Portfolio

Private Equity Secondaries have grown but so have their opportunities. Near-term opportunities will be fertile while underlying trends will sustain the asset class in the long-term. Private Equity investors should be greedy.

Market volatility has surged. Investors should no longer be allocating into Tail Risk structures. For those invested, start monetizing gains and let CTAs and Developed Market Fixed Income take the wheel from here.

As the first Fed cut of this cycle approaches, this Strategy Insight looks at the cross-asset implications of a Treasury curve bull steepening. Investors should maintain a defensive positioning.

The Global Investment Strategy team downgraded global equities to underweight in late June. The latest reading from our MacroQuant model is consistent with this decision.

The market is pricing in a soft landing, but we see growing signs that the global economy is faltering. Investors should be defensively positioned.

We are growing positive on Growth assets with recession expectations increasing our optimism on entry points. Equities are led by APAC Private Equity, North America Venture Capital, and Europe Buyouts. Our outlook continues to improve on CRE within the Inflation & Diversification bucket while we are underweight Multi-Strategy amongst Hedge Funds. We maintain an overweight to Senior Direct Lending for Income with a preference for North America.

We project US Multifamily cap rates to increase from 5.2% to 6.5%. While we find an unfavorable risk-adjusted return on the asset, especially relative to other opportunities in CRE, cap rates are moving closer to peak.

At the asset class level, the GAA Quant model is overweight equities, underweight bonds, and neutral cash.

Concerns about the global economy have shifted from sticky inflation to faltering growth. Tight monetary policy is finally starting to bite. We suggest increasing portfolio defensiveness.

Special Report

California and Technology are currently in a downturn but is not apparent from the performance of the NASDAQ. On its own, the job losses in the Tech sector are not significant enough to precipitate a US recession. However, when coupled with direct and indirect spill-over effects into other service sectors, the impact on consumption could trigger a recession. In North America, we are overweight Venture Capital and Private Credit, becoming more optimistic on CRE, and underweight Private Equity.