Services Tags: OCIO

The Four Virtues of Private Equity

In classical philosophy we are taught that there are four virtues of mind and character. Given the uncertainty that lies ahead in 2023, it is prudent (pun intended) to revert back to these virtues — as they relate to private equity — to outline a framework that may help investors effectively navigate the market.

  • Prudence: The ability to discern the appropriate course of action
  • Temperance: The practice of discretion, restraint, and moderation
  • Fortitude: strength, endurance, and the ability to confront fear
  • Justice: fairness

Read > The Four Virtues of Private Equity

 

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.

The Real Game of Thrones: Evolving Geopolitical Dynamics and the Potential Impact for Global Investors

Following the Saudi-led OPEC+ announcement that the bloc will cut oil production by 2 million barrels per day, reports emerged that Saudi Arabia will soon join the BRICS alliance and deepen economic cooperation with China. Despite recent tensions with the U.S., the Kingdom’s preeminent role in the Belt and Road Initiative and potential admission to the BRICS alliance could drive global infrastructure development, technology research, and capital market expansion across global markets, potentially benefiting investors with long-term global and emerging market exposure.

This newsletter summarizes the Belt and Road Initiative (BRI) and BRICS Alliance, provides a brief history of Saudi-U.S. relations, and analyzes the Kingdom’s Vision 2030 efforts to diversify Saudi Arabia’s economy, ultimately concluding with the outlook and risks for investors.

Read > The Real Game of Thrones: Evolving Geopolitical Dynamics and the Potential Impact for Global Investors

 

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.

An Investor’s Holiday Wish List

Hopefully not another year of coal
In the spirit of holiday fun — and an effort to put 2022 investment returns behind us — we have put together our investor wish list for 2023. We have broken the wish list into two categories: the “must-haves,” which carry the most weight and are most observable, and the “stocking stuffers,” which may not be headline grabbers but are nonetheless impactful across economies and markets. Predictably, the “must-have” items focus on a reversal of the major trends that drove the markets this year; we “must have” a better outlook across at least some of these topics. The “stocking stuffers” category is a variety of topics that either directly impact the major trends from 2022 or are more targeted with their impact on specific asset classes. And while we recognize this is not an exhaustive list, we feel strongly that if these wishes come true we can all feel better about market returns in 2023.

This year’s must-haves:

  • Lower inflation
  • Less aggressive Fed policy leads to fewer interest rate hikes in 2023
  • Avoid a deep recession
  • Resolution of geopolitical conflicts

And stocking stuffers:

  • Broad-based earnings in the U.S. stock market
  • A weaker U.S. dollar
  • Credit defaults start to flatline
  • Slowdowns in hiring and wage growth
  • Favorable news out of China
  • History repeats itself

Read > An Investor’s Holiday Wish List

 

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.

International Equities: Waitin’ on a Sunny Day

In recent years, international stocks have underperformed their domestic counterparts by a significant margin. Specifically, the MSCI ACWI ex-US index has compounded annual returns at just 3.3% over the last decade through the end of October, compared to an annualized return of 12.8% for the S&P 500 index. This current stretch marks the longest period of relative outperformance on a trailing 5-year basis for either index since the early 2000s.

This newsletter examines a host of factors that have contributed to this pattern of performance, including differences in composition between U.S. and international equity indices, currency movements, and geopolitics and analyzes the diversification benefits of international equity allocations within portfolios despite performance challenges.

Read > International Equities: Waitin’ on a Sunny Day

 

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.

2022 Investment Symposium

Friday, September 23, 2022
8:00 AM – 2:00 PM

Marquette clients – We hope you’ll join us at our annual Investment Symposium! This year’s event will be held in person in Chicago and virtually via livestream.

We’re excited to welcome Dr. Jean Twenge for our morning keynote analyzing generational differences with a focus on marketing trends among Gen Z. Marquette’s research team will then take the stage, featuring an In Context Conversation covering 2022 and beyond and three flash talks discussing timely investment topics. Rounding out the day, Ted Seides will join Nat Kellogg, Marquette’s President and Director of Manager Search, for a conversation spanning Ted’s experience, expertise, and insights from nearly three decades in the industry as our main presentation.

________________________________________

AGENDA

All times in Central Time

8:00am REGISTRATION OPEN
Livestream will begin at 8:30
Breakfast served until 10:00

8:45 WELCOME REMARKS by Brian Wrubel, CEO

9:00 MORNING KEYNOTE by Dr. Jean Twenge
Professor of Psychology at San Diego State University and author of iGen: Why Today’s Super-Connected Kids Are Growing Up Less Rebellious, More Tolerant, Less Happy—and Completely Unprepared for Adulthood

10:00 Break

10:15 IN CONTEXT CONVERSATION
An Investor’s Roadmap for 2022 and Beyond
Greg Leonberger, Jessica Noviskis, David Hernandez, Evan Frazier, and Frank Valle

