Dan Rosenbaum

Looking forward to #DigitalAssetsWeek in May and my panel discussion: The CBDC and Stablecoin 2024 Evolution!

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Fascinating to hear S&P Global Sustainable1’s Frédéric Samama sounding the alarm on how fast carbon budgets are depleting, while pointing to financial innovation and solutions supporting investors in meeting their commitments and having an impact in the real world. Institute of International Finance #2024IIFEuropeanSummit S&P Dow Jones Indices

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It was great to launch our whitepaper - Building the Digital Asset Securities Ecosystem - at Consensus along with Euroclear, Clearstream and Boston Consulting Group (BCG). The whitepaper provides a risk and control framework for digital asset securities to ensure they are as safe and sound as the traditional securities markets. I was delighted to join Jørgen Ouaknine from Euroclear, Gregory Rodeheaver from Clearstream and Kaj Burchardi from Boston Consulting Group (BCG) to discuss the whitepaper and how three leading FMIs are partnering to help drive adoption of digital asset securities. Download the whitepaper and watch the video here: https://okt.to/dWvqlz #DTCC #DigitalAssets #Innovation

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Bain & Company’s latest PE review sheds interesting - and critical – light on the current refinancing hurdles faced by portfolio companies. Their suggestion to echo strategies from the aftermath of the 2008-2009 financial crisis points to the need for proactive measures to navigate current challenges, like a 66% drop in exit values. Spreading the report via the Financial Times: https://lnkd.in/er77Q75b Toby Nangle #PrivateEquity #PortfolioCompanies #GlobalEconomy

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Since this was recorded in March market expectations for rate cuts fell dramatically and have now moved up from the recent bottom. Clearly Fed policy continues to (in the short run) drive both the REIT credit and equity narratives.

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One area of public equity investing that have not seen the same rally as the one occurring across financial markets in 1H24, are SPACs, which have experienced a “boom to bust” reversal of fortunes in the past few years. Michael C. Eisenband, FTI Consulting's Co-Leader of Corporate Finance & Restructuring, gives his thoughts: https://lnkd.in/gDKdF8Ju #SPACs #Restructurint

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On June 4, Fiera Capital Senior Portfolio Manager Dominic Bokor-Ingram will be attending the Markets Group 3rd Annual Southern California Institutional Forum in Beverly Hills to discuss the ongoing evolution of investor mindsets within the less examined opportunity sets across select and smaller emerging markets. The topical debate regarding the suitability and merit of an asset class that has soured so many investors in the past is a challenging one to unfold. We hope to simplify some of these complexities and look forward to engaging in constructive dialogue with institutional allocators, consultants, and other professional investment practitioners during the forum and throughout next week. #emergingmarkets #fieracapital

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Good piece by Coalition Greenwich. It discusses the use of consultants by institutional asset owners to help evaluate managers, asset allocation, etc. Hopefully future updates will address the fact that the value-add of such consultants are hard to determine as they also provide the performance reports clients rely upon.

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BCG's 2024 Global Asset Management Report is, like alot this year, AI themed. Some of the interesting highlights: - global assets under management (AuMs - defined as those that are professionally managed and charged management fees) grew by 12% in 2023 to $120 trillion after a 9% drop in 2022. - Of that, the Middle East and Africa was $2.5 trillion (2% of global market AuMs) and had grown at 13%, slightly faster than the global average - While alternatives represented less than 25% of global AuMs, they generated more than half the fees. Alternatives were made up mostly of private equity (45%), followed by real estate and private credit with 19% each - Since 2006, 90% of asset mgr's revenue growth was from market appreciation, helped by low interest rates. - In 2023, 70% of flows to global mutual funds and ETFs were for passive strategies - Fee compression continues with an average fee (excluding alternatives) of 22bps in 2023 compared to 26bps in 2010; Money Markets and bonds led fund inflows, public equities saw outflows in 2023 - Less than 4 of every 10 mutual funds' launched in 2013 still exist in 2023 - On AI, BCG surveyed 57 global asset mgrs with $15 trillion under mgmt. 39% said they expect to have at least one full-scale AI use case - mostly in sales and IT - in the next six months - Sales: AI automation of RFPs, proposals, emails, social media content, and identifying client targets (e.g., filtering public data) - IT: app development and code generation #AI #innovation #middleeast #assetmanagement #bcg

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Read our latest Private Market Insights newsletter for Ares’ views on the industrial real estate sector and the compelling entry point that may be emerging for value investors

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The transition in emerging markets and developing economies represents a multi-trillion dollar investment opportunity. Within emerging markets, India continues to be a major market for decarbonization, having pledged to reach net-zero emissions by 2070. Should India achieve its stated ambition, it would reduce global warming by 0.2 degrees celsius.  Leveraging ambitious government and corporate India decarbonization goals, the appetite for #cleanenergy continues to grow at scale in India. This provides an opportunity for private #climatefinance to bridge the massive scale-up needed for the clean energy #transition. Over the years, we have leveraged our operating capabilities and global expertise to build a high-quality portfolio of #renewableenergy assets across India. Today our portfolio comprises over 22 GW of wind and solar assets in operation or in development across leading platforms. We are committed to helping #India decarbonize and achieve its #netzero goals. Read our latest insight paper here: https://brkfld.co/25v9ru9g

