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M&A in 2021: asset management primed for consolidation

Dealmaking is hotting up in a sector under relentless margin pressure

There were a record number of mergers and acquisitions in the asset management sector in 2020. Recent share price moves suggest investors are betting on more to come.

Activists like Nelson Peltz and John Paulson are agitating for deals and bank executives including Jamie Dimon are hunting for ways to expand their in-house asset management arms. Meanwhile, falling margins and changing client needs are forcing the pace.

Larry Fink, who runs BlackRock, the world’s biggest asset manager, expects further consolidation among smaller players and says executives have little choice. “Firms that are trying to drive long term change, they have to do that.”

Speculation around deal candidates and potential predators has been intense since Morgan Stanley snared Boston’s Eaton Vance in a surprise $7bn deal in October that added $500bn in assets and raised the bank’s asset management arm to $1.2bn. The Financial Times reported it had beaten JPMorgan Chase to the prize. Seized by the idea that Mr Dimon might now make a tilt for Invesco instead, investors sent Invesco shares up 6.5 per cent on one day last week.

“Banks want to diversify and find additional revenue streams outside of lending when interest rates are so low,” said Kyle Sanders, analyst at Edward Jones. “A lot of asset managers need to get bigger and provide a greater product mix for clients who have broad portfolios.”

Just like individuals may find it convenient to use the investment advice and funds offered by their bank, large asset management clients such as pension funds and insurers would prefer to deal with fewer managers who can offer products across asset classes — from equities, through bonds to alternatives like real estate — and across international markets.

That has long been the driving force behind the rise of BlackRock, which now oversees nearly $9tn of client money.

“Investors are looking for fewer organisations to provide advice and they are seeking holistic conversations for a complete portfolio,” Mr Fink said. “Other asset managers can do that, but most of the industry was not developed that way.”

Consolidation in the sector “is not about scale and cost cutting, it’s about providing a broad conversation with clients”, he said.

Deals do usually result in cost savings, however, and that is no small advantage given relentless downward pressure on margins. The average annual fee on actively managed equity mutual funds, for instance, had declined from 0.96 per cent in 2010 to 0.72 per cent at the end of 2019, according to Piper Sandler and the Investment Company Institute. The fees on passively managed equity exchange traded funds have dropped from 0.32 per cent to 0.18 per cent over the same period.

Asset managers also face rising regulatory burdens and a need to invest in technology and data that can boost the distribution of their products.

But recent deals including Franklin Templeton’s takeover of Legg Mason last year, the $5.7bn acquisition by Invesco of Oppenheimer in 2019 and the 2017 merger of Janus and Henderson did not stem customer outflows. Active managers continue to suffer from a general record of lacklustre investment performance over the past decade, driving customers to passive funds that cost less and by definition do not underperform.

“The question is how do you survive and thrive when the ecosystem is evolving,” said Michael Cyprys, analyst at Morgan Stanley. “It will be a multiyear journey for asset managers to improve their position and expand their growth into new areas and extend distribution more widely via technology.”

Even relative giants see the value in bulking up. State Street, inventor of the exchange traded fund, with $3.1tn in its asset management arm, has talked with UBS about combining the unit with the Swiss bank’s own wealth management business, which has $2.8tn in assets. By contrast, Wells Fargo and Bank of Montreal, banks with subscale asset management arms, are looking to shed them.

Meanwhile, several standalone players have become the targets of activists. Mr Peltz held a stake in Legg Mason and was a supporter of its takeover by Franklin Templeton, having been vocal about asset managers getting bigger and using scale to cut costs and increase their market share. His hedge fund, Trian Partners, holds a near 10 per cent stake in both Invesco and Janus Henderson.

BrightSphere Investment Group, the New York-listed multi-boutique that used to be part of the UK’s Old Mutual, has activist pressure from John Paulson, who became its largest shareholder in 2018 and has since been installed as chairman. In November, the share price surged 17 per cent in a few days after talk it was exploring the sale of its private equity affiliate Landmark for $1bn.

“Activists always want an exit and if they think consolidation could facilitate that exit, they’ll push for that,” said Elizabeth Cooper, partner at corporate law firm Simpson Thacher. 

The top 10 asset managers only account for 35 per cent of market share, making it the most fragmented industry globally after capital goods, according to Morgan Stanley.

