ALTERNATIVE MARKETS UPDATE – MID NOVEMBER 2024

​There is no doubt that the US election has had a significant impact on market performance since last week. President-elect Trump achieved a decisive victory, including a win in the popular vote. Furthermore, the Republican Party also secured victories in both the House of Representatives and the Senate. This should facilitate the implementation of the majority of the planned changes. Following the confirmation of Trump as the winner, equities began to rally. While there was already a change in equity sentiment following the first rate cut by the Fed, confidence continued to grow when Trump emerged victorious. The conclusion of the US election in a relatively smooth process undoubtedly had a part to play. This has led to a reduction in uncertainty in global markets. The second significant factor is the election of Trump as President. Investors are confident that the new administration will make financial markets a priority, as was the case in his first term. As a result, the S&P 500 reached a new record high of 6,000 points for the first time. The Nasdaq reached a new milestone, surpassing the 19,000 mark for the first time. In the commodities market, this had the opposite effect. Gold, a traditional asset used to manage uncertainty, saw a decline from its previous highs. In the context of a bullish market sentiment, gold is perceived as a less attractive investment. Investors are inclined to hold risk-on assets with higher potential returns, as opposed to gold, which is used to mitigate risk. The price of gold fell from $2,700 to $2,550 over the past week. Crude oil initially gained, but soon began to decline. The Republican agenda supports fossil fuels and is likely to push the industry forward. This is likely to result in more supply and overall lower prices. WTI crude oil declined from $71 per barrel to $68. Lastly, the big winner from the US election result is the cryptocurrency market. Trump's campaign trail agenda was notably pro-crypto, with a particular emphasis on the potential for the US government to establish a Bitcoin reserve. It should also result in a clear regulation of cryptocurrencies during his tenure. This prospect prompted a surge in Bitcoin’s price, reaching a new record high of $93k. The subsequent 45% rally in slightly more than a week triggered another bull run in the cryptocurrency market, with Ethereum not far behind with gains of 38% in a single week. Figure 1 illustrates the price development since October 2024 and the impact of Trump as US President Elect.

*|MC_PREVIEW_TEXT|*

RESEARCH PERSPECTIVE VOL. 239 November 2024 Alternative Markets Update There is no doubt that the US election has had a significant impact on market performance since last week. President-elect Trump achieved a decisive victory, including a win in the popular vote. Furthermore, the Republican Party also secured victories in both the House of Representatives and the Senate. This should facilitate the implementation of the majority of the planned changes. Following the confirmation of Trump as the winner, equities began to rally. While there was already a change in equity sentiment following the first rate cut by the Fed, confidence continued to grow when Trump emerged victorious. The conclusion of the US election in a relatively smooth process undoubtedly had a part to play. This has led to a reduction in uncertainty in global markets. The second significant factor is the election of Trump as President. Investors are confident that the new administration will make financial markets a priority, as was the case in his first term. As a result, the S&P 500 reached a new record high of 6,000 points for the first time. The Nasdaq reached a new milestone, surpassing the 19,000 mark for the first time. In the commodities market, this had the opposite effect. Gold, a traditional asset used to manage uncertainty, saw a decline from its previous highs. In the context of a bullish market sentiment, gold is perceived as a less attractive investment. Investors are inclined to hold risk-on assets with higher potential returns, as opposed to gold, which is used to mitigate risk. The price of gold fell from $2,700 to $2,550 over the past week. Crude oil initially gained, but soon began to decline. The Republican agenda supports fossil fuels and is likely to push the industry forward. This is likely to result in more supply and overall lower prices. WTI crude oil declined from $71 per barrel to $68. Lastly, the big winner from the US election result is the cryptocurrency market. Trump's campaign trail agenda was notably pro-crypto, with a particular emphasis on the potential for the US government to establish a Bitcoin reserve. It should also result in a clear regulation of cryptocurrencies during his tenure. This prospect prompted a surge in Bitcoin’s price, reaching a new record high of $93k. The subsequent 45% rally in slightly more than a week triggered another bull run in the cryptocurrency market, with Ethereum not far behind with gains of 38% in a single week. Figure 1 illustrates the price development since October 2024 and the impact of Trump as US President Elect. Figure 1: Performance of various Assets Since October 2024 and Since Trump Became President Elect, Sources: Investing, Standard & Poor’s, Nasdaq, Wisdomtree, ICE & CoinMarketCap, November 2024 With the presumably beneficial impact of a Trump administration on financial markets, private markets – in particular private equity and venture capital – are likely to recover from the poor performance of the last few years. It is important to note that a significant contributing factor was a natural correction from the very steep surge that occurred in 2021 and 2022. During this period, the majority of private companies attempted to raise capital at extraordinarily high valuations. Consequently, many companies had accumulated substantial capital, reducing the need for further fundraising, which in turn led to a decline in private equity activity. As illustrated in Figure 2, the valuations of companies in Series A to Series D+ range increased by between 100% and 145% in 2021. In 2022, there was a slight decrease in valuations, which fell between 70% and 130%. The significant deal activity in those years has resulted in a decline in gains between rounds to 10% to 50% in 2023 and 2024. While a soft landing in 2025 is still a possibility, financial markets are expected to stabilise. The further anticipated rate cuts by the Fed, along with a beneficial view from the Trump administration, are likely to be key contributors to this outcome. This should make venture capital and private equity more appealing again, as IPO and exit opportunities will rise. Currently low valuations could spur another strong bull market, especially for venture capital. Figure 2: US Venture Capital Median Step-up by Series from 2014 to Q3 2024, Source: Pitchbook, November 2024 Despite its previous success as one of the most promising emerging sectors, FinTech has faced significant challenges over the past two years. The sector saw significant growth and the emergence of numerous unicorns during the 2020/21 bull market. However, the sector was affected not only by the general decline in private equity but also by a shift in investor interests. The sector was subsequently overshadowed by the rise of artificial intelligence in the subsequent bull market. The value of public FinTech companies doubled from the onset of the pandemic to the sector's peak in autumn 2021. Private FinTech companies saw an even more significant increase, resulting in threefold quarterly investments. Prior to the pandemic, the sector saw consistent inflows of approximately $12 billion per quarter, which increased to $42 billion in Q4 2021. Investments in private companies then saw a gradual decrease until reaching approximately $10 billion per quarter by Q1 2023. This trend continued with a significant decline in the third quarter of 2024. However, with the anticipated upswing in financial markets, the FinTech sector is well-positioned for a strong rally. In addition to the upside elaborated for venture capital, FinTech is in an even more advantageous position. In the presumably more active IPO market, the FinTech sector will rise to prominence again with blockbuster IPOs from companies like Klarna and Revolut. Additionally, as shown in Figure 3, rising public FinTech stocks add further optimism for the sector. Figure 3: Public Fintech Stock Prices and Private Fintech Investments from Q2 2019 to Q3 2024, Sources: Dealroom, Investing, Mirae Asset Financial Group (Global X FinTech ETF), November 2024 STONE MOUNTAIN CAPITAL Stone Mountain Capital is an advisory boutique established in 2012 and headquartered in London with offices Pfaeffikon in Switzerland, Dubai and Umm Al Quwain in United Arab Emirates and Tallinn in Estonia. We are advising 30+ best in class single hedge fund and multi-strategy managers across equity, credit, and tactical trading (global macro, CTAs and volatility). In private assets, we advise 10+ sponsors and general partners across private equity, venture capital, private credit, real estate, capital relief trades (CRT) by structuring funding vehicles, rating advisory and private placements. As of 2nd February 2024, Stone Mountain Capital has total alternative Assets under Advisory (AuA) of US$ 62.4 billion. US$ 48.5 billion is mandated in hedge funds and US$ 13.9 billion in private assets and corporate finance (private equity, venture capital, private debt, real estate, fintech). Stone Mountain Capital has arranged new capital commitments of US$ 1.95 billion across more than 25 hedge fund, private asset and corporate finance mandates and has been awarded over 100 industry awards for research, structuring and placement of alternative investments. As a socially responsible group, Stone Mountain Capital is a signatory to the UN Principles for Responsible Investing (PRI). Stone Mountain Capital applies Socially Responsible Investment (SRI) filters to all off its alternative investment strategies and general partners on behalf of investors.    