Throughout 2021 one of the biggest worries for investors, business owners, and policy makers has been the return of inflation…see the full story on our partner’s site

Annuities have been on a hot streak as of late and that continues into the 2021. Data collected from a combination of Morningstar and Beacon Annuity Solutions shows that sales for all annuities are up 17.3% through the first half of 2021 dwarfing previous years growth. And over the previous year up a staggering 27.9%. But the makeup tells the interesting story, total fixed annuities were up 12.1% while fixed annuities were almost level with 0.2% growth. And within variable annuities it was registered index linked annuities that dominated the sector with 11.2% growth and up 107.8% over the previous year’s same period. The book value of fixed annuities grew from 32% from Q1 to Q2 in 2021 totaling $12.7 billion.

FINSUM: This is a huge growth in annuities, and it probably stems from the inflation risk in the bond market, annuities are just the safer alternative for an income stream vs yield-less bonds.

Private equity firms are overwhelmingly turning to private credit as a buyout means over traditional bank financing. In a survey by Dechert law firm 45% of private equity firms have increased their use of private credit in buyouts in the last three years, which was a 10% increase from the previous year. Now private credit only trails real estate and private equity in private capital assets and is expected to grow to $1.46 trillion by 2025. It's a combination of a borrowing flexibility and yield chasing that has investors opening the doors to private credit. Private markets also seem less tumultuous to global volatility with longer contracts that are locked up and untradable. This is a big reason more than 50% of PE firms said its their preferred method to finance buyouts.

FINSUM: Ultra low yields and global instability are the biggest draws to private markets, because we know they are statistically less correlated with super liquid debt markets.

MetaCap has acquired a MCAP technology company in an equity exclusive transaction. MCAP is a fintech software development company that hosts a suite of software and e-market making services that offer liquidity solutions to institutional investors. Metacap sees the acquisition as part of their growth in client facing businesses and sector expansion. They can leverage the new acquisition by expanding what they can offer customers and grow their clientele. Revenue and EBITA growth has been a key point of success for MTEC and that as a one two punch they can be even stronger with the merger moving forward.

FINSUM: This is yet another dip into digital portfolio construction via buyout or merger, and a sign of how quickly fintech is moving the frontier in the financial industry.

Evergrande’s crisis has been all over the news in the last month, but it appears there is contagion in the high yield debt market. The bond market sell off, particularly from off-shore investors has spread to companies like Tencent and financial companies like Bank of Communication Hong Kong. This has pushed the ICE BofA Asian Dollar High Yield Corporate China Issuers Index to over 25%, which is the peak yield for the index since 2008. Sparking the yield climb is a combination of regulation, high leverage, and low liquidity. A bump in liquidity from the Chinese central bank has calmed domestic investors, but ultimately government policy will have to lighten up for yields to start to fall.

FINSUM: The endless regulation is spilling into the rest of the economy in China, and no amount of liquidity provisions will bring back outside investors. Rather, China needs to loosen the grip if they want to give companies a chance at refinancing their debt moving forward.