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The Immigrant Investor Program in Ireland attracts wealthy Chinese

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George smiles broadly as he sips a pint of Guinness in a cozy Dublin pub, enjoying the famous warmth of the land of céad míle fáilte (100,000 welcomes). As one of the increasing number of Chinese nationals investing in Ireland in exchange for residency, he has every reason to feel at home.

Georges, who asked that his real name not be revealed, has invested 1 million euros in it Ireland He said China’s uncertain economic outlook has led wealthy individuals like himself to seek additional residence options abroad. “I am worried about the future in China,” he said.

The popularity of the Immigrant Investor Program (IIP) in Ireland has skyrocketed for a decade in 2022, with a number of potential investors from China more than tripled to 785 in the nine months through September, from 243 in all of 2021. Applications from all countries registered a record high of 812, nearly double the annual record set in 2019.

Since the scheme began in 2012, Chinese investors, including those from Hong Kong, have accounted for more than 90 percent of successful applicants and €1.18 billion has been invested in total.

At previous national congresses of the Communist Party of China, “the key word was ‘economic growth.’ But the buzzword of the 20th Congress [in October] It was a “struggle”. said the head of an Ireland-based fund, focused on the hospitality sector, where George has invested 1 million euros. The CEO of the fund asked not to be identified.

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He added, “The middle class and above worry about what it means for them, for their fortunes, for their careers, for their family.”

Vertical chart showing Chinese investor residency applications in Ireland

Ireland is becoming an increasingly tempting choice, in part due to problems with similar schemes elsewhere. Brexit made the UK a less attractive option even before London in February discontinued its Immigrant Investor Program Due to security concerns, the US scheme has also been suspended for several months.

“We’ve seen a huge jump [in IIP investments in Ireland] “My hunch is that this is because of Brexit,” said Niamh Walsh, who runs TDL Horizons, which focuses on hotel and tourist property sales, in County Donegal, and which has worked with IIP clients, since 2017.

Other factors such as education and the country’s friendly reputation have made the English-speaking EU member state a desirable choice for investors like George.

Nearly three years of harsh coronavirus restrictions—only Relax in December It was another factor in wealthy Chinese seeking residence abroad. “You can definitely draw a relationship there,” said James Hartshorn, CEO and co-founder of Bartra Wealth Advisors, a leading international investment fund, whose portfolio includes social housing and nursing homes.

Many countries have schemes offering residency or even passports in exchange for investment, Hartshorne said, but Ireland’s success has been making FDI investment “a tool for channeling investment into areas of the economy that really need it”.

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“Because of the cost of capital, the interest rate goes up and the cost of goods goes up[which could slow investment in those sectors]. . . The program is more important now than it used to be,” he said.

applicants have Four modes are availableThey can invest 1 million euros in an Irish project, invest 1 million euros in an approved investment fund or invest 2 million euros in a listed REIT – all for at least three years. Or they can donate €500,000 – or €400,000 if applications are submitted jointly by five people – to an arts, sport, culture or education project.

Peter Fitzpatrick, the Irish Dale MP from County Louth and former Gaelic footballer, has raised nearly €15m from Chinese IIP investors to build the first Gaelic games ground in his county in 60 years.

“We got an agent with contacts in Asia and we got 37 applicants willing to invest 400,000 euros,” he said. Maybe we could raise the money [without IIP] But not as quickly. It’s a dream come true.”

A view of County Donegal in Ireland
Ireland is becoming an increasingly tempting choice for investors, in part due to problems with similar schemes elsewhere. © Gareth McCormack / Alamy

Both Georges, who has been running an environmental monitoring business in China remotely, and Helen, a lawyer who also asked that her real name not be used and who has invested €500,000 in the same fund, say education has been a big motivator. George has a son who is in high school and Helen has one who is in university in Ireland.

Walsh said the “big benefit” is that investors only spend one day a year in Ireland. They do not lose residence in their countries of origin. However, the IIP does not give investors the right to a passport.

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Investors need to maintain the investment for at least three years. Then they can sell their investment and retain residency status, but they have no further investment obligation, said the hospitality-focused fund’s chief executive.

Although Chinese demand is driving the international investment programme, orders from the United States have also increased. “It took everyone by surprise,” said Hartshorn. “The main reason I heard has to do with the political situation in the United States. [Former president Donald] Trump has a lot of people worried, there is polarization and anxiety about where things are going. There are huge historical links between Ireland and the United States, so it allows Americans to go back to their roots.

