https://castleplacement.com Castle Placement Fri, 26 May 2017 19:38:48 +0000 en-US hourly 1 https://wordpress.org/?v=4.7.5 Oil & Gas Drilling Increases – May M&A Update https://castleplacement.com/2017/05/oil-and-gas-drilling-increases-may-ma-update/ https://castleplacement.com/2017/05/oil-and-gas-drilling-increases-may-ma-update/#respond Tue, 16 May 2017 13:39:22 +0000 https://castleplacement.com/?p=10677 Many oil and gas upstream companies are increasing their domestic capital spending, especially in West Texas. Relative stability in crude oil prices and greater visibility on profit margins from stacked plays and new technology have led companies to ramp up capital spending plans for 2017. A recent Bloomberg article indicates that U.S. drillers are increasing 2017 capital spending by 32% […]

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Many oil and gas upstream companies are increasing their domestic capital spending, especially in West Texas. Relative stability in crude oil prices and greater visibility on profit margins from stacked plays and new technology have led companies to ramp up capital spending plans for 2017.

A recent Bloomberg article indicates that U.S. drillers are increasing 2017 capital spending by 32% to $84 billion, compared with just 3 percent for international projects. Much of the increase is being allocated to the Permian Basin, “where producers have been reaping double-digit returns even with oil commanding less than half what it did in 2014.” (Bloomberg). According to EOG Resources Chief Executive Officer Bill Thomas some Permian Basin completed wells yielded 70% returns at 1st quarter prices.

Together with increased capex spending, upstream companies are growing reserves through acquisitions. Selected recent upstream transactions include the following deals:

Upstream M&A Deals May 2017 (Source: Oil & Gas Financial Journal)

  • Noble Energy has entered into an agreement to divest its Appalachian basin assets to HG Energy LLC
  • Jonah Energy has signed a definitive agreement to acquire natural gas and oil producing properties in the Jonah and Pinedale fields and surrounding area from LINN Energy Inc. for approximately $580 million.
  • Centennial Resource Development has entered into an agreement to acquire certain undeveloped acreage and producing assets in Northern Delaware basin from GMT Exploration for ~$350 million
  • Diversified Gas & Oil has entered into an agreement to acquire certain Appalachian basin assets in Ohio, Pennsylvania, Southern New York and Northeast Tennessee from Titan Energy LLC (formerly Atlas Resource Partners) for $84.2 million. The transaction includes 494,229 net acres and ~7,300 wells with net production of 40.878 MMcfe/d
  • Trilantic Capital Management and Waveland Energy Partners announced an equity commitment to invest in DJR Energy LLC, a newly formed E&P company focused on developing oil and gas resources in San Juan basin in New Mexico.
  • Memorial Production Partners successfully completed its financial restructuring and emerged from Chapter 11 as Amplify Energy Corp, by eliminating ~$1.3 billion of debt.
  • WPX completed the previously announced acquisition of Delaware basin assets from Panther Energy and Carrier Energy for $775 million.
  • PetroLegacy Energy II completed the previously announced acquisition of Midland basin acreage from Pioneer for $266 million.

 

Source: Bloomberg

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Virtual and Augmented Reality – May 2017 Update https://castleplacement.com/2017/05/virtual-augmented-reality-may-2017-update/ https://castleplacement.com/2017/05/virtual-augmented-reality-may-2017-update/#respond Mon, 01 May 2017 20:51:27 +0000 https://castleplacement.com/?p=10594 Virtual and Augmented Reality (VR/AR) has been growing dramatically and there is little doubt it will continue to do so over the longer term. SuperData Research projects virtual reality to grow to $38bn by 2020 and Goldman Sachs estimates that VR/AR could generate $45bn in annual revenue by 2025 (or even reach $110bn, surpassing the TV market in an upside […]

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Virtual and Augmented Reality (VR/AR) has been growing dramatically and there is little doubt it will continue to do so over the longer term. SuperData Research projects virtual reality to grow to $38bn by 2020 and Goldman Sachs estimates that VR/AR could generate $45bn in annual revenue by 2025 (or even reach $110bn, surpassing the TV market in an upside scenario). Not surprisingly, Facebook is focusing on VR/AR as one of its next key growth engines – in 2014, Facebook acquired Oculus VR, a leader in virtual reality technology. More recently, Facebook’s Zuckerberg indicated that augmented reality is Facebook’s next big act, calling it “Act 2” for the company. Over $2.3 billion was raised in VR/AR startups in 2016 versus $658 million in 2015.  Head mounted displays accounted for approximately half of the 2016 investment, and solutions/services, video, peripherals, games, applications and advertising accounted for most of the rest. The future dramatic growth will include expansion of this technology into other markets including real estate, healthcare, education, tourism, and construction.

