The investment industry speaks about the “60/40” portfolio so much that it is largely assumed to be the “correct” portfolio for a large number of investors. However, it describes modern asset allocation about as well as Happy Days did the 1950s or Friends the 1990s. (Great shows both – but a bit detached from the real world.) To be fair, the 60/40 portfolio can be a useful starting point to illustrate the pros and cons of additional asset classes and/or alternate portfolio construction approaches. Furthermore, it demonstrates some of the critical foundations of modern asset allocation: stocks provide a high long-term return expectation, while bonds provide diversification through negative correlation and lower volatility. Today, the asset and wealth management industry largely agrees that the 60/40 portfolio will not deliver the same outcome as it has in the past. This is forcing investors of all kinds to consider new and/or larger allocations to alternative asset classes and strategies, but that leads to a key question: if not 60/40, then what?
There has been tremendous activity in the SPAC market in 2020 and 2021, a time when more than half of the IPO activity has been attributable to the issuance of new SPACs. CAIA’s Keith Black, PhD, CAIA, CFA, FDP, Managing Director, Content Strategy, and Aaron Filbeck, CFA, CAIA, CIPM, FDP, Director, Global Content Development, discuss Keith’s recent blog post on SPACs, offering insight into their how arbitrageurs, shareholders, and private companies might consider them. Listen to their conversation and read more on the blog here.
New research from CAIA Association suggests that investors place higher emphasis on qualitative factors when performing due diligence on private capital managers, a stark contrast to the quantitative factors typically emphasized with hedge funds and traditional investment managers. This panel answers the following questions: What are the most important questions to ask during the manager research process? What are the most important qualitative factors to consider? What are some of the biggest differences between performing investment and operational due diligence on liquid strategies vs. illiquid strategies?
African private markets probably present the premier opportunity for investing to contribute to the UN's SDGs while also creating attractive financial returns. The potential for bringing solutions for the bottom billion, leveraging Africa's mobile infrastructure, is vast and being used by a lively and creative venture community with increasing numbers of later stage opportunities and the emergence of unicorns such as Zipline and Flutterwave. At the same time, larger buyout and growth equity opportunities in sectors such as agribusiness and related logistics, distribution, and financial services companies are creating the potential for delivering impact at scale. Impact potential includes improvements in ESG, job creation, waste reduction, and the benefits of their products, such as fertilizers and other agricultural inputs.
Bill Kelly talks with "Alts Goes Mainstream" podcast host Michael Sidgmore about the importance of being a responsible fiduciary, his start in the industry, and what it taught him about always asking: what does it mean to the end client? Listen in!
The future of sustainable investing is in the balance. It involves balancing financial and extra-financial considerations, balancing short-term and long-term goals, and balancing interests among stakeholders and over time, while seeking fair outcomes for all. How do investment professionals take the next step to apply these practices in their daily activities? How can investment organizations better align their culture and incentives around solving sustainability issues? This conversation between Rebecca Fender, CFA of CFA Institute and Carol Jeppesen, CAIA of the PRI discusses the influencers, drivers, enablers, and action steps of building a robust sustainable investment program.
Culture, Communication, and Common Ground: How Managers and Investors Can Start Speaking the Same Language.
Stacy Havener, Founder and CEO of Havener Capital Partners and Aaron Filbeck, CFA, CAIA, CIPM, FDP, CAIA's Director of Global Content Development discuss organizational culture, emerging managers, and how assessing soft skills can help make for a more informed allocation decision.
Get more insights on the due diligence process at our Due Diligence resource page.
Private Equity is the largest alternative asset class with $4.42tn in AUM worldwide. The expectation is that Private Equity could more than double over the next five years. In this presentation, Aaron Filbeck, CAIA, CFA, CIPM, FDP, Director, Global Content Development, CAIA Association, covers a range of topics related to private equity investment, including the structure and life cycle of private equity funds and analyze the cash flows and fees that are characteristic of such funds. We examine various performance measures and walk through calculations related to the measurement of returns. Aaron's presentation is followed by Joseph Borda, Senior Vice President, Research & Data Operations, Preqin, who presents on private equity updates for 2021. This presentation also covers industry AUM, dry powder, fundraising, deals, and investor appetite. This presentation is moderated by Millissa Allen, CAIA, Managing Director, Global Head of Fundamentals of Alternative Investments.
Aaron Filbeck, Director, Global Content Development, CAIA Association explores and reviews information about the CAIA Association and our flagship program, the CAIA Charter Designation program
What’s the best way to measure volatility of private equity? Perhaps simply assigning a leverage multiple isn’t enough. Moderated by Aaron Filbeck, CFA, CAIA, CIPM, FDP, Director, Global Content Development, CAIA Association, William Kinlaw, CFA, and Megan Czasonis of State Street Associates discuss some of the main takeaways of “Private Equity and the Leverage Myth.” This paper was published in the Winter 2021 edition of The Journal of Alternative Investments.