Latest news with #MainStreet
Yahoo
13-06-2025
- Business
- Yahoo
Retail Investors Risk Ominous Opportunity Cost With Private Investments, Moody's Warns
Is Wall Street unwittingly copying Wile E. Coyote's newfangled traps for the Road Runner by promoting new products for individual investors that will invariably backfire? Maybe so, says Moody's, which warned this week that increasing efforts to sell private equity and private debt funds to retail investors may not end especially well. While there's a chance the movement could open up 'higher-return opportunities to ordinary investors' that were previously walled off, the ratings firm sounded the alarm that unmanaged growth 'could have systemic consequences.' Risk yourself accordingly. READ ALSO: Just How Much Data Does the Fed Need to Cut Rates? and Europe Delays Stricter Banking Rules to Keep 'Level Playing Field' With US Rivals The $1.7 trillion private credit, or private debt, market comprises financing from specialized firms, asset managers, private equity shops, and hedge funds that make loans to companies outside of the traditional bank-lending ecosystem. The sector took off after traditional banks pulled back from some risky lending when they were hit with tightened regulations following the 2008 financial crisis. The $4.7 trillion private equity market, meanwhile, involves investing in companies that don't offer shares on the public market. Private credit and private equity firms typically raise money for their funds from institutional investors like pensions and endowments. But with the sector exploding in size, private fund managers have launched initiatives to woo more capital by letting individual investors buy into the market through new retail products. In his annual letter to shareholders, Blackrock CEO Larry Fink pledged to open private markets to individual investors and declared it a core growth area for the firm. 'Assets that will define the future — data centers, ports, power grids, the world's fastest-growing private companies — aren't available to most investors… they're locked behind high walls,' he said. More broadly, Moody's said there is general cause for concern in inviting more individual investors into the private market: First, for the retail investors themselves: 'One of the most pressing concerns for 'Main Street' investors is liquidity and the inherent lack of it in private markets,' the ratings agency's analysts wrote. They then warned that, in times of market stress, investors 'might not be able to access money at all' from illiquid private assets. They also warned that the handful of large firms that command the private-fund market frequently invest in the same deals, meaning investors could end up with investments that aren't sufficiently diverse and thus 'amplify systemic vulnerabilities.' Second, there's the risk to the funds themselves, which face 'reputation loss, heightened regulatory scrutiny and higher costs' if individual investors' access to cash isn't delicately managed. 'If growth outpaces the industry's ability to manage such complexities, such challenges could have systemic consequences,' Moody's wrote, essentially saying the entire financial system could feel the weight of any growing pains. But Wait, There's More: For private market funds, there's also the risk that making private markets more like public ones would betray the fact that they 'favor illiquidity premiums, price stability, small lending groups and discretion,' which would hurt the returns of private funds if they have to disclose more information. The other risk is the influx of cash itself, which Moody's said will 'inflame situations where demand is outstripping supply in a market that already has more than $4.2 trillion in dry powder.' Private funds have typically had years to deploy capital strategically, they noted, but 'some managers may be tempted to compromise on underwriting standards or stretch into riskier assets to keep pace with inflows and capitalize on the opportunity.' This post first appeared on The Daily Upside. To receive delivering razor sharp analysis and perspective on all things finance, economics, and markets, subscribe to our free The Daily Upside newsletter. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CTV News
12-06-2025
- Business
- CTV News
Demolition coming for empty fire damaged building on Main Street
The vacant burnt out building that the city is looking to demolish on Main Street. Uploaded June 11, 2025. (Jeff Keele/CTV News Winnipeg) The City of Winnipeg is looking for a contractor to do a wet demolition of a fire damaged building on Main Street. Wet demolition is a process to safely remove asbestos. A fire broke out at the vacant commercial building at 881 Main St. nearly four years ago. At the time, CTV News reported it was set for demolition. Beside the building is a burnt out church that caught fire twice in the last year. Coun. Ross Eadie said the city will pay for the work and then transfer the costs to the owner's property tax bill. 'The time limit is up. (The city) gave them a grace period and now they're putting out, and they're going to hire a company. The city will pay them to do a wet demolition,' said Eadie. It's a new policy, stemming from scores of problem properties plaguing inner-city neighbourhoods, where owners are dragging their feet on cleaning them up. A mountain of rubble, which once stood on the Sherbrooke Street lot, was one of the catalysts. The pile was left over for more than two years from an apartment building fire until the city stepped in, cleaned it up, and put the cost on the property tax bill.