The number of applicants in the United States, usually about five or fewer since the launch of the IIP, has doubled to 11 so far last year. The program has seen 31 successful applicants from the United States since 2012 and 1,511 from China, with a large number of investors also from Vietnam, Saudi Arabia and South Africa.

The chief executive of a hospitality-focused fund said Chinese investors, who come from a country where there is no Google, no Facebook, and news largely from official sources, “really appreciate the freedom” Ireland offers. But whether it can continue to attract the same volume of wealthy applicants depends on “where China goes from here” economically and politically.

He added, “Ireland was a ‘kept secret’ in Europe.” . . Now it has been discovered.”

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We need to pay more attention to skewed economic signals

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The writer is chair of Queen’s College, Cambridge and advisor to Allianz and Gramercy

Inflation was the dominant economic and financial issue of 2022 for most countries around the world, especially for advanced economies that have a consequential impact on the global economy and markets.

The effects have been seen in declining living standards, increasing inequality, increasing borrowing costs, stock and bond market losses, and occasional financial mishaps (fortunately small and so far contained).

In this new year, recession, both actual and feared, has joined inflation in the driving seat of the global economy and is likely to replace it. It’s a development that makes the global economy and investment portfolios subject to a wide range of possible outcomes — something that a growing number of bond investors seem to be aware of more than their equity counterparts.

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International Monetary Fund iYou will likely review soon Her economic growth forecasts again, predicting that “a third of the world will be hit by recession this year”. What is particularly notable to me about these worsening global prospects is not only that the world’s three major economic regions – China, the European Union and the United States – are slowing down together, but also that this is happening for different reasons.

In China, a chaotic exit from the wrong Covid-19 policy is undermining demand and causing more supply disruptions. Such headwinds to domestic and global economic well-being will continue as long as China fails to improve the coverage and effectiveness of its vaccination efforts. The strength and sustainability of the subsequent recovery will also require that the country more vigorously renew a growth model that can no longer rely on greater globalization.

The European Union continues to deal with energy supply disruptions as the Russian invasion of Ukraine continues. Strengthening inventory management and reorientation of energy supplies is well advanced in many countries. However, it is not yet sufficient to lift immediate constraints on growth, let alone resolve long-term structural headwinds.

The United States has the least problematic view. The headwinds to growth are due to the Fed’s struggle to contain inflation after mischaracterizing rate increases as fleeting and then initially being too timid to adjust monetary policy.

The Fed’s shift to an aggressive front-load of interest rate hikes came too late to prevent the spread of inflation in the services sector and wages. As such, inflation is likely to remain stubborn at around 4 percent, be less sensitive to interest rate policies and expose the economy to greater risk for accidents from additional policy errors that undermine growth.

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The uncertainties facing each of these three economic areas suggest that analysts should be more careful in reassuring us that recessionary pressures will be “short and shallow”. They need to be open, if only to avoid repeating the mistake of prematurely dismissing inflation as transient.

This is especially important because these diverse drivers of recessionary risk make financial fragility more threatening and policy shifts more difficult, including potentially Japan. Get out of interest rate control Policy. The range of possible outcomes is extraordinarily large.

On the one hand, a better policy response, including improving the supply response and protecting the most vulnerable populations, can counteract the global economic slowdown and, in the case of the United States, avert a recession.

On the other hand, additional policy errors and market turmoil can lead to self-reinforcing vicious cycles with rising inflation and rising interest rates, weakening credit and compressed earnings, and stressing market performance.

Judging by market prices, more bond investors are better understanding this, including by refusing to follow the Fed’s interest rate guidance this year. Instead of a sustainable path to higher rates for 2023, they believe recessionary pressures will lead to cuts later this year. If true, government bonds would provide the yield and potential for badly missed portfolio risk mitigation in 2022.

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However, parts of the stock market is still weakly bearish pricing. Reconciling these different scenarios is more important than investors. Without better alignment within markets and with policy signals, the positive economic and financial outcomes we all desire will be no less likely. They will also be challenged by the risk of more unpleasant outcomes at a time of less economic and human resilience.

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Macro hedge funds end 2022 higher, investors say, while many others take big losses By Reuters

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© Reuters. FILE PHOTO: Traders work on the trading floor of the New York Stock Exchange (NYSE) in New York City, US, January 5, 2023. REUTERS/Andrew Kelly

By Svea Herbst Baylis

NEW YORK (Reuters) – Some hedge funds betting on macroeconomic trends have boasted of double and even triple-digit gains for 2022, while other high-profile companies that have long been on technology stocks have suffered heavy losses in volatile markets, investors said.

