Services Tags: OCIO

Institutional Retirement Plans Legislative Update — SECURE Act

As speculated in Marquette’s recent  4Q 2019 DC Legislative Update, Congress passed sweeping retirement savings reform by tacking the Setting Every Community Up for Retirement Enhancement Act of 2019 (“SECURE Act”) onto its year-end spending bills. On December 17th and 19th, the House and Senate respectively passed the SECURE Act (“the Act”) with the goal of enhancing retirement readiness for Americans. This update outlines a summary of the Act’s provisions impacting our defined contribution (DC) and defined benefit (DB) plan clients.

Read > Institutional Retirement Plans Legislative Update — SECURE Act

As always, your consultant will be able to address any specific questions you may have regarding these changes. A similar summary targeting individual investors can be found here.

 

The opinions expressed herein are those of Marquette Associates, Inc. (“Marquette”), and are subject to change without notice. This material is not financial advice or an offer to purchase or sell any product. Marquette reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs.

Richard H. Thaler to Deliver 2018 Investment Symposium Luncheon Keynote

Richard H. Thaler 

Charles R. Walgreen Distinguished Service Professor of Behavioral Science and Economics at the University of Chicago Booth School of Business

Richard H. Thaler is the 2017 recipient of the Nobel Memorial Prize in Economic Sciences for his contributions to behavioral economics. Thaler studies behavioral economics and finance as well as the psychology of decision-making which lies in the gap between economics and psychology. He investigates the implications of relaxing the standard economic assumption that everyone in the economy is rational and selfish, instead entertaining the possibility that some of the agents in the economy are sometimes human. Thaler is the director of the Center for Decision Research, and is the co-director (with Robert Shiller) of the Behavioral Economics Project at the National Bureau of Economic Research.

Thaler is the co-author (with Cass R. Sunstein) of the global best seller Nudge (2008) in which the concepts of behavioral economics are used to tackle many of society’s major problems. In 2015 he published Misbehaving: The Making of Behavioral Economics. He has authored or edited four other books: Quasi-Rational Economics, The Winner’s Curse: Paradoxes and Anomalies of Economic Life, and Advances in Behavioral Finance (editor) Volumes I and II. He has published numerous articles in prominent journals such as the American Economics Review, the Journal of Finance and the Journal of Political Economy.

Thaler is a member of the American Academy of Arts and Sciences, a Fellow of the American Finance Association and the Econometrics Society, and in 2015 served as the President of the American Economic Association. Before joining the University of Chicago faculty in 1995 Thaler taught at the University of Rochester and Cornell as well as visiting stints at The University of British Columbia, the Sloan School of Management at MIT, the Russell Sage Foundation and the Center for Advanced Study in Behavioral Sciences at Stanford.

Originally from New Jersey, Thaler attended Case Western Reserve University where he received a bachelor’s degree in 1967. Soon after, he attended the University of Rochester where he received a master’s degree in 1970 and a PhD in 1974. He joined the Chicago Booth faculty in 1995.

John V. Miller, CFA to Deliver 2018 Investment Symposium Opening Keynote

John V. Miller, CFA

Head of Nuveen Municipals at Nuveen Asset Management

John leads the municipals fixed income strategic direction and investment perspectives for Nuveen. He also manages several municipal bond strategies and closed-end funds.

John is a trusted public voice in discussing key issues and trends within the municipal market. He is a frequent guest on CNBC, Bloomberg Television and Fox Business News. His perspective is often sought out by leading industry media such as The Wall Street Journal, Barron’s, Bloomberg News and Morningstar.

Before being named the co-head of fixed income in 2011, he was chief investment officer for the firm’s municipal bond team starting in 2007. He was named a managing director and head of portfolio management for Nuveen Asset Management in 2006. John became a portfolio manager in 2000 after starting at the firm as a municipal credit analyst in 1996. He began working in the financial industry at a private account management firm in 1993.

 

Alternatives 101 Video Series

Our Alternatives 101 video series covers each of the major alternatives asset classes, with guidance provided by several of Marquette’s research analysts and directors. In contrast to traditional investments, alternatives investing includes asset classes other than stocks, bonds, and cash (reference our Investing 101 series for more information about traditional investing concepts). This series aims to introduce trustees, staff, and other investors to the key terms and concepts they may encounter when investing in these typically less familiar asset classes.

The series covers:

View each talk in the player below— use the upper-right list icon to access a specific presentation.

For more information, questions, or feedback, please send us an email.

Private Equity Position Paper – 2019 Update

This position paper explores the fundamentals of private equity as an asset class. Particularly, we examine the subcategories of venture capital, growth equity, buyout, direct lending/ mezzanine debt, and distressed, and the investment styles within them; mechanics of investing in private equity including fund structure, commitment period, cash flow, and the J-curve; investor fees and performance; and recent trends. Recommendations and guidance towards the investment manager search process and making an allocation to the asset class are also included.

Download PDF > Private Equity Position Paper

 

The opinions expressed herein are those of Marquette Associates, Inc. (“Marquette”), and are subject to change without notice. This material is not financial advice or an offer to purchase or sell any product. Marquette reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs.

