Services Tags: Asset Allocation

Marquette Views on 2025 Traditional Investments Outlook Featured on Nonprofit News

Published January 9, Director of Research and Managing Partner Greg Leonberger, FSA, EA, MAAA, FCA was interviewed for Nonprofit News’ Special Report 2025: Traditional Investments Outlook (subscription required).

Greg discussed the outlook for both U.S. equities — including expectations for inflation, economic growth, and the impact of the new administration — and fixed income — including Marquette’s customized approach to portfolio construction, particularly as the rate environment has changed in recent years — in the article.

For more coverage of expectations for the year ahead, Marquette’s 2025 Market Preview webinar will be hosted on January 16 with in-depth analysis by our research team and Greg’s Quarterly Letter from the Director of Research will be published the following week.

Amy Miller Speaking at NASP 2025 Financial Services Conference 6/3

On Tuesday, June 3, Amy Miller will be speaking at the National Association of Securities Professionals (NASP) 36th Annual Financial Services Conference, “Driving Economic Impact: The New DEI,” hosted in Columbus, Ohio.

Amy will be joining a panel entitled, “The New Alternatives in Private Equity,” described as follows: Private equity asset class has evolved since its debut in the 1980s to meet the needs of a broad base of investors. New opportunities for investors include co-investments, secondaries, and continuation vehicles, among others. This panel of asset allocators and consultants will discuss what resources investors may need to effectively build and manage a private equity portfolio that includes exposure to fund-of-funds, funds, and single assets.

The conference will bring together over 500 professionals to attend sessions on global economic trends, trustee education, alternatives and institutional investing and AI’s impact on the financial services landscape, as well as networking and professional development. For more information, please visit the event webpage.

New Year, New President…Same Outlook?

From an investor’s perspective, the current environment feels lot like it did twelve months ago: U.S. equity markets returned over 20% the prior year, fixed income is (still) offering attractive yields, and overall portfolio performance was positive for most programs. Nevertheless, nothing lasts forever and sentiment can shift on a dime. It is also likely that some of President Trump’s policies will have an impact on markets, with the specific impact varying by the policy and asset class.

In this edition:

  • U.S. Economy and Policy Expectations
  • Fixed Income: “If you liked it last year, you’ll like it this year”
  • U.S. Equity: Concentration risk still looms
  • Non-U.S. Equities: Positive earnings outlook, policy uncertainty
  • Real Assets: Real estate bottoms, infrastructure demand robust
  • Private Markets: Private equity on the rebound, private credit still compelling

Multi-Asset Credit: Taking Offense From Good to Great

Before the football season began, we authored a white paper that detailed offensive and defensive elements of a fixed income portfolio. For most investors, an aggregate (core) mandate provides defense while strategic allocations to high yield, senior secured loans, and emerging market debt (EMD) are the primary sources of offense. Relative to an aggregate benchmark, this structure has outperformed over market cycles. However, just as championship teams adjust and innovate throughout a season, so too should an investor’s portfolio.

Multi-Asset Credit (MAC) strategies are single portfolios that dynamically allocate across a broad range of global credit markets to provide higher levels of income and a diversity of fixed income exposures. These mandates can serve as a single-solution credit allocation or as a credit alpha overlay in the context of a broader credit portfolio. There is no perfect definition of MAC, but what they do offer is diversification, flexibility, and ease of access and operations. While these markets are not new, investors may be unfamiliar with the mechanics of a MAC strategy and its potential benefits.

This newsletter provides an overview of MAC, including the opportunity set, allocation structure and considerations, diversification benefits, and sample MAC manager performance.

Are You Ready for Some Fixed Income?

As the leaves change to autumn and the authors cheer on their Fighting Leathernecks, fall is the perfect time for investors to reassess their fixed income portfolios. Fixed income is a hybrid security that offers both offensive and defensive properties. Much like a good football team, a fixed income portfolio needs to combine a strong offense with a solid defense.

Some strategies provide more offensive characteristics while others are more defensive. Portfolios with too much offense act like the Greatest Show on Turf. They do well when the economy is strong, but falter in down markets. Conversely, a fixed income portfolio that is overly reliant on defensive strategies will do well in a risk-off environment but will struggle in a strong economy like the Super Bowl Shufflin’ ’85 Bears.

While those were great teams, they were not a dynasty that stood up to the test of time. To build an all-weather fixed income portfolio that will perform in multiple market environments, an investor needs to balance offense and defense.
Fixed income has three primary objectives: income, diversification, and liquidity. Income, or yield, is what an investor is paid for loaning money to another entity. Fixed income helps to diversify portfolios primarily through duration. When risk assets are selling off, interest rates are generally falling. Duration is what drives fixed income prices higher in such scenarios. Finally, fixed income assets can be a source of liquidity. The weight of these qualities is dependent on if the strategy is more offensive- or defensive-minded.

This white paper outlines offensive and defensive fixed income characteristics and strategies and considerations for investors when building a “gameplan” for their fixed income allocation.

What Does Elevated Index Concentration Mean for Active U.S. Equity Managers?

