Commercial Awareness Discussion Thread

Daniel Boden

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  • Sep 6, 2018
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    Has anyone been following the situation with Archegos? I was wondering if anyone had any thoughts on whether there are any specific legal issues involved or if there are any broader implications to this?
    Not sure about legal issues but I think there could be some real commercial implications with the amount of leverage that banks are willing to lend hedge funds in future! If banks decide to reduce their exposure and reduce the amount of leverage they give to HFs (as they wouldn't want to take the losses that Nomura and Credit Suisse have done - estimated to be around $2bn and $3-4bn respectively!) then that could have a real impact on the level of deals and investments that HFs can do in the future and indeed the companies that will need this level of financing from a HF!
     
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    Sam55

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    Not sure about legal issues but I think there could be some real commercial implications with the amount of leverage that banks are willing to lend hedge funds in future! If banks decide to reduce their exposure and reduce the amount of leverage they give to HFs (as they wouldn't want to take the losses that Nomura and Credit Suisse have done - estimated to be around $2bn and $3-4bn respectively!) then that could have a real impact on the level of deals and investments that HFs can do in the future
    Yeah I definitely agree here- seems like nomura and credit suisse got really screwed over when MS and GS started dumping all their shares
     

    Matt_96

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    Not sure about legal issues but I think there could be some real commercial implications with the amount of leverage that banks are willing to lend hedge funds in future! If banks decide to reduce their exposure and reduce the amount of leverage they give to HFs (as they wouldn't want to take the losses that Nomura and Credit Suisse have done - estimated to be around $2bn and $3-4bn respectively!) then that could have a real impact on the level of deals and investments that HFs can do in the future and indeed the companies that will need this level of financing from a HF!

    Wasn't the whole reason Archegos ended up being so overleveraged something to do with the fact that it was structured as a family office rather than a traditional hedge fund and therefore didn't have as much scrutiny? That was my takeaway anyway.
     
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    Daniel Boden

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    Wasn't the whole reason Archegos ended up being so overleveraged something to do with the fact that it was structured as a family office rather than a traditional hedge fund and therefore didn't have as much scrutiny? That was my takeaway anyway.
    Yeah it was a family office and so has far fewer regulatory requirements e.g. a much-reduced amount of financial reporting but hedge funds generally do have a lot of leverage hence why I think it could have industry-wide implications going forwards
     
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    Alison C

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  • Nov 27, 2019
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    Hi, does anyone know if there is a guide to analysing commercial news articles? Such as by using SWOT and PESTLE! Thank you!
    Hi - I don't use this very much but the Strive ladies did a podcast on Commercial Awareness a while back and discussed just this. From memory, they suggested a framework from an article, focusing on
    • What?
    • So What?
    • What Next?
    which might at least kick start you. It's good and simple but encompasses the 'why does this matter/what might the impact be?' elements really neatly.

    For the TCLA newsletter, the framework used is The Story (plus any relevant Background) and What it Means for Law Firms and Businesses. If you use the SWOT/PESTLE factors to help you consider the key aspects of the story using those factors in that order, then the relevance will probably be easier to see.

    Another approach to consider might be the factors used for teaching GCSE History Medicine Through Time (yes, a bit random I know but bear with me). What you are trying to do is look for explanations, patterns and factors. RAWGTICCS:
    • Religion (in Ireland and Israel, for example, you can't ignore this for most stories; also some individuals' actions are tied to their beliefs)
    • Attitudes (eg are people ready? if so/not, why? Are there activist tendencies? Cultural blocks such as racism?)
    • War (always expensive - and you could just consider work conflict if actual wars are irrelevant)
    • Governments (what is top of their agenda and how are they managing it?)
    • Technology (has something changed? Is new tech enabling or disabling something that has just happened/might happen?)
    • Individuals (eg Bill Gates, Zuckerberg etc etc)
    • Communications (this can mean everything from emails and Whatsapp to roads - think Suez Canal)
    • Chance (eg what if it had happened on a different day of the week or not in that order)
    • Science (this plays a big role in so much)
    I don't usually use those but going through them now, they are pretty helpful. They might give you a broad canvas to decide what you think should make the cut.

    So maybe collate your own list of key factors?? With a jazzy way to remember them? And put them on the forum?

    EDIT: links to Strive resources
     
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    Dwight

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    Dec 21, 2019
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    Hey everyone,

    Can someone please direct me to a resource (podcast episode, article, blog - whatever really) that provides a useful overview of the energy sector/industry for 2020 or 2021 with the challenges and issues (and possibly the impact on law firms).

    Thanks
     

    Hatikulli

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    Nov 23, 2019
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    Hi everyone,
    I have an assessment centre coming up (YAY!) and I am dreading the commercial awareness question. If I am asked to talk about a recent commercial development and how it can affect the firm, do you think it is a good idea to talk about climate change and its effect on practice areas?

    Thank you in advance :)
    @Jessica Booker
     

    Jessica Booker

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    Aug 1, 2019
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    Hi everyone,
    I have an assessment centre coming up (YAY!) and I am dreading the commercial awareness question. If I am asked to talk about a recent commercial development and how it can affect the firm, do you think it is a good idea to talk about climate change and its effect on practice areas?

    Thank you in advance :)
    @Jessica Booker
    I’d stress it’s unusual for there to be one question that would cover commercial awareness.

    I would probably try to find something more specific within climate change. Climate change is a big topic on its own - there will be lots of different stories within it, so try to focus on one of those specific stories, especially if it is more aligned to the firm’s work.