Posts in category Business and finance


ApprovedBusinessBusiness and finance

WhatsApp: Mark Zuckerberg’s other headache

“THERE’S too much sensationalism, misinformation and polarisation in the world today,” lamented Mark Zuckerberg, the boss of Facebook, recently. To improve things, the world’s largest social network will cut the amount of news in users’ feeds by a fifth and attempt to make the remainder more reliable by prioritising information from sources which users think are trustworthy.

Many publishers are complaining: they worry that their content will show up less in users’ newsfeeds, reducing clicks and advertising revenues. But the bigger problem with Facebook’s latest moves may be that they are unlikely to achieve much—at least if the flourishing of fake news on WhatsApp, the messaging app which Facebook bought in 2014 for $19bn, is any guide.

In more ways than one, WhatsApp is the opposite of Facebook. Whereas posts on Facebook can be seen by all of a user’s friends, WhatsApp’s messages are encrypted. Whereas Facebook’s newsfeeds are curated by algorithms that try to maximise the time users spend on the service, WhatsApp’s stream of messages is solely generated by users. And whereas Facebook requires a fast connection, WhatsApp is not very data-hungry.

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ApprovedBusiness and financeFINANCEFinance and economics

Direct-lending funds in Europe

WHEN Caronte & Tourist, a Sicilian ferry company, needs a new ship, it is cheap and easy to borrow from a bank. But in 2016, when Caronte’s controlling families wanted to buy back the minority stake held by a private-equity firm, banks balked at the loan’s unusual purpose. Edoardo Bonanno, the chief financial officer, also worried that the €30m ($33m) in extra bank debt might make shipping loans harder to obtain from them in future. So he turned instead to a direct-lending fund run by Muzinich & Co, an asset manager.

Such funds are only about a decade old in Europe (and not much older in America, where they started). Assets under management at Europe-focused funds increased from a mere $330m at the end of 2006 to $73.3bn by mid-2017, which includes $27.9bn of “dry powder”, or funds yet to be lent out (see chart). In 2017 alone 24 direct-lending funds raised a record $22.2bn. Such funds do what they say on the tin: lend directly to firms, usually in the form of big, multi-year loans. The borrowers are often either companies that are too small to raise equity or debt on capital markets, or private-equity funds buying such firms.

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