iCapital, a leading global fintech platform, announced today that it agreed to acquire UBS Fund Advisor LLC, UBS’s legacy proprietary US alternative investment manager. The agreement also includes the feeder fund platform that UBS manages. The platform, which is also referred to as “AlphaKeys Funds,” represents more than $7 billion in client assets. It includes private equity, hedge fund, and real estate feeder funds. iCapital will now manage and operate the platform, while UBS Financial Advisors continue to serve their high and ultra-high net worth clients that hold feeder funds. UBS became an investor in iCapital in 2017 and entered into a strategic relationship to structure new feeder funds going forward. It also integrated iCapital’s proprietary technology into its private fund operations. In 2021, the partnership was enhanced to further digitize the UBS Advisor experience. The transaction is expected to close sometime this year.

Finsum:iCapital, which has had a long-standing relationship with UBS, is acquiring its Alternative Investments Feeder Fund Platform which represents more than $7 billion in client assets.

With most stocks falling yesterday, the Cboe Volatility Index (VIX), also known as Wall Street’s fear gauge, jumped 15.5% to close the day at 23.80. This was the index’s highest closing level in almost three weeks. This resulted in volatility-related ETFs seeing large jumps in performance. For instance, the ProShares VIX Short-Term Futures ETF (VIXY) rose 6.5% on the day, while the leveraged ProShares Ultra VIX Short-Term Futures ETF (UVXY) jumped 9.7%. The VIX had previously been on a downturn since the market bottomed in June, but with anxiety beginning to hit investors once again, volatility is returning. The jump in the VIX can be attributed to investors anticipating another round of interest hikes in September. Plus, last Thursday’s month-end options expirations likely contributed to a resurgence in volatility. 

Finsum: Month-end option expirations and concerns over additional rate hikes drove the VIX higher yesterday, resulting in strong returns for volatility ETFs.

Stocks had one of their worst days in months as the market fell off 2% and sent volatility measures such as the VIX spiking. Wallstreet’s ‘fear gauge’ was up nearly 4% as a result. This all happens as the dollar is reaching very strong levels and almost parodies the euro. While that might be great for those on a summer vacation in the Mediterranean, it's bad news for investors, because it reflects a more fed tightening, rising treasury rates, and inflation. Investors are concerned about rising volatility once again after it felt like it was behind them. With healthy job numbers and inflation trying to turn a corner, things looked bright and the market felt it, but the reality of a one-off good inflation report is setting in.

Finsum: Advisors need strategies for resilience vs inflation and excess volatility because its persistence seems strong.

BlackRock launched a new series of fixed-income ETFs which allow access to buy-write investments on bond securities. iShares 20+ Year Treasury Bond BuyWrite Strategy (TLTW), Shares High Yield Corporate Bond BuyWrite Strategy ETF (HYGW), and the iShares Investment Grade Corporate Bond BuyWrite Strategy ETF (Cboe: LQDW) are all different variations of the new options available to investors. BR says buy-write strategies have been available to equity ETFs for a long time, but have not infiltrated fixed income. These options will give more exposure to yield in what has been one of the most difficult times for fixed-income investment in decades. This just adds to BR’s legacy of innovation and creativity in bond market ETFs.

Finsum: This is an interesting idea, and maybe if inflation is cooling quicker than expected bonds are too cheap. 

Fixed Income ETF: Bonds, Total Market, ETF, Treasuries

The U.S. has an extended history of periods of financial regulation, specifically trust-busting. That period has been in hibernation though for the last 50 years, that is, until now. Many judges in the United States may be getting a slue of cases related to similar topics with mergers and competition as Private Equity has extended its ownership to unprecedented levels. There is more alignment than ever within the administration on the future of competition and private equity when it comes to policy. They are pursuing new readings and interpretations of longer-standing precedents that will be more stringent on PE. This new strain of regulation has long-standing Democratic Economists like Larry Summers voicing concern, calling the new policies ‘populist antitrust’.

Finsum: There have been a large number of papers on the effect of co-ownership and competition that private equity companies are imposing, and that could be reaching its peak.