But, for all the signs pointing towards further consolidation, sceptics highlight that asset management transactions are hard to execute because integrating different cultures and structures has traditionally been challenging.

“I don’t see it shrinking down to a handful of multitrillion dollar players,” said Janis Vitols, head of global asset management investment banking at Bank of America. Transactions will be tactical in nature, depending on whether players need to add new geographies or hot asset classes, such as private credit or real estate, to their product mix.

“It’s more nuanced than just rushing to buy assets and build a mega player. It depends on whether they want to grow in the US, Europe or Asia or in a specific category,” said Mr Vitols. “Scale is important but it will be targeted.”

BaFin boss ‘believed’ Wirecard was victim until near the end

Felix Hufeld thought short sellers might have faked the disappearance of €1.9bn, three people and document say

The head of Germany’s financial watchdog suggested Wirecard might be the victim of an elaborate plot by short sellers even after the company discovered that €1.9bn of its stated cash was missing, according to three people briefed on the matter and a document seen by the Financial Times.

Felix Hufeld, president of BaFin, raised the possibility with Wirecard chairman Thomas Eichelmann, according to these sources, in a phone call that took place last June after the payments group’s auditor EY was informed by two banks that documents purporting to confirm the company’s cash position were “spurious”.

Two of the people said Mr Hufeld told Mr Eichelmann that he thought there was a 50-50 chance that the reported missing cash was part of an attack by investors betting against the company’s share price.

The documented incident shows how strongly BaFin clung to the notion that Wirecard was a victim rather than a perpetrator of fraud even after EY refused to audit its 2019 results.

For years, BaFin had dismissed reports of fraud at Wirecard and filed a criminal complaint against FT reporters, alleging they colluded in market manipulation. The case was dropped after Wirecard filed for insolvency, having acknowledged the €1.9bn probably did “not exist”.

BaFin said Mr Hufeld had several phone calls with the chairman, but denied that at that point he believed short sellers might be behind the group’s woes.

“In mid-June, BaFin did not have any insights about potential short seller attacks against Wirecard. In his talks with Wirecard’s supervisory board, Mr Hufeld at no point described such a scenario as likely,” BaFin said, adding that the written summary of the call seen by the FT was “evidently wrong”.

Mr Eichelmann declined to comment.

According to the document seen by the FT, Mr Eichelmann on June 18 briefed the supervisory board about his conversation with Mr Hufeld. According to that account, the BaFin president pointed out that “the content and wording” of the letters from two separate Manila-based banks to EY was “very similar”.

Mr Hufeld also was said to have noted that one of the letters was signed by a vice-president, a relatively low-ranking employee. He was reported to have said that the documents would appear like “co-ordinated statements” and may represent “a campaign that is directed against the company”.

One person with knowledge of the discussion said Mr Eichelmann was “really perplexed” about Mr Hufeld’s assessment as it sounded similar to the view of Wirecard’s then-chief executive Markus Braun. Until Mr Braun was pushed out of the company on June 19, he stressed that the bank letters reflected a “misunderstanding” which would be resolved soon. He is now in police custody.

In a separate, earlier conversation with Wirecard representatives on June 17, a different BaFin employee expressed disbelief about the letters in which the two banks pointed out that previous balance confirmations were “spurious”.

BaFin told a lawyer working for Wirecard that it was “incomprehensible” how two letters from banks could “call all facts that were previously audited [by EY] into question”.

The Philippine central bank a few days later said Wirecard’s missing cash never entered the country’s banking system and the company disclosed that the money probably did “not exist”.

Wirecard, which later acknowledged that large parts of its Asian business were a sham, filed for insolvency within a week.

BaFin has long been under fire for its mishandling of early warning signals of misconduct at Wirecard. After short sellers in 2016 published fraud and money-laundering allegations, the regulator discussed the “homogeneous cultural background” of investors betting against the company, noting they were “mainly Israeli and British citizens”.

In 2019, it temporarily protected Wirecard from short sellers, brushing aside Bundesbank concerns and filed the criminal complaint against the FT journalists.

At the same time, dozens of BaFin employees were heavily trading Wirecard shares and derivatives, with some of them breaching disclosure rules. One of the employees left BaFin at the end of November after his contract was terminated.

Fabio De Masi, an MP for the leftwing Die Linke party, called for the dismissal of Mr Hufeld and BaFin vice-president Elisabeth Roegele, who is in charge of securities supervision.