Third Quarter Review of Asset Allocation: Risks and Opportunities

The third quarter saw mixed results for financial markets. Economic fundamentals generally remain strong but signs of deterioration are starting to emerge. Unemployment currently hovers around 3.5%, and inflation is near the Fed’s target of 2%. However, 3Q GDP growth was under 2% (though the 1.9% figure exceeded the 1.7% estimate), and the PMI index has been below 50 since August (a reading under 50 is indicative of contraction in the manufacturing sector). Overall, the most important global trends we see are the following:

  • The U.S.-China trade conflict continues to weigh heavily on both countries as talks remain ongoing;
  • The Federal Reserve (“Fed”) reversed course by cutting interest rates and further cuts are still possible;
  • The U.S. Treasury yield curve inverted briefly, which historically has signaled a recession over the subsequent 12–24 months;
  • Brexit negotiations were extended to January 31, 2020, therefore further perpetuating the uncertainty around the UK’s exit from the EU;
  • Negative interest rates continue to grow in prevalence around the world.

The impact of these shifting dynamics is explored further in this newsletter as we review third quarter performance and expectations going forward for each of the major asset classes.

Read > Third Quarter Review of Asset Allocation: Risks and Opportunities

 

The opinions expressed herein are those of Marquette Associates, Inc. (“Marquette”), and are subject to change without notice. This material is not financial advice or an offer to purchase or sell any product. Marquette reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs.

3Q 2019 Market Briefing

Live Webinar – Thursday, October 24, 2019 – 1:00-2:00 PM CT


Please join Marquette’s asset class analysts for a live webinar based on our 3Q 2019 Market Environment. This webinar series is designed to brief clients on the market as soon as possible after quarterly market data becomes available.

The overall U.S. economy will be discussed, along with fixed income, U.S./non-U.S. equity, hedge funds, private equity, real estate and infrastructure.

Featuring:
Greg Leonberger, FSA, EA, MAAA, Partner, Director of Research
Jeffrey Hoffmeyer, CFA, Lead Analyst, Asset Allocation
Ben Mohr, CFA, Director of Fixed Income
Samantha Grant, CFA, CAIA, Senior Research Analyst, U.S. Equities
David Hernandez, CFA, Senior Research Analyst, Non-U.S. Equities
Joe McGuane, CFA, Senior Research Analyst, Alternatives
Jeremy Zirin, CAIA, Senior Research Analyst, Real Assets
Brett Graffy, CAIA, Research Analyst

Who should attend: Institutional investment stewards, private clients, investment managers

Live webinar attendees will be able to submit questions to the presenters and vote in audience polls during the event. Questions will be answered during the final 15 minutes of the webinar, as time allows.

If you are unable to attend the webinar live, you can also view it afterward on demand. Registrants will automatically receive a follow-up email shortly after the end of the webinar to notify them of webinar recording availability

Catastrophe Bonds

Institutional investors are constantly searching for additional asset classes that may help diversify a portfolio and enhance returns. Catastrophe (“cat”) bonds may be such an asset class that could help diversify a portfolio’s interest rate, credit/equity and currency risk by providing non-correlating natural event risk. Cat bonds are typically issued by insurance companies that pool property and casualty policies. They pay coupons to the bondholder using the policy premiums received. When a natural event occurs — such as a hurricane or an earthquake — part of the principal of a cat bond may be used to pay the insurance claims on the pool of policies. In other words, the investor is paid to assume a part of the risk associated with natural events. Historically, cat bonds average 5% to 10% return annually.

This paper discusses the benefits of cat bonds and the mechanics of how they work, along with their market size. The characteristics of cat bonds and the types of cat bond strategies will also be examined. The paper will provide details about cat bonds’ merits and risks to help investors make informed decisions about whether to consider this asset class. It will conclude with a discussion of recent and long-term performance.

Read > Catastrophe Bonds White Paper

The opinions expressed herein are those of Marquette Associates, Inc. (“Marquette”), and are subject to change without notice. This material is not financial advice or an offer to purchase or sell any product. Marquette reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs.

 

Investing 101 Video Series

Our Investing 101 video series covers the fundamentals of investing. This series aims to create a knowledge base for trustees, staff, and other investors of the key terms and concepts that they encounter most frequently, with guidance provided by several of Marquette’s research analysts and directors.

The series covers:

Marquette encourages open dialogue with our consultants and research team. For more information, questions, or feedback, please send us an email.

Stoking the Fire: The First Post-Recession Rate Cut

On July 31, 2019, the Federal Reserve cut interest rates for the first time since the 2008 Financial Crisis from a fed funds target rate of 2.25%–2.5% to 2%–2.25%. This well-telegraphed and long-expected 25 basis point cut, roughly 11 years after their last cut in December of 2008, signals a shift in the Fed’s monetary policy towards one of dovish stimulus after a period of hawkishness from 2015 to 2018 that saw the Fed raise the fed funds target rate nine times from 0–0.25% to 2.25%–2.5%.

This newsletter examines the reasons behind and the initial and potential reactions to the latest interest rate cut, including a look at unemployment, inflation, and the yield curve.

Read > Stoking the Fire: The First Post-Recession Rate Cut

The opinions expressed herein are those of Marquette Associates, Inc. (“Marquette”), and are subject to change without notice. This material is not financial advice or an offer to purchase or sell any product. Marquette reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs.