Julian Salisbury

Thanks to Paula Campbell Roberts from KKR for joining us this month on our How Should I be Positioned podcast. We great conversation about the current state of the US economy, as well as the outlook for inflation, growth, interest rates, and market volatility over the next five years. One thing that we agree on is that the US economy is in a new macro regime. This has implications for strategic asset allocation decisions, which we also discuss. Listen to the podcast for all the details. #shareubs https://lnkd.in/eJasj_EZ  

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If you think portfolio risk management is just about diversification, think again. This article sheds light on some surprising strategies that challenge common perceptions. Here are some thought-provoking takeaways: - Did you know that reducing the number of investments in a portfolio can sometimes actually decrease risks? It's all about strategic selection. - Contrary to popular belief, actively managing risk doesn't necessarily mean more frequent trading. In fact, a hands-off approach can be a smart move. - One of the key points discussed is the importance of understanding the correlation between investments, a factor often overlooked in risk management strategies. - Asymmetric risk and the role it plays in portfolio management is explored, offering a fresh perspective on balancing risk and return. - Ever considered tail risk hedging? This article dives into this lesser-known strategy that can enhance risk management effectiveness. Share your thoughts and feelings on these unconventional risk management strategies. https://lnkd.in/ecgSpH93

Kudos to Phil Bak. He's Toto the dog pulling back the curtain and exposing that the all-powerful Oz is a fake. In an unusually candid article filled with jaw dropping nuggets, here are four gems: - "The quarterly returns for private real estate investments are volatile, we just don’t see the volatility. Of course, you already knew that. The very notion that volatility ceases to exist simply because an investment is not traded in a liquid marketplace is silly. Just because an investment is not traded cannot possibly make it less volatile or less correlated, but smooth returns are very much part of the appeal; so much so that industry wag Cliff Asness humorously observed that ‘volatility laundering’ is not just a feature, it’s the main attraction." - "BREIT is the poster child for the "democratization of private assets" but the discounted deal with the University of California doesn't sound very democratic at all. If your fund manager has to lure investors with an 11.25% guarantee to invest alongside you, you should probably get out as soon as you can - or get your own 11.25% guarantee." - "What if Blackstone has been reporting inflated returns for years? What if it all ends with them saying, “Just kidding”? It might call everything into question. This space has been gaining market share at a rapid pace but if this doesn’t have a happy ending people might not trust these guys in polyester vests as much as they used to. And if you don’t trust PE guys, who do you trust?" - "...remember that it’s not an illiquidity premium that you want to pay for. It’s a liquidity premium. Because when liquidity matters, it suddenly matters the most." The time is ripe for a fresh perspective on public market equity implementation that is complementary to private assets' absolute return orientation. A perspective that focuses on satisfactory investment outcomes that align with an asset owner's actual spending needs and goals, rather than continuing the historically common practice – and expected future folly – of tethering one’s public 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 minimum liabilities (ie: payout rates, actuarial hurdles, spending goals, etc.). Importantly, such a change in public equity perspective comes without ratcheting-up illiquidity, non-transparency, leverage or alts-like fees & expenses. .

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Now on substack: our research paper on BREIT's liquidity and valuation, along with the story of this research being stifled for a whole year. https://lnkd.in/gH6BW8TX

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MSO earnings season starts this week, with eight of the top ten US operators reporting. Consensus analyst expectations are for the top ten MSOs to show a Q/Q 2.62% contraction in revenue and adjusted EBITDA to decline 6.18%. (1/3) The top ten MSOs' Y/Y revenue is expected to grow by 3.20%, and AEBITDA is expected to expand by 17.30%. Analysts predict the highest Y/Y revenue growth for Ascend Wellness Holdings (CSE: AAWH.U / OTCQX:AAWH) at +22.40%, and Cresco Labs is predicted to have the best Y/Y improvement in AEBITDA at +62.00%. Finally, here are some of the companies reporting this week: May 7: Ascend Wellness Holdings (CSE: AAWH.U / OTCQX:AAWH) May 8: Green Thumb Industries (GTI), Verano, MariMed, Inc. May 9: Curaleaf, Trulieve, TerrAscend, Cannabist, Jushi Holdings Inc. Source: FactSet

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Over 240 firms added 450+ strategies to the Nasdaq eVestment platform in 1Q24 for visibility with consultants, intermediaries, and investors. The newly marketed strategies were added by firms domiciled across 30 unique countries spanning from Australia to Singapore to Switzerland, and 28% indicated integration of ESG considerations into their respective investment processes. From a geographic standpoint almost 200 were broadly diversified (i.e. had a global investment focus) in nature, however, in total the newly promoted strategies spanned over 30 different regions across #balanced, #equities, #fixedincome, #hedgefund and #realestate capabilities. Please see the link below for further details… (managers please do contact the Nasdaq eVestment team should you have questions regarding optimizing presence/visibility, opportunities, and relevant trends/insights of those areas where your firm has expertise!).

