The Valt Journal #05
The Valt Journal #05
Featuring Midyear insights by Blackrock, Nuveeen, Partners Group, M&G, Crescent Capital; Beyond Beta by Apollo, Credit Squeeze by PGIM, Global Asset Management and Wealth reports by BCG.
Hi, Welcome to the new edition of The Valt Journal. In every issue, we cover the best and the latest insights into the global private markets. The Valt Journal is a repository of time sensitive and timeless research, delivered to your inbox every 2 weeks, so you don’t have to look anywhere else! Clicking the headlines is all it takes.
Do not miss our special section on Energy Transition x Private Capital!
REPORTS AND RESEARCH
Beyond Beta: How to Use Alternatives to Replace Public Equity
Apollo Global
Asset managers are offering new solutions that aim to mitigate the challenges and simplify the process of investing in alternatives. How are they replacing equity with alternatives to enhance potential risk-adjusted portfolio returns?
Decision drivers for today’s private markets
Nuveen
The confluence of higher interest rates and overall economic uncertainty can lead to attractive private capital investment opportunities; however, it is critical to align with experienced managers that remain vigilant, selective, and diversified.
PE Exit Timelines and the Impending Maturity Wall
Pitchbook
A maturity wall is fast approaching for PE funds that are nearing the end of their term life to distribute their capital back to investors through exits. Is US PE heading toward a pileup of companies taking longer to exit?
Private Credit Insights 2023
Crescent Capital
A confluence of factors in today’s market is bringing newfound attention to private credit. But what is driving interest in private credit today beyond the dislocation in the banking system?
Credit Squeeze: From distress and dislocations to steep discounts
PGIM
As credit conditions tighten, opportunities are emerging for smart investors. With banks cutting back on lending, pricing dislocations are appearing in financial markets. Can investors with patient capital be the winners?
Real Estate Market Review 2Q 2023
KKR
Cost of capital has increased for all asset classes, directly impacting the real estate investment landscape. However, second-order effects of rate increases on real estate values and capital markets can be critical. What are the best investment opportunities in real estate today?
Private Markets Outlook 2H 2023
Partners Group
A dynamic evolution of structural changes is brewing which will drive a redistribution of profit pools and alter economic structures. What can be the compelling investment opportunities?
Mid-year Investment Perspectives 2023
M&G Investments
2023 has been an eventful year so far, but despite periods of volatility, financial markets have largely stabilized after last year’s challenges. How to navigate these uncertain markets? Private markets take centre stage.
2023 Mid-year outlook: Testing the waters
Nuveen
Investors daunted by this uncertain environment need not stay on the sidelines indefinitely. Closer scrutiny reveals true pools of potential, particularly in the industrial and multifamily sectors. What are the best opportunities?
2023 Mid-year Outlook: New regime, new opportunities
Blackrock
One can find opportunities by getting granular within asset classes and harnessing structural forces like the rise of AI and the rewiring of globalization. What will drive returns now and in the future?
Q3 2023 Corporate credit outlook: Can the good times roll?
FS Investments
Markets saw strong returns during the first half of the year, but there are reasons for caution. Active management and sound fundamental underwriting will be essential to drive returns in 2H 2023.
Monthly Market Monitor - July 2023
Morgan Stanley
A concise review of economic and asset class data through clear and impactful charts providing insights across a broad array of markets and investment topics.
Global Wealth Report 2023
BCG
Amid intensifying client demands for higher and more efficient service levels, how can wealth managers achieve ongoing, profitable growth in this volatile era? How is interest income from deposits overcompensating for declining investment-fee revenues in many regions? Could headwinds for the wealth management industry lead to some tailwinds for private markets?
Global Asset Management Report 2023
BCG
The asset management industry has reached a turning point that will require rethinking the way it operates. We are now facing an era of higher interest rates and market uncertainties. Has the tide turned?
ARTICLES
Private Asset Investing Desperately Needs New Market Infrastructure
Bain & Co.
PE firms and asset managers are eager to expand their business with individuals as many wealthy investors are looking to increase their holdings of private alternative assets. Firms need to build robust digital infrastructure to keep up with demand from individuals.
Gaining entry to private credit
M&G Investments
As private markets continue to evolve, improved accessibility is opening the doors to unique opportunities across the private credit spectrum through different fund structures.
The disintermediation of lending
UBS
In the wake of the recent banking turmoil, institutional investors have stepped in to provide capital directly to the smaller and mid-sized companies, often on terms that can be seen as favorable on both sides of the deal.
