>>> Iceland Central Bank (Sedabanki) announces new rules on foreign exchange tha

Iceland Central Bank (Sedabanki) announces new rules on foreign exchange that provide for liberalization of capital controls on households and business capital controls 
- Made changes to restrict undesirable inflows of foreign denominated capital that could create systemic risk through carry trade
- Capital controls on the country's individuals, firms and pension funds have been lifted with effect on Tuesday
- Central bank expects to acquire the majority of Krona help offshore, have acquired ~ISK90B from offshore holders of the currency
- Will buy offshore Krona using foreign exchange reserves, which currently are at an all time high

FT : Sanofi hails broader promise of eczema medicine

Sanofi hails broader promise of eczema medicine
Development comes after loss of patent protection on blockbuster drugs

Sanofi has hailed an eczema medicine tipped to be the biggest drug launch of the year as an “inflection point” as it tries to plug a revenue gap left by patent expiries on top-selling products.

If, as expected, US regulators approve Dupixent for treatment of the serious skin condition, analysts say the drug could generate peak annual sales of up to $6bn.

The development follows a difficult period for the French drugmaker that has lost patent protection on blockbuster medicines and twice failed to buy cutting-edge biotechnology companies, losing out in recent months to rivals Johnson & Johnson and Pfizer.

During late-stage clinical trials, about two-thirds of patients taking Dupixent with a steroid cream saw a dramatic improvement in their eczema, while nearly 40 per cent achieved clear or almost clear skin. Participants also reported a marked reduction in itching, the number one complaint among sufferers of atopic dermatitis.

The pathway targeted by Dupixent is also thought to have a role in several other conditions. Sanofi, in collaboration with Regeneron, a biotech that discovered the drug and will take half of the profits, is trialling the medicine in people with asthma, nasal polyps and food allergies, as well as children with atopic dermatitis.

Elias Zerhouni, president of global research and development at Sanofi, said the medicine marked “an inflection point . . . It is a pipeline in a single drug”.

The company has been under pressure to make up for the loss of patent protection two years ago on the last major drug in its portfolio. Lantus, the insulin medicine, had sales of more than $6bn in 2015. Analysts have estimated revenues generated by the drug will fall to about $2.9bn a year in 2020, emphasising the scale of the company’s challenge.

Dr Zerhouni said: “For Sanofi it’s really essential to overcome the patent cliff . . . We have to truly innovate with breakthrough drugs that can attack disease with two targets at once or three targets at once.”

Underlining the size of the potential market for Dupixent, he pointed out that more than 300m patients around the world suffered from asthma, “and it’s increasing in incidence”.

Adnan Butt, analyst at RBC Capital Markets, compared Dupixent with anti-inflammatory drugs such as AbbVie’s Humira and J&J’s Remicade. They were first approved for arthritis but went on to become top-selling medicines after being proven to work in a wide range of illnesses, generating a combined $23bn in sales last year.

“The revenue numbers could be very big based on the prevalence of severe-to-moderate atopic dermatitis in the wider population,” said Mr Butt.

Dr Zerhouni, who took the R&D helm after heading the National Institutes of Health in the US, said he had pushed the tie-up with Regeneron “in an effort to catch up in the field of biologics and to move [Sanofi] from being a traditional pharma company to a bio-pharma company. Because I just believed that science required that.”

His scientists were now focusing on other multi-targeted treatments, including one for diabetes, for which they were “developing molecules that have two and even three therapeutic actions at once. That is where the revolution is going to be,” he added.

FT : ECB could lift rates while tapering QE

ECB could lift rates while tapering QE
A warning on eurozone monetary policy sequencing and a clinical look at smart beta

Our round-up of the week’s best comment and analysis from the Financial Times focuses on the European Central Bank strategy, green investment and the future of India’s economy.

The selection is taken from our Markets Insight and Smart Money columns, written by industry contributors and FT commentators.

Olivier Garnier, a group chief economist at Société Générale, looks at the European Central Bank’s exit strategy from ultra-loose monetary policy. He warns investors not to rule out that the ECB could raise rates while it is still in the process of tapering its stimulus spending.

