🍋 How Billionaires Invest in 2024

Family offices are as bullish as ever, and Zuck joins the $200 billion club.

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Short Squeez
September 27, 2024

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“Diversification is protection against ignorance. It makes little sense if you know what you are doing.” — Warren Buffett

Good Morning and Happy Friday! Mark Zuckerberg became the 3rd American man to join the $200 billion club, with Meta’s stock up 64% this year. The U.S. economy grew 3% last quarter, M&A activity is picking up, and Dish and DirecTV are nearing a merger. Citi and Apollo agreed to work together on $25 billion worth of private credit deals. Billionaire Dave Tepper thinks Fed has to cut rates 2-3 more times to preserve credibility. Meanwhile, Bill Gates is enjoying hot dogs in Times Square while promoting his new Netflix show. Plus why being unfocused is the silent killer of success.

Think Bitcoin will reach new highs this year? Make your prediction with Kalshi.

SQUEEZ OF THE DAY

How Billionaires Invest in 2024

According to Citi Private Bank's latest survey, the ultra-wealthy are feeling more confident about the economy than ever. The survey found that 97% of family offices are expecting positive returns this year, and nearly half are betting on double-digit gains. 

If you're unfamiliar with a family office - lots of billionaire families will create them to manage their capital. Usually, you need at least $100M in investable assets to create one.

It’s the most bullish that family offices have been in years, with wealthy families putting their money to work in alternatives and equities as interest rates dip.

After two years of sitting on cash piles, waiting for a recession that never quite hit, family offices are jumping back into the riskier assets—especially in private equity, with 47% planning to up their PE allocations this year.

But it’s not just private equity getting love. More than a third of family offices are also increasing their stakes in developed-market stocks, especially U.S. equities. Equities now make up 28% of the average portfolio, up from 22% last year. See below:

And the big winner this year? Artificial intelligence. From Jeff Bezos to Bernard Arnault, family offices are betting big on AI. Over half have AI exposure, and 26% plan to increase their investments.

Takeaway: With a lower interest rate environment, family offices are embracing more risk. These offices are no strangers to risk, often favoring alternatives like private equity, venture capital, real estate, and hedge funds, which now make up 40% of their portfolios. This trend is set to continue, especially as more family offices make direct investments in private companies. It’s officially the 🎵Alternatives Era🎵 where, as Ray Dalio famously put it, “Cash is trash.”

PRESENTED BY KALSHI

Bitcoin Surges to $65K—Will It Hit a New All-Time High?

Bitcoin just hit its highest point in two months, surging past $65,000. With the Federal Reserve’s rate cuts and China’s economic stimulus in play, all eyes are on the next move for crypto’s king.

When will Bitcoin break its all-time high this year? Kalshi’s prediction markets let you forecast the future of Bitcoin and more. Make your prediction—profits could be just a click away.

HEADLINES

Top Reads

  • Mark Zuckerberg's net worth hits $200 billion (Fox)

  • US economy grows at 3% annualized pace in second quarter (YF)

  • We may have finally pulled ourselves out of our economic funk (CNN)

  • Citi, Apollo join forces in $25 billion private credit push (YF)

  • DirecTV, Dish nearing merger agreement (BB)

  • U.S. M&A activity shows gains as election looms (Axios)

  • Why there's not enough data for Fed to cut 50 bps again (YF)

  • David Tepper says the Fed has to cut rates at least two or three more times (CNBC)

  • Wendy's takes aim at McDonald's broken McFlurry machines (YF)

  • Major chip stocks are rallying (CNBC)

  • Blackstone confirms $13 billion investment in Britain for AI data center (YF)

  • Bill Gates is talking about his new Netflix show and enjoying NYC hot dogs (Fox)

CAPITAL PULSE

Markets Rundown

Market Commentary

Stocks rose on Thursday, driven by China’s fiscal stimulus and optimism in the tech sector. Chinese policymakers announced additional fiscal measures to complement earlier monetary support, boosting global equities, especially in light of recent struggles in China’s economy.

U.S. markets also benefited from a strong earnings report from Micron, which reinforced the positive momentum around AI-driven growth.

