Services Tags: Investment Consulting

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.

Luis Sierra Speaking at 2024 529 Conference 9/30

On Monday, September 30th, Luis Sierra, CFA, will be speaking at the annual 529 Conference hosted by ISS Market Intelligence in Orlando, Florida.

Luis will be presenting a session entitled, “Structuring & Evaluating the Investment Lineup,” addressing:

  • Investment structure in philosophy and in practice
  • Defining key terms and differentiating factors
  • Investment types and management style trends
  • New asset classes, trends in selection, and review of fee types

The 529 conference brings together the entire 529 and ABLE ecosystem and includes critical conversation and debate surrounding the latest federal and state legislative developments, product enhancements, investment trends, marketing campaigns, distribution strategies, operational initiatives, consumer insights, and regulatory and compliance announcements.

For more information, please visit the 529 Conference website.

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.

Evan Frazier Speaking at Portfolio Summits 2024 Fiduciary Investor Central Summit 9/12

On Thursday, September 12, Evan Frazier, CFA, CAIA will be speaking at the inaugural Fiduciary Investor Central Summit hosted by Portfolio Summits in Chicago.

Evan will be moderating the “Diversifying Your Portfolio” panel, described as follows: The first principle of investing is not to put all your eggs in one basket. While this sentiment is valuable, it can be difficult to effectively diversify your portfolio when risk and return in each asset class is ever-changing. Hear from investors about how they effectively diversify their portfolios. Learn about what led them to each strategic decision and how they keep up with market changes.

The Fiduciary Investor Central Summit will bring together 100+ accredited institutional investors based across the Midwest for a day of insightful panel discussions, presentations, Q&A, and networking. For more information, visit the event webpage.

1Q 2024 Market Insights Video

This video is a recording of a live webinar held April 25 by Marquette’s research team analyzing the first quarter of 2024 across the economy and various asset classes and themes we’ll be monitoring in the coming months.

Our quarterly Market Insights series examines the primary asset classes we cover for clients including the U.S. economy, fixed income, U.S. and non-U.S. equities, hedge funds, real assets, and private markets, with commentary by our research analysts and directors.

Sign up for research alerts to be invited to future webinars and notified when we publish new videos. If you have any questions, please send us an email.

Mind the Gap

Any ride on the London Tube reminds riders to mind the gap: Beware the space between train car and platform as you board and depart the train. A recent trip to London brought this phrase back to me and it seemed like a perfect description of how to look at financial markets this year, with the “gap” serving as the difference between expectations and reality, most particularly in terms of interest rate cuts.

In our market preview, we identified the Fed pivot as a primary driver of financial markets this year, most especially how expectations of cuts would line up with actual Fed policy. Going into the year, the market had priced in at least five cuts, which helped fuel a furious fourth quarter rally and investor optimism for 2024. One quarter in, however, those expectations have been turned on their head. Hotter than expected inflation and jobs reports in March have created a “higher for longer” narrative with the market expecting no more than two cuts during the second half of the year. Some economists have taken an even more bearish stance, suggesting there will not be any cuts. Overall, rates rose across the curve during the quarter as current U.S. debt levels sustained the long end of the curve while the short end was relatively unmoved.

Intuitively, many investors would expect such a big change in rate expectations to weigh heavily on markets, both equities and bonds. In that sense, equity performance was surprising during the first quarter, as the upward trend from 2023 continued. Predictably, bonds suffered as rates rose, but below investment grade sectors were profitable. To be fair, though, it should be noted that equities have endured a difficult start to this month, down 4.6% through April 22 as the higher for longer narrative has gained momentum.¹

Going forward, what should we watch for from asset classes as we venture into a market environment that looks much different than what we were expecting only three months ago?

Kweku Obed Speaking at CFA Institute Careers Webinar Series Event 8/1

On Thursday, August 1, Kweku Obed, CFA, CAIA will be speaking on a webinar hosted by CFA Institute for CFA Program candidates.

The first webinar in the series, this event will “zoom into” Investment Consulting and address the following topics and questions for attendees.

  • What do Investment Consultants do day-to-day?
  • What are the key skills and attributes you need to be a successful Investment Consultant?
  • What are the most common ways into the industry?
  • How does the CFA Program set you up for success in the Investment Consulting industry?

For more information, please visit the event webpage.

Marquette Speaking at PSACC 2024 Annual Conference 7/23

On Tuesday, July 23, Patrick W. Wing, CFA, CIPM and Sam Frymier will be speaking at the Pennsylvania State Association of Country Controllers’ (PSACC) 2024 Annual Conference in York, PA.

Pat and Sam will be presenting a session entitled, “Tales from the Road: A Consultant’s Perspective.” The annual conference gives controllers, deputies, and their solicitors the opportunity to participate in roundtable discussions and receive training on various topics related to the responsibilities of the controller’s office and county government. For more information, visit the PSACC website.

Marquette Speaking at ALTSCHI 2024 Forum 7/22–23

On July 22–23, Dave Smith, CFA, Kweku Obed, CFA, CAIA, and Greg Leonberger, FSA, EA, MAAA, FCA will be speaking at ALTSCHI 2024, jointly produced by Markets Group, CFA Society Chicago, and the CAIA Association®.

Dave will be joining a panel on the 22nd entitled, “Opening Keynote Panel: Innovation Unleashed: The Rise of Total Portfolio Approach,” described as follows: As some of Strategic Asset Allocation’s shortcomings become clearer, select global asset owners have begun experimenting and transitioning to a more holistic approach to building portfolios. Total Portfolio Approach, while more a “state of mind,” than a tangible linear process, can offer improvements in culture, competition for capital, governance, and investment outcomes. How should investment professionals assess its fit for their organization and where should they begin?

Kweku will be moderating a panel shortly after entitled, “Keynote Panel: Private Market Investments – Time to Shine,” described as follows: As investors search for additional sources of revenue and methods for portfolio diversification in the volatile and changing environment, private markets stand out as an area of opportunity. The panel brings together leading alternatives investors and allocators to share the role private equity, private debt, venture capital, and more play in their portfolios and what they look for in managers to meet their objectives in these asset classes. Panelists will address risks and opportunities across capital structures, expected returns, and the operational requirements for managing the unique complexities in private markets.

On July 23, Greg will be moderating a panel entitled, “Infrastructure, Critical Materials, and Clean Energy Investments—What will the Path to Growth Look Like?” described as follows: What is the outlook for U.S. infrastructure, energy security, and critical minerals supply? What is the scope for public-private partnerships in the absence of a national development plan? There are still many questions about the measurement and due diligence surrounding ESG so how are fund managers and allocators capitalizing on the opportunities while minimizing the risks, and how can a more positive impact on the environment take shape?

ALTSCHI is developed and led by the CAIA Association and CFA Society Chicago and is specifically designed to provide relevant, education-focused content for individuals who manage, advise, allocate to, or oversee alternative investments. With leading allocating and management firms, the agenda will include topics such as global asset allocation, risk management, private markets, real assets, alternative beta strategies, private equity, hedge funds, ESG, crypto, and more. For more information, please visit the event webpage.