In this edition of VantagePoint, we review the drivers of inflation globally and conclude that widespread inflation concerns are likely overdone. For investors concerned about the risks of inflation, we refresh our analysis on the complex relationship between asset classes and inflation and dig deeper into the implications of higher inflation on equities.
In our view, hedge funds are a critical component of a strategic asset allocation and play an important role in long-term alpha generation as well as beta and correlation mitigation strategies. However, across strategies only a very small number of funds offer an appropriate level of risk-adjusted returns, and identifying those funds takes considerable time and resources.
Our hedge fund professionals diligently review the broad universe of hedge fund opportunities, identifying managers early in their life cycle and forming long-term business partnerships with those that we expect to generate attractive and sustainable risk-adjusted returns.
Our hedge fund expertise spans an array of strategies including long/short equity, event-driven, credit-focused, and global macro. Over the last four decades, our clients have benefited from the differentiated return streams, capital protection, and reduced volatility offered through these strategic partnerships.
Recent years have seen challenges for hedge funds and a shift toward low-fee passive and alternative risk premia (ARP) products in investor portfolios. In this paper, we investigate whether ARP and hedge funds are complementary or whether ARP funds are actually a viable replacement for hedge funds.
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This paper discusses recent trends in US commercial real estate fundamentals and looks ahead to what might be in store for the remainder of 2021. Overall, we are reluctant to sound overly bullish about the broad asset class, as the outlook for some sectors is unclear. Still, for investors looking to immediately deploy capital, we highlight two categories of opportunities.
During the past decade, nonprofit healthcare providers have undergone a wave of accelerating consolidation. When systems combine, the new entity created will have new financial health metrics. A fresh review of how a transaction will impact the newly combined long-term investment pool (LTIP) is crucial. This paper examines key variables to assess and specific examples of how a LTIP might restructure post-merger.
While colleges and universities have faced several financial fissures due to the disruptions of COVID-19, their endowments have been a source of financial stability. Four key financial indicators tell this story: operating margins were compressed, tuition discounts grew, institutions borrowed more debt, and endowment spending was consistent. In this note, we review these financial pressures and the endowment implications that emerged in Cambridge Associates’ second annual Endowment Radar Study of private college and university finances.
Private investors and wealthy families face distinct portfolio management complexities. Our latest paper details how we build and manage portfolios to meet each private client’s long-term goals.
Investors are facing a challenging period for earning what they spend and achieving adequate portfolio diversification. With most DM sovereign bond yields near or below zero, expected returns for bonds are at all-time lows and diversification qualities are constrained. In this edition of VantagePoint, we evaluate defense and diversification options to identify a modern approach to diversification in this low-yield era.
In private investing, it appears that way, but a deeper look suggests there could be a method to the valuation madness.