Three things that got the team talking this week - Firetrail Investments

Weekly insights from the Trail

Three things that got the team talking this week

April 5, 2024April 12th, 2024

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1. A time for deals…

2024 has got off to a very strong start for global oil and gas M&A. Deal volumes hit their strongest first quarter since 2019. This comes as a record 26% of global buyout dry powder is at least 4 years old, with growing pressure to put the powder to work.

Source: Barrenjoey (April 2024)

Source: Preqin; Bain analysis (April 2024)

2. Home is where the wealth is…

Household wealth in Australia grew +9% y/y in Q1 2024, to a record $16 trillion. Household liabilities-to-income hit a record 198%, but the wealth-to-income ratio remains far higher at a record 1043% – and is likely a key reason the RBA rate hikes have resulted in less weakness than expected, to date. February household spending rebounded further to 3.6%, the fastest since September 2023, after January 2024 improved to 2.9%.

Source: ABS, RBA, Macrobond, UBS estimates (April 2024)

3. Home is shrinking…

Over to the US and demographic trends are favourable for stronger new home sales in the coming years, with the growing population of 35-44 year olds. But the median size of new single-family homes continues to decline. The median size of homes in the US peaked at 2,473 square feet (~230 square metres) in 2016. Today, the size of new homes being built is 2,237 square feet (~208 square metres), as seen in the second chart below.

Source: US Census Bureau, BofA Global Research (April 2024)

Source: Census Bureau, Haver Analytics, Apollo Chief Economist (April 2024)

Disclaimer

This article is prepared by Firetrail Investments Pty Limited (‘Firetrail’) (ABN 98 622 377 913, AFSL 516821) as the investment manager of the Firetrail Australian High Conviction Fund (ARSN 624 136 045), the Firetrail Absolute Return Fund (ARSN 624 135 879), the Firetrail Australian Small Companies Fund (ARSN 638 792 113) and the Firetrail S3 Global Opportunities Fund (ARSN 653 717 625) (‘the Funds’). Pinnacle Fund Services Limited ('PFSL') (ABN 29 082 494 362, AFSL 238371) is the product issuer of the Fund. PFSL is not licensed to provide financial product advice. PFSL is a wholly-owned subsidiary of the Pinnacle Investment Management Group Limited (‘Pinnacle’) (ABN 22 100 325 184). The Product Disclosure Statement (‘PDS’) and Target Market Determination (‘TMD’) of the relevant Fund are available via the links below. Any potential investor should consider the PDS and TMD before deciding whether to acquire, or continue to hold units in, the Fund.

Links to the Product Disclosure Statement: WHT3810AU, WHT5134AU, WHT3093AU, WHT7794AU

Links to the Target Market Determination: WHT3810AU, WHT5134AU, WHT3093AU, WHT7794AU

For historic TMD’s please contact Pinnacle client service Phone 1300 010 311 or Email service@pinnacleinvestment.com

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