“Markets do not seem so far to have discounted the possibility of such a change in the sequencing of the ECB exit strategy. If circumstances were arguing in favour of this change, the central bank would thus have to prepare and communicate it well in advance.”

The Financial Times’ Stephen Foley describes positive and negative takes on the impact investing deal between the US hedge fund Mariner Investment and Crédit Agricole, which is a new twist on what is known as “synthetic securitisation”.

“The US hedge fund reckons it has found a way to turn an investment of about $150m into $2bn of new funding for renewable energy and other green projects.”

There are not enough data on the real-world impact that companies exert, such as greenhouse gas emissions, says Patrick Odier, senior managing partner in the Lombard Odier Group.

“This is one important reason why so-called ‘impact investing’ — which seeks out profitable ‘social enterprises’ whose goods explicitly make life more socially and environmentally sustainable — has tended to take the form of microfinance, private equity or debt, or Green Bonds.”

The FT’s John Authers describes an academic “clinical trial” of the five most popular Smart Beta factors: value, size, low-risk, momentum and income.

“In a pleasant surprise, the academics’ conclusion is upbeat. All five effects are genuine, in that they tend to cause stocks to perform differently (even if they do not always perform better) and all should be monitored by investors.”

Despite social support Narendra Modi, India’s prime minister, still needs to cut red tape, root out corruption and pick up investment to enhance the domestic stock market, the FT’s Henny Sender argues.

“Global optimism may be helping the stock market, but so far Mr Modi has largely been a disappointment for many investors. When Raghuram Rajan stepped down as governor of the Reserve Bank of India last June, the hope that the RBI would finally force banks to deal with their legacy of bad loans and unleash a new credit cycle in India vanished with him.”

FT : Eczema drug from Regeneron tipped for blockbuster status

Eczema drug from Regeneron tipped for blockbuster status
Analysts predict first medicine for skin illness will make $6bn in annual sales

When Morgan Burns’ severe eczema cleared up at the age of 13, he thought he had been handed a reprieve from the painful condition that plagued his childhood.

“But in law school it came back with a vengeance and it was all over the place — my hands, elbows, feet, knees, back,” recalls Mr Burns, 47. “No part of my body was spared.”

He embarked on an unsuccessful “20-year quest” to treat his cracked and bloody skin, until one day he secured a place on a trial of a new drug discovered by Regeneron, the New York-based biotech company. The medicine, Dupixent, changed his life.

“Over the next six to eight weeks, there was a continuous improvement until one day my skin was basically clear,” says Mr Burns, a lawyer, who has been injecting himself with the drug each week for the past 14 months.

The US Food and Drug Administration is due to decide whether to approve the new medicine for moderate to severe eczema, or atopic dermatitis, this month, and analysts are predicting blockbuster sales for Regeneron and its commercial partner, French drugmaker Sanofi.

If Dupixent is given a green light, it is expected to be the most lucrative drug launch of the year, with annual revenues of $4.6bn by 2022, according to EvaluatePharma, the research group.

There are no approved medicines for moderate or severe atopic dermatitis, which affects 8.5m adults in the US and EU, so patients must make do with steroid creams and other, sometimes questionable, treatments.

Adnan Butt, analyst at RBC, is forecasting peak annual sales of up to $6bn, a figure predicated on a price tag of roughly $25,000 per patient per year for Dupixent, which patients will probably have to take for life. He says the dearth of options for patients will make it easier for Regeneron and Sanofi to charge such a price.

But some physicians think insurers and pharmacy benefit managers — often referred to as “payers” — could demand steep discounts, or require doctors and patients to jump through several hoops before agreeing to reimburse the drug.

“Payers have their antenna up and . . . they will be aggressive in containing utilisation,” says Dr Peter Bach, a pricing expert at Memorial Sloan Kettering Cancer Center. He points to the difficulty that Amgen, Regeneron and Sanofi have had securing reimbursement for their new cholesterol-lowering drugs, and similar problems for Novartis’ recently launched heart medicine.