Indexing has risen in popularity over the last decade, particularly for U.S. equity investors. The fees are lower and indexing is perceived as less risky, with investors primarily seeking beta exposure to the market. However, these indices have evolved against an ever-changing economic and financial market backdrop. As a result, several unintended structural issues have emerged, particularly related to concentration risk. Understanding this evolution and how it could alter the overall exposures within a broader portfolio is critical, as these indices are not static. Notably, the composition of some indices alongside the increase in passive capital has created headwinds for active managers and helps to explain recent performance challenges.

This newsletter examines the progression of passive management, how and why U.S. equity index concentration has increased in recent years, and the effects and risks investors need be aware of across the market capitalization spectrum.

Greg Leonberger Speaking at Pensions & Investments Chicago Fixed Income & Credit Conference 9/24

On Tuesday, September 24, Greg Leonberger, FSA, EA, MAAA, FCA will be speaking at Pensions & Investments’ (P&I) Chicago Fixed Income & Credit conference.

Greg will be moderating a panel entitled, “What Does Diversification Look Like in the New Era?” described as follows: In a world where yields are higher and investors can access an array of fixed-income options with appealing risk-return profiles, it seems that diversification would come much easier. However, that’s not always clear cut. As more money has piled into safe haven assets, does that present concentration risk? Are there certain sectors or geographies in, say, emerging markets, that can provide uncorrelated returns? How should investors approach sectors such as CLOs, MBS, and ABS, given dispersion in issuer performance and credit fundamentals? This panel will discuss the myriad approaches to diversification and the need to remain flexible and avail of tactical opportunities.

P&I’s Fixed Income & Credit series will bring together a pan-institutional group of asset allocators to discuss a range of approaches to fixed income across the public and private markets. Whether for income generation, defensive or, increasingly, return allocations, asset owners and industry providers will share their timely and forward-focused strategies. For more information, please visit the conference website.

Impact of SEC Rule Changes for Money Market Funds Regulatory Update

Over the past year, the SEC has been phasing in regulatory changes for money market funds resulting from adopted amendments to Rule 2a-7. These amendments were passed on July 12, 2023, in response to the stress that money market funds faced at the start of the pandemic in March 2020 when investors rapidly pulled more than $130 billion dollars from money market funds. As a result, the Treasury and Federal Reserve had to step in to provide emergency liquidity facilities to shore up the short-term funding market. The changes primarily focus on institutional prime and tax-exempt money market funds, which have historically been more susceptible to investor runs.

This regulatory update summarizes these changes as well as which fund types are impacted.

Marquette Speaking at Pension Bridge 2024 Private Equity Exclusive 7/23–24

Nat Kellogg, CFA and James R. Wesner, CFA will be speaking at the Pension Bridge Private Equity Exclusive 2024 hosted by With Intelligence in Chicago from July 22–24.

Jamie will be moderating a Concurrent Session – Track A panel on July 23 entitled, “Healthcare – Fighting Fit,” described as follows. The U.S. healthcare industry continues to grow, buoyed by structural changes such as an ageing population. Driven by a need to offload assets and return capital to LPs, an increase of assets is coming to market. Yet the healthcare industry faces challenges, such as rises in labor costs and margin costs, alongside ubiquitous macroeconomic headwinds.

  • What opportunities might arise from State-level healthcare transaction review laws?
  • Which subsectors of healthcare promise growth in the private equity market in 2025?
  • How might changes in Federal Trade Commission and other regulations impact allocations to healthcare private equity in the coming years?
  • How will artificial intelligence focus opportunities in healthcare?
  • How can LPs capitalize on the growth of take-privates and carve-outs in healthcare?
  • How immune is healthcare to macroeconomic headwinds?

Nat will be moderating the CIO panel closing the conference, “Private Equity and the Battle for Allocation,” described as follows: Over the course of the three days of the Private Equity Exclusive many different LP strategies will have been put to the audience. In this closing session, three leading Chief Investment Officers will determine the position of private equity from a whole-portfolio perspective.

  • To what degree does private equity stack up against increased allocations to private credit and infrastructure?
  • What are the key considerations for LPs when deciding what to allocate to PE?
  • Does the denominator effect still hold relevance in portfolios?
  • Will private equity continue to outperform public markets and under what conditions might it not?
  • When will the promise of a robust and sustainable private equity portfolio take shape again?

Now in its nineteenth year, the Private Equity Exclusive brings together thought leaders from North American LPs and GPs for networking, knowledge sharing, collaboration and relationship building. For more information, please visit the event webpage.

The Growing Popularity of Continuation Funds

Historically, the private equity secondary market has been used by limited partners (“LPs”) to sell exposures at the end of their lives and as such contained only tail-end exposures. Selling these lingering exposures to private equity funds allowed LPs to clean up their balance sheets and fueled the growth of secondary private equity funds within the broader private equity space. As the market evolved, however, higher-quality assets began transacting as investors started to use secondary markets as a useful portfolio management tool. More recently, general partners (“GPs”) have come to occupy an increasing percentage of the overall market. In 2023, about $110 billion in volume traded in private equity secondaries, with about 50% of the total transaction activity represented by GP-led transactions.

In this newsletter, we provide an overview of continuation funds, including their growth, structure, transaction requirements, and considerations for investors.