John Graham

I sometimes wonder if our banking regulatory regime can be explained by an action grasped by the average toddler - squeezing a ballon. Efforts to clamp down on risk are manifested by the squeeze, but, as the toddler can attest, that does not make the balloon smaller for the air will immediately pop up somewhere else.   In the post Apollo-Athene world, are we basically seeing a reconstitution of traditional banking before the Federal Reserve Act and the regulatory regime set in place in response to the financial cataclysm of the Great Depression?    We have been habituated to consider banks as lumbering, tightly regulated, quasi-public institutions, but for millennia, banks were highly entrepreneurial private institutions.    The fundamental requirement of any bank is not access to Fed liquidity but a source of stable capital. With insurance companies as seemingly bottomless fonts of capital, why dance with regulatory devil? In the pre-GFC days, many of those creating these “new old stock” bank equivalents would have been happily dissatisfied plying their trade in the investment banks, but as with the balloon, a hard squeeze and they pop out somewhere else.    Of course, in a pinch, will we have a future JP Morgan to lock the principals in his library to force consensus on action?   Meanwhile, the balloon continues to get squeezed. #banks #alternativeinvestments #fintech Duke Master in Fintech

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The definition and scope of #privatecredit are both evolving every day. Looking forward to discussing some of the interesting trends we’ve recently been seeing.

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Yesterday, I joined BNN’s “The Close” with andrew bell. We discussed how some of the best Fixed Income opportunities might be right here in Canada. While Nvidia and AI stocks are still grabbing headlines, the Canadian Bond Market is quietly performing in the background. We covered topics like inflation outlooks and curve steepening and even highlighted a top pick in emerging markets. This chat has insights for many investors. Most importantly, I emphasized why Canadian fixed income is set to continue to deliver solid performance in the coming months. Thanks to Andrew and the BNN Bloomberg team for an engaging discussion. While everyone’s focused on the Euro Cup (go Germany!), in the World Cup of Fixed Income investing, Canada could bring home the trophy! https://lnkd.in/gV6JDJnV #euro24 #bonds #Canada #SouthAfrica #fixedincome

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Private debt has emerged as a compelling alternative investment option, offering unique opportunities for diversification and potential downside protection. Dive into our paper, which provides a digestible roadmap and assists in tailoring exposures based on specific risk and return objectives. #PrivateDebt #investment #markets

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How is the shifting correlation between stocks and bonds challenging traditional portfolio strategies? Experts, including MFS Fixed Income Portfolio Manager Ward Brown, addressed how at the Fiduciary Investment Symposium in Toronto. Find out what they had to say about navigating this newfound fixed income landscape.

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One more step forward in catalysing interest in impact investing, see what the Canadian impact investing community is doing below.

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💡In the world of asset allocation - is there any room left for innovation? 💡How does a total portfolio approach holistically change mindset and approach? 💡Where does it work well – and what are its drawbacks? 💡This discussion with Derek Walker of CPP Investments | Investissements RPC covers a LOT of ground - from the origins of total fund investing, to how it works in practice, and what it means to have a "factor first" approach. 💡We delve into whether it works for every organization and what the possible limitations are as well as how we can all innovate in the area of asset allocation more broadly. This is a great discussion that reminds that even established principles can do with a refresh from time to time. 💡With thanks to Ruffer and Nuveen, a TIAA company for supporting production costs of Series 3 of the Fiftyfaces Productions Ltd. #fiftyfacespodcast 💡Sincere thanks to John L Bowman, CFA for introducing me to Derek and for the work he does at CAIA Association to spread awareness of innovation among allocators globally. https://lnkd.in/gGmAbDbb

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Real Estate Investment Trusts (REITs) are poised for a potential resurgence after COVID-related shutdowns and high inflation have sideswiped the industry. Watch as The TCW Group's Iman Brivanlou and Ted Tawinganone examine improving occupancy rates, anticipated interest rate cuts, and long-term secular trends which are expected to drive sector growth and create attractive opportunities for portfolio diversification. https://tcwgrp.com/6xk517