“Finance Minister Olaf Scholz eventually needs to act. Mr Hufeld and Ms Roegele allowed themselves to be used by Wirecard and even believed in a conspiracy when Wirecard was already collapsing,” he told the Financial Times, adding that a “clean break” was needed to restore the reputation of Germany’s financial regulators. “Business as usual is over,” said Mr De Masi.

Lessors raise $14.9bn in January thanks to confidence in robustness of niche in travel market

A string of successful bond deals for aircraft leasing companies reflects a view among investors that this niche of the travel industry is a safer way to bet on a recovery in the sector.

In total, seven leasing companies, which own planes they lease to airlines, have raised a combined $14.9bn in January, according to data from Dealogic, with several receiving cut-price borrowing costs.

Investors said the deals nonetheless offered attractive returns in a corner of the airline industry more protected against further fallout from the spread of coronavirus. 

“Out of the whole travel sector they are probably one of the better positioned,” said Monica Erickson, head of the investment-grade corporate team at DoubleLine Capital. “It’ll be a while before anything normalises but the types of planes they have will remain out there. The terms they have with the airlines . . . they can withstand the expected downturn.”

Last week, Aircastle raised a $750m seven-year bond with an additional yield, or spread above US Treasuries, of 2.3 per cent, down from an early indication of 2.6 per cent when the deal was first marketed to investors, according to people familiar with the transaction. Air Lease also raised $750m, this time for three years at a spread of 0.72 per cent. 

Earlier this month, AerCap raised $1bn. The five-year deal priced with a spread of 1.55 per cent, down from initially being marketed at around 1.8 per cent.

Most lessors typically enjoy long lease times, which enables them to straddle difficult patches for the airline industry. Their main risks stem from airlines failing to pay rents, or even going bankrupt. But since airlines have secured capital to help survive the shock of the pandemic, that in turn has bolstered the position of the lessors.

The returns on offer to investors from the lessors’ bonds are historically low, but they are still attractive compared to comparable bonds in the market. Most lessors sit at the bottom end of the investment-grade rating spectrum, clinging to the sought-after status while some airlines’ unsecured bond ratings have tumbled into ‘junk’. The average investment-grade rated corporate bond with a maturity of five to seven years currently carries a spread of just 0.77 per cent. 

Lessors’ borrowing costs have fallen significantly. Air Lease’s previous debt issue in November was a 10-year bond with a coupon of 3.13 per cent. As exuberance over the rollout of coronavirus vaccines has intensified, the yield on the bond has fallen to 2.75 per cent. 

“We have had a lot of capital raises and we are only three weeks in to the year,” said Helane Becker, an analyst at Cowen Securities. “As more vaccine gets into people’s arms I think people will be more willing to travel.”

In a further sign of encouragement for the industry, investment firm Castlelake last week sold the first securitised bond backed by a bundle of aircraft leases since the pandemic took hold last year. 

Evan Carruthers, co-founder for Castlelake, said the $595m deal had a number of changes from pre-pandemic bonds, such as ensuring funds were diverted to the highest rated slices of debt in the event that leases go unpaid. 

“I think it’s a sign of repair,” he said. “It’s about addressing concerns over what happens if this pandemic lasts another 12 to 18 months and there are collection issues. How do you guarantee the deal still performs? I think there is an elevated awareness of risk in aircraft leasing.”

Saudi wealth fund in talks to lure health and technology companies

Public Investment Fund in push to have foreign groups set up operations in the kingdom

Saudi Arabia’s sovereign wealth fund is seeking to use its financial muscle to lure international health and technology companies to set up operations in the kingdom.

The $400bn Public Investment Fund is “already in discussion with a number of companies in the health sector”, governor Yasir al-Rumayyan told the Financial Times.

It is holding talks with electric car start-up Lucid Motors, in which it invested $1.3bn to acquire a 67 per cent stake, to establish a manufacturing facility in the kingdom, and with “many” companies in SoftBank’s Saudi-backed $100bn Vision Fund, he said.

“The next step is to go forward in getting them to the kingdom,” Mr Rumayyan said.

Crown Prince Mohammed bin Salman has earmarked the PIF as central to grandiose plans to modernise the kingdom and create new industries that reduce dependency on oil, with the aim to hit $1tn in assets under management by 2025. But the kingdom has struggled to attract foreign investment outside the energy sector.

