☕️ Fee drain

Good morning.

With the US on MLK holiday and while US President Donald Trump gives markets a breather by delaying tariff announcements—amid reports he’ll first scrutinise trade deals with China, Canada and Mexico—we’re turning to a piece of analysis that shines a harsh light on hedge fund returns and fees.

The FT will have you know that nearly half of all profits generated by hedge funds since the 1960s —US$1.8 trillion ($2.88 trillion) out of US$3.7 trillion — have been pocketed by managers as fees, according to numbers crunched by LCH Investments.

The report shows hedge fund fees have surged from around 30% of gross gains before 2000 to nearly 50% today. Multi-manager platforms, with their “pass-through” expense model, have driven up costs further, charging investors for everything from bonuses to office rents, alongside hefty performance fees of up to 30%.

Yet, the sector’s leaders, like Citadel, DE Shaw, and Millennium, continue to outshine rivals, suggesting that in a fee-heavy industry, it takes money to make money.

🏆 LOI Subscriber #TBD

Market movers

Star Entertainment shares plunged again on Monday after the casino operator reported a 15% revenue drop, ongoing funding struggles and a “material uncertainty” warning, as weak trading and regulatory pressures take their toll.

The quick sync

• ASIC's crackdown on Sanlam Private Wealth exposes the risks of 'licence for hire' firms, putting hundreds of thousands of Australian investors in the regulatory crossfire. (Capital Brief)

• Labor faces calls to align with Trump’s TikTok policy as the app's future in Australia hangs on US-led safety reforms. (Capital Brief)

• HSBC considers options including exit from Australian consumer banking as part of a global restructuring, while retaining commercial operations. (Bloomberg)

• Australia’s inaugural commercial spacecraft reentry puts the nation on the map in the booming private space sector. (Capital Brief)

Trading floor

M&A

• Ventia sells Toowoomba crossing contract for $6.3m, expecting $20-25m profit. (Capital Brief)

• Macquarie boosts stake in Next Payments as founder trims holding. (AFR)

• Chemist Warehouse merger could prompt nearly $1bn in franchisee sell-downs. (AFR)

• Iress sells superannuation business to Apex for $40m, plus potential milestone payments. (Capital Brief)

• BGH Capital offers to buy PwC’s private tax business amid growing interest from private equity. (AFR)

• Star Entertainment's investors assess options to save the company, including selling stakes in Queen's Wharf development. (AFR)

• Insignia grants CC Capital limited due diligence to explore a better takeover offer. (Capital Brief)

• Optus mulls selling sports streaming to Nine, potentially shifting EPL rights to Stan. (AFR)

• Mumbrella changes ownership to The Intermedia Group and Tim Burrowes, forming Mumbrella Media. (Mumbrella)

Capital Markets

• Victoria’s gas storage project expands to $1bn amid increased demand. (AFR)

• Australia’s first commercial spacecraft reentry marks a milestone for its growing space industry. (Capital Brief)

• Bitcoin hits record high as Trump’s pro-crypto stance gains momentum, despite concerns over new meme coins. (Capital Brief)

• Miners rise on ASX amid strong China data, despite cyclone-related port closures in WA. (Capital Brief)

• Energy Transition Minerals targets $9m raise amid rising US interest in Greenland. (AFR)

• Pexa shares climb on ASX following Morgans upgrade. (Capital Brief)

• Gold stocks retreat on ASX as spot gold falls, with geopolitical risks boosting future demand. (Capital Brief)

• Karoon shares fall as Who Dat West well is abandoned after failed drilling. (Capital Brief)

• IGO flags major impairment for Kwinana lithium refinery as lithium prices slump. (Capital Brief)

• LHC Capital profits from US property fund and shifts focus to Life360 and TechnologyOne. (AFR)

• Australia invests $2bn in aluminium industry to create jobs and drive net-zero transition. (Capital Brief)

• MA Financial secures $171m for its first ASX-listed investment trust, launching in March. (Capital Brief)

VC

• Oho signs 5-year deal with Tennis Australia, joining the AO Startups program. (Startup Daily)

• Big VCs raise $3bn, widening the gap with newer investors. (AFR)

• Coalition backs $20,000 small business lunch deductions, claiming no inflationary impact. (Smart Company)

People moves

• Monique Conheady joins Hysata’s board, adding to her roles in clean tech ventures. (Startup Daily)

• Ampol adds Helen Nash and Stephen Pearce as independent directors. (Capital Brief)

• Sanlam Private Wealth caught in ASIC licensing crackdown, highlighting risks of "licence for hire" model. (Capital Brief)

• Super fund CEOs support APRA and ASIC's climate risk regulations. (Capital Brief)

The watercooler