Private Credit Funds, Interoperability, Being a Weapon
Private Credit Funds, Interoperability, Being a Weapon
3.09 | “It is better to be a warrior in a garden than a gardener in a war.” - Chinese proverb
News and Numbers
Markets this Week:
S&P 500 is up 0.5%.
NASDAQ 100 is up 1%.
Bitcoin-USD is down 1%.
Ethereum-USD is down 3%.
Headlines from this Week:
A Canadian judge ruled that the thumbs up emoji ‘👍‘ constitutes a valid agreement to a binding contract.
A U.S. federal judge ruled that the Biden administration cannot move to remove misinformation from online platforms, as it violates 1st amendment rights.
Finance
By Vlad Estoup, B.Comm. (Finance); working in Ethereum cybersecurity
The Financial Fortress: How High-Net-Worth Individuals Use Private Credit Funds for Market Protection
In the unpredictable world of financial markets, wealthy investors are continuously seeking innovative strategies to safeguard their wealth and generate steady returns. Their secret weapon against market downturns and volatility? Private credit funds. These unique investment vehicles offer a refuge away from the traditional markets' ebbs and flows, typically providing a return of around 8% APR and serving as a bulwark against market downturns.
Deciphering Private Credit Funds
Private credit funds specialize in lending to private companies that may not have sufficient access to traditional banking channels due to various restrictions. These funds cater to different needs such as growth capital, refinancing, and buyouts, and are often secured by the borrowing company's assets, offering an extra layer of protection for investors.
The exclusivity of these funds to accredited investors, or those with significant net worth, income, or financial experience, makes them particularly appealing to high-net-worth individuals. These funds are generally exempt from registration with financial authorities, like the Securities and Exchange Commission (SEC), allowing for greater access and flexibility for accredited investors.
Why the Wealthy are Turning to Private Credit
There are several compelling reasons why wealthy investors are opting for private credit funds:
Superior Returns: In the current low-interest-rate environment, private credit funds offer an attractive alternative, often providing higher returns compared to traditional fixed income assets.
Market Downturn Protection: The low correlation between private credit funds and public markets offers a safety net during market downturns. This unique feature allows wealthy investors to protect their portfolios from stock market volatility.
Consistent Income Stream: Regular interest income from private credit funds is an appealing feature for wealthy investors seeking a consistent and reliable income source.
Inflation Shield: Given that private credit funds often come with floating interest rates, they can provide a hedge against inflation, a significant concern for long-term investors.
Risk Mitigation Strategies
While private credit funds offer an attractive proposition, it is essential to recognize and navigate the inherent risks, which can include credit risk, liquidity risk, and managerial risk. High-net-worth individuals typically have access to financial advisors and experts who can perform due diligence on fund managers, past performance, underlying assets, and the fund's strategy to mitigate these risks.
The Growing Appeal of Private Credit
Private credit funds are experiencing an uptick in popularity, driven by the demand for yield and diversification, and the increasing number of private companies requiring lending services. This trend suggests that the market for private lending will continue to expand, providing wealthy investors with an ongoing opportunity for portfolio diversification and protection against market volatility.
In conclusion, private credit funds offer high-net-worth individuals a unique opportunity to both protect their wealth during market downturns and generate consistent returns. These funds are becoming an increasingly common component of wealthy investors' portfolios, thanks to their diversification benefits and the protection they offer from traditional market fluctuations. However, like all investments, they come with their own risks, and careful due diligence is a necessity for successful investing.
This is not financial advice and you should always do your own research before investing in any securities or cryptocurrencies.
Sci-Tech
By Keyann; Software Engineer in Web3
Interoperability
Interoperability is a term that often circulates within the Web3 space, but what does it mean, and why is it relevant?
Interoperability, in simple terms, refers to the seamless communication and data exchange between different systems and platforms. In the context of the internet and blockchain, interoperability plays a crucial role in bridging the gap between these transformative technologies.
One prime example of the benefits of interoperability lies in the realm of digital assets.
Traditionally, when you buy a digital gift card, or unlock a character in a video game, that asset is central to the platform on which you acquired it. It goes hand in hand with data privacy, in the sense that you don’t actually own the data. Even when you delete a post or image online, it will likely still exist on the platform, and be used for other commercial purposes, even it isn’t visible on the platform.
With the rise of blockchain technology, various digital assets such as cryptocurrencies, non-fungible tokens (NFTs), and digital collectibles have gained prominence. However, these assets often exist on separate blockchain networks, limiting their potential impact.