Our Team   Our Mandates   Our Research   Our News     Contact We are able to source any specific alternative investment search and maintain relationships with dozens of best-in-class hedge fund managers, private equity and private debt general partners (GPs) and real estate and infrastructure developers. We don’t pass any costs on to our investors, since our compensation comes from our mandated managers, GPs and developers. Please contact us, should you require further information about our solutions.   Schedule a call with the team Main UK Tel.: +44 207 268 4905 Main Switzerland Tel.: +41 44 586 45 55 Main UAE Tel.: +971 4383 5386 We have updated our privacy policy to take into account the new requirements of the GDPR. Please take some time to read the policy, which explains what personal data we collect, why we collect it, how we use it and other relevant information. You can review our privacy policy here, our anti-bribery policy here and our commitment to the UK stewardship code here. Stone Mountain Capital LTD is registered (Reference: ZA589246) in the data protection public register of the Information Commissioner's Office ('ICO') in the United Kingdom. No action is required if you wish to remain in contact, however please reply if you want your details removed by contacting us at [email protected] or by using the unsubscribe button below. In case this newsletter has been forwarded to you and you want to subscribe, please click here. Stone Mountain Capital is a limited company (LTD) registered in England & Wales with registered number 8763463. The registered address is: One Mayfair Place, Devonshire House, Mayfair, London W1J 8AJ, England, United Kingdom. Stone Mountain Capital LTD is authorised and regulated with FRN: 929802 by the Financial Conduct Authority (‘FCA’) in the United Kingdom. Stone Mountain Capital LTD is the Distributor of foreign collective investment schemes distributed to qualified investors in Switzerland. Certain of those foreign collective investment schemes are represented by First Independent Fund Services LTD, which is authorised and regulated by the Swiss Financial Market Supervisory Authority (‘FINMA') as Swiss Representative of foreign collective investment schemes pursuant to Art 13 para 2 let. h in the Federal Act on Collective Investment Schemes (CISA). Stone Mountain Capital LTD conducts securities related activities in the U.S. pursuant to a Securities and Exchange Commission ('SEC') Rule 15a-6 Agreement with Crito Capital LLC, a U.S. SEC registered broker-dealer, and member of Financial Industry Regulatory Authority (‘FINRA’), Securities Investor Protection Corporation (‘SIPC’) and Municipal Securities Rulemaking Board (‘MSRB').  Stone Mountain Capital Partners LLP is incorporated as limited liability partnership in England & Wales with company registration number: OC430515. Its registered office is: One Mayfair Place, Devonshire House, Mayfair, London W1J 8AJ, United Kingdom. Stone Mountain Capital Partners LLP is registered as Appointed Representative with FRN: 934964 of Stone Mountain Capital LTD which is authorised and regulated with FRN: 929802 by the Financial Conduct Authority (‘FCA’) in the United Kingdom.  Stone Mountain Capital Ventures LLP is incorporated as limited liability partnership in England & Wales with company registration number: OC439509. Its registered office is: Devonshire House, ​One Mayfair Place, Mayfair, London W1J 8AJ, United Kingdom. Stone Mountain Capital Ventures LLP is incorporated as Appointed Representative with FRN: 967914 of Stone Mountain Capital LTD which is authorized and regulated with FRN: 929802 by the Financial Conduct Authority (‘FCA’) in the United Kingdom. Stone Mountain Capital Advisers OÜ is registered as Private Limited Company Osaühing (OÜ) and investment company at: Harju maakond, Kesklinna linnaosa, Järvevana tee 9, 11314, Tallinn, Estonia with company registration number: 17054974. Stone Mountain Capital FZC is registered as Free Zone Company (FZC), a limited liability company in United Arab Emirates (UAE) at: Atrium Tower, Office AT-101, 1st Floor, One UAQ, P.O. Box: 7073, UAQ Free Trade Zone, Umm Al Quwain, United Arab Emirates with company registration number: 6813. Stone Mountain Capital FZC (DMCC Branch) is registered as branch of Stone Mountain Capital FZC and investment company at: Almas Tower, Level 54, Office 5431, P.O. Box: 112911, Jumeirah Lake Towers (JLT), Dubai Multi Commodities Centre (DMCC) Free Zone, Dubai, United Arab Emirates with company registration number DMCC-912005. All