 

The future of quantitative investing is under question, as a growing group of experts have been calling for more machine-learning techniques to be incorporated in a move away from the models that made so many people successful. And 2020 has not been kind to quants, as the volatility caused by the pandemic earlier in the year slammed many systematic funds that couldn't keep up.

Bradley Saacks took a look at the long-time, billionaire players; under-the-radar heavy-hitters; and entrepreneurial founders with serious pedigrees who will be guiding quant investing into its next phase.

Read the full story here:

The 24 quant power players driving the future of hedge funds, from well-known billionaire founders to under-the-radar data chiefs

Betterment eyes new ways to tap the retail-trading frenzy

E-Trade, TD Ameritrade, Charles Schwab, and Interactive Brokers all reported record levels of daily trades during the second quarter.Hollis Johnson/Business Insider

In an interview with Rebecca Ungarino and Dan DeFrancesco, Betterment president of retail Mike Reust offered a window into how the robo-adviser is thinking about the recent self-directed trading mania.

Betterment is not trying to launch a "Robinhood clone," Reust said. But it is looking for ways to tap into the retail trading surge with more tailored options and examining the "psychology and the human side of it," he said. 

Read the full story here:

Roboadviser Betterment is looking for ways into the do-it-yourself trading boom dominated by Robinhood, like adding more customization for users

WeWork hires big brokers to fill space

Faced with large vacancies in its sprawling portfolio of office spaces, WeWork has turned to major commercial real-estate brokerage companies to help it fill millions of square feet of space.

As Dan Geiger reports, the move to hire outside firms is a turnabout for the flexible-workspace company that comes as the pandemic has battered the country's office market, stalling leasing activity and clouding the questions of when and how tenants will return to the workplace.

Read the full story here:

WeWork is embracing big brokerage firms to help it fill space it gobbled up in NYC and Los Angeles. It's a key pivot for the coworking giant as leasing demand slows.

On the move

Cubist, the quant unit of Steve Cohen's Point72, has hired Denis Dancanet as its new head. Dancanet spent a combined two decades at Morgan Stanley and the quant fund PDT, which he left in 2016. Since then, he founded a startup called Jetoptera that hopes to make flying cars and was the head of research at Theorem, a Y Combinator-backed data-science startup focused on the loan market

Careers

  • Government-focused consulting firm Booz Allen is hiring and gearing up for &A, even as competitors cut costs and stay out of growth mode
  • Meet the 20-year-old founder of @WallStreetConfessions, an Instagram account that's become an open forum to discuss the dark side of finance and gathered followers including the CEO of Jefferies
  • Headhunters lay out what bonus season could look like this year for Wall Street traders
  • 3 ways law school graduates can stay on top of their game if their new jobs as associates have been delayed or canceled

Private equity

  • Blackstone just hired an Amazon Web Services exec who helped the cloud giant do M&A. It's the latest sign that big private-equity firms are muscling in on specialty tech investors' turf.

Real estate

  • JCPenney has hired brokers to sell off 163 locations across the US as the department-store chain slashes its footprint and tries to emerge from bankruptcy
  • A flexible leasing company — think Classpass for apartments — is expanding to cities like Denver and Atlanta after building a C-suite with former WeWork and Airbnb execs
  • SL Green is looking to sell a $1.1 billion Amazon-anchored building to buy back its shares. Here's a look at its strategy to defend its share price as the office market tanks.
  • IBM is on the hunt for a massive Manhattan space, showing that worries about the death of the big-city office may be overblown

Hedge funds and investing

  • Anthony Scaramucci's flagship fund is getting hit with a huge wave of redemptions. He explained why investors are pulling up to $900 million and where he's finding new money.
  • Billionaire Ray Dalio's Bridgewater is having a really bad year. Inside the layoffs, lawsuits, and double-digit losses at the world's largest hedge fund.
  • Here are the 8 'long-lasting implications' of the pandemic hedge-fund billionaire Seth Klarman lays out to investors in a new letter
  • Billionaire Cliff Asness says that going through value-investing hell has only made him more confident — and shares the advice he'd give his younger self

Fintech and startups

  • Affirm is reportedly eyeing an IPO that could value it at $10 billion. Here's how the buy now, pay later fintech became one of the breakout stars of 2020.
  • OpenSpace, a startup that applies AI to managing building sites, used this pitchdeck to nab $15 million. Here's a look at its vision to be the 'telemedicine of construction.'

Legal

  • Doubling down on diversity can help law firms land big clients like Microsoft. Industry experts give 2 key steps to making firms more inclusive.
  • 4 Schulte Roth partners who rep lenders like Cerberus and Sixth Street Partners are moving to Proskauer after a dispute over firm leadership
  • Top VCs say these 9 legal tech startups are poised to take off as clients pressure law firms on costs

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

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

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