Faced with the economics of an older and sicker population, US payers have increasingly been driving a harder bargain with drugmakers. They have been emboldened by the public outcry over egregiously priced medicines such as the $10,000 acne cream and the $750 Aids pill.

Analysts say the launch of Dupixent will be a test of whether drugmakers can convince buyers to foot the bill for new medicines with premium prices. In a sign of the importance of the negotiations, Leonard Schleifer, Regeneron’s chief executive, has handled them personally.

“There is no competition, so from a market perspective we would be free to price the drug at a very robust price,” says Dr Schleifer. “But I feel that we should be responsible, and price the drug responsibly.”

In return, he says, he wants payers to agree to a “grand bargain” where they will reimburse the medicine for patients who need it.

“I’m very optimistic that this formula of working together with a breakthrough product but being responsible in pricing will lead payers to be equally appropriate on how they make the drug accessible,” he says.

Regeneron says there are roughly 300,000 patients in the US who do not have their atopic dermatitis under control, but some analysts think the number could be as high as 500,000.

Before trying Dupixent, Mr Burns attempted lots of treatments, including standing in a sunbed-style lightbox and slathering himself with vegetable oil once a day. “It sort of helps until you realise all your clothes are stained,” he says.

In the most serious cases, doctors use toxic drugs that suppress the immune system such as cyclosporine, which is used in organ transplant patients, and methotrexate, more commonly associated with cancer treatment. Neither medicine has been endorsed by regulators, meaning physicians use them “off label”.

“All of them increase the risk of infections and [cancer] down the road, so they are associated with some pretty heavy baggage,” says Dr Jonathan Silverberg, a dermatologist at Northwestern Medicine in Chicago who conducted trials of Dupixent.

By targeting a biological pathway that triggers atopic dermatitis, Dupixent can control the condition without suppressing other parts of the immune system, meaning it is much safer than drugs such as cyclosporine.

“[Dupixent] is able to target very specifically this inflammation without the collateral damage of hitting other parts of the immune system that are needed to fight off infections,” says Dr Silverberg.

During late-stage clinical trials, around two-thirds of patients taking Dupixent with a steroid cream saw a dramatic improvement in their eczema, while nearly 40 per cent achieved clear or almost clear skin. Participants also reported a marked reduction in itching, the number one complaint among sufferers of atopic dermatitis.

The pathway targeted by Dupixent is also thought to cause several other allergic conditions, and Regeneron is trialling the medicine in people with asthma, nasal polyps, food allergies, as well as children with atopic dermatitis.

Mr Butt describes the product as a “pipeline within a drug”, and compares it to anti-inflammatory agents such as AbbVie’s Humira and Johnson & Johnson’s Remicade. The medicines were first approved for arthritis but went on to become the world’s top-selling drugs after being proven to work in a wide range of illnesses, generating a combined $23bn in sales last year.

Many atopic dermatitis patients also suffer from asthma and other allergic illnesses, and Regeneron and Sanofi are hoping that Dupixent could help control two or more conditions. That would allow the companies to make a “two-for-the-price-of-one” argument when negotiating with cash-strapped healthcare systems.

“If you have one molecule that does two things you essentially have a cost-effective way of doing combination therapies,” says Elias Zerhouni, president of global research and development at Sanofi, likening the approach to “sending a missile with multiple warheads”.

Dr Zerhouni stresses that the drug is intended to be used only in patients for whom there is no effective treatment. “We do not want Dupixent to be used for millions of patients who don’t really need it. We want it to be used for the thousands of patients that really need it.”

