Kilde’s Fountain of Finance #9 - 07 March
Greetings!?
In this newsletter edition, we explore the rise of private credit allocations among family offices, tech investment trends in Asia, and insightful discussions on peak yields.
Furthermore, we examine the industry buzz surrounding family offices' pivot to private markets for better returns, the transition of private credit funds to "evergreen" structures, and Singapore's prominence in the realm of private credit.
Kilde’s Industry Intel: Our Favorite Industry Report Roundups
Family Offices Increasing Private Credit Allocations: Insights from Citi Private Bank
What's the one alternative asset class gaining momentum among family offices? New research reveals the answer.
Overall, the report provides valuable insights into how sophisticated family offices navigate today's complex markets. Their steady allocations to private credit and other alternatives demonstrate a focus on long-term return objectives.?
Link to the report: https://www.privatebank.citibank.com/insights/the-family-office-survey
Tech Investment Trends in Asia
The tech investment landscape is shifting rapidly across Asia. Here's a look at some of the key trends in China, India and Southeast Asia:
Link to the report: https://www.globalprivatecapital.org/research/2023-emerging-tech-trends-in-asia/
Peak Yields: Are we there yet?
Calling the top in interest rates is a hot topic among investors nowadays. With the recent volatility in bond yields, everyone is asking - did we already see the peak?
According to T. Rowe Price's analysis, we are likely still in the late stage of the Fed tightening cycle, where yields tend to spike before falling. They outline four signposts to watch for to signal we've hit the peak:
Until these occur, expect fleeting rallies but bond yields to remain elevated. Any yield curve rally will likely be concentrated on the short end first.
In conclusion, although peak yields may approach shortly, crucial indicators imply that we are currently in the blow-off phase. Exercise patience before tactically extending the duration. Stay tuned!
Link to report: https://www.troweprice.com/en/ch/insights/avoiding-false-signals-in-wait-for-peak-us-treasury-yields
Kilde’s latest scoop on Investing
Family Offices Shifting Focus to Private Markets for Better Returns
A recent survey by Campden Wealth and RBC reveals a notable trend among family offices — entities managing investments for families with assets of $100M or more. For the first time, these offices are allocating more funds to private markets (29.2%) than to public stocks (28.5%), seeking better long-term returns with less volatility. Despite a 19% rally in the S&P 500 this year, family offices are drawn to private equity, venture capital, and