Threat of 'down rounds' spur private credit funds in Asia
Reuters
$2.5 billion new credit funds were launched or planned in 1H 2023. Funds targeting Asia hit record $11.2 billion in 2022. Are Asian startups moving away from equity due to increasing fears of ‘down rounds’?
Key takeaways from the first APLMA Private Credit conference
K&S Perspectives
Potential for private credit growth in Asia – myth or reality? Read the key takeaways from APLMA Private Credit conference.
PE Fundraising Woes Aren’t Over Yet
Institutional Investor
Investors plan to put slightly more capital to work in private equity this year after commitments bottomed out in 2022. Will PE fundraising make a comeback?
How PE is paving the way for private wealth?
Pitchbook
By 2025, HNIs will have 2.4x more assets in PE funds than in 2020 as per a BCG report. Private equity has traditionally been a preserve for institutional investors, yet fund managers are increasingly targeting HNIs. Will HNIs increase their exposure to PE?
Governance structures may drive PE outperformance
Hamilton Lane
Investors and advisors who understand the market are well-positioned to make informed and comprehensive decisions about their portfolios. Can governance structures drive returns?
Private Equity valuations withstand the volatility of 2022
Neuberger Berman
With relatively small changes in value for five consecutive quarters, at this point in the market cycle, buyout funds have enjoyed a much less bumpy ride than public equity markets. Is the recovery underway for buyout funds?
VC Exit Value Sags to Lowest Level Since the GFC
Institutional Investor
PitchBook projects that exits of venture capital-backed companies will be worth only $20 billion in 2023, the lowest since 2009.
State of Private Markets (Venture Capital): Q2 2023
Carta
A first cut of key data points and charts on the startup ecosystem and insights of the funding rounds in 2Q 2023.
Changing demand dynamics: Opportunities for European insurers in private markets
M&G Investments
The unprecedented levels of volatility in gilt markets during September 2022 has brought a fundamental shift in the UK defined benefit pension scheme market, as well as the demand dynamics for certain asset classes. Can European insurers emerge as winners?
SPECIAL SECTION:
ENERGY TRANSITION x PRIVATE CAPITAL
Financing the energy transition
Nuveen
Energy security and climate change are driving an unparalleled economic shift in the energy sector worldwide, and reshaping the investment landscape for green energy credit as a result. What are the investment opportunities within green credit?
Sustainable Investment Insights: Decoding ‘WAGR’
GIC & FTSE Russell
This paper focuses on Weighted Average Green Revenue (WAGR) as the most promising metric currently for integrating climate solutions into portfolio construction.
2023 ESG Report: The EBITDA of ESG
Carlyle
Carlyle’s ESG report discusses how to manage EBITDA through an ESG lens, seeking to optimize the relationship between financial performance and ESG outcomes.
PODCASTS, VIDEOS AND INTERVIEWS
The Insight Conversations with Howard Marks and David Rosenberg
Oaktree Capital
In this podcast, Howard Marks (Co-Chairman) and David Rosenberg (Co-Portfolio Manager, Global Credit) discuss trending topics including evolution of the high yield bond market, investor optimism, and why this time might actually be different in financial markets. (~33 min)
Understanding single asset secondaries
Pantheon International
This short videos discusses the importance of single asset secondaries and what can be the potential opportunities in the market. (~5 min)
Private Credit: Opportunity in a Directionless Economy
Barings
In this interview, Barings’ Ian Fowler (Co-Head - Global Private Finance) and Adam Wheeler (Co-Head - Global Private Finance) explore how today’s uncertain macroeconomic environment is shaping private credit and what lies ahead for the asset class. (~8 min)
Private Markets: Q1 2023 Preliminary Valuation Summary
Neuberger Berman
In this video, Doug Manor (MD - Private Markets) provides an overview of private equity markets and an outlook based on trends in the marketplace. (~8 min)
Q&A with Jose Minaya and Ken Kencel
Nuveen and Churchill Asset Management
In this interview, Jose Minaya (CEO - Nuveen) and Ken Kencel (President & CEO - Churchill AMC) discuss how private credit has grown dramatically into a $1.4 trillion market since the GFC and is set to expand significantly. Can this be the decade for private credit?
Private Markets Outlook: What Does the Future Hold?
State Street
In this series of podcasts, State Street’s private markets managers are seeking new ways to navigate rising inflation rates, the need for increased transparency, and the retail potential of private assets.
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