Happy Friday. Welcome to The Chaos Coordinator! We are Brain Candy's snarky little sister, delivering carefully curated news happening across the industry (that you should probably care about) right to your inbox, with a hefty dose of irreverence.
In this issue, we dive into:
SEC x Hedge Funds x PE
Fintech x Comeback
Discounts x M&A
Energy Tax x Crypto Miners
Tech CEOs x White House
Online Comments x Creative Briefs
What's happening in.....
PE/VC
"I Got New Rules, I Count 'Em"
- Dua Lipa The SEC
The SEC has enhanced disclosure requirements for hedge funds and PE firms. These rules were developed through a proposal process that began in January 2022 and will now require private fund managers to provide more detailed info on an accelerated timeline about potential risks or hazards to the financial system. Hedge funds with at least $1.5 billion in assets under management will have 72 hours at most to report “certain events that we believe may indicate significant stress or otherwise serve as signals of potential systemic risk implications or as potential areas for inquiry so as to mitigate investor harm,” the SEC wrote. PE funds would have 60 days after the end of a quarter to report secondary market transactions and “general partner removals and investor elections to terminate a fund or its investment period.” Funds of more than $2 billion will also have additional annual reporting requirements, including strategies and use of leverage, states the report.
Fintech revenues are projected to grow sixfold from $245 billion to $1.5 trillion by 2030, according to a report released this week by Boston Consulting Group and QED Investors. The report titled "Global Fintech 2023: Reimagining the Future of Finance" offers an extensive analysis of the evolving fintech landscape across the world, highlighting the latest trends and opportunities in the global fintech market, while also taking a look at the regulatory environment fintechs face alongside emerging technologies. The report reminds us that in 2022, fintechs on average lost more than half of their market value. However, according to the research, this plunge was a short-term correction in an otherwise long-term positive trajectory.
Discount prices keep global M&A activity bobbing along in the sea of uncertainty.
2023's Q1 macroeconomic environment was gloomier than the past two weeks in NYC (does the sun even exist?). Combined with a near banking crisis, Q1 resulted in a reduction in M&A transactions, causing a 32% drop in global deal value from the previous year's peak. Despite this, the total value of M&A deals for the quarter surpassed $1 trillion. Although some sellers, such as private equity firms, were less active in recent months, lower valuation multiples in certain cases incentivized deal activity. Pitchbook's Q1 2023 Global M&A Report dives into dealmaking trends within industries and between regions.
The Biden administration is promoting a tax proposal from a recent federal budget, which calls for crypto miners to pay an amount equivalent to 30% of their energy expenses. The White House stated that “currently, crypto mining firms do not have to pay for the full cost they impose on others, in the form of local environmental pollution, higher energy prices, and the impacts of increased greenhouse gas emissions on the climate,” according to the CEA’s description of the levy it calls the Digital Asset Mining Energy (DAME) tax. The tax could raise up to $3.5 billion in revenue over the next 10 years, the announcement stated.
Read more on the “harms crypto miners impose on society,” here.
GENERATIVE AI
Our Favorite Tech CEOs Take a Field Trip
What do you bring when you're summoned to the White House to talk AI? Fresh tulips? A bottle of rosé? A 12-step action plan?
Prior to a meeting with top tech CEOs on Thursday, the White House disclosed several initiatives related to artificial intelligence. The announcement came hours before VP Kamala Harris and other administration officials were set to meet with the CEOs of Alphabet, Anthropic, OpenAI and Microsoft. "AI is one of the most powerful technologies of our time, but in order to seize the opportunities it presents, we must first mitigate its risks," a fact sheet from the White House states. "Importantly, this means that companies have a fundamental responsibility to make sure their products are safe before they are deployed or made public." The meeting included a "frank and constructive discussion on the need for companies to be more transparent with policymakers about their AI systems, the importance of evaluating the safety of such products, and the need to protect them from malicious attacks."
A new secret weapon has been unlocked for strategist everywhere. And no, it's not ChatGPT.
As we well know, in today's world, the success or failure of a brand often hinges on its ability to generate buzz among through social media chatter - audience engagement has never been so important. Being able to pin an idea to a topic that is already being talked about by fans/users/consumers increases the likelihood of it gaining traction on social media platforms, where conversations hold significant power. "Tapping into comments effectively requires you to deploy two things: some really great social listening and a removal of ego," shares Charlie Cottrell, editorial director of We Are Social.
In honor of Cinco de Mayo, allow us to introduce you to the tequila toast: arriba (glasses up); abajo (glasses down); al centro (glasses to the front which wishes health to everyone participating in the toast); y pa’ dentro (your tequila goes inside aka drink up). We encourage you to celebrate responsibly; cheers 🌶️.