>>> The Body Shop attracts interest from CVC; former L’Occitane managing directo

The Body Shop attracts interest from CVC; former L’Occitane managing director Jacques Osti working with CVC - report

The Body Shop International’s auction has attracted interest from the private equity firm CVC Capital Partners, according to a Sunday Times report. The newspaper said former L’Occitane [HKG: 0973] managing director Jacques Osti is leading the CVC bid, but did not cite a source for the information.
L’Oreal [EPA:OR], the French cosmetics company that owns The Body Shop, announced last month that it was considering strategic options for the UK-based cosmetics company. The Financial Times reported on 8 February that L’Oreal had hired the investment bank Lazard to advise on a potential sale of The Body Shop.
CVC is working on a GBP 850m (EUR 968m) bid for The Body Shop, The Sunday Times item said.
The private equity firms Advent International and Apax Partners are among the parties interested in buying The Body Shop, according to the newspaper.
The report went on to cite City sources who said some prospective bidders had been deterred by The Body Shop’s international partnerships, which make gauging the business’ overall strength difficult.

(ZH) "Civil War" Breaks Out At White House Over Trade... And Goldman Is Winning

"Civil War" Breaks Out At White House Over Trade... And Goldman Is Winning


Earlier this week, when we discussed Peter Navarro's jarring op-ed in the WSJ in which he alleged that the persistent US trade deficit "would put US national security in jeopardy", we said that "a better question than what is Navarro's purpose by writing it, is why he is writing it, and does his use of a public forum like the WSJ mean that there is friction between him and Trump camp, especially since in recent weeks it appears that a core pillar of Trump's trade policies, namely the border adjustability, appear to no longer be on the docket of actionable items."
As it turns out, that was precisely the correct question, because as the FT reports, "a civil war has broken out within the White House over trade, leading to what one official called "a fiery meeting" in the Oval Office pitting economic nationalists close to Donald Trump against pro-trade moderates from Wall Street."
More notably, the person at the center of this "civil war" is none other than Navarro, who as we expected is now said to be losing influence, and as a result he resorted to using the WSJ as a means to appeal directly to the general public. It may have been a prudent gamble: the WSJ op-ed may have helped Navarro salvage some of his credibility with Trump, according to the FT:


The officials and people dealing with the White House said Mr Navarro appeared to be losing influence in recent weeks. But during the recent Oval Office fight, Mr Trump appeared to side with the economic nationalists, one official said.
Facing off the "hardline group" of Navarro, and other "nationalists" such as Steve Bannon, is a a "faction" led by former Goldman COO Gary Cohn, a career globalist, who leads Mr Trump’s National Economic Council.
But what is just as important, is that if the FT is right, then allegations that Trump has "sold out" to his Goldman advisors may be premature: in fact, if anything, Trump appears to be playing off one camp, the "nationalists", against its polar opposite, the "Goldman globalists":


The battle over trade is emblematic of a broader fight on economic policy within the Trump’s administration. It comes ahead of a visit to Washington next week by Ms Merkel, the German chancellor, and amid preparations for a meeting of G20 finance ministers in Germany next week at which allies’ concerns over protectionism are likely to be high on the agenda.

While the White House was non-committal, providing the FT with the following brief statement:


“Gary Cohn and Peter Navarro are both valued members of the president’s economic team. They are working together to enact the president's economic agenda, protect American workers and grow American businesses.”
... the "globalists" led by Cohn and others "have seized on Mr Navarro’s public comments — and widespread criticism by economists of his stand on trade deficits and other matters — to try and sideline him."


That has led to discussions over moving Mr Navarro and the new National Trade Council he leads out of the White House and to the Commerce Department, headed by another Wall Street veteran, Wilbur Ross.
And, if the FT is correct, it appears that the Goldman-led faction is winning:


Cohn has also been featuring more prominently in discussions over the renegotiation of the North American Free Trade Agreement with Canada and Mexico, one of Mr Trump’s top trade priorities. After a meeting with Mr Cohn and other White House officials on Thursday, Mexico’s foreign minister, Luis Videgaray, said the goal was to wrap up talks quickly and by the end of this year. That contradicted Mr Ross, who has called for deeper and potentially longer talks that could drag well into next year.
Cohn's sidelining of Navarro has only picked up recently, and in an attempt to alienate him from Trump, he has become "an increasingly isolated figure in the administration. He has been operating with a very small staff out of an office in the Old Executive Office Building adjacent to the White House while Mr Cohn, who has been adding staff to his NEC base inside the president’s residence itself."
Meanwhile, Cohn has been beefing up his staffing ranks with more, like-minded "globalist" supporters, such as Andrew Quinn, a former trade official who served as a senior negotiator during the Obama administration’s push for a Trans-Pacific Partnership with Japan and 10 other countries. In other words, someone who is desperate for much more, not less, global trade alliances. The White House last month announced Mr Quinn would serve on the NEC as a “special assistant to the president” for international trade. Quinn's appointment led to an outburst from Breitbart, which labelled the career official an “enemy within” the Trump administration earlier this month.
The bottom line, however, is that the fate of Trump's trade policies may rest in the fate of Navarro, and to a lesser extent Bannon: the two are the last bastion to push for Trump's initial protectionist policies; should they fade, it will be the policies of "Goldman" that end up being enacted. As the FT further notes, "Mr Navarro’s apparent sidelining have been helped ease some foreign officials’ concerns about the prospects of the Trump administration acting on campaign threats to raise tariffs and take other aggressive steps that could lead to a trade war."
“The situation is less worrying than it was two months ago because [Mr] Navarro seems to be more and more marginalised,” said one European official. “His influence seems to be diminishing quickly.”
And while Navarro's ultimate fate remains unclear, a new, and more interesting "civl war" may emerge should he lose all influence: American trade unions vs "Goldman Sachs."


Thea Lee, a top trade official at the AFL-CIO, the US’s largest union, and a member of the president’s recently-appointed manufacturing council, said Mr Trump appeared to be bending to the growing influence of the administration’s Wall Street veterans and walking away from his campaign promise for a fresh approach to trade.

“At the moment it appears that the Wall Street wing of the Trump administration is winning this battle and the Wall Street wing is in favour of the status quo in terms of US trade policy,” Ms Lee said.
In retrospect, those who said Trump will ultimately do Wall Street's bidding, may have been correct all along

(Recode.net) SoundCloud needs more money, or it may sell at a fire-sale price

SoundCloud needs more money, or it may sell at a fire-sale price
In 2014, the streaming music service thought it was worth $700 million. It could sell for much less.

SoundCloud needs more money, or it needs a buyer.

Sources say the streaming music service has been trying to raise more than $100 million since last summer, without success. It has also talked to potential acquirers, including Spotify, without closing a deal.

The upshot, according to people familiar with the company: SoundCloud is now at a point where it may sell for less than the $700 million investors thought it was worth a few years ago. One source thinks it will consider bids, as long as they’re above the total investment it has raised to date — about $250 million.

SoundCloud’s struggle is taking place while there’s renewed investor interest in streaming music. Even though the industry’s economics are challenging, users have embraced streaming, and are even willing to pay for it: Spotify, which would like to go public next year, says it has more than 50 million paid subscribers worldwide. Apple Music says it has more than 20 million paid subs.

SoundCloud’s stall has been out in the open for some time. Investors pegged its value at $700 million in 2014, and since then it has raised money twice — including last year’s $70 million Twitter investment — at the same valuation.

The service says it has 175 million monthly unique users, but it hasn’t updated that number since 2014, either.

A SoundCloud spokesperson would only say the company is talking to potential investors and strategic partners. The spokesperson added that the conversations, led by new CFO Holly Lim, “reflect the market interest in our differentiated platform, unmatched user reach and strong outlook for 2017 and beyond.”

Meanwhile, efforts to boost revenue by adding a paid subscription model to its free, core service, don’t seem to have generated much traction. SoundCloud launched a $10-a-month service a year ago, after long negotiations with the big music labels and publishers; it just recently introduced a $5 tier. The company said it expects sales to grow by two and a half times this year thanks to its new subscription service.

Last fall, SoundCloud had talks with Spotify about a sale, though it’s unclear how far those went. It has also talked to Google in the past, people familiar with the company say.