information in this perspective including research is classified as minor acceptable non-monetary benefits ('MNMB') in accordance with article 11(5)(a) of the MiFID Delegated Directive (EU) 2017/593 and FCA COBS 2.3A.19. For United Arab Emirates (excluding Dubai International Financial Centre (’DIFC’) and Abu Dhabi Global Market (’ADGM‘)) residents only. This website, any document, and the information contained herein, does not constitute, and is not intended to constitute, a public offer of securities in the United Arab Emirates (’UAE‘) and accordingly should not be construed as such. Securities are only being offered to a limited number of exempt investors in the UAE who fall under one of the following categories of Exempt Qualified Investors: (1) an investor which is able to manage its investments on its own (unless such person wishes to be classified as a retail investor), namely: (a) the federal government, local governments, and governmental entities, institutions and authorities, or companies wholly-owned by any such entities; (b) foreign governments, their respective entities, institutions and authorities or companies wholly owned by any such entities; (c) international entities and organisations; (d) entities licensed by the Securities and Commodities Authority (the ’SCA‘) or a regulatory authority that is an ordinary or associate member of the International Organisation of Securities Commissions (a “Counterpart Authority”); or (e) any legal person that meets, as at the date of its most recent financial statements, at least two of the following conditions: (i) it has a total assets or balance sheet of AED 75 million; (ii) it has a net annual turnover of AED 150 million; (iii) it has total equity or paid-up capital of AED 7 million; or (2) a natural person licensed by the SCA or a Counterpart Authority to carry out any of the functions related to financial activities or services, (each an “Exempt Qualified Investor”). The Securities have not been approved by or licensed or registered with the UAE Central Bank, the SCA, the Dubai Financial Services Authority (’DFSA‘), the Financial Services Regulatory Authority (’FSRA’) or any other relevant licensing authorities or governmental agencies in the UAE (the ‘Authorities‘). The Authorities assume no liability for any investment made as an Exempt Qualified Investor. This website, any documents and securities are for the use of Exempt Qualified Investors only and should not be given or shown to any other person (other than employees, agents or consultants in connection with a named addressee's consideration thereof). Stone Mountain Capital FZC is registered as Free Zone Company (FZC), a limited liability company in United Arab Emirates (UAE) at: Atrium Tower, Office AT-101, 1st Floor, One UAQ, P.O. Box: 7073, UAQ Free Trade Zone, Umm Al Quwain, United Arab Emirates with company registration number: 6813. Stone Mountain Capital FZC (DMCC Branch) is registered as branch of Stone Mountain Capital FZC and investment company at: Almas Tower, Level 54, Office 5431, P.O. Box: 112911, Jumeirah Lake Towers (JLT), Dubai Multi Commodities Centre (DMCC) Free Zone, Dubai, United Arab Emirates with company registration number DMCC-912005. Copyright © 2024 Stone Mountain Capital LTD. All rights reserved. Any business communication, sent by or on behalf of Stone Mountain Capital LTD or one of its affiliated firms or other entities (together "Stone Mountain"), is confidential and may be privileged or otherwise protected. This e-mail message is for information purposes only, it is not a recommendation, advice, offer or solicitation to buy or sell a product or service nor an official confirmation of any transaction. It is directed at persons who are professionals and is not intended for retail customer use. This e-mail message and any attachments are for the sole use of the intended recipient(s). Our LTD accepts no liability for the content of this email, or for the consequences of any actions taken on the basis of the information provided, unless that information is subsequently confirmed in writing. Any views or opinions presented in this email are solely those of the author and do not necessarily represent those of the limited company. Any unauthorised review, use, disclosure or distribution is prohibited. If you are not the intended recipient, please notify the sender by reply e-mail and destroy all copies of the original message and any attachments. By replying to this e-mail, you consent to Stone Mountain monitoring the content of any e-mails you send to or receive from Stone Mountain. Stone Mountain is not liable for any opinions expressed by the sender where this is a non-business e-mail. Emails are not secure and cannot be guaranteed to be error free. Anyone who communicates with us by email is taken to accept these risks. This message is subject to our terms at our Disclaimer.