GP-Led secondaries take a seat in the middle of this risk-return & investment-duration spectrum. They solve multiple issues for both GP's and LP's.
How Are Relative Currency Valuations Impacting Portfolios TodayCurrencies
Currency research has boomed in our feeds. There are so many dynamics at play and parity levels are being reached. Key themes being researched include the the strength and weaknesses of the major trading block currency pairs, including the Yen, Euro, Sterling and the current currency champion, the all dominant U.S. Dollar.
With monetary policy driven rate hikes moving at different speeds across the zones, as Central Bankers accept they have been behind the curve, currency valuations are moving, and moving fast. Which in turn will have a second derivative impact on domestic (imported) inflation, and the manageability of a soft landing. The impact across the entire Institutional portfolio cannot be ignored.
FX trends are impacting asset classes.
Against the US dollar, the Japanese yen is at a 24-year low. Over the same period, the domestic purchasing power of the dollar has almost halved, whilst that of the yen has barely moved.
Are There Institutional Investors In Crypto?Currencies
As the market for cryptocurrencies has increased in size and liquidity, the crypto market has become in scope for even the largest institutional investors.
But what percentage do institutions own today? Who owns it and why? Has crypto evolved into an asset class with an expected return, diversifying features and a store of value?
Or has the recent collapse of the stablecoin UST and the associated crypto token LUNA tempered interest? Institutional Investors are revisiting the properties of Crypto for inclusion in their portfolios, using future Central Bank Digital Currencies (CBDC's) as a benchmark. And assessing the wider opportunities that distributed ledger, smart contracts and tokenisation presents.
What Happens in Crypto Stays in Crypto?
The market cap of cryptocurrencies peaked in late-2021 at $3.0 tn and has since plummeted to around $1.3 tn. The primary catalyst for this decline has been an increasingly hawkish Fed with financial conditions tightening by the most since the global financial crisis. The drying up of liquidity has negatively impacted all risk assets, but with an especially pronounced impact on crypto.
Decentralized Autonomous Organizations (DAO)Private Equity
What Is A DAO? What Are The Risks? What Are The Opportunities?
From global networks of stakeholders to Special Purpose Vehicles, a DAO is arguably the next iteration of the corporate structure. It has the potential to revolutionise industries on a scale not seen since the shift from unlimited liability to limited liability companies.
But how can it can be facilitated? What are the risks? And which companies are at forefront of this structural paradigm?
There are several global themes impacting currency markets that are raising currency policy questions at European Professional Investors Investment Committee meetings. And in particular, currency overlays on portfolios.
What Are The benefits of Private Equity Secondaries Beyond Diversification?Private Equity
Private Equity Secondaries exhibit 4 key characteristics that are gaining attention with professional investors, at this stage of the economic cycle:
1. J-curve mitigation.
2. Cash flow predictability.
3. Shorter durations.
4. Enhanced downside protection.
The bigger question is how to select a Private Equity secondaries manager that can capture all these potential benefits?
Blockchain technology can fundamentally change how economic value is stored, exchanged or even created via market places. Yet the full potential of the application of blockchain technology is still in its infancy.
In an environment of "no more easy money", rising rates, cost-push inflation, and a breakdown in just-in-time supply chains, public equity valuations have readjusted sharply. But are investors in the illiquid world of Private Equity feeling the same pain?
The Future Of The US DollarCurrencies
Has The US Dollar Reached Peak Privilege?
With the blocking of Russia's USD reserves and exclusion from SWIFT, the USD has arguably been used as a weapon of mass economic destruction by the American Government.
But in FX markets, every action typically has an equal and opposite reaction.
When it comes to the use of the USD as a means of geopolitical control, the question on investors minds now is whether de-dollarisation will be accelerated by countries who wish to free themselves of these now explicit controls.
And in particular, will the renminbi start to slowly erode the dollar's dominance in world trade.
Valuing Secondaries in Volatile MarketsPrivate Equity
In calm markets, the reported NAV of a private equity fund is generally accepted as a useful gauge of the intrinsic value of the underlying companies in the portfolio. But what happens when volatility spikes and markets are less predictable?
Volatile markets can delay potential exits resulting in GP-led sales, or create 'forced' LP sellers looking to raise liquidity or de-risk.
At this juncture, seasoned long term private market investors are increasing their time allocated to deal flow sourcing. As informed investors, they recognise that volatile markets can shift the NAV away from intrinsic value, and create interesting opportunities in secondaries.