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Diversification Versus Hedging: Which One Should Investors Pursue?
The base requirements for any diversifying strategy should be uncorrelated returns to stocks, specifically when stock markets crash or decline, and positive returns. But it is remarkably difficult to identify products that fulfill these two criteria.
Dispersion Is The Name Of The Game
Overall, it is fair to say that Private Equity activity is cooling down, but not falling off a cliff.
Is Boutique An Advantage In Venture Capital?
The challenge is not just to get into venture capital, but to get into the right funds within venture. The catch-22 is that the quality funds don’t need any more capital. The demand is often greater than the supply.
ESG: Complex In A Vague Sort Of Way
Here in the US, "green" and "anti-woke" politicians battle it out over public pension investments, while three-fourths of pension participants can't say what "ESG" is supposed to stand for.
Are Private Equity Valuations Too High?
Some investors are concerned that private equity valuations are too high. The Dow fell 8.8% in 2022, while the S&P 500 and the MSCI World each fell around 18%.
The ETF Crusades
Before ESG investing became fashionable there was values-based investing. In its simplest form, values-based investment allows an investor to express religious beliefs through financial instruments, albeit in the crudest of forms: via exclusions.
Manufactured Housing: Predictable Top Line, But Operating Expenses Reset
The manufactured housing sector has an impressive history of managing well through difficult economic and financial periods by providing a truly affordable housing proposition to an undeserved market where extensive barriers to supply exist.
A Couple Of Tough Weeks For Hedge Funds
Hedge funds have experienced some of their worst performance ever over the last couple of weeks. Our best estimate of March performance has the industry down roughly 3%, with most of that loss being booked in the past week or so.
Multi-Strategy Hedge Funds: Jack Of All Trades, Or Master Of None?
Citadel made $16 billion in profits in 2022, Millennium made $8.0 billion, and Point 72 made $2.4 billion. Given such stellar performance, the interest in multi-strategy hedge funds has been rising again. But are these funds worth the interest?
Ark Innovation Vs. Invesco Nasdaq In The Dot.Com Bust
The confluence of deflating valuations and bursting credit bubbles suggests that the fate of expensive, low-quality firms today could be far worse than what befell investors in the dot.com bubble.
Nailing Alternative Investment Portfolio Construction: What Are We Working With?
The analogy of building a house is not too far off from constructing a diversified portfolio. If asset allocation is like deciding the location of your new home, there are many more steps to take before your portfolio is move-in ready.
Exploring The Link Between Lumber Prices And Timber Markets
During the early months of the Covid-19 pandemic, and despite the broad-based economic fallout that ensued, North American lumber markets (markets for building materials like 2 x 4s used for construction framing) experienced historic gains.
Looking Ahead At The PE Landscape With Quantitative Data From 2022
Last year was a mixed bag for the US private equity market. Deal activity remained resilient even as investors grappled with the deceleration of economic growth and the Federal Reserve's aggressive rate hikes.
Can You Really Capture Pollution And Who Is Responsible?
Pollution is a by-product of economic activity and while there is consensus that there needs to be a check, who does what is often a debatable point.
The Problem With PE's Pyramid Scheme Comparisons
For anyone working in finance, having your industry compared to a Ponzi scheme is less than ideal, to say the least. Unfortunately, for the private equity sector, this is what it has come to.
If It Don’t Make Dollars, It Don’t Make Sense
While many have seen an ostensibly higher quality of SaaS companies matriculate to the public markets in the last five years, much of the valuation expansion experienced was driven by low interest rates.
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