Yes. Economic growth is slowing, and governments have limited monetary and fiscal policy responses available in the event this slowdown becomes a recession. Today, investors need to weigh the investment implications of likely policy options.
European credit investors have enjoyed significant gains in 2019 as the combination of weak economic data and central bank easing has pushed yields lower. Investors will need to be nimble to find attractive risk-adjusted returns in the months ahead.
Our biannual report summarizes asset allocation and total investment performance for 29 of Cambridge Associates’ UK foundation and endowment clients.
No, sterling-based investors should not change their currency hedge ratios or their allocations to sterling-denominated assets based on potential Brexit outcomes.
Elevated equity market valuations and potentially rising bond yields suggest the return environment for traditional risk assets could be difficult. Faced with this challenge, institutional investors are seeking alternative sources of return. Alternative risk premia strategies—which harvest well-established risk premia and market anomalies across asset classes—may fit the bill.
Yes. While equity and bond markets don’t often rise in tandem like they have lately, history suggests that both recent moves could be warranted if central bank stimulus successfully extends the cycle. But that is a big “if”; several moving parts cloud the macro outlook, and markets are assuming that central banks can reverse the recent economic slowdown.
As part of our ongoing commitment to alternative credit, Cambridge Associates (CA) began compiling a database of credit stress and losses in one of the largest strategies within private credit, senior debt (i.e., direct lending). Our initial outreach in the United States and Europe yielded data from 11 senior debt funds tracking material document modifications (which we use as a proxy for credit stress, greater detail below) and loss rates in bilateral and clubbed middle-market lending.
Yes. The seemingly ever-expanding US-China trade war has undercut economic activity in the euro area, challenging earnings expectations and the bloc’s currency.
No, we don’t believe the politics of Brexit are conducive to tactical asset allocation.
Our biannual report summarizes asset allocation and total investment performance for 29 of Cambridge Associates’ UK foundation and endowment clients.