The S&P 500 is now on track for its sixth positive week in the last seven.

Commodities saw mixed movement, with copper prices jumping on China growth hopes, oil declining, and gold edging higher on monetary stimulus.

Economic data released Thursday pointed to a steady, though slowing, U.S. economy. Final revisions confirmed that Q2 GDP grew at 3%, while durable goods orders and employment data were better than expected, signaling resilience.

Initial jobless claims dropped for the third consecutive week, easing concerns about a labor market downturn. This data suggests the economy is decelerating but remains strong enough to support the recent market rally.

Looking ahead, Friday’s core PCE inflation reading will be key for markets. Expectations for a 2.7% year-over-year increase align with the Fed's view of moderating inflation.

While markets are pricing in future rate cuts, any surprises in the inflation data could trigger volatility, although the Fed appears to be more focused on labor market trends.

Movers & Shakers

  • (+) Micron Technologies ($MU) +15% after the chipmaker beat earnings.

  • (+) Southwest Airlines ($LUV) +5% because the company’s CEO outlined the airline’s overhaul.

  • (–) Super Micro Computer ($SMCI) -12% after the DOJ probed the company.

Private Dealmaking

  • Automatic Data Professing in talks to buy WorkForce Software for $1.2 billion 

  • Zing Health, a Medicare insurer, raised $140 million

  • Distribution, a ground transportation marketplace, raised $80 million

  • UJET, a cloud contact center solutions provider, raised $76 million

  • Crisp, a supply chain data startup, raised $72 million

  • Cyclic Materials, a recycling company, raised $53 million

For more PE, VC & M&A deals, subscribe to our Buysiders newsletter.

NEIGHBORHOOD WATCH

Real Estate Digest

Mortgage rates have hit a two-year low, leading to a surge in refinance demand. With the Fed signaling potential rate cuts before year-end, prospective homebuyers are waiting to see if rates drop further, despite the possibility of higher home prices.

Latest News

New Listings

Fill out this form if you're looking to buy, sell, rent or invest.

BOOK OF THE DAY

Supremacy

In November of 2022, a webpage was posted online with a simple text box. It was an AI chatbot called ChatGPT, and was unlike any app people had used before. It was more human than a customer service agent, more convenient than a Google search.

Behind the scenes, battles for control and prestige between the world’s two leading AI firms, OpenAI and DeepMind, who now steers Google's AI efforts, has remained elusive - until now.

In Supremacy, Olson, tech writer at Bloomberg, tells the astonishing story of the battle between these two AI firms, their struggles to use their tech for good, and the hazardous direction they could go as they serve two tech Goliaths whose power is unprecedented in history.

The story focuses on the continuing rivalry of two key CEOs at the center of it all, who cultivated a religion around their mission to build god-like super intelligent machines: Sam Altman, CEO of OpenAI, and Demis Hassabis, the CEO of DeepMind.

Supremacy sharply alerts readers to the real threat of artificial intelligence that its top creators are ignoring: the profit-driven spread of flawed and biased technology into industries, education, media and more.

With exclusive access to a network of high-ranking sources, Parmy Olson uses her 13 years of experience covering technology to bring to light the exploitation of the greatest invention in human history, and how it will impact us all.

“The inside story of the battle to create our future: The players, the egos, the stakes.”

DAILY VISUAL

Car Insurance Costs Keep Rising

Price of car insurance has increased 50% since the pandemic began

Source: Apollo

PRESENTED BY BILL

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DAILY ACUMEN

Perspective

Sometimes the biggest challenges we face aren’t about changing our circumstances but changing how we see them.

Perspective is a powerful tool that allows us to reframe obstacles, turning setbacks into opportunities for growth.

Consider how two people can experience the same event—one sees failure, the other sees a learning opportunity. The difference lies in perspective.

By actively choosing to shift your viewpoint, you can transform frustration into curiosity, fear into resilience, and failure into feedback.

The next time you encounter a challenge, ask yourself: what’s another way to see this? A shift in perspective can change everything.

ENLIGHTENMENT

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