Well-capitalized funds that are interested in expanding tend to view massive cutbacks at large investment banks as an opportunity to diversify their businesses and increase their "human capital".
For new drug chemical entities and investments in high-technology startups, on which the evidence is most complete, the median project yields less than the capitalized cost of capital funds invested, but losses on the majority of projects are more than offset by gains from the most successful projects.
That's because big, well-capitalized fund firms can better absorb the hits to revenue that lagging performance combined with incentive fees can bring, especially if just some of their funds offer incentive fees, notes University of Connecticut finance professor Joseph Golec.
Oil importing states, on the other hand, followed this development very closely as they turned to abundantly capitalized oil funds to rescue companies that came under severe distress from the global credit crunch that began in 2008.
Maris, who is a managing partner at Google Ventures, has gone from sitting next to Anne Wojcicki at a Swedish investment bank to Kevin Systrom as a Noogler to managing one of the world's most capitalized corporate funds — to even a brief stint on tour with his wife, singer songwriter Tristan Prettyman.
If the loans were going to large and well-capitalized investment funds, whose overall capital base would back the repayment of the government loans, the plan would have merit of providing liquidity to the market for toxic assets.
Shareholder activism now entails the harder work of overhauling businesses, something that will leave the playing field to the better-capitalized hedge funds.
Instead, the government loans by design will go to poorly capitalized special investment funds set up specially to buy toxic assets.
The most heavily capitalized one to receive funding in the past couple of years appears to be FloWater, a Denver-based startup that provides pure water refill stations and has raised about $8 million to date.
We have some suggestions to help ensure the greatest security for that portion of cash to be retained in a regular money market: –Stay with the largest and best capitalized brokerage and mutual fund companies; they typically have deeper pockets and are able to supply additional cash to avoid breaking the buck.