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The concept of venture capital arbitrage is not broken, the execution is. https://lnkd.in/eUWVbuR7 #AssetManagement #OMERS #Ontario #VentureCapital #Rebuttal #Subprime #Pensionfunds

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Isaac Taylor at The Wall Street Journal offered an insightful overview of increasing default risk in the private credit market as indicated by JPMorgan Chase’s asset management group, who pointed to growing stress fueled by declining interest coverage ratios and the quest for higher returns amid rising interest rates. In navigating the complex terrain of credit markets, it's imperative to go beyond default rates and recoveries and factor in the often-overlooked third dimension: credit spreads. Unlike the more uniform aspects of credit analysis, the landscape is dotted with idiosyncrasies, demanding a nuanced approach. Investors must meticulously evaluate each issuer across the triad of defaults, recoveries, and spreads, rather than relying on broad asset class assessments. After all, applying averages across the credit spectrum is akin to using a blunt instrument in assessing risk and reward.   Click here to read the full story: https://lnkd.in/ea59Wqxy     

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The use of ESG criterion in investing is on the rise: in fact, almost 70% of investors note that they review non-financial aspects. Excited to share Vontobel's latest white paper on the integration of #ESG factors into the financial advisory business. Great read on challenges and cognitive biases that advisors face, and how we can overcome them while building cutting-edge portfolios: https://bit.ly/3RUWY11

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In the past week, Bloomberg has had the following headlines: * June 5th: ‘Everything Is Not Going to Be OK’ in Private Equity, Apollo’s Co-President Says   * June 7th: Private Credit Defaults Will Purge ‘Tourist Investors,’ BCI Says   * June 11th: Pimco Warns of More Regional Bank Failures on Property Pain   * June 11th: Private Equity Faces ‘Lost Generation’ on Higher Interest Rates   It would seem that “higher for longer” is causing discomfort for those asset owners and allocators with private market exposure. Those practitioners were likely attracted to the esoteric alchemy of private markets and the allure of higher returns with lower mark-to-market volatility.   Meanwhile, go-forward public market returns for broad equity exposures tethered to the S&P 500 are widely forecast to be meager as well.    Hence, after 40 years of persistently declining yields, quantitative easing (QE) and then ZIRP, the previous, seemingly ever-present, generous supply of adequate, above-spending investment returns - for both commonly utilized public and private market investing - has withered. For the foreseeable future the cupboard is bare, and the continuing potency of long-tenured, status-quo methods, prescriptions and dogmas must now be questioned and reconsidered.   In the new post-ZIRP environment, the most relevant benchmark becomes the asset owner’s minimum required spending threshold plus inflation (typically estimated to be 7-8%).   Therefore, the pursuit of satisfactory investment outcomes that are relevant to asset owners’ actual spending needs and goals is essential, rather than continuing the historically common practice – and expected future folly – of tethering one’s equity beta to that of an equity benchmark whose performance from today’s elevated levels is widely expected to be sluggish and insufficient to fund an investor’s minimum liabilities (ie: payout rates, actuarial hurdles, spending goals, etc.). As the Bloomberg headlines underscore, signposts are popping up warning of the dangers ahead in private assets with the preponderance of NAV loans, secondaries, “democratization”, gating of LP exits, maturity walls, doubts about IRR calculations, distributed to paid-in capital (DPI), etc.   Fresh perspectives and differing ideas about public market equity implementation that strive for satisfactory, above-spending outcomes are starving for attention. Layan Odeh

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Notes From The Desk: CAD Inflation - The Trend is Your Friend. Canadian inflation declined for the fourth month in a row, with all measures now below 3%. By the numbers: - Headline CPI fell from 2.9% last month to 2.7% (2.7% expected). - CPI Trim fell from 3.2% to 2.9% (2.9% expected). - CPI median fell from 2.9% to 2.6% (2.7% expected). The implications: Today’s data brings rate cuts into sharper focus, with yields 5-7 bps lower this morning. The bond markets have a cut at the June 5th meeting as a coin toss. We believe that if they don’t cut in June, they will cut in July.