 

VR/AR investors include:

21st Century Fox, Alibaba, Amazon, Anorak Ventures, B Capital, Boost VC, CIC, CITIC, Colopl Next, Comcast, DFJ, Fidelity, Google, GREE VR Capital, Greylock, HTC, Intel, J.P. Morgan, KPCB, Lenovo, Lightspeed, Maven Ventures, MGM, NetEase, Outpost Capital, Presence Capital, Qualcomm, Samsung, Sand Hill Road, Sequoia, Signia Ventures, Softbank, Super Ventures, T.Rowe Price, Tencent, The VR Fund, Warner Bros, Wellington

 

Key April 2017 VR/AR Raises/Acquisitions

Company $ Millions Description
Purdue University 0.8 Received grant to train manufacturers in VR
UpSkill 1.4 Builds enterprise software for industrial AR devices
AMD Not disclosed Acquired IP and key engineering team from Nitero to create wireless VR and AR headsets
Virtualitics 4.4 Develops an analytics software for virtual reality and augmented reality application market
Pluto VR 13.9 VR/AR capabilities for video-conferencing, social media, and online gaming
GeoCV

 

1.8

 

Scans interior spaces using a 3D camera equipped smartphone and proprietary software that can be viewed in 3D from any angle in virtual reality (VR), or in a web browser
Baidu Inc. Acquisition Acquired visual perception technology company, xPerception Technology
Avegant 13.7 Mixed reality headset
Whodat 0.6 Building a proprietary hybrid SLAM (Simultaneous Localisation and Mapping) system to place virtual information without any markers
Vizor 2.3 Building a platform to produce 360 degree tours
Shadow Creator 14.0 VR software and headset maker

 

 

 

Sources: techcrunch.com, digi-capital.com, haptic.al

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Equipment Leasing Outlook 2017 https://castleplacement.com/2017/04/equipment-leasing-outlook-2017/ https://castleplacement.com/2017/04/equipment-leasing-outlook-2017/#respond Tue, 18 Apr 2017 15:02:36 +0000 https://castleplacement.com/?p=10542   The outlook for the Equipment Leasing industry and M&A activity appears positive for 2017 and beyond. Non-residential construction markets continue to improve and the new administration’s talk of an infrastructure spending plan of as much as $1 trillion could drive additional growth longer term. Additionally, a more favorable regulatory environment has construction industry professionals optimistic about the future. John […]

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The outlook for the Equipment Leasing industry and M&A activity appears positive for 2017 and beyond.

Non-residential construction markets continue to improve and the new administration’s talk of an infrastructure spending plan of as much as $1 trillion could drive additional growth longer term. Additionally, a more favorable regulatory environment has construction industry professionals optimistic about the future. John Crum, National Sales Manager, Construction, at Wells Fargo Equipment Finance indicated that his customers “believe a changing regulatory environment could be more conducive to expansion in the construction and infrastructure space”.  President Trump’s campaign promises surrounding infrastructure spending and deregulation have resulted in the third highest Optimism Quotient recording in the last two decades, according to Wells Fargo’s 2017 Construction Industry Forecast.

According to the Equipment Leasing & Finance Foundation – Q2 2017, “Most equipment verticals should expect their growth outlook to improve relative to last year:

  • Agriculture Machinery investment growth should remain sluggish over the next two quarters.
  • Construction Machinery investment growth is likely to accelerate over the next three to six months.
  • Materials Handling Equipment investment is likely to grow at a slow but stable pace over the next three to six months.
  • All Other Industrial Equipment investment growth should improve over the next three to six months.
  • Medical Equipment investment growth may slow over the next three to six months.
  • Mining & Oilfield Machinery investment growth should improve over the next three to six months.
  • Aircraft investment growth may strengthen over the next three to six months.
  • Ships & Boats investment growth is expected to expand in the next three to six months.
  • Railroad Equipment investment growth should rebound over the next three to six months.
  • Trucks investment growth should strengthen over the next two quarters.
  • Computers investment growth may modestly improve over next three to six months.
  • Software investment growth is likely to remain stable or slow modestly over the next three to six months.”

The equipment leasing M&A activity was also very strong in 2016 – Source The Alta Group:

AcquirerTarget2016 Closing
Wells FargoGE Capital – 4 DivisionsFirst Quarter
Navitas Credit Corp.Liberty Financial Group, Inc.January
BofI Federal BankPacific Western Equipment Finance (certain assets)March
Hitachi Capital AmericaCreekridge CapitalJune
Atalaya Capital ManagementCG Commercial Finance July
Engs Commercial Finance CoConnext Financial, Ltd.September
Hanmi BankBank of California (Commercial Specialty Finance Unit)October
Warbug PincusAcentium CapitalNovember
Radius BankNewStar Financial (equipment finance division)December
Avolon Holdings Ltd.CIT Group (commercial aircraft leasing)Pending
Sumitomo Mutsui BankingAmerican Railcar Leasing (Icahn Enterprises)Pending

With the expectation of industry expansion through both spending and deregulation, the equipment finance space is likely poised for growth and significant M&A activity from private equity firms, banks and leasing companies.

http://www.equipmentfa.com/articles/6633/strong-signals-abound-for-the-construction-industry

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SFIG Vegas 2017 Conference – Synopsis https://castleplacement.com/2017/03/sfig-vegas-2017-conference-synopsis/ https://castleplacement.com/2017/03/sfig-vegas-2017-conference-synopsis/#respond Mon, 13 Mar 2017 16:03:29 +0000 https://castleplacement.com/?p=10175 The Structured Finance Industry Group had their SFIG Vegas 2017 Conference at the Aria Resort & Casino in Las Vegas from February 26th to March 1st  – around 7,000 ABS market professionals attended including investors, issuers, financial intermediaries, regulators, law firms, accounting firms, technology firms, rating agencies, servicers and trustees.   The impact of finance regulation was the hot topic […]

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The Structured Finance Industry Group had their SFIG Vegas 2017 Conference at the Aria Resort & Casino in Las Vegas from February 26th to March 1st  – around 7,000 ABS market professionals attended including investors, issuers, financial intermediaries, regulators, law firms, accounting firms, technology firms, rating agencies, servicers and trustees.