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What is Power-to-X and how can it fill the gaps in the renewable energy journey and help technologies extend into new sectors in the future? Read our latest digital article. #nuveeninfra

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Final agenda - Berenberg NextGen #AI Powered Funds Forum, June 27, 2024, hosted at the Berenberg office, Bockenheimer Landstrasse 25, Frankfurt am Main, Germany. As the host and moderator for the upcoming #AI event, I am pleased to have had the experience, together with team Berenberg, to offer a full day agenda, comprised of expert speakers and panel members coming from and making a contribution to the #AI powered asset and wealth management industry, who will share exciting developments and practical applications. Every day we are observing encouraging news from technology firms, emerging, boutique and large established investment managers who are embracing #AI to offer active and passively managed products, services, tools and solutions. These innovative market participants are applying AI to either enhance investment decision making and or offering investment strategies managed by #AI. For investors the AI powered investment management industry is providing unique opportunities, options and alternatives as to how money can be managed. There are a few seats still available for the June 27 AI event. Feel free to contact me directly for additional information fred.sage@nextgen-alpha.com. Berenberg,Nico Baum,Klaus Naeve,Matthias Born,RAM Active Investments,Emmanuel Hauptmann,Tian GUO, PhD,Google Cloud,Sahil Suri,artellium, Dr. Bernhard Paul Breloer, Christopher Krauss, PhD,Thomas Fischer,ACATIS Investment KVG mbH,Kevin Endler,Eric Endress, PhD,Tungsten Capital Management GmbH,Michael G.,FIRST PRIVATE Investment Management,Richard Zellmann,Christian Schuster,Dr. Sebastian Wenz,Colivar,Mahnoosh Mirghaemi,Dr. Karen Wendt,NNAISENSE,Jonathan Masci,Florian Trifterer

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The graph in this article shows the WACC and the percentile rankings of 41 US BSL #CLO managers based on their average percentile across at least 10 of their deals from the 2013 to 2023 vintages, according to asset prices as of May 28, 2024. It is interesting to note that managers with a primary CLO blended DM print of below 190 bps are represented across the performance percentiles. In other words, managers in both the top and bottom quartiles managed to print their CLO liabilities with a blended DM of less than 190 bps. If you’re an investor in the CLO market, we invite you to register with us using your business email address to gain complimentary access to our freemium content.

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[PODCAST] Higher for longer interest rates are having profound effects on endowment and foundation portfolios across the US. The volatility this creates is making it more challenging to construct portfolios for the long-term and creating questions around liquidity management. Bill Burns and Meggan O'Shea join Texas Hemmaplardh in the latest episode of Critical Thinking, to discuss how these investors are navigating regime change. bit.ly/4cjOGXY

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The landscape of structured investments appears poised for growth, with total US issuance up 41% in Q1 2024 compared to Q1 2023, per Structured Products Intelligence | SPi. Read our latest blog post by Marc Premselaar, Senior Managing Director, Capital Markets, to uncover how CAIS is propelling the evolution of structured investments through our powerful combination of people, platform, and product. https://lnkd.in/g-U2P8Va #structuredinvestments #financialadvisors #wealthmanagement

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At the most recent FOMC meeting, central bank policy makers communicated that the string of recent firm inflation prints have not fundamentally changed their outlook for inflation or monetary policy. The credit markets are not pricing in a contraction of growth. Although headline pricing across most sectors of the fixed income market appear rich, beneath the surface a very different story exists across industries, capital structures and sectors. Read our specialty fixed income outlooks for the 2nd Quarter of 2024: https://bit.ly/4b8PEWt

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There is a lot of talk about the PE industry not delivering the exits they promised. PitchBook succinctly put it with the title “Behind the J-curve” in its recent in-depth analysis of distribution activity in private market funds. Another side of that story, particularly relevant for secondary buyers like us, is that many private market funds hold their assets at seemingly inflated valuations. TVPI numbers look great for most funds, but they can’t monetize their holdings anywhere near their current NAV, indicating their estimate of “fair market value” is way too optimistic. There is always a market, the price may just not be where you wish it. To a large degree, the reluctance to exit companies results from having them marked too high. Assets were aggressively written up to look good in the short-term, impressing LPs with “paper gains” to raise the next, much bigger fund. #secondaries #privatemarkets

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How to counterattack short sellers and force them to cover: Wall Street has become trench warfare with bully groups of short sellers on the attack. Do you think they will cover by writing a strong Press Release? That is not the case with 80% of Newsworthy Companies. There is one sure way to ambush short sellers and that is with "psychological keywording": Unlike in the 20th century, The Markets are now run by computers/robots and AI so it's not the investors to get your stock to cover, it is all AI and just a few words will in fact cause the short sellers to become your best friend. www.kinsleystreet.com

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"Asset Pricing with Cognitive Biases and Deep Learning": "Biased expectations can explain two central puzzles in the asset pricing literature: the equity premium puzzle and the excess volatility puzzle." https://lnkd.in/euFNTFM7

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For the first time in years, rising yields have made bonds a much more powerful part of the asset allocator’s toolkit. How should asset allocators be thinking about the role of fixed income in portfolios? Download the report → https://bit.ly/3yddQc3

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Citywire's Ian Heath discusses US Equities with Matt Benkendorf in a follow-up to their meeting last year. Topics discussed include the #Magnificent7 and investors' changing expectations for rate cuts - click through for the video below Vontobel #QualityGrowthInvesting #USEquities

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Check out CNR's proprietary 4Ps analysis framework (Policies, Population, Potential, Profitability), which seeks to identify the best opportunities for global equity investing over the coming decade. Our approach is that, after asset allocation, the next important decision in portfolio construction is where to invest regionally. https://lnkd.in/dswu4BBi

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