Rokos Capital, run by Chris Rokos and one of a handful of so-called global macro companies, gained 51% last year. Fund investors this week, who asked not to be identified, said Brevan Howard Asset Management, the company where Rokos once worked, posted a gain of 20.14% and Caxton Associates returned 16.73%.

Haider Capital Management’s Haider Jupiter Fund rose 193%, an investor said.

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Data from hedge fund research showed that many macro managers have avoided crumbling stock markets that have been rocked by rapid interest rate increases and geopolitical turmoil, including the war in Ukraine, to rank among the best performers in the hedge fund industry. The company’s macro index rose 14.2% while the general index of hedge funds fell 4.25%, its first loss since 2018.

Equity hedge funds, where the bulk of the industry’s roughly $3.7 trillion in assets are invested, fared worse with a loss of 10.4%, according to HFR data. And while that beat the broader stock market’s loss of 19.4%, some high-profile funds posted even bigger losses.

Tiger Global Management lost 56% while Whale Rock Capital Management ended the year with a 43% loss and Maverick Capital lost 23%. Coatue Management ended 2022 with a loss of 19%.

But not all companies that bet on technology stocks suffered. John Thaler JAT Capital finished the year with a 3.7% gain after fees after a 33% increase in 2021 and a 46% gain in 2020.

Sculptor Capital Management (NYSE::), where founder Dan Och is fighting the company’s current CEO in court over his salary increase, posted a 13% drop.

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David Einhorn’s Greenlight Capital, which bet that Elon Musk would be forced to buy Twitter, ended the year up 37% while Rick Sandler’s Eminence Capital rose 7%.

A number of so-called multi-manager companies where teams of portfolio managers bet on a variety of sectors also boast positive returns and have been able to deliver on their promise that hedge funds can deliver better returns in distressed markets.

Balyasny’s Atlas Fund (NYSE: Enhanced) gained 9.7%, while Point72 Asset Management gained 10%. Millennium Management gained 12% while Carlson Capital ended the year with a 7% gain.

Representatives for the companies either did not respond to requests for comment or declined to comment.

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German automakers point to easing supply chain problems

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Sales at BMW and Mercedes-Benz jumped in the final months of 2022 as the German premium auto brands indicated supply chain problems plaguing the industry were abating.

Automakers around the world have experienced parts shortages since the pandemic, especially semiconductors, leaving many of them with large fleets of incomplete vehicles that can’t be delivered to customers.

BMW and Mercedes each said their full-year vehicle deliveries fell last year by 4.8 percent and 1 percent, respectively, due to Suppliers Bottlenecks as well as lockdowns in China and the war in Ukraine.

But supply pressures eased in the last quarter of the year, as BMW recorded a 10.6 percent jump in sales, with 651,798 vehicles delivered, and Mercedes fulfilling 540,800 orders, up 17 percent from the same period in 2022.

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BMW He said the main effects of supply chain bottlenecks and continued lockdowns were felt in the first six months of the year, adding that “sales were steadily picking up in the second half.”

Mercedes boss Ula Kallenius told the Financial Times last week that the list of problems in the auto supply chain was declining, but added that long waits for cars would continue into 2023.

“One chip is enough to be vital [ . . .] Missing, and then you can’t finish the car, even if you have everything else.

Both brands recorded strong sales growth electric car. Mercedes, which last week announced a plan to build 10,000 charging docks, said EV shipments grew 124 percent to 117,800 last year compared with its predecessor.

Similarly, BMW reported strong growth in electric vehicle sales, with deliveries of fully electric vehicles doubling last year to 215,755.

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Analysts at Bank of America said that sales of electric vehicles, including hybrid cars, reached a historic peak last November, with 1.1 million units sold. They attributed this largely to the upcoming phase-out of customer subsidies in Germany.

Participate in Mercedes BMW and BMW prices held steady Tuesday morning as investors priced in an image of an improving showing.

Rolls-Royce, a subsidiary of BMW, announced Monday that sales have hit a 119-year record, driven by strong demand in the United States, its largest market.

The luxury brand has been largely unaffected by the semiconductor pressure, mainly because it makes relatively few compounds and therefore needs fewer chips.

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