 

The impact of finance regulation was the hot topic at SFIG 2017 with a consensus on less supervision and enforcement. However, there was no consensus on how regulations and rules under Obama will be changed by the new Trump administration. Some of the changes may well include the Dodd Frank act rollback, CFPB reform, fiduciary rule suspension and paring of risk retention rules, with almost all aspects of the regulatory regime open for discussion.

 

Although not as big a focus as it was in last year’s conference, market place lending issuance increased by 59% (Source: PeerIQ tracker – YoY). Prosper and other platforms are expected to launch ABS programs in 2017. Some interest in public issuance under Reg AB but due to CEO certification requirement will probably continue with Reg 144A. One panel suggested the market place lenders are becoming more of an extension of traditional lending and questioned whether connecting borrowers and lenders over the internet offered value.

 

A relatively new theme at this year’s SFIG Conference was blockchain technology. The Chamber of Digital Commerce and SFIG announced the formation of a strategic partnership focused on advancing the use of blockchain technology in securitization markets. The technology is expected to be an opportunity for reinvention across the structured finance industry. Some of the distinct benefits of blockchain according to a white paper presentation by Deloitte include:

  • Single, consistent source of information
  • Complete, immutable audit trail
  • Better valuation and price discovery
  • Speed and certainty
  • Security

Lastly, speakers on other panels discussed/suggested:

  • that major changes in student loan programs are not expected to be enacted this year;
  • subprime auto net losses are rising despite positive economic environment;
  • AAA CLO spreads tightening due primarily to issuance declines;
  • investors overwhelmingly like “skin in the game rules” while smaller issuers (especially certain CLO managers) are having trouble raising the capital

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Peer-to-Peer (P2P) Dominance https://castleplacement.com/2017/02/peer-peer-p2p-dominance/ https://castleplacement.com/2017/02/peer-peer-p2p-dominance/#respond Wed, 22 Feb 2017 19:33:03 +0000 https://castleplacement.com/?p=10075 The peer-to-peer (P2P) payment industry, through digital platforms such as Venmo and Google Wallet, has become a preferred method for monetary transactions as a younger tech-savvy generation ages and gains more spending power. The question facing the industry is how to monetize the inevitable dominance of this technology from a generation that has come to expect these types of services for […]

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The peer-to-peer (P2P) payment industry, through digital platforms such as Venmo and Google Wallet, has become a preferred method for monetary transactions as a younger tech-savvy generation ages and gains more spending power. The question facing the industry is how to monetize the inevitable dominance of this technology from a generation that has come to expect these types of services for free.

There is little doubt P2P payments will grow significantly over time ($17 billion annually by 2019 and 126 million adults per year by 2020 – Sources: Forrester Research and Javelin Strategy & Research).

As an example, PayPal-owned Venmo – $17.6 billion in payments in 2016 – charges a fee for users who prefer credit cards but not on debit cards. Facebook’s Messenger payments (debit card only) doesn’t charge a fee and considers it a way to keep users on their platform. Snapchat’s Snapcash and Square’s Square Cash also offer P2P payments but none of them are generating significant revenue to date from this feature.

The current conventional wisdom is to use their technology plus their base of P2P users and follow a path to monetization by expanding into the mobile POS market and charging merchants and businesses who are OK with paying transaction fees. For example, Venmo plans on allowing its users to pay for goods and services with their app and charge merchants transaction fees. However, the initial “Pay with Venmo” rollout was extremely limited (event tickets on Gametime and delivered food on Munchery).

Others believe another path to monetization is to sell their technology. For example, Mastercard does not offer a direct-to-consumer P2P app but their Mastercard Send offers businesses the technology to reimburse their customers without having to send a check in the mail. Early adaptors of Mastercard Send include Berkshire Hathaway Travel Protection and FreeShipping.com. As the technology becomes commoditized, it’s too early to predict if this is a viable monetization strategy.

Although the exact paths to P2P payment monetization are still unclear, the massive growth in usage will inevitably lead to unforeseen opportunities – at least that’s what the industry players are banking on.

https://castleplacement.com

 

 

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Fintech: Payment System https://castleplacement.com/2017/02/fintech-payment-system/ https://castleplacement.com/2017/02/fintech-payment-system/#respond Fri, 03 Feb 2017 19:59:18 +0000 https://castleplacement.com/?p=9760 Two years ago the Federal Reserve released Strategies for Improving the US Payment System, a plan that was intended to improve the payment system by making it faster, more secure and more efficient. Since this plan was released, the Fed has collaborated with key stakeholders to implement strategies from the plan to ensure that the US payment system keeps up […]

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Two years ago the Federal Reserve released Strategies for Improving the US Payment System, a plan that was intended to improve the payment system by making it faster, more secure and more efficient. Since this plan was released, the Fed has collaborated with key stakeholders to implement strategies from the plan to ensure that the US payment system keeps up with the fast changing requirements of American consumers and businesses.

The five strategies outlined in the plan include: 1) Stakeholder Engagement, 2) Faster Payments, 3) Payment Security, 4) Payment Efficiency, and Enhanced Federal Reserve Services. In its January 2017 progress report, the Fed describes what has been accomplished in each area and what he next steps are.

Since its beginning, the plan has generated a great amount of attention and responses from the FinTech industry. A number of payment technology providers are currently working with the Fed to implement its strategies.

