The growth of legal sports gambling in the US has led to increased addiction issues, particularly among younger people. While the industry generates tax revenue, it also aggressively advertises to recruit new gamblers through misleading promotions and celebrity endorsements. Making gambling more convenient through mobile apps has fueled repetitive weekly betting. Restricting sports gambling to physical locations could help curb addiction, as Delaware has seen. However, the industry prioritizes profits over harm reduction.
Private equity ownership of hospitals has grown significantly over the last decade, with over $1 trillion invested in healthcare deals. However, a new study finds patient care tends to deteriorate at hospitals after being acquired by private equity firms. Analyzing insurance claims, the research found patients at PE-owned hospitals faced a 25% higher likelihood of falls, infections, or other forms of harm. While private equity ownership is associated with higher costs and revenues for hospitals, this study examined the impact on clinical quality of care. Hospital success depends not just on financial metrics but also on patient outcomes and satisfaction. The pressure to pay down debt from leveraged buyouts can lead PE-owned hospitals to understaff and compromise sanitation, undermining patient care. Notably, lower death rates at PE hospitals stemmed not from better care but from younger admitted patients and more transfers to acute care facilities. When private equity buys healthcare providers, the goal is typically to restructure and resell for profit in a few years by raising prices and cutting costs, which benefits investors more than patients.
The Private Fund Rule Debate Isn’t Over Yet discusses the ongoing legal challenge to the SEC’s private fund advisor rule. While private equity trade groups argue the rule is burdensome, a new amicus brief was filed by the Institutional Limited Partners Association and 11 state pension plans supporting the SEC’s authority to oversee private funds. They believe the oversight helps address structural issues like information asymmetries that have allowed negotiating power to shift too far in favor of private equity firms. The brief argues the rule helps level the playing field by establishing transparency and fiduciary obligation defaults. Even sophisticated investors like pension funds face challenges overcoming information disadvantages when negotiating with private equity firms that have greater legal resources. The debate underscores a desire among investors to rebalance power dynamics in the private equity industry.
Countdown Capital, an early-stage venture capital firm focused on hard tech startups, is shutting down by the end of March. The firm’s founder concluded that funding industrial startups is not inefficient enough to justify their existence, and that larger, multi-stage VCs are best positioned to generate strong returns. Notably, Countdown was relatively early to focus on hard tech but competition from large funds has increased. While Countdown had backed companies like K2 Space and Hadrian, the letter suggests that small, specialized early-stage funds struggle to compete against large multi-stage incumbents. For example, Countdown was priced out in deals where larger funds were willing to pay 50-100% more. As a result, the firm will return uninvested capital and cease operations after completing current deals.
Crypto Market Outlook 2024 discusses expectations for the crypto market in the new year. 2023 saw increased institutionalization as more regulated exchanges grew and traditional futures saw rising volumes. Approval of a bitcoin ETF in the US is anticipated in Q1 2024 and could bring over $1 trillion in new capital to bitcoin and ether. The piece argues this ETF tailwind is underappreciated and will distinguish bitcoin and ether from altcoins. If a US recession occurs, stimulus may boost demand for bitcoin as a store of value. Smart contract platforms, DeFi, and computing tokens are predicted to outperform as their activities become increasingly interlinked. Position sizing and risk tolerance will be important given potential low liquidity. Broadly diversified altcoin indices or stablecoins may offer safer passive exposure than individual tokens. Overall the ecosystem is viewed as more robust entering this cycle.