Barron's : Blackstone Units Have 40% Upside and Yield More Than 8%

Blackstone Units Have 40% Upside and Yield More Than 8%
The alternative-asset manager has been raking in far more money than its peers.
Blackstone Group ’s complex operating structure seems almost designed to turn ordinary investors away from its shares—technically, its units. They recently fetched $28.94, down from an initial offering price of $31 nearly 10 years ago. Yet the alternative-asset manager’s cash distributions could soon grow too large to ignore. Wall Street predicts a yield of more than 8% this year, based on a combination of steady, predictable management fees and lumpier performance fees that Blackstone earns when it exits profitable investments. Earnings used to fund those distributions could double in five years, judging by the pace at which Blackstone has been raising new cash and putting it to work.
As payments swell, income investors are likely to warm to the units, driving the price higher and closing the discount to better-understood peers in asset management. At 10 times forward earnings, Blackstone (ticker: BX) trades at about a one-third discount toT. Rowe Price Group (TROW), which runs actively managed mutual funds, and is barely half as expensive as BlackRock (BLK), a giant in exchange-traded funds that track market indexes.

There have been false starts for Blackstone unit holders, and Barron’s made an ill-timed recommendation of the shares nearly two years ago at $41 (“Blue Skies for Blackstone,” May 2, 2015). What has changed since then, apart from Blackstone’s 13% growth last year in fee-earning assets under management, is nearly everything in Washington, D.C., raising the prospect of a sweeping tax overhaul.
It bodes well for Blackstone investors that firm co-founder and CEO Stephen Schwarzman is chair of President Donald Trump’s Strategy and Policy Forum. “Steve called me up the day after the election—it might have even been the same night, Jamie, to be honest with you, you know Steve,” the president said during a White House gathering of the forum last month, whose members include JPMorgan Chase (JPM) chief James Dimon. But even if tax changes make Blackstone’s limited partnership structure less advantageous than that of standard C corporations, they could benefit Blackstone indirectly. It could simply choose to convert to a corporation. That would insert the company into major stock market indexes and probably set off a spree of institutional buying.
AS DETAILS OF A TAX OVERHAUL emerge, even the possibility of such a conversion could spark a rally in Blackstone’s partnership units. Management says only that it will weigh its options. With or without a conversion, the units have significant upside potential. Credit Suisse analyst Craig Siegenthaler, who calls Blackstone his top pick among asset managers for 2017, has a price target of $40. That’s nearly a 40% gain, not including the distributions.
In one sense, Blackstone’s business model could hardly be simpler. It turns money into more money on behalf of investors, and collects a fee for its troubles. Those investors buy into Blackstone’s funds or other vehicles, which deploy cash mainly in real estate, private equity, hedge funds, and loans. The investors who buy Blackstone’s publicly traded units get exposure to these asset classes indirectly. What they’re really betting on is Blackstone’s ability to continue to bring in money, find good deals, and generate hefty returns.
Over the past three years, Blackstone has raised nearly as much capital as its four largest public competitors combined: Apollo Global Management (APO), KKR (KKR),Carlyle Group (CG), and Oaktree Capital Group (OAK). Fee-earning assets under management were $277 billion last year, and dry powder was $101 billion. Blackstone has more cash than debt, an A-plus credit rating, and a remarkable ability to borrow cheaply. In October, it raised 600 million euros ($640 million) at 1% interest for 10 years—less than half what the U.S. government pays to borrow. Over the long term, the firm has earned 20% a year on its real estate investments and 18% in private equity. “We know more than other investors because of our market data,” Schwarzman told Barron’s last week. “We typically have some control, whereas regular stock investors are stuck with what they’ve got. And we can use leverage to enhance performance.”

