The Valt Journal #06
The Valt Journal #06
Featuring private market insights by Apollo, Abrdn; Credit Outlook reports by Blackrock, Varde, GS; CLO Insights by Barings, M&G; PE Report by Bain; Making it liquid by GS; and the special section!
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.
Don’t miss the special section on real estate.
REPORTS AND RESEARCH
Private Markets House View - 1H 2023
Abrdn
Private assets’ near term outlook and current valuations in the context of historic averages across asset classes including PE, Infra, Real Estate, Private Credit and Natural Resources.
Mid-Year Outlook 2023
Apollo Global
High inflation is expected to keep the cost of capital elevated until 2024. The expectations are for a soft landing but is a hard landing is still possible? Private capital has a role to play in helping buffer the effects of the credit crunch.
Private Markets Mythbuster: This record isn’t broken
Partners Group
With higher interest rates and sticky inflation, a new macro regime is at play, with consequences to all asset classes across both private and public markets. Can private equity buyouts continue to succeed in the new macro regime?
Alternative Investing Through a Slowing Economy
Citi Global Wealth
There are many opportunities for alternative investment managers to take advantage of: market stress, capital dislocations and asset repricings. Can active management become a differentiator in turbulent times?
Global Credit Outlook: Unpacking private debt growth drivers
Blackrock
Beyond traditional sector and credit selection, the current backdrop further underscores the value of investments with embedded structural protections against downside risk. What are the drivers for continued growth of private debt?
Värde Views: A Cycle Revolving Around Financing Dependency
Värde
Dissect the contradictory narratives around the unfolding credit cycle and surface the compelling investment opportunities revolving around the cycle’s epicenter: financing dependency.
A rising tide lifts private credit
Monroe Capital and Goldman Sachs
Private credit has demonstrated an impressive track record over the past decade and continues to attract strong inflows, but success has brought its challenges. A rising tide has lifted all boats, but what happens when the tide goes out?
Private Capital Insights 2023
Latham & Watkins
The challenges facing the global banking sector this year could create more opportunities for private debt firms. Will private capital play a significant role in the global economy?
Swiss Pension Funds and Private Markets
Partners Group
Can pension funds (and other institutional investors) who are adding private markets to their portfolios really enhance risk-return profiles and increase overall portfolio diversification?
Clean Transition Investing: From Managing Risk to Unprecedented Opportunity
Apollo Global
The global energy transition is challenging. Deep decarbonization will require significant innovation and meaningful changes in both business practices and consumer behavior.
ARTICLES
Private Equity Mid-Year Report 2023
Bain & Co.
Stalled dealmaking and exits have jammed the capital flywheel, putting a premium on liquidity. Who will pay?
Why Institutions Should Be Rooting for More Retail Investors in Private Assets
Institutional Investor
Pension funds, endowments, and others are likely to benefit from the trend of personal portfolios allocating more to private assets.
Secondaries vs Continuations Funds
Institutional Investor
While seconaries continue to offer solid opportunities, continuation funds seem to be losing steam as PE investors choose to opt for liquidity.
Forget What You Know About Picking the Best PE Funds
Institutional Investor
Machine learning algorithms can be used on fund documents to detect patterns that could help in manager selection. This paper, ‘Limited Partners versus Unlimited Machines’ provides a detailed anecdote on AI and the performance of PE funds.
[Primer] Understanding Private Equity Performance 101
Wellington Management
A quick and easy guide on how to measure and interpret private equity performance.
PE fund launches pacing for big decline after paltry 1H2023
S&P Global
Global PE and VC fund launches in the first half of 2023 lagged significantly behind the pace set last year as challenging fundraising dynamics continue to deter managers.
Making it liquid: The key features of semi-liquid funds
Goldman Sachs
Compared to traditional drawdown funds, semi-liquid evergreen funds can offer immediate private markets exposure and provide investors with a regular source of income along with some liquidity.
Direct lending in times of uncertainty
Pictet Asset Management
Rising interest rates, higher inflation and lacklustre economic growth may not sound like ideal investment conditions. But for private debt – is lending directly to businesses a better way ahead?
Private Credit: Positioning for a downturn
Abrdn
It is critical to construct private credit portfolios for which the risks of credit default and downgrade are as low as possible. What are the key investment principles that could help?
Opportunities in Leveraged Loans for active investors
AXA Investment Managers
Fundamental credit selection, diversification and active trading are essential to mitigate the tail risk from global economic uncertainty and challenges to corporate creditworthiness.
Sustainable investments in European leveraged finance and CLOs
M&G Investments
Is it reasonable to expect that leveraged finance assets under management – in funds and CLO – will advance at a fast pace?
CLOs: A Bifurcated Field of Opportunities
Barings
While the likelihood of higher-for-longer interest rates continues to present challenges, it has also created attractive opportunities across the CLO market.
Private placement potential in corporate pension
Goldman Sachs
As interest rates appear to be leveling off, sponsors may be evaluating private placements with the objective to boost yield within their hedging portfolios.
Climate Innovation and the New Capex Cycle: Bridging the €90 trillion gap
Neuberger Berman
How can convergence of technology and climate lead to opportunities and benefits for corporate players and investors?
IN FOCUS: Real Estate x Infrastructure
Why invest in global infrastructure?
JP Morgan
Infrastructure has the potential to provide inflation protection, income and resilience in uncertain times.
Adding structure to your portfolio with infrastructure
Blackrock
In a market regime of higher macro and market volatility, infrastructure assets offer the potential of stable returns, inflation mitigation, diversification benefits and an opportunity to drive the energy transition forward.
Wide-ranging opportunities in real estate investing
UBS
Objectives of real estate investing in the current climate - diversification, rental income, capital value growth and inflation protection.
Investing in real estate impact
Nuveen
Impact strategies offer a more direct, active approach to real estate investments. An impact strategy should have clear and measurable goals. What can be the specific outcomes from real estate impact strategies?
Tap into Real Estate Opportunities in Data Centers, Multi-Family and Logistics Areas
PIMCO
Megan Waters, PIMCO’s real estate expert, discusses where investors may find compelling opportunities – amid the downturn – to pursue attractive returns from debt and equity investments across public and private markets. (~6 min)
Q&A with Paul Guest - An opportune timing in real estate
UBS
Paul Guest (Senior Portfolio Manager) provides insights into what makes the current investment environment unique for the real estate sector.
PODCASTS, VIDEOS AND INTERVIEWS
CIO Views: Advancing the 60/40s with alternatives
Goldman Sachs
Julian Salisbury (CIO) and Candice Tse (Global Head of Strategic Advisory Solutions) discuss in this video, whether a a sharp rise in volatility has ended a decade of strong performance for the 60/40 portfolios. (~25 min)
Q&A with Andres Small - Role of secondaries
Partners Group
Andres Small (MD, PE Partnership Investments) discusses the role of secondaries in the evolution of private markets.
Q&A with Nick Jansa - Outlook for Private Equity
OTPP
Nick Jansa (Executive MD, EMEA) speaks about market trends and opportunities in PE - How has the PE market evolved over time? What should investment firms be thinking about as they move forward against today's economic backdrop?
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