Evan Vitale

Accounting Professional

Evan Vitale – Bloomberg & Other VC Headlines

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By Evan Vitale

Here are a few of the venture capital stories making headlines this week:

Fortune.com is reporting that Bloomberg Beta, the early-stage venture capital arm of Bloomberg LP, today announced that it has closed its second fund with $75 million. That’s the same size as Bloomberg Beta’s debut fund, with all of the money again coming from the parent company. You can read the full story here: http://for.tn/2ah4Wih

In Europe, venture capital has regained some momentum in the second quarter, but is still down 22% from 2015, this coming from Venture Beat.

According to the latest report from Dow Jones VentureSource, during the three months ending in June, European companies raised $3.33 billion in 461 deals.

That’s up 18 percent from Q1 in terms of amount raised. And it represents an increase of 9 percent in the number of deals.

Catch up on all the details here: http://bit.ly/29PrSkE

Fast Company has an interesting article: “More Unicorns But Fewer Deals: The Current State of Venture Capital Funding.”

The only thing certain about the global economy is uncertainty. Thanks to political unrest, terrorist attacks, and the repercussions of Brexit, caution is the dominant mindset of investors in every market, according to the latest quarterly global report on venture capital trends published jointly by KPMG International and CB Insights.

You can read the full report here: http://bit.ly/2a5E7eD

Meanwhile, in Arizona, the Phoenix Business Journal is reporting that the state has enjoyed a big second quarter in venture capital deals.

A 34 percent increase in venture capital deals in Q2 2016 were reported by PwC and NVCA for Arizona. The new report finds five deals more than DowJones VentureSource reported.

 

Evan Vitale – China Real Estate Bubble Bursting

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Finally, the Chinese real estate market seems to be stalling. It’s been a long run.

For almost 20 years, increases have occurred in construction and real estate prices across all of China. But development is starting to come back to earth as housing starts have decreased by 25 percent from a year ago.

Some economists are saying that the bubble has burst, something that could have severe economic and political implications.

The Chinese government put a series of policies in play in order to try to tame the ever-rising market. For starters, they’ve placed punitive interest rates on mortgages for second homes and a ban on buying third homes. Plus, the central bank has kept short-term interest rates well above the rate of inflation.

Not only has there been a delay in new projects – existing projects are being completed at a reduced speed as well. This has led to a slowing in both steel and cement output as well as retail sales.

Chinese economists believe that this downturn in the real estate market will most likely lead to considerable increases in nonperforming loans.

However, there is no need to worry about a shutdown such as the one that occurred in the U.S. in 2008. More than half of the homes in China were purchased over five years ago and real estate prices have doubled in that same time-frame. And Chinese families have a tendency to save – putting almost half of their income into a savings account.

Households in China have 66 percent of their assets in their homes, a much larger percentage than that of the U.S.