Last year, however, the market for initial public offerings turned tepid. For Blackstone, the result was a moderate case of financial constipation. Deal exits slowed from 2015, pulling down performance fees. With less money paid out to investors, there was a bit less opportunity to raise and invest fresh cash. Investment performance was solid, but distributable earnings plunged 43%.
Therein lies the complication with Blackstone. Cash payouts depend on deal exits, and those don’t always line up neatly with calendar years. Consolidated Edison (ED) will pay investors 3.7% this year, sure as Manhattan’s lights come on. Blackstone will pay them anything from 4%, counting only steady fees plus performance fees that are already locked in, to 8% or more if the firm cashes in winning investments this year, as analysts predict. Moreover, generally accepted accounting principles, as U.S. bookkeeping rules are called, can tell tidy stories about companies that turn raw materials into widgets, or that buy widgets and sell them at a markup, but they can confuse Blackstone unit holders. Last year, GAAP earnings attributable to Blackstone surged 46%, to $1.04 billion. A non-GAAP measure called economic net income, which is more closely watched among alternative-asset managers, rose 11%, to $2.39 billion.
WHILE BLACKSTONE’S deal making dipped from peak levels last year, it was by no means sleepy. Top transactions announced or completed included a $6.1 billion purchase of medical staffing concern TeamHealth Holdings, an $8 billion takeover of BioMed Realty Trust, whose tenants include drug researchers, and a €3.3 billion deal with fallen German real estate firm IVG Immobilien to buy OfficeFirst, a collection of buildings in cities like Frankfurt and Berlin. Blackstone used the plunge in crude oil and Brexit as opportunities to add holdings in energy and United Kingdom real estate.
Investment returns based on carrying values were solid, from 11% for private equity and real estate up to 18% for distressed debt and 23% for performing debt. The Standard & Poor’s 500 index last year returned 12% including dividends.
One way to think about Blackstone’s distributable earnings, or DE, is as the product of money put to work five or so years before. DE per unit peaked in 2015 at $3.23 a share, but the fuel for that was the $110 billion in fee-earnings assets back in 2010. DE per unit was just $1.78 last year, but based on Blackstone’s assets, it’s set up to jump to $6 or $7 at the next cycle peak, probably sometime between 2019 and 2021, according to Credit Suisse’s Siegenthaler. If he’s right, the unit price could double by then even without an expanding price/earnings ratio.
“We’re a relatively new asset class, so investors don’t fully understand us,” says Schwarzman. “And we launched just before the financial crisis, which poisoned the well. Even so, the valuation seems odd and illogical.” Blackstone, if anything, has a more stable business model than mutual fund companies, he says, because its investors are locked in for the long term, while mutual fund investors can flee.
Recent growth initiatives include investment funds for what Schwarzman calls retail investors, by which he means wealthy families, and real estate vehicles that seek more moderate returns with reduced risk. And with Trump pushing $1 trillion in fresh spending for roads, bridges, and airports, Blackstone is looking at infrastructure.

Barron's : Insider Selling Spikes: Sign of an Airy Market?

Insider Selling Spikes: Sign of an Airy Market?
Although all market declines are preceded by bearish ratios, not every bearish ratio predicts a decline.

Insiders, like every other investor, have enjoyed the 9% rally in the market since President Donald Trump was elected. Given the spike, it isn’t entirely surprising that they are reaping the fruits of their gains, but lately they have been selling in droves.

Indeed, in the week that ended Feb. 24, there were 188% more companies with open-market sales than purchases, a ratio not reached since December 2013, according to Insiderinsights.com, which tracks such statistics. The following week, the ratio totaled 143%. While that isn’t necessarily predictive of a market swoon, it does bear watching.

“Although strong market declines are preceded by bearish insider ratios, not every bearish ratio is predictive of a decline,” says Jonathan Moreland, director of research at Insiderinsights.com. But he notes that the December 2013 spike in the ratio was followed by a flattening of the market after a huge surge, and then a notable dip in early 2014.

Of somewhat greater concern to Moreland is the strong recent rise in volatility, which indicates a lack of conviction by executives. In fact, the only time his indicator has been this volatile was “sometime leading into the 2008 market decline,” he says.

Given that worrying trend, Insiderinsights.com has advised investors to raise their level of cash to 20% from 10%. But the outfit still recommends overweights in banks, biotechs, basic materials, and infrastructure.

That said, Moreland concedes that the market “does look airy.” Consider yourself warned.