Wall Street Journal
11-06-2025
- Politics
- Wall Street Journal
Judges Can't Be Ruled by Fear
We would ride our bicycles after elementary school past the Eskimo Queen ice cream stand on Main Street, en route to buy baseball cards at the little grocery owned by the father of our classmate Freddy Schiefer. One day, just east of Gould Road, a billboard-like sign appeared. 'Impeach Earl Warren,' the sign said in huge letters.
Yahoo
11-06-2025
- Business
- Yahoo
How a flood of retail investor money into private markets could stress the whole financial system
Retail investors are getting more access to opaque private markets, and it's raising risks. The activity could also be a systemic threat to the broader financial system, Moody's said. Private markets are less liquid than their public counterparts, but retail investors want quick access to funds. Retail investors are increasingly being offered access to private markets as investing heavyweights compete for their business. But the shift has created a host of risks for individuals and the broader financial system. That's the takeaway of a new report from Moody's, which warned of "systemic implications" as ETFs and retirement funds facilitate a flood of money from individual investors. Once reserved for the investing world's elite echelons, the booming private equity and private credit markets are slowly being opened up to Main Street investors. The development has sparked some debate about the wisdom of offering everyday people access to illiquid, complex investments. The report from Moody's comes as the $1.4 trillion market for private equity and credit investments has exploded in recent years. As public listings have dried up, more companies have turned to private markets for funding; however, investments from institutional investors are slowing, driving the big players to look for new frontiers. In recent months, giants including BlackRock, State Street, KKR, and Apollo have unveiled ETFs, target date retirement funds, and other investment vehicles aimed at Main Street — and there's reason to be wary, Moody's said this week. Among other risks, a flood of new money into the space could set off a race among money managers to deploy capital, the firm said. "If competition for retail capital outpaces the supply of quality assets, and if growth outpaces the industry's ability to manage these complexities, such challenges could have systemic consequences," Moody's analysts wrote. "Some managers may be tempted to compromise on underwriting standards or stretch into riskier assets to keep pace with inflows and capitalize on the opportunity." What's more, retail investor participation risks heightening volatility in times of market stress, and the market itself is less liquid and more complex than stocks. One of the big draws of the stock market for investors is that you can buy or sell shares at a moment's notice. Not so with private investments, which don't necessarily have "mark to market" valuations. "One of the most pressing concerns for 'Main Street' investors is liquidity and the inherent lack of it in private markets. Retail investors often require quicker access to their capital and have less long-term investment flexibility," Moody's wrote. The ratings agency points to the Great Financial Crisis, when people turned to their 401(k)s for cash while the economy soured. In such a situation, if money is locked up in private market investments, people could have trouble accessing their money. "In volatile markets, retail investors may run for the exits, which would exacerbate liquidity needs and the risk of potential mismatches between a product's available liquidity and what investors are expecting." Read the original article on Business Insider Sign in to access your portfolio
Reuters
10-06-2025
- Business
- Reuters
Moody's flags risks from retail investors' push into private credit
June 10 (Reuters) - The rapid growth in retail investors, who put their money into private markets, could create liquidity and asset quality risks, Moody's Ratings warned on Tuesday, highlighting potential vulnerabilities within the private credit sector. The rush to court "Main Street" investors is transforming the traditionally institutional world of private credit, with asset managers launching new funds tailored to retail demand. But the shift is also raising concerns about transparency, liquidity, and underwriting standards, as firms race to deploy capital amid limited supply of high-quality assets. Private markets are gaining prominence as public listings have declined and more companies opt to delist, Moody's said, adding that with institutional investors facing capacity constraints, asset managers are increasingly turning to retail capital to sustain growth. "Under the current U.S. administration, the regulatory approach toward the private market has changed, with priorities shifting from enhanced disclosure requirements to a greater emphasis on accelerating capital formation," the ratings agency said in a report. To meet retail investors' expectations for quicker access to cash, asset managers are rolling out products with periodic liquidity windows, Moody's said. But in volatile markets, sudden redemption requests could strain these funds, creating a mismatch between available liquidity and what investors expect, Moody's added. The ratings firm also cautioned that as competition for high-quality assets intensifies, some asset managers may take on greater risks, investing in lower-quality assets to keep pace with surging demand.
