Private Credit: Opportunities Abound

A robust opportunity set for credit opportunity funds has emerged thanks to a constellation of factors. Rising interest rates, a retrenchment of bank lending appetite, and an expected economic downturn have combined to increase borrowing costs for stressed issuers and create a broad distressed opportunity. Investors that commit capital to funds this vintage year are […]

June 2023

Is China’s Economy Stalling?

No. Economic growth in China is likely to reach 5% this year, which is in line with government targets and consensus forecasts. Following a stronger-than-expected first quarter, recent economic data has softened, disappointing investor expectations of a sharper recovery after last year’s COVID-19 lockdown, but the Chinese economy is not on the verge of relapsing […]

June 2023

US Debt Ceiling Deal to Weigh Modestly on Already Weak Economic Growth Outlook

Over the weekend, US President Joe Biden and House Speaker Kevin McCarthy finalized an agreement in principle to suspend the US debt ceiling through January 1, 2025. The deal is expected to be approved by Congress before June 5—the date Treasury Secretary Janet Yellen expects the United States to run out of cash. The agreement […]

May 2023

Should Investors Continue to Overweight US Small Caps Despite Recent Banking Sector Stress and Growing Recession Fears?

Yes, investors should overweight US small-cap stocks, given valuations remain attractive and will provide a cushion if an expected recession unfolds. Banking sector turmoil and the sensitivity of more leveraged companies to higher interest rates have weighed on sentiment, but corporate fundamentals and balance sheets are starting at healthy levels. Investors fleeing to the presumed […]

May 2023

US Real Estate Faces Challenges, But Opportunities Exist

Investors are understandably concerned about US commercial real estate (CRE), given the rapid changes in interest rates since the beginning of 2022 and the recent banking sector stress. Indeed, the Federal Reserve now expects a recession, which we anticipate will lead to declines in real estate prices in the near term. In the medium term, […]

May 2023

Do Recent Central Bank Meetings Alter Our US Dollar Outlook?

No, we expect that while the US dollar should decline from its current elevated level over the medium term, there are factors that will continue to provide it with support in the short term. If our expectations are met, later this year or early next year should be an opportune time to consider positioning portfolios […]

May 2023

Should Investors Alter Portfolios in Response to Debt Ceiling Risks?

No. We think most investors should not alter portfolios based solely on debt ceiling risks. Instead, they should remain focused on the long term and rely on the diversification in their existing portfolios. But given the potential for additional stress in funding markets, investors should ensure they have ample liquidity to meet upcoming capital calls […]

May 2023

Buying India’s Growth Story, But Not Today

India has garnered significant investor attention, given its recent economic and stock market outperformance, its large and growing population, and its rapid ascent as a manufacturing alternative to China. But should investors buy the hype surrounding Indian equities? We think India’s bright economic prospects have the potential to drive strong equity market returns in the […]

May 2023