According to the Wall Street Journal, these supporters are not limited to large corporations. Startups are also “trying to get in on the act”. Dwolla Inc., a small software provider that focuses on helping companies make transactions directly with banks, has proposed collaboration plan to the Fed. The company hopes that under the leadership of the fed, the industry can work together to “build a system more fair and open than the previous systems, which were created behind closed doors”.

With the boom of proposals for technological advancement and a promotion of public interest, we can expect an exciting year ahead for the Fintech industry. For example, a London-based mortgage Fintech, has raised £5.5 million on January 23rd, 2017. Press releases commented that this signals that Fintech has finally arrived in the mortgage industry. As technology keeps bringing changes and challenges into traditional banking, the capital-raise environment is likely to be more open and friendly for startups in the field.

 

https://castleplacement.com

 

Reference:

https://fedpaymentsimprovement.org/wp-content/uploads/progress-report-january-17.pdf

http://www.wsj.com/articles/fed-issues-report-on-faster-payments-initiative-1485450480

http://www.businessinsider.com/mortgage-fintech-habito-raises-55m-from-silicon-valleys-ribbit-capital-2017-1

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The US oil and Gas Industry Hopeful after Inauguration https://castleplacement.com/2017/01/oil-gas-industry-hopeful-inauguration/ https://castleplacement.com/2017/01/oil-gas-industry-hopeful-inauguration/#respond Mon, 30 Jan 2017 15:09:42 +0000 https://castleplacement.com/?p=9718 The oil and gas industry in the United States gained a new ally when Donald Trump was sworn in as the 45th President on January 20th. The President has promised to reverse existing policies that restrict energy development projects on public lands, which will result in more domestic oil & gas production and make the US more energy independent. The […]

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The oil and gas industry in the United States gained a new ally when Donald Trump was sworn in as the 45th President on January 20th.

The President has promised to reverse existing policies that restrict energy development projects on public lands, which will result in more domestic oil & gas production and make the US more energy independent.

The President’s energy friendly policies were evident during the first week of Trump’s presidency when he signed a pair of executive orders, allowing the construction of two oil pipelines that were opposed by President Obama. These two executive orders allow TransCanada to build the Keystone XL pipeline and Energy Transfer Partners to complete construction of the unfinished portion of the Dakota Access pipeline. This construction would allow the United States to become less dependent on foreign oil, as the projects would significantly expand domestic oil and gas production.

By and large the oil and gas industry should be optimistic that the new administration will bring a friendlier environment for drilling, building of pipeline projects and overall expansion.

https://castleplacement.com

Reference:

http://www.cnbc.com/2017/01/24/trump-to-advance-keystone-dakota-pipelines-with-executive-order-on-tuesday-nbc.html

http://www.forbes.com/sites/mergermarket/2016/11/11/oil-and-gas-industry-buoyed-by-trump-election/#c7b79f26d00e

http://www.latimes.com/nation/la-na-pipelines-analysis-20170124-story.html

http://www.houstonchronicle.com/business/article/Out-West-Trump-eyes-federal-lands-for-oil-and-10869823.php

 

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Growing Trends in Venture Capital for 2017 https://castleplacement.com/2017/01/growing-trends-venture-capital-2017/ https://castleplacement.com/2017/01/growing-trends-venture-capital-2017/#respond Wed, 18 Jan 2017 17:49:55 +0000 https://castleplacement.com/?p=9560 The post Growing Trends in Venture Capital for 2017 appeared first on .

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Over the course of the past year, Venture Capital (VC) firms have become more cautious when looking to invest in startups and early stage companies.  This made it more difficult for companies to receive funding and, in conjunction; the technology IPO market was weak until the end of the year.  However, because funding for VC firms was strong, there is growing hope for the industry moving into 2017.  The venture capital industry landscape has developed a barbell structure, meaning that there are many small and many large VC funds, with few mid-sized funds.

This year has the potential to be better than 2016 because VC firms are holding large amounts of cash and, as valuations are expected to decrease, firms may be poised to strike.  Furthermore, there is an expectation that the technology IPO market will continue to rebound, following its upward trend at the end of 2016.  President-elect Donald Trump has stated that he intends to decrease taxes and regulations on business while increasing major infrastructure development.  If true, this could help to stimulate spending as well.

Based on interviews with top Silicon Valley investors, artificial intelligence and machine learning will be the hottest areas VC firms may look to invest in during 2017. Artificial intelligence has the potential to influence every industry including financial services, healthcare and retail by changing software and business structure.  Overall, there is reason to be optimistic about the role of Venture Capital firms in the new year.

2017 will be a strong year for venture capital

Venture Beat – VC Predictions 2017

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Fix and Flip on the Rise 2017 https://castleplacement.com/2017/01/fix-and-flip-on-the-rise-2017/ https://castleplacement.com/2017/01/fix-and-flip-on-the-rise-2017/#respond Wed, 11 Jan 2017 18:05:57 +0000 https://castleplacement.com/?p=9446 In 2016 the number of investors fixing and flipping homes hit its highest level since 2007. 2017 is expected to see continued growth with estimates of $48 billion in total sales. Rising home prices, low interest rates and favorable lending terms have helped fuel the resurgence. Big banks, including J.P. Morgan Chase & Co, Wells Fargo & Co, Goldman Sachs […]

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In 2016 the number of investors fixing and flipping homes hit its highest level since 2007. 2017 is expected to see continued growth with estimates of $48 billion in total sales. Rising home prices, low interest rates and favorable lending terms have helped fuel the resurgence. Big banks, including J.P. Morgan Chase & Co, Wells Fargo & Co, Goldman Sachs Group Inc., increased credit lines and arranged financing vehicles for home flippers in 2016.