By embracing interoperability, digital assets can transcend the boundaries of individual networks or platforms, resulting in a more connected and efficient ecosystem. For example, consider the scenario of loyalty coupons or rewards programs implemented on the blockchain. With interoperability, these digital assets can seamlessly move across different blockchain platforms, allowing users to access and redeem their rewards with ease or exchange them for money without the need for a central authority, regardless of the specific platform supporting the loyalty program.
Furthermore, interoperability can revolutionize the gaming industry by enabling the transfer of in-game assets or props across different gaming platforms. Players would no longer be limited to a single game or ecosystem, as interoperability would allow them to utilize their hard-earned virtual possessions in various gaming experiences. This seamless integration of assets can enhance gameplay, foster cross-platform interactions, and create a more dynamic gaming environment for enthusiasts.
Paradigm Shift
By Roman Kuittinen-Dhaoui, BBA, CPHR Candidate; working in Human Resources
Being a Weapon
In martial arts, there is a valuable lesson reflected in a Chinese proverb: “It is better to be a warrior in a garden than a gardener in a war.” As someone who has practiced karate for 18 years, I have come to realize that skilled martial artists often embody kindness and humility. They approach their training with a student mentality, continuously striving for improvement and leaving their ego behind. Through practice, they understand both the potential for harm and the responsibility that comes with their skills.
Training in martial arts is like honing a blade. When consistently practiced, one's abilities become sharp and effective. However, without training, skills can become dull, much like a rusty sword. Skilled martial artists comprehend the power they possess, whether it be through strikes, kicks, or grappling techniques. Yet, you'll rarely find a true martial artist engaging in street fights. They possess the wisdom to de-escalate situations, even if it means being subject to insults. They are secure in themselves and do not feel the need to prove their abilities. They can tame their ego. Furthermore, they understand the potential consequences of their actions, and their training instills a sense of responsibility.
The benefits of self-defense training extend beyond physical prowess. It also cultivates confidence, enabling individuals to navigate life with a greater sense of awareness. While no one is invincible, martial artists learn to discern when it is appropriate to defend themselves and when it is wiser to retreat and live to fight another day. They acknowledge that there may always be individuals who are bigger, stronger, or more skilled, but they possess the knowledge and self-assurance to make informed decisions in challenging situations.
Ultimately, the proverb conveys the notion that it is preferable to cultivate strength, resilience, and preparedness in a peaceful environment, rather than finding oneself ill-equipped and vulnerable during times of conflict and adversity. It emphasizes the importance of honing one's skills, maintaining a vigilant mindset, and being proactive in self-improvement, so that when faced with challenges, one is better positioned to navigate them effectively and emerge victorious, both in physical battles and in the broader struggles of life.
TLDR: learn how to fight but don’t get into fights.
(Head)Space
The right choice is the hard choice.
I believe in karma to a large extent. I try to be calm, kind, honest, trustworthy, generous, and supportive.
But I've had a rough last month, to say the least.
Sure, bad things happen, but when a series of random and uncontrollable negative events starts to occur, and you're forced to put out fire after fire, it makes you question your life, your decisions, and your values. That's what has been on my mind this week.
Amongst all the events, one shareable moment was that my fridge broke this weekend, and having to deal with that is such a hassle. It smelt hazardous. I had to throw out all the food and get a new one (3-week delivery at the earliest). Now, for the next 3 weeks, I have to figure out new menu ideas that don't require refrigeration. I realize it's a first-world problem to have, but that's not the main issue. It's another annoying thing to deal with that gets in the way of all the other things I committed to allocating my focus on, like the tasks at work that I want to complete or the goals I set for saving money.
In the moment, as I'm opening mouldy jar after mouldy jar to clean out the fridge, I questioned why I wasn't more frugal with my time or money.
However, unbeknownst to them about my fridge problems, I had about three friends reach out to me, inviting me for dinner or brunch, like a sign from God to restore my faith.
At the same time, I was talking to another friend. They had an issue they desperately needed help with but had soured many of their relationships (including ours), and, as a result, weren't able to remediate the issue because they didn’t have anyone that was willing to help. Ultimately, the fire they have to put out may burn down their place.
Moral of the story - questioning our faith in the face of negative events is a problem that affects many people. But when you’re good others, good people will be there for you in an inevitable time of need. This allegory of a ‘fridge on fire’ represents how staying true to your faith or, in this instance, being a good person who's good to others is both the right and wise decision.
Company of the Week
Chime
Chime is a fintech company providing a suite of consumer products including debit cards, spending accounts, and optional savings account, all on a mobile banking app. The financial technology company was founded in 2013 on the premise that basic banking services should be helpful, easy and free. The company partners with regional banks to design member first financial products.
Written by: Vlad Estoup, Keyann Al-Kheder, and Roman Kuittinen-Dhaoui