The Valt Journal #10

Featuring special section on Energy Transition x Private Capital with latest research from Blackrock, Neuberger Berman, KKR, M&G, Bain, Wellington, GIC, Impax AM and others.

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.

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REPORTS AND RESEARCH

📝 Private debt allocation in institutional portfolios
GIC x Stepstone
An overview of private debt investment opportunities that introduces a systematic framework for optimising private debt allocations in institutional portfolios.

📝 Global Investor Conference 2023
Carlyle
The balance of power in capital markets might be swinging in the favour of liquidity providers, who could encounter new opportunities as companies look to refinance liabilities and dispose off noncore assets to raise funds without adding to debt levels.

📝 Asset allocation at official institutions
Neuberger Berman
This paper lays down the three critical steps that official institutions could take to enhance their risk-adjusted estimated returns with focus on reserves funds, SWFs and public pension funds.

📝 Hedge fund opportunities: rising rates and uncertain market
Blackrock
Hedge fund strategies seem to be back after years of quantitative easing suppressing volatility. Thoughtful allocation to hedge funds expected to improve on an absolute and risk-adjusted basis along with diversification benefits. Selecting the right managers is critical.

📝 Global Private Debt Report
Pitchbook
Private debt strategies continue to draw strong interest from institutional investors, with H1 2023 fundraising commitments at c.$95 billion vs $91 billion in H1 2022. Pitchbook report on global private debt market.

📝 Future state of the investment industry
CFA Institute
A framework of the most significant developments that will impact the investment industry with focus on increase in demand for personalized products, need for advanced and targeted platforms and tokenization leading to expansion of investible universe.

📝 Global Investment Committee: Q4 2023 Outlook
Nuveen
This report identifies infrastructure, private credit and dividend-paying equities as the sectors with opportunities today and suggests that investors should think of extending portfolio durations instead of over-allocating to cash.

📝 How asset selection drives deals
Neuberger Berman
Intelligent asset selection is crucial in periods of volatility. The current environment allows managers to be selective with respect to LP-led secondaries deals, but GP-led deals offer better selectivity given the increase in private AUM.

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ARTICLES

✏️ How to think about private infrastructure as inflation finds its resting point
KKR
Stocks and bonds are more correlated than ever and bonds might not continue to perform as the traditional shock absorbers. Managers could explore infrastructure as the asset class that offers a natural inflation hedge and risk-adjusted returns.

✏️ Long the strong
Neuberger Berman
The prolonged adjustment to higher rates is just beginning. Asset classes that offer flexibility and have relative strength and quality characteristics might perform better than certain other asset classes that offer limited options.

✏️ Why LPs are hungry for direct investments
Carta
LPs are investing directly in companies, either through a co-investment alongside a traditional VC fund or through a separate direct investment. Superior returns, larger stakes and lower costs are driving the interest for direct investment among LPs.

✏️ Private Market Insights – September 2023 Edition
UBS
Quick snapshot of latest trends, drivers and news across private asset classes.

✏️ How VCs measure fund performance
Carta
What are the benchmarking metrics used by VC funds to evaluate their fund performance? This piece explains metrics like IRR, MOIC, TVPI, RVPI, DPI etc.

✏️ The largest scalable opportunity of the decade for Asia
M&G
Growing urban population coupled with low housing affordability, changing consumer behaviours and high interest rates could present new opportunities.

✏️ ESG in private credit: a key differentiator?
M&G
The proportion of European AUM with ESG considerations is advancing at pace – rising to c.60% of total funds in the last two years. ESG integration in private debt is still relatively at an early stage – but regulatory and investor demand could increase the priority for the sector.

✏️ A buyer’s market is coming for tech assets
Bain & Co.
Reduced exits, extended hold times, and latent dry powder could lead to tech asset exits that will create a crowded, competitive buyer’s market.

✏️ The sophistication era of consumer tech
Lightspeed
Consumer fintech is entering a new era of consolidation, optimization and intelligent technology.

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SPECIAL SECTION:
ENERGY TRANSITION x PRIVATE CAPITAL

📝 Global perspectives on investing in the low-carbon transition
Blackrock
A survey of 200 institutional investors that lays out what they are thinking about investing in the low-carbon transition.

📝 Climate change: the impact for investors
Impax Asset Management
A review of impact of climate change for investors that focuses on the economic costs for investors, the various risks and their impact on asset values.

✏️ A new energy investment paradigm
Neuberger Berman
Today’s fossil-fuel profits could be invested in the long-term growth of clean and renewable power. Investors should find the right balance to use some of the energy industry’s $4tn of annual net income to help unlock the net-zero economy of the future.

✏️ Investors have energy all wrong
Institutional Investor
Experts at Cohen & Steers suggest that energy addition will define the next century rather than energy transition.

✏️ Sustainable finance may reshape fixed income markets
Wellington
A quick view of the distinct trends in sustainability that have the potential to transform fixed income markets, leading to new opportunities and innovative financial structures like blue bonds or natural-capital-backed debt.

📝 The low-carbon transition in private markets
Blackrock
A detailed overview of opportunities in real estate, infra and private credit, that are arising as we transition to a low-carbon future.

📝 Global Hydrogen Review 2023
International Energy Agency
An annual publication by IEA that tracks the global hydrogen demand and progress in key areas like infrastructure, trade, policy, investments and innovation.

📝 The battery value-chain
LGIM
This whitepaper navigates the entire battery value-chain and explores the current battery technology landscape, analyzing the market for the critical components and innovations.

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PODCASTS, VIDEOS AND INTERVIEWS

🎙 Assessing the opportunities & risks in high yield today
Barings
Scott Roth (Co-head, US High Yield) comments on the credit quality of the high yield market and how investors may not need to take excessive risks to earn attractive returns. (~33 min)

🎙 Bonds and beyond in today’s fixed income markets
Neuberger Berman
Experts from Neuberger Berman deep dive into the various sectors of fixed income, while assessing the opportunities and risk profile that place this asset class under the spotlight. (~26 min)

🎥 Spreading out: private credit’s next growth wave
Private Equity Wire
The latest Private Equity Wire webinar features experts from Allianz, Alcentra and Stafford Private Markets. The discussion explores the private credit landscape and the key themes of demand, supply, competition, innovation, and regulation. (~47 min)

🎙 Climate week & takeaways for climate finance
TCW
Experts from TCW discuss main takeaways from Climate Week NYC and the roundtable TCW hosted with the Institute for International Finance (IIF). (~12 min)

🎥 What’s driving growth in European data centers?
PIMCO
Watch an introduction to European data centers and the secular trends in the sector. In this video, Kirill Zavodov (Portfolio Manager) discusses the outlook ahead and opportunities in the space. (~6 min)

🎙 A sustainable future: counterproductive sustainable investing
Man Institute
Jason Mitchell (Head of Responsible Investment Research) and Prof. Kelly Shue (Yale University) discuss how and why sustainable investing is producing counterproductive outcomes. (~44 min)

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