The fund has pledged to spend $40bn in the domestic economy annually over the next five years.

As it focuses more at home, Mr Rumayyan said the fund’s international exposure would come down to about 20 per cent of assets under management during the next five years, from nearly 30 per cent after it poured at least $7.7bn into US and European stocks in the first quarter of last year to take advantage of the market volatility. Still, in absolute terms, foreign investments will continue to grow, he said.

Analysts have questioned how the PIF will be able to finance its vast commitments, particularly as Saudi Arabia has been hit by the coronavirus pandemic and low oil prices.

But Mr Rumayyan said funding would come from a combination of loans, dividends from its holdings, government cash injections and the privatisation of Saudi companies it owns, beginning as early as this year.

Last year, the PIF received $40bn from the central bank’s foreign reserves, and was the main beneficiary of the December 2019 stock market listing of oil company Saudi Aramco, which raised $29bn by releasing just a small slice into public hands.

Mr Rumayyan said Riyadh might consider listing more shares in Saudi Aramco “if the valuation is right”, and that the state oil company itself was considering a “massive” programme of asset divestments.

“Historically speaking, [Saudi Aramco] used to do everything themselves . . . they had their own airports, their own fleets, their own pipelines,” he said. “Now if it makes sense for us to divest some of these assets, we’re definitely going to do it. It could include anything except the main operations.”

Mr Rumayyan, who is also chair of Saudi Aramco, said the PIF would need additional government cash injections, but insisted that would happen only when the central bank’s reserves, which fell to about $444bn in the middle of last year, were replenished.

He also rejected concerns that Saudi Aramco, which has been the bedrock of the economy, was in danger of becoming a cash machine for the sovereign wealth fund. 

“We have governance in both companies . . . The PIF way will never allow one party to put the pressure on the other one,” he said.

As part of its effort to diversify the economy, the PIF has established more than 30 domestic companies over the past three years, in sectors from defence to waste recycling. It is also overseeing the development of three so-called “giga-projects” — Neom, a futuristic $500bn “mega city” development, Qiddiya, a more than $15bn sports and entertainment complex, and a high-end Red Sea tourism project expected to cost at least $10bn.

But it has drawn criticism that it is crowding out the private sector by dominating the domestic economy.

“They are increasing the risk and the leverage of the state to the detriment of the private sector, it’s becoming a state enterprise,” said a Gulf analyst. “They think the solution to Saudi Arabia’s problems is the PIF but it has not been proven yet.”

However, Mr Rumayyan insists the PIF has been nurturing the private sector. “We are paving the way for them to come in,” he said.

World’s most indebted property developer’s push into electric cars has been hit by delays

Shares in the electric car unit of China Evergrande, the world’s most indebted property company, surged to a record high after a $3.4bn cash injection boosted hopes for its stalled ambitions to rival the likes of Tesla.

The company’s Hong Kong-listed shares soared more than 60 per cent on Monday, a day after the group announced that strategic investors had bought a 9.75 per cent stake for HK$26bn (US$3.35bn).

Evergrande Auto, as the EV unit is known, has vowed to spend Rmb30bn ($4.6bn) between 2019 and 2021 building factories and acquiring technical expertise in its bid to become a global leader in electric cars.

But production delays, unfinished factories and the company’s naming in an industry investigation by China’s state planner have piled pressure on Evergrande Auto, which has not begun commercial sales of its vehicles.

Evergrande’s pivot into EVs also coincided with Beijing’s increasing scrutiny of the property sector in a bid to cool red-hot prices, such as by limiting the amount that developers can borrow.

Evergrande Group, the parent company, has a nearly 68 per cent stake in the EV unit.

The parent group’s early repayment of a $2bn bond this month helped ease investor concerns about Evergrande’s debt burden, which as of June stood at Rmb835.5bn. Last March, the company pledged to reduce its borrowings by Rmb150bn per year through 2022.

Investors in the Evergrande Auto fundraising included Greenwoods Global Investment; Liu Minghui, chairman of China Gas; and Chan Hoi-wan, spouse of Joseph Lau, former chairman of developer Chinese Estate. They agreed to a one-year lock-up of shares. 

Evergrande Auto said the funds would be used to invest in research and development, production and paying off debts.

