This paper summarizes the mechanics and treatment of GRATs, their heightened appeal right now, and the key tax, legal, and investment considerations to explore before implementing this strategy.
Despite the recent volatility, in our view, munis continue to be an attractive alternative to both Treasuries and high-quality corporates for long-term taxable investors. Even tax-exempt investors that typically don’t hold munis may want to consider them in the current environment given relative valuations and credit fundamentals.
COVID-19 plunged the global economy into a deep recession triggering concern over a surge in corporate defaults. Recent monetary and fiscal stimulus has allowed a rebound in credit assets ranging from high-yield bonds to highly rated asset-backed securities, but other markets remain dislocated.
Before COVID-19 most hospitals generated liquidity from their operating model. In our May 2020 survey of 27 hospital systems, we learned that COVID-19 has driven hospitals to search for liquidity from multiple sources, including, for some, the investment portfolio.
No, we still believe China remains an important exposure for investment portfolios. However, US-China tensions will continue to escalate. Investors need to reaffirm both the rationale and implementation of their China investment strategy and must communicate this with key stakeholders. For further reading, please see the “Decoupling” section of Celia Dallas and Wade O’Brien’s “VantagePoint:…
It has been difficult to find a more out-of-favor sector in institutional investors’ portfolios than energy over the past five years, and with the recent spread of COVID-19 reducing demand for oil & gas, that reality appears set to continue – creating both challenges and opportunities. Amid the sector’s ongoing evolution, the energy PE investment strategy that dominated the market has become outdated, and investors that wish to capitalize on potential opportunities in this market must re-think their approach.
With the initial chaos of the COVID-19 pandemic somewhat behind us but much uncertainty and potential volatility ahead, plan sponsors will be well served by focusing on—and possibly recalibrating—some core plan management elements. These approaches include liquidity management, rebalancing processes and opportunities, governance, and communication.
In April 2020, Cambridge Associates conducted a survey of our foundation clients to gauge sentiment about spending for the current year and to understand potential sources of flexibility and liquidity in light of the COVID-19 pandemic. This year has brought tremendous disruption and uncertainty, but foundations are approaching these challenges with responsive philanthropy and a long-term view, so they can support important causes in 2020 and beyond.
The US economy lost a staggering 20.5 million jobs in April, in the worst plunge in payrolls since the Great Depression, according to data released by the US Bureau of Labor Statistics this morning.
The “secret sauce” to long-term investment success is, in most cases, the governance that guides and oversees the investment program. Governance plays the special role of steering endowments toward long-term goals, through good times and bad. Good governance is a steady presence that does not get overly confident or discouraged by a single decision or caught up in the latest trend. Good governance is rewarding for the institution it serves and the investment committee members who participate.