Online lenders and crowdfunding sites have also contributed to the growth in the fix and flip business enabling lenders to provide loans in less time. LendingHome says it’s extended over $1 billion in loans over the last 2-1/2 years.

However, a few concerns are being raised: investors have been offered high loan-to-value ratios and looser documentation requirements through smaller finance companies which aren’t subject to the post-crisis rules; investors are experiencing profit pressures with mortgage rates rising since the election and the increased number of home flippers.

Yet with ample sources of capital and average profits of about $61,000 per flip, many investors remain optimistic. Let’s see what 2017 brings.

 

http://www.wsj.com/articles/as-home-prices-rise-flippers-make-a-comeback-1482921000?emailToken=JRrzdP1/Y3SThN08aMw1zxgoaawFTveTR1jaNzXQO1PB8XLRoPq5yr8uwt6+om7qTANx4NUJ5Wc0RniI3DowDZXIw+Yn

Attom Data Solutions November 2016 Housing News Report

 

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Trump & FinTech? https://castleplacement.com/2016/11/trump-and-fintech/ https://castleplacement.com/2016/11/trump-and-fintech/#respond Mon, 21 Nov 2016 03:45:34 +0000 https://castleplacement.com/?p=8866 There have been heated discussions about where our country is heading under the Trump administration since the presidential election ended. In particular, FinTech, a sector with increasing significance to the economy, is watching closely to figure out where the future lies for the industry. An open internet environment, as many believe, is essential to the growth of FinTech companies. Democrats […]

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There have been heated discussions about where our country is heading under the Trump administration since the presidential election ended. In particular, FinTech, a sector with increasing significance to the economy, is watching closely to figure out where the future lies for the industry.

An open internet environment, as many believe, is essential to the growth of FinTech companies. Democrats (Obama, Clinton) have been mostly in favor of net neutrality, while Republicans (Cruz, McConnell) have been opposed. While unclear what President-elect Trump will do, he has compared net neutrality to the defunct Fairness Doctrine and stated that net neutrality would allow parties to target conservative content on the internet. GOP lawmakers already introduced a bill this year to end net neutrality, a bill Trump would likely sign into law if passed. The fear of such consequences has led to uncertainty clouding the entire industry – which has the potential to slow down investing activities and drag us into the paradox of thrift. Others believe (like Peter Thiel) that net neutrality is an unnecessary regulation and would have limited impact.

On the other hand, some see ways for FinTech companies to benefit from the Trump presidency. For example, as Trump hopes to move student loans origination back to the private sector, more innovations and capital flows may be stimulated. Dismantling Dodd-Frank, reinstating Glass-Steagall and/or reducing power of the CFPB, can also boost performance of the industry – particularly FinTech lending and payments.

In either scenario, we believe innovation ultimately wins and opportunities in FinTech will continue.

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SoFi and Fannie Mae created a Cash-Out Refi for Student Loans https://castleplacement.com/2016/11/new-cash-out-refinance-option-student-loan/ https://castleplacement.com/2016/11/new-cash-out-refinance-option-student-loan/#respond Tue, 15 Nov 2016 13:54:10 +0000 https://castleplacement.com/?p=8876 SoFi, an online personal finance company, has partnered with Fannie Mae to offer student loan borrowers a cash-out refinance option. This new loan option, called Student Loan Payoff ReFi, allows consumers to use their home equity to pay off their student debt. By paying down student debts, borrowers can experience increased financial freedom due to the lower rates of mortgages. […]

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SoFi, an online personal finance company, has partnered with Fannie Mae to offer student loan borrowers a cash-out refinance option. This new loan option, called Student Loan Payoff ReFi, allows consumers to use their home equity to pay off their student debt.

By paying down student debts, borrowers can experience increased financial freedom due to the lower rates of mortgages. The spread between student and mortgage rates makes this cash-out refinance option highly attractive. Additionally, compared to other traditional cash-out refinancing, SoFi’s product is priced 25 basis points lower. By staying within certain investor criteria, approximately 8.5 million of the 44 million US consumers with student debt who are also homeowners will qualify for the loan.

Still early in its development, SoFi and Fannie Mae see a lot of potential with the new product offering.  Although the concept of refinancing is not new, the Refi program stands out as SoFi will pay the student debt servicer directly from the proceeds of the ReFi. This product will now help homeowners turn traditional mortgage holding into an opportunity to ease their student debt burdens, thanks to today’s low-rate environment.

