Here is BeBeez’s weekly roundup on the stock market performance of leading private capital stocks listed on the world’s major exchanges. In collaboration with eToro
Overseas markets are still wondering about the possible impact that the Donald Trump’s tariff war will have on inflation rates. However, there is a fairly solid consensus that the introduction of new tariffs could add about half a percentage point to the inflation rate. And the higher-than-expected consumer price hike figure released this week certainly did nothing to dispel this. The Federal Reserve may not carry on further interest rate cuts and there no longer seems to be the conditions for a lower cost of money, at least in the US.
The situation in the UK is quite different. The country is struggling with a rather sluggish GDP which creates problems for the Crown budget and the Keir Starmer Government’s spending plans. This context triggered a fall in 10-year rates since mid-January, with the Gilt yield falling from its peak of 4.8% to 4.5% on 14 February, Friday.
This substantial decoupling of the economies on the opposite sides of the Atlantic Ocean means that the performance of the securities that BeBeez selected on eToro and reported on the Trading Floor page depends closely on the asset class of reference and the area in which they operate.
For example, the stabilisation of rates is favouring the investors in in private debt, especially those who finance real estate projects that are also benefiting from the purchase of existing loans on the secondary market, whose prices become more attractive if the borrowing costs rise. Last week, Apollo Commercial Real Estate Finance (ACRE) gained almost 11% for such a reason and in light of solid 4Q24 results that recorded a profit of 38 million US Dollars. In 2024, Apollo posted losses of 132 million (see the presentation here), while the stock went down 8.35% over the whole year.
Last week, BlackStone Mortgage Trust (BMT) shares have gone up 8.7%. In 4Q24, the firm posted profits of 38 million with total losses of 202 million for the whole 2024 (see here the presentation) mainly due to massive loans write-offs in the portfolio. However, BMT’s stock over the 12 months remained essentially unchanged, unlike ACRE, so the base effect was less favourable.
UK’s private capital firm Intermediate Capital Group (+4.7% last week) benefited from more favourable rates in the domestic money market.
California’s direct lending house Blackrock TCP Capital Corp, a credit provider for mid-caps, also took advantage of the rates and also of substantial share purchases by several asset managers, who are probably anticipating flattering results for 2024, expected on 27 February, Thursday.
Last week, the shares of Ares Commercial Real Estate Corp. went down -15%, even though the stock has been one of the best performers of the previous week (see here a previous post by BeBeez). On 12 February, Wednesday, the company said that 2024 losses amounted to 35 million US Dollars (see here the press release) after the implementation of a strategy aimed at improving the assets average quality. However, investors see the firm’s 200 million cash as a parachute from futher credit write-offs.
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