December was lost in a fog of masks and Netflix bingeing. But one item that penetrated our consciousness was a superb credit webinar, courtesy Lincoln International. Their data, gleaned from over 1600 portfolio companies, are a strong proxy for #privatecredit behavior:  

For example, sector performance underlined valuation advantages for less COVID-impacted industries such as tech, healthcare, and business services. The losers remain energy, consumer discretionary, and real estate.  

The “better” companies are pushing multiples above the previous high watermark of Q4 2019 of 9.8x ebitda to 10.4x at Q3 2020....

As we wrap up our special #SPAC series, let’s take a look at the performance of these vehicles over time.   

According to research firm Renaissance Capital, of the 200-plus SPACs launched since 2015, 107 have completed mergers and gone public. Shares in those issuers averaged a loss of 14%. Compare that to an average regular-way IPO return of +49% over that period.  

This year there have been 194 traditional IPOs for $67 billion – the highest level in six years. SPAC activity as been similar 200 vehicles for $64 billion...

Workers unwrapping the Christmas tree at Rockefeller Center last month found a little present. The 75-foot high Norway spruce from Oneanta, NY was sheltering what appeared to be a baby owl.

The stowaway turned out to be an adult northern sawhet that hid in the branches until it was discovered. No word whether “Rocky” planned  other holiday stops on his NYC tour.

Year-end festivities do include more SPAC closings. “There’s been a significant surge of activity on the front end,” one SPAC lawyer commented, “so there needs to be an increase in [merger] activity.”...

For Thanksgiving the noted sommelier and “lifestyle director” Sara Lehman reviewed eleven wines – cabernets, pinot grigios and rosés – all under $10.  

Selections came from Trader Joe’s (“It’s reminding me of apple juice”), Costco (“Give it a nice swirl first”), and BJ’s (“I’m getting some barnyard”). The winner? Target: “If I were to bring something less expensive to my friends.”  

$10 prices reminded us of SPACs. These ‘blank-check’ companies differ from regular-way IPOs by being priced at $10/share, and floating from there.  

SPACs sponsors are seeking investments in colorful sectors...

Besides COVID, the elections, and what the fifth instalment of the Scream series will be called (it’s not Scream 5), what’s getting the most attention is #SPACs, or special purpose acquisition companies.  

These are publicly traded shells with cash looking to buy businesses. SPACs were originally designed to help smaller companies access public equity. For various reasons, they’ve never taken off. That’s changed.  

As our Chart of the Week shows SPAC IPOs zoomed this year. So far in 2020 there have been 183 such vehicles raising $66 billion. Compare that to 2019 when only $13.6 billion was raised from 59 IPOs...

Answer: For most of US history, it was March 4, not January 20. Question: What is Inauguration Day?  

We found ourselves channeling our inner Alex Trebek this week as the nation’s attention began shifting from elections to vaccines.  

Pfizer’s trial results sent Wall Street to record highs. But on Main Street rising infections are propelling a third virus wave across the US, with almost a million new cases reported last week – up from 600,000 only a week ago.  

With winter upon us, COVID will unfortunately march on, impacting commercial activity again...

Given all that’s gone on this year, it’s unsurprising that Election Day came and went, with only a big “TBD” to show for it.   

Results now are mostly in, but this uncertainty had little impact on the capital markets. The S&P had its best week since April and bond yields sank only mildly. As is often the case, business thrives when government is gridlocked.  

October’s HY bond volume of $34 billion, the second highest October ever. BSL activity reached $44 billion for the month – with September’s $50 billion, the best two-month performance since pre-COVID...

150 million US adults will “participate in Halloween-related activities,” according to a survey. 53% will decorate their homes and 18% will “dress up their pet.”  

We tried to imagine getting our cat Serena into a pumpkin costume. Not happening. But we are encouraged Americans are spending for the second-costliest holiday of the year.  

Putting cash to work is also much on the minds of private credit investors. With 60 shopping days left in the year, appetite for yield remains keen.  

Some worry that market conditions will get frothy again. But the data doesn’t support that...

We were sad to hear of Coca-Cola’s decision last week to discontinue Tab by year end.  

Launched in 1963 Tab was a pop culture icon, appearing in Back to the Future and Ghostbusters. But competition from Diet Coke spelled its demise.  

It takes superior management to keep brands vital. Remember Scooter Pies, Quisp, or FudgeTown cookies? Without support even popular snacks will fade away.  

Private credit, similarly, features a number of participants, but not all created equal. Some have long successful track records. Others, as one friend put it, “are operating without a driver’s license.”  

A reporter with one top institutional investor-focused publication asked about our view that 2020 could be the best vintage for private credit in a decade...

The journal Astrobiology has highlighted 24 planets that could possibly sustain life. Criteria for “superhabitability” include stars younger than the Sun and atmospheres with warmth and moisture greater than Earth.

All these planets are over 100 light years away – not ideal for COVID getaways. But for those who don’t mind long trips with the kids, such conditions could mean more longer lifespans and a nicer lifestyle. 

Other extraterrestrial news this week came from our content partners who published findings on third quarter fundraising...