Resource:

https://www.nationalmortgagenews.com/news/sofi-fannie-mae-offer-cash-out-refi-for-student-loans

http://www.housingwire.com/articles/38430-sofi-and-fannie-mae-announce-cash-out-refinance-student-loan-offering

http://www.marketwatch.com/story/its-now-easier-to-refinance-your-home-to-pay-off-student-debt-but-should-you-2016-11-02

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Fintech Sandbox in Hong Kong https://castleplacement.com/2016/10/fintech-sandbox-in-hong-kong/ https://castleplacement.com/2016/10/fintech-sandbox-in-hong-kong/#respond Fri, 21 Oct 2016 02:13:10 +0000 https://castleplacement.com/?p=8860 As fintech companies continue to grow and garner worldwide attention, the Hong Kong Monetary Authority decided to capitalize on this. The Hong Kong Monetary Authority is establishing a regulatory “sandbox” to enable faster trials of products and to maintain competitive versus its peer countries such as China, Australia, and Singapore in the fintech race. Effective as of September 6th 2016, […]

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As fintech companies continue to grow and garner worldwide attention, the Hong Kong Monetary Authority decided to capitalize on this. The Hong Kong Monetary Authority is establishing a regulatory “sandbox” to enable faster trials of products and to maintain competitive versus its peer countries such as China, Australia, and Singapore in the fintech race.

Effective as of September 6th 2016, the authority will “allow banks to conduct tastings and trials of newly developed products on a pilot basis. Within the sandbox, banks can try out their new fintech products without the need to achieve full compliance with HKMA’s usual supervisory requirements,” a Hong Kong regulator noted.

That being said, the sandbox is only available to banks that are looking to use fintech, and apply it to current banking methods as opposed to start-up fintech firms. As a result of this, the HKMA hopes to remain as a major innovative hub and solicit more banks to innovate within Hong Kong. Their fellow peers such as Australia and Singapore are also applying similar initiatives to push forward developments in fintech. So with Hong Kong being a major financial hub, they will need to continue to promote new development and differentiates themselves from other incubators.

http://www.bloomberg.com/news/articles/2016-09-06/hong-kong-makes-fintech-push-as-city-seeks-to-catch-up-to-rivals

http://www.reuters.com/article/us-hongkong-banks-regulator-idUSKCN11C0EV

https://www.cryptocoinsnews.com/hong-kong-sets-fintech-innovation-hub-supervisory-sandbox/

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Financial Services Innovation Act of 2016 https://castleplacement.com/2016/09/financial-services-innovation-act-of-2016/ https://castleplacement.com/2016/09/financial-services-innovation-act-of-2016/#respond Wed, 21 Sep 2016 02:18:29 +0000 https://castleplacement.com/?p=8862 As of today, the US may be the financial center of the world, but many believe it is lagging behind when it comes to innovation. This is partly due to the many laws and regulations financial services firms are required to follow. The proposed “Financial Services Innovation Act of 2016” will establish a regulatory framework that will provide FinTech firms and […]

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As of today, the US may be the financial center of the world, but many believe it is lagging behind when it comes to innovation. This is partly due to the many laws and regulations financial services firms are required to follow. The proposed “Financial Services Innovation Act of 2016” will establish a regulatory framework that will provide FinTech firms and startups the access and flexibility they need to innovate and experiment.

The purpose of the legislation is to address outdated financial laws and regulations, make the US more globally competitive versus its peers, and the mitigate constriction of regulatory supervision. Congressman McHenry, Chief Deputy Whip, recently proposed new legislation to promote FinTech innovation within the US. As such, McHenry seeks to introduce the Financial Services Innovation Offices (FSIO) within existing regulation agencies. If accepted, it will allow certain innovative products or services to adhere to an alternative compliance plan, enabling them to have more flexibility.

McHenry hopes the proposed bill will pass and receive bipartisan support. He notes that FinTech innovation may provide superior financial services for all customers at a lower cost.

http://mchenry.house.gov/news/documentsingle.aspx?DocumentID=398355

https://www.crowdfundinsider.com/2016/09/90477-congressman-mchenry-introduce-bill-create-financial-services-innovation-offices-boost-fintech-growth/

http://www.crowdfundinsider.com/2016/09/90541-financial-services-innovation-act-2016-deck/

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FinTech: To be or not to be with Strategics https://castleplacement.com/2016/09/fintech-to-be-or-not-to-be-with-strategics/ https://castleplacement.com/2016/09/fintech-to-be-or-not-to-be-with-strategics/#respond Wed, 21 Sep 2016 01:49:51 +0000 https://castleplacement.com/?p=8858 JP Morgan joined hands with OnDeck Capital to help make loans available to its small business customers in an inexpensive and quick process. Bank of America similarly inked a deal with ViewPost in an effort to provide small business users with a way to manage their cash flows better. These deals are reflections of a fundamental shift in big bank’s […]

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JP Morgan joined hands with OnDeck Capital to help make loans available to its small business customers in an inexpensive and quick process. Bank of America similarly inked a deal with ViewPost in an effort to provide small business users with a way to manage their cash flows better.

These deals are reflections of a fundamental shift in big bank’s attitudes for fintech startups. Although fintech startups were once viewed as a “threat”, banks have been increasingly open to the idea of partnering with them. According to an IDC and SAP survey of 253 banking institutions, over 35% of banks view fintech startups as possible collaborators and 15% view them as possible tech acquisitions.

Although mutually beneficial for both parties, fintech startup have now found themselves in a precarious situation. Many of the fintech startups that partner with banks operate on a “rent a charter” model. Essentially, banks are responsible for providing services and financing behind the fintech startup.

For example, around 80-90% of capital lent through the Prosper and Lending Club, a peer to peer lender, was institutional money. Despites lowering non-credit costs, many fintech startups have come under increasing scrutiny and regulations as a result of these partnerships.

In August 2016, the Federal Deposit Insurance Corp (FDIC) proposed legislation to increase supervisory attention to online lending services that use third party financers.  The new proposal recommends that banks partnered with online lenders conduct yearly examinations, set performance standards, and require access to data.

