Venture capital offers compelling returns for the stalwart long-term investor. The most relevant question for investors in any stage of venture is the potential impact of prevailing market conditions on ultimate returns. In this brief, we look at valuation data today and also use our proprietary data set of funds to review historical returns during periods when valuations reset.
Determining the appropriate size of near-term reserves and how to invest any remaining reserves is more art than science and requires careful consideration of a number of factors.
Every year, we take a fresh look at the themes and drivers likely to influence capital markets and, along with our valuation analysis, inform our asset allocation recommendations. Heading into 2015, we identified five trends that influenced our advice: US dollar strength, weakening commodity prices, elevated US equity valuations, extremely low sovereign bond yields, and…
Despite seemingly high yields, today is not a particularly attractive time to buy emerging markets debt, whether hard currency or local currency.
Considering climate factors is an economic risk management and opportunity capitalization issue core to prudent investing for the long term.
Ongoing growth headwinds, an earnings recession, and still-elevated valuations make us skeptics that US equities’ four-year bull market can continue much longer.
Conventional wisdom says that only ten venture-backed investments matter per year and that an equally concentrated number of certain venture firms makes those investments, but conventional wisdom may lead investors to miss attractive opportunities with managers that can provide exposure to substantial value creation.
In 2009, we published a paper titled “Behavioral Risk” that described the universal tendency to make poor investment decisions in times of crisis because individuals typically allow instinct and emotion to override objective analysis of the pertinent data. The ideas in the paper remain as pertinent as ever. To return investors’ attention to this important topic, we are republishing the paper with comments that reflect the ideas in light of the current environment.
Frontier markets equities present an interesting opportunity for long-term investors with an understanding of the risks and pitfalls of this asset class.
Yields have indeed risen sharply over the past several months, but given the cyclical nature of the asset class, along with worrisome trends in issuance volume and quality, we still do not find them compelling.