Soaring interest in China's electric car makers has helped propel shares of companies including Nio, Xpeng and Li Auto as investors seek out the next potential Tesla in the world’s largest EV market. But some are sceptical Evergrande Auto will be able to compete in the crowded field.

Nigel Stevenson, an analyst at Hong Kong-based accounting investigation firm GMT Research, said that most of the proceeds from Evergrande Auto’s capital fundraising could end up being passed on to the parent company. As of June, Evergrande Auto’s debt stood at Rmb75bn, most of which was either owed to or guaranteed by its parent. 

“Evergrande Auto remains primarily a property company,” Mr Stevenson added. The company’s largest cash outflow in 2019 was investment in properties under development, he pointed out.

Hedge fund Element warns of deep economic blow from new virus strain

Europe’s investors and policymakers should cut forecasts, says fund’s head of markets

Investors and policymakers are failing to grasp how deeply the new variant of coronavirus will damage the European economy, Element Capital, one of the world’s largest macro hedge funds, has warned.

Expectations for economic growth need to be cut as the B.1.1.7 coronavirus variant spreads beyond UK borders, and lockdowns across the continent could extend months beyond current estimates, the fund’s head of markets Colin Teichholtz said in an interview.

“What you are seeing in the UK today you will see over much of continental Europe, and I don’t think markets [and] . . . policymakers are really grasping that,” Mr Teichholtz said. “Are policymakers getting this? Are people updating their economic forecasts for the second quarter to reflect a much worse outcome in terms of the economy being able to reopen? There is very little indication of that in forecasts.”

Element has emerged as one of the hedge fund success stories of the pandemic crisis, betting early that the BioNTech and Pfizer vaccine would be more effective than the broader market anticipated. The fund returned 18.8 per cent last year and has never reported a down year since billionaire Jeffrey Talpins launched the fund in 2005.

The pessimistic outlook from Mr Teichholtz stemmed from low vaccination rates across the EU, with countries such as Germany, France and Spain lagging behind the pace of inoculations in the US and UK.

UK Prime Minister Boris Johnson warned on Friday that the new variant might be more lethal and more infectious than the earlier wave of the virus.

European Central Bank president Christine Lagarde last week described new virus variants from the UK and South Africa as “not so positive” factors that “could require more stringent measures”. Still, Mr Teichholtz pointed to her assertion that the central bank’s forecasts for 3.9 per cent growth in 2021 remain “broadly valid”.

“That set of assumptions has to be off by at least a quarter and that’s another three months of people being stuck at home, people being furloughed, many companies . . . not being able to function,” he added.

He cautioned that lockdowns could last until June if policymakers did not take more aggressive measures across the continent to contain the virus soon.

The senior member of Element’s portfolio management team, who joined the firm from BlueMountain Capital in 2019, declined to comment on the fund’s positioning. Last August, Mr Talpins told clients the fund was wagering on a decline in European equities at the time and had taken a “significant short position”.

Mr Teichholtz said the brisk pace of vaccinations in the US would probably insulate the country from the same outbreak that he envisions in Europe. Stock markets in both regions have continued to advance this year, with the benchmark Euro Stoxx 600 marginally outpacing the S&P 500.

“I don’t think it is crazy for markets looking out over a longtime horizon to feel good . . . and certainly central banks have made clear at least for the foreseeable future they’ll keep policy very easy,” he said.

“That being said, I would say whatever your assumption is for global growth for the first half of 2021, you should probably move that assumption a little lower because of the impact likely in Europe.”

Before social media was about algorithms and viral misinformation, kids in Hong Kong loved a clunky instant-messaging service used on dial-up PCs. Now they’re grown up, and back.

HONG KONG—WhatsApp users around the world who are worried about the company’s shifting policy on data privacy are flocking to rival messaging apps such as Signal and Telegram.

In Hong Kong, some are choosing an alternative that reminds them of their childhood—before algorithms, Big Tech and viral misinformation.

ICQ was a pioneering, mid-1990s internet messaging service then used on bulky PCs on dial-up. It was a precursor to AOL Instant Messenger, and was last in vogue when the TV show “Friends” was in its prime and PalmPilots were cutting edge.

It’s been modernized over the years, and now is an app for smartphones. Lately it has skyrocketed up Hong Kong’s app charts, with downloads jumping 35-fold in the week ending Jan. 12.