On the other hand, fintech companies that choose to remain isolated from bank partnerships risk lacking the deposit base to fall back on as well as preventing big banks from entering their niche.

Slow growth and consumer default loans in the online lending sector have many people in the sector worried. Combined with online lenders decreasing their employee base and LendingClub involved in a fabricated loan data scandal, many online lenders are seemingly forced to join hands with banks as a safety net.

Some online lenders have found an escape route to both scenarios. Companies such as Mondo and N26 have been granted banking licenses in the United States and Germany respectively to test their products and services.

For many new players in the field, however, obtaining these licenses without the resources of a powerful institution is nearly impossible.

As fintech startups become more prominent, balancing regulatory procedures and disruptive innovation will certainly be key.

 

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Risks Associated with Crowdfunding https://castleplacement.com/2016/09/risks-associated-crowdfunding/ https://castleplacement.com/2016/09/risks-associated-crowdfunding/#respond Wed, 21 Sep 2016 01:22:20 +0000 https://castleplacement.com/?p=8856 Fundraising with online crowdfunding platforms can be rewarding but there are risks and still many open questions. Beyond the obvious concern of fraud or misleading information provided by companies, many believe the “wisdom of the crowd” in often highly technical, early stage businesses is flawed. Many believe without a “professional lead” investor doing due diligence and negotiating terms – the […]

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Fundraising with online crowdfunding platforms can be rewarding but there are risks and still many open questions.

Beyond the obvious concern of fraud or misleading information provided by companies, many believe the “wisdom of the crowd” in often highly technical, early stage businesses is flawed. Many believe without a “professional lead” investor doing due diligence and negotiating terms – the crowd should stay away.

Further, comparisons to crowd wisdom in large markets (public stock markets) are not applicable to the relatively limited number of investors in a crowd funded private business.

Proponents of crowdfunding argue Adam Smith’s “invisible hand” theory and experts often fail because they tend to think alike and do not benefit from the crowd’s diversity of opinions.

 

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Future of digital Payments https://castleplacement.com/2016/09/future-of-digital-payments/ https://castleplacement.com/2016/09/future-of-digital-payments/#respond Wed, 21 Sep 2016 01:18:12 +0000 https://castleplacement.com/?p=8854 As digital payments such as credit cards are widely accepted nowadays, one may wonder whether the payment methods of card and non-card (for example, account to account/ACH) will move in different orbits. Will the digital payment replace the traditional payment method some day or will they just merge together and create a new hybrid payment? These are questions people are […]

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As digital payments such as credit cards are widely accepted nowadays, one may wonder whether the payment methods of card and non-card (for example, account to account/ACH) will move in different orbits.

Will the digital payment replace the traditional payment method some day or will they just merge together and create a new hybrid payment?

These are questions people are curious about for whom closely follow the development in digital payment.

In recent events such as MasterCard acquisition of VocaLink, Visa pact with Paypal and US ClearXchange network’s announcement of signing deals with Visa and Mastercard to extend the reach of the network, it seems that the digital payment and non-card payment methods are being pulled together towards a hybrid, real time payment model.

Service providers will increasingly demand a historic review of low-value payments, pulling together payments that have traditionally been in the account to account world, such as salary, benefits, supplier and bills.

http://banknxt.com/57462/card-payments-mastercard/?utm_medium=email&utm_source=fintechweeklycom

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FinTech: Industry Valuation and Investment https://castleplacement.com/2016/08/fintech-industry-valuation-and-investment/ https://castleplacement.com/2016/08/fintech-industry-valuation-and-investment/#respond Wed, 24 Aug 2016 01:00:36 +0000 https://castleplacement.com/?p=8848 Goldman Sachs values the fintech industry at US$4.7 trillion. This value has increased recently because of the large influx of VC and strategic capital in the last two years.  In 2013, there were $4.05 billion of investments into FinTech.  This increased over three times to $13.8 billion in 2015. The global adoption rate for FinTech, defined as the “number of […]

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Goldman Sachs values the fintech industry at US$4.7 trillion.

This value has increased recently because of the large influx of VC and strategic capital in the last two years.  In 2013, there were $4.05 billion of investments into FinTech.  This increased over three times to $13.8 billion in 2015.

The global adoption rate for FinTech, defined as the “number of users as a percentage of the digitally active population” is around 15.5%.  The top three cities for this adoption rate are New York, at 33.1%, Hong Kong, at 29.1%, and London, at 25.1%.

Asia, investing $4.5 billion over 130 deals ($20.4 million/deal), has invested the greatest amount as a continent, followed by America, at $20.4 million/deal, and Europe, at $12 million/deal.  This increase in funding is also seen in deal volume, which has increased at 11.4% from last year, as the number of FinTech companies that are VC-backed is increasing at 33% each year.  This has led to $14.7 billion of FinTech raises in the first half of 2016.

According to Ernst & Young, individuals use FinTech services for three primary reasons, convenience in the account setup procedures, more attractive rates and fees, and better quality in terms of service and products.  The top reason cited for those who do not use FinTech is lack of awareness.

Possibly the most important number is the 4% increase, to $196.7 billion, in aggregate spending in FinTech startups by global financial institutions.