10:45 Break

11:00 RESEARCH FLASH TALKS
Fixed Income Alternatives: Delivering Returns in an Uncertain Environment
Brett Graffy and Chad Sheaffer

Pricing Power: The Relationship Between Inflation and ESG
Linsey Schoemehl Payne and Ibrahim Rashid

2022 Crypto Crash: Boom or Bust?
Greg Leonberger and Nic Solecki

12:00pm Lunch Break

12:45 TED SEIDES in conversation with Nat Kellogg, President, Director of Manager Search
Host of Capital Allocators Podcast; best-selling author; asset management thought leader; Founder and Former Co-CIO of Protege Partners

2:00 ADJOURN

 

VENUE DETAILS

The Union League Club
65 W. Jackson Blvd.
Chicago, IL 60604
(312) 427-7800

Patrick McDowell Joins CFA Institute’s GIPS Standards for OCIO Working Group

Launching September 1st, CFA Institute has announced the creation of the GIPS Standards for OCIOs Working Group to provide input into the development of GIPS® standards guidance for OCIOs. Marquette’s Patrick McDowell, CPA, CAIA was selected to join the 15-member Working Group, which will be responsible for helping to identify the requirements within the GIPS® Standards for Firms that are challenging to apply to the OCIO business as well as developing a consultation paper.

Per CFA Institute, “Firms comply with the GIPS® standards to fulfill their ethical duty to fully disclose and fairly present performance, advance fair competitive practices within the industry, and respond to the demands of prospective clients and investors.” For more information about CFA Society, visit their website.

James Wesner Speaking at ALTSMIA 2022 12/12

On Monday, December 12th, James R. Wesner, CFA will be speaking at ALTSMIA, an education-focused alternative investment event developed by CFA Society Miami, CFA Society of South Florida, CAIA Association, Miami Finance Forum, and Markets Group in Miami, Florida.

Jamie will be moderating a panel entitled, “What is the Outlook on the US Real Estate Market Now,” with several industry professionals. Diversification in a U.S. real estate portfolio has been difficult in the midst of extreme uncertainty in the last two years. This panel will discuss short-term opportunities as well as who will have to wait until later in the post-COVID world for improved prospects; how a core real estate manager can access and maximize fundraising interaction, and how ESG and sustainable investing have become more accessible within the asset class. 

ALTSMIA 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.

It’s Always Darkest Before the Dawn

Diversification has been said to be the only free lunch in investments. Since the inception of the Lehman/Barclays/Bloomberg Aggregate index,¹ there have been only 18 of 187 quarters (9.6% frequency) with negative returns in both the bond and equity markets, as measured by the Aggregate and S&P 500 indices, respectively. Comparable results are seen in the monthly data: Of 561 months, only 83 times did both the fixed income and equity markets deliver a negative total return (15.2% frequency). Over the last 45+ years, there has never been a calendar year that recorded negative returns in both indices, though that looks likely to change this year.

This newsletter analyzes 2022’s equity and bond market performance and the importance of diversification and discipline amid such negative momentum.

Read > It’s Always Darkest Before the Dawn

¹Actual data goes back to 1986; backfilled data back to 1976

 

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.

Livestream Videos: 2022 Investment Symposium

The presentations by our research team from Marquette’s 2022 Investment Symposium livestream on September 23rd are now available. Please feel free to reach out to any of the presenters should you have any questions.

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

 

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. Past performance is not indicative of future results. For full disclosure information, please refer to the end of each presentation. Marquette is an independent investment adviser registered under the Investment Advisers Act of 1940, as amended. Registration does not imply a certain level of skill or training. More information about Marquette including our investment strategies, fees and objectives can be found in our ADV Part 2, which is available upon request.

Halftime Market Outlook: A Mixed Bag

Last week, we hosted our “Halftime” Market Insights Webinar. As the host, my job was to introduce the analyst for each section and then summarize his or her comments before moving to the next speaker. After the fourth section, I found myself using the term “mixed bag” for the third time; it was at that moment that I knew I had my title for this letter!

Of course, “mixed bag” is an overused and unoriginal cliché to describe a perspective that features both positive and negative elements. If we focus solely on the first half of the year, it is hard to find much good news at all between negative economic growth, historically high inflation, and hefty losses in both the equity and bond markets. Even the good news is rooted in how bad things are…after all, how much longer can inflation stay above 9%? Could the equity market REALLY drop another 20% the second half of the year? Alas, our “mixed bag” descriptor admittedly relies on the assumption that conditions should improve at least somewhat for the remainder of the year, though likely not enough to reverse the damage inflicted during the first half. On an absolute and relative basis, growth and return figures should be better, but it is naïve to think that all of the bad news is behind us.

In this edition:

  • Inflation expectations
  • Consumer and business sentiment
  • The S&P 500’s worst six-month start to a year since 1970
  • Recession probability
  • The Agg’s worst start to a year ever
  • Bonds go back to being bonds

Read > Halftime Market Outlook: A Mixed Bag

 

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.