In 2013, US private equity and venture capital turned in their best annual performance since 2006 and 1999, respectively. Strong returns from the large sectors, particularly financial services in the private equity benchmark and information technology (IT) in venture, contributed most to the indexes’ results. In the five years between 2009 and 2013, private equity…
As US small-cap valuations have grown increasingly extreme, so has our conviction in underweighting them Small caps have benefited from the recovery in US economic conditions since 2009 and the perceived safe-haven status of domestic US assets. Investors have earned low single-digit nominal returns from historical valuation levels equivalent to those today, an unappetizing prospect…
The big drop in US Treasury yields this year has once again confounded the consensus. Benchmark ten-year Treasury yields have declined from 3% to around 2.5% in under five months. Investors that took duration risk were handsomely rewarded, as 30-year long bonds have returned 12.2% year-to-date through May 23, the best performance over this period…
US private equity and venture capital funds began 2014 with positive first quarter returns, as indicated by the Cambridge Associates LLC benchmark indexes. Compared to their strong fourth quarter performance, private equity and venture capital fund returns were lower for the quarter, as were public equity returns. For the second quarter in a row the…
Monetary policy is an important wildcard, but deleveraging has faded as a headwind for U.S. economic growth and investors would be unwise to weigh it heavily in their investment decisions.
While simple 100% U.S. equity and stock/bond portfolios have outperformed highly diversified portfolios recently, highly diversified portfolios have delivered consistently superior returns over decades.
Equities surged ahead during the fiscal year, while commodity-related assets and high-quality bonds struggled.
A closer look at the mounting cash on corporate balance sheets reveals more questions than answers as to how it may benefit shareholders.
The venture capital model is not broken – indeed, fundamentals look better than they have for many years – but returns will likely continue to be concentrated in top-performing funds.
Given lower yields, returns on high-yield bonds and leveraged loans are likely to taper off, but in a muddle-through or bear market environment their returns should compare favorably with those of equities.