More than 75% of this spending is on maintenance of existing technologies, not necessarily new technologies, showing that existing traditional banking institutions are, figuratively and literally, buying into FinTech.

http://www.forbes.com/sites/jamesgiancotti/2016/07/20/fintech-startups-enjoy-a-historic-moment-as-most-of-their-funding-is-coming-from-asia/2/#740e48b91aff

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China and Fintech https://castleplacement.com/2016/08/china-and-fintech/ https://castleplacement.com/2016/08/china-and-fintech/#respond Sun, 21 Aug 2016 01:15:36 +0000 https://castleplacement.com/?p=8852 The people of China have been slowly but surely getting more involved in fintech services. Unlike in the West, where the people have been sticking more to traditional institutions where they believe it’s safer than online companies, the people of China have no issues with trusting online mediums for financial services. The Chinese are more than happy to get rid […]

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The people of China have been slowly but surely getting more involved in fintech services.

Unlike in the West, where the people have been sticking more to traditional institutions where they believe it’s safer than online companies, the people of China have no issues with trusting online mediums for financial services.

The Chinese are more than happy to get rid of the middle man and the traditional intermediate steps that are typical in financial services.

Through technology being implemented in financial services the masses have access to them too, even with the geographically-remote markets, instead of only the wealthy.

Many feel mobile is the answer as there are almost 1.3 billion mobile phone users in China. The Chinese also have a strong desire to invest over a shorter period of time instead of waiting weeks after meeting with financial advisors.

As China’s economy grows there will be a greater demand of financial services.

https://techcrunch.com/2016/08/14/china-is-disrupting-global-fintech/?utm_medium=email&utm_source=fintechweeklycom

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FinTech: Shift in Wealth Management https://castleplacement.com/2016/08/fintech-shift-in-wealth-management/ https://castleplacement.com/2016/08/fintech-shift-in-wealth-management/#respond Sun, 21 Aug 2016 01:12:08 +0000 https://castleplacement.com/?p=8850 Many bankers are starting to embrace robo advisory. Wayne Patenaude, the chief executive of Cambridge Savings Bank, went against the norm and rather than hiring a team of traditional financial advisors, he decided to partner with SigFig, a robo advisory startup in San Francisco. He is not alone. Bank of America and Wells Fargo will deliver their robo advisory products […]

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Many bankers are starting to embrace robo advisory. Wayne Patenaude, the chief executive of Cambridge Savings Bank, went against the norm and rather than hiring a team of traditional financial advisors, he decided to partner with SigFig, a robo advisory startup in San Francisco.

He is not alone. Bank of America and Wells Fargo will deliver their robo advisory products in the next year, which is a groundbreaking shift in the wealth management business. Other big names in the U.S retail banking are expected to provide robo advisory platforms. Tim Sloan, president and chief operating officer at Wells Fargo, commented that they are simply giving what customers are demanding, which is to manage their assets on their own time. Regional and foreign-owned banks, such as Capital One Financial, U.S. Bancorp and UBS are also following the same path.

Compared to traditional wealth management firms, robo advisors only manage a small part of the market, about $45 billion. But, it has the potential to attract the mass affluent and young professionals between 25 and 45 years old.

Meanwhile, some banks plan to provide hybrid advice to their customers, who may want to have it. New technology and new customer attitudes are the main drivers of robo advisors, but robo advisors still have to be tested in market downturns to eliminate skepticism. Either way, many believe robo advisors will not replace advisors, but enhance the work of financial advisors.

http://www.financial-planning.com/news/once-fearful-of-robos-banks-now-court-digital-advice-alliances

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The Growth of Global Fintech Investment https://castleplacement.com/2016/07/the-growth-of-global-fintech-investment/ https://castleplacement.com/2016/07/the-growth-of-global-fintech-investment/#respond Thu, 21 Jul 2016 00:53:28 +0000 https://castleplacement.com/?p=8846 Lately there has been a lot of research being done on Fintech growth. This research shows that although there is a dramatic increase in the Asia Pacific region, there is a much slower growth in the UK. We can conclude from this information that China has advanced ahead of Europe, the UK and USA South and East in Fintech investment […]

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Lately there has been a lot of research being done on Fintech growth. This research shows that although there is a dramatic increase in the Asia Pacific region, there is a much slower growth in the UK.

We can conclude from this information that China has advanced ahead of Europe, the UK and USA South and East in Fintech investment growth from July 2015 to June 2016. During this time in China, fintech investment grew immensely to $8.8 billion. This is a 252% increase since 2010, where the total global fintech investment stands at $80 billion since 2010. THere has been a 343% increase in investment in Australia and New Zealand as well. This moves their investment growth from $300 million between 2010 to 2015 to $1.36 billion in the last year alone. These growths show how quickly the amount of fintech investment growth is growing and there is no sign of it slowing down anytime soon.

As of now the UK is leading the rest of Continental Europe in investment growth with $7.2 billion versus $6.8 billion. Although during the last year the growth in the UK has been moving at a slower pace at 33% versus 55%. The research shows the biggest area of investments are peer to peer lending (P2P) and direct lending at $5.3 billion. This represents 66% of all investments, breaking it down to 21%, or $3.3 billion, to direct lending and 12.3%, or $2 billion, to ‘Peer-to-peer lending’. Since 2015, there has been a decrease in investment in loans from $8 billion down to $3.3 billion for the first half of 2016, a yearly run rate of around $6.6 billion. This is a result of institutional investors being more cautious in placing funds on to direct lending and P2P platforms in 2016.

https://www.crowdfundinsider.com/2016/07/87856-global-fintech-investment/

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