Insights: Notes from the Field

Notes from Texas Bank Tour: Is This Time Different from Previous Downturns?

Last week we traveled to Texas with a group of investors to meet with management teams from 15 different banks (14 are publicly traded). With the exception of six banks, all are headquartered in Texas, and all but one has notable energy exposure in their loan portfolios (Oklahoma, Mississippi, Arkansas, and Louisiana banks also participated). The stocks of most of these banks have dropped over the…

Notes from Switzerland: Rising Regulatory Risk Places Swiss Private Banking Under Pressure

We recently traveled to Switzerland to meet with regulatory policy experts and representatives from the country’s major banks. Switzerland, while geographically small and landlocked, is home to a highly developed and skilled economy. It is one of the world’s most affluent nations, with the 6th highest GDP per capita (3rd excl. very small economies) of ~US$87,000 (Canada at ~US$50,000). Consistent with its longstanding neutrality, Switzerland is…

Notes from Sweden: Large Nordic Country; Oligopoly Banking Sector with High Capital Levels

We recently traveled to Sweden to meet representatives from the country’s four major banks and regulatory policy experts. For background, Sweden is the largest of the five Nordic countries by both population (9.7 mln) and economic output (US$570 bln). Of significance, it remains outside of the eurozone, i.e., it has its own currency/central bank (Finland is the only Nordic country in the eurozone; the other three…

Notes from the Netherlands: Eurozone Country Dominated by Two Large Public Banks

We recently traveled to the Netherlands to meet with representatives from the country’s major banks and regulatory policy experts. The Netherlands is the most densely populated large economy outside of Asia, with 16.8 mln people, and is a member of the eurozone. Its developed economy is focused on foreign trade, and it ranks as the second largest exporter of agricultural products in the world. It’s GDP…

Notes from Denmark: Small, Wealthy Country; Well Capitalized Banks

We recently traveled to Denmark to meet with regulatory policy experts and representatives from the country’s major banks. Denmark is the smallest of the Nordic countries by size, but the second largest by population with ~5.7 mln. It remains outside of the eurozone, along with three of the other four Nordic countries (Finland is a eurozone member). It has a developed (mixed) economy focused on foreign…

BofA Merrill Lynch Financials Conference in NYC: Notes from the Field

We recently attended the Bank of America Merrill Lynch Banking & Financial Services Conference in New York City. Representatives from major banks, asset managers, and consumer finance companies participated in very informative Q&A sessions, providing us and other investors with their thoughts on interest rates, M&A, and the credit environment. We would identify the following key takeaways:

Business Development Corps: Notes from NYC Field Trip

We recently travelled to New York City to meet with executives from a group of business development companies (“BDCs”), a diverse category of “other financials” focused on yields. There are over 30 publicly traded BDCs in our investable universe, with market capitalizations ranging from ~$100 mln to several billion dollars. Yields for these financials are generally over 8%.

European Trip to London, Frankfurt, and Madrid: Notes from the Field

A recent trip to Europe – 3 days in London at a European financial services conference, and 1 day field trips to Frankfurt and Madrid – gave us an opportunity to meet with executives from more than 25 financial services companies and agencies (including 19 banks and 3 insurers) representing 9 countries. Notably, the trip reinforced our European investment thesis, although a disparity of country and…

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