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How U.S. Rate Decisions Impact BC's Wallets As the U.S. Federal Reserve nears its next rate decision (April 30 - May 1), the ripple effects extend beyond American borders, directly impacting the financial well-being of residents in British Columbia. The interconnected nature of global economies means that fluctuations in U.S. interest rates can significantly influence the rates BC residents pay on mortgages and loans, affecting everything from household budgets to savings. Diverging from U.S. monetary policy poses several challenges for Canadian central bankers. Lowering interest rates in Canada relative to higher rates in the U.S. could weaken the Canadian dollar. This would make exports more competitive but also raise import costs, potentially leading to a wider trade deficit. Furthermore, a significant interest rate differential might prompt capital to flow out of Canadian assets in search of higher returns in the U.S., pressuring the Canadian dollar and adding to inflationary forces—factors the Bank of Canada must consider as it seeks to control inflation. Investors in British Columbia should pay close attention to the U.S. Federal Reserve's upcoming rate decision, as it will have significant implications for Canadian monetary policy and market conditions. Key sectors such as real estate and financial services are susceptible to changes in interest rates. Understanding these dynamics will help investors make informed decisions about adjusting their portfolios to better handle potential currency fluctuations and benefit from the prevailing economic environment. #BCFinance #CanadaInterestRates #InvestmentStrategyCanada

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Is it ever too early to integrate ESG into business operations? Join me today at the Together | Ensemble Conference at the University of Waterloo, where my panel will explore why it's never too early to incorporate ESG principles. We will discuss how ESG integration enhances fundraising, performance, and risk management from seed to scale. Panel Topic: Integrating ESG From Seed to Scale: Is it Ever too Early to Integrate ESG? #sdgs #impactinvesting #ESG #ESGprinciples MEDA (Mennonite Economic Development Associates) Mastercard Foundation Africa Growth Fund

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I would like to discuss the issues on the April 1 Nikkei article titled "Good Performance, Future Strategies of Japanese Companies: Time to Increase Personnel Expenses and Capital Expenditures."

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While my career as a voice actor may be up for debate – one thing that is not is my pride in the efforts my team and Mackenzie have taken to enhance Canadian investors’ ability to access sustainable investments over the past decade. This 54th Earth Day is themed after “Planet vs Plastic”, signaling two key achievements including Canada’s hosting of negotiations on a Global Plastics Treaty this week, as well as the launch of the world’s first Plastic Bond earlier this year. The life cycle of plastics has long challenged the global ecosystem, beginning with emissions from manufacturing to improper recycling practices. Looking forward, tackling these complex problems will require both global policy and targeted investment. The ability to create quantifiable alpha through investing in impact-focused instruments is something that we should be proud to embrace not only on Earth Day but every day. As a Fixed Income portfolio manager, I began my career managing inflation linked bonds, an asset class which remains close to my heart even decades later, the past few years have reaffirmed that in the world of macro: inflation reigns supreme. While demand side factors can be adjusted through central bank policies, supply side factors are notoriously difficult to impact. As worsening climate conditions and acute extreme weather events threaten our ability to sustainably maintain core food sources, risks to inflation shift to the upside. Volatility from extreme rainfall to droughts has seen surging prices in coffee and cocoa beans. Thanks to our incredible partners in Marketing for your support in the creation of such an outstanding video and for our continued collaboration! 

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For investors in artificial intelligence, it may be time to expand the approach. We recommend considering international companies and exploring potential opportunities across the value chain, including infrastructure, software and AI applications. Explore the difference between AI 1.0 and 2.0 as this game-changing technology continues to evolve. https://bit.ly/3UmG0tO. International investments may not be suitable for all investors. International investing involves a greater degree of risk and increased volatility. Changes in currency exchange rates and differences in accounting and taxation policies outside the U.S. can raise or lower returns. Some overseas markets may not be as politically and economically stable as the United States and other nations. Investments in international markets can be more volatile.

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