“It recalls my childhood memories,” said 30-year-old risk consultant Anthony Wong, who used ICQ when he was in grade school. He has since connected with more than two dozen friends on the platform after some bristled this month at a privacy policy update by WhatsApp that would allow some data to be stored on parent Facebook Inc.’s servers.

Some users were also exasperated by what they saw as Facebook’s efforts to curry favor with China. WhatsApp, which has about two billion users, says it doesn’t have access to the contents of personal messages and that its planned privacy-policy changes are related to business users.

The ICQ app doesn’t necessarily address users’ privacy concerns. Its messages are encrypted, but it is owned by a company in Russia—where the government holds technology firms by a tight leash.

An ICQ spokeswoman said user messages are “never shared with anyone,” except by court order.

For the revived Hong Kong users, a change driven by concerns about privacy was mostly overtaken by nostalgia for the days when technology was a fun pastime for kids in the know.

Long before texting, ICQ—a homonym of “I seek you”—permitted users on PCs to communicate with friends across the street or around the world.

With its green flower logo, goofy message alert sounds and numerical user IDs, it provided a way for instantaneous communication before smartphones and social-media apps were developed.

Although “instantaneous” in those days was relative: Mr. Wong remembers how slow it was to share music files with friends. “It took forever to download a song,” he said.

Earlier this month, Alvis Sio and her friends were brainstorming a replacement for WhatsApp. “Why don’t we go back to ICQ?,” one said. Ms. Sio found the idea of returning to an IT relic reminiscent of a less complicated era.

“Back in the days with ICQ, you needed both people to be ready at their computers in order to send messages,” said the 30-year-old postgraduate student, who used the service in her early teens. She said the elaborate sequence of logging on, connecting to the internet, finding friends and starting a chat was like a ritual.

Tel Aviv-based Mirabilis Ltd. launched ICQ in 1996, and it was one of the first instant-messaging programs to gain global popularity. America Online Inc. two years later acquired it for $287 million, and near the turn of the millennium it had about 100 million users.

The Russian internet firm now called Mail.Ru Group Ltd. bought ICQ from AOL in 2010, and has since expanded its offerings beyond its original desktop service to include a smartphone app with group video calling, audio messages and more. The ICQ spokeswoman declined to say how many total users the service has but said it was most popular in countries such as Russia, Nigeria and Germany. Mail.Ru Group runs VK, also known as VKontakte, Russia’s most popular social network.

The spokeswoman said downloads in Hong Kong during one week earlier in January surpassed those during last year’s entire fourth quarter. In the week ending Jan. 12, downloads soared to 7,000, compared with 200 the previous week, according to San Francisco, Calif.-based app analytics firm Sensor Tower. Google searches for “ICQ” are at a level not seen in a decade, Google Trends data shows.

Vicky Choi and her husband, Jay Pang, both 38 years old, used ICQ as teens—although they were each dating other people at the time. “Hello,” Ms. Choi wrote to her husband in recent days on the platform, her first message in more than two decades. “Hi,” Mr. Pang immediately responded, “after so many years.”

Mr. Pang, an airline ground crew worker, said his contact list of friends had been “frozen in time,” with status updates from 20 years ago. One read: “I’ll find my way,” a cryptic phrase invoking the aesthetic of angst-ridden “emo” rock music popular at the time.

He said he has helped four or five friends to look up their ICQ numbers—he still has them on his old friend list—and get online.

Some of ICQ’s original elements remain, such as its classic “uh-oh” notification sound. One feature now dropped: “random chats,” in which a user would be randomly assigned a chat partner from somewhere in the world.

“There would always be someone to chat with,” said Mr. Pang, who said he was occasionally connected with strangers in locations such as Taiwan, Europe, the U.S. and the Middle East.

Ms. Choi said she misses another eliminated feature, so-called invisible mode, which allowed users to “lurk” without anyone knowing they were online. “When my boss texts me and I don’t feel like getting back to him right away, I wish I could go on invisible,” she said.

A hitch for users trying to restart their old accounts—it is hard to remember decades-old passwords.

Joyce Lai, a 30-year-old aerial exercise instructor, tried to take to ICQ again in recent days. She had committed her ICQ user number to memory in fourth grade, but she can’t log in because she forgot her password.

“I’ve tried so many combinations of my ex-boyfriends’ birthdays and phone numbers, but none of them worked,” Ms. Lai said.