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“As we approach the second half of the year, a number of investment themes for equity investors come to mind: 1) Breadth may not yet be back but is poised to return; 2) In the US, small is big again; 3) Time to find value in “value”; 4) Japan — it’s different this time!” Andrew Heiskell, Equity Strategist Read now: https://lnkd.in/eWmrdwCj #insuranceassetmanagement #insuranceassetmanagementstrategygroup

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As the DOW Jones closed above 40,000 for the first time in its history, Olaolu Aganga recently joined the team on CNBC’s Closing Bell to discuss our playbook in alternatives and current strategic and tactical asset allocation views. Through what many have described as a “supercycle” election year, we see large asset owners seeking out stability in longer-term allocations to alternatives – including private credit and private equity. Typically marked to market at a slower rate, exposure to alternatives can provide important stability through more volatile periods. Balancing strategic and tactical decision making across portfolios is all about assessing risk and return relative to time horizon. Strategically, we’ve been neutral on Europe for some time, but tactically, we’ve been looking internationally to capture opportunities across emerging markets, most recently in China where we see valuation distortion. Join the Mercer Investments team and Olaolu Aganga LIVE in Nashville for the Global Investment Forum June 10-12: bit.ly/3Vm71yw

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Great slide to visually get a sense of the #privateequity players and the scale of #USA dominance. Currently, only 13% (2,790) of U.S. companies with over $100 million in revenue are public, which means there are over 19,000 private companies that could potentially offer investment opportunities…. If you’re eligible to get access? The number of public firms has fallen by roughly half since 1997, while the number of companies backed by private equity funds has doubled from 2006 to 2017.

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“We expect to grow faster than the projected industry average over the next five years,” the Los Angeles-based alternative asset manager wrote in a presentation posted Tuesday. Ares is among several publicly traded alternative asset managers to set ambitious targets for growth in the coming years. Brookfield Asset Management has said it aims to raise fee-bearing capital to $1 trillion by 2028, while KKR & Co. Inc. is looking to pass $1 trillion in assets in five years and Apollo Global Management plans to reach the same target by 2026. Blackstone Inc. hit the $1 trillion milestone last year. Executives identified credit – its largest asset class – as well as wealth and insurance as key areas of growth. In the wealth business, Ares aims to increase assets under management to about $100 billion in 2028, up from about $25 billion now. Shares of Ares have surged nearly 73% over the past 12 months as the firm benefited from higher interest rates and strong demand for private credit.

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In MFS’ view, sustainability considerations are jigsaw pieces of the fundamental research puzzle and need to be integrated when material. Learn about our approach, 2023 engagement activities and more in our latest Annual Report. bit.ly/3UWXH2a.

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#Earnings commentary from consumer-oriented firms about waning pricing power and tighter margins looks troubling. Marija Veitmane, head of #equity strategy, returns to #STTStreetSignals with her take on a bifurcated earnings environment, where #tech still trumps all but the outlook for consumer stocks, #banks and sector rotation strategies is murkier. Peter Vincent, head of trading in EMEA, is also back, with his #macro spin on consumer trends, and where rate markets and #currencies can go. http://ms.spr.ly/6044YVt5p

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CLO Equity has gained recognition as an institutional investment strategy in recent years. And with good reason. CLO Equity is relatively uncorrelated to other core asset classes and offers the potential for high cash flow and attractive total returns. The drivers of CLO Equity returns, however, are more complex than meets the eye. Conventional wisdom is that the best times to issue CLOs is when the arbitrage (“arb”), or net interest margin, is historically wide. Yet, our analysis, detailed in a recently issued white paper authored by my colleague Stephanie Walsh, suggests this sentiment might be misleading. Despite high initial equity arbitrage being a strong predictor of new CLO creation, it has actually shown a negative correlation with ultimate CLO equity performance. So what are the drivers of CLO Equity performance? To answer this question, it’s essential to look beyond just the arb. We find there are other key influences on CLO performance, such as asset prices, refinancing transactions, and manager expertise, among others. 1) CLOs issued during market downturns, such as in 2020 and 2022, exhibited significant upside, despite poor initial arbitrage, due to subsequent market rallies. 2) Moreover, the ability for CLOs to refinance liabilities after non-call periods added flexibility and, in many cases, substantially lowered debt costs, as seen in the refinancing wave of 2021. 3) Manager expertise also plays a crucial role. We’re privileged to have a 23+ year track record of managing, structuring, trading, and investing in CLOs. Through that experience, we’ve come to understand that credit expertise, loss avoidance, and trading acumen are often key components of CLO portfolio returns. As with many aspects of investing, there is more than meets the eye when assessing the CLO space in our view. We believe one cannot simply look at one or two metrics to determine whether a CLO will perform better or worse relative to history or other CLOs. The arb, and its weak correlation to ultimate CLO equity returns, is a prime example of this. Rather, there are a multitude of factors driving CLO equity returns, some market driven, and others influenced by manager performance and deal structuring. We believe it is important for investors to understand all of these factors when evaluating CLOs and CLO managers. Explore our full thoughts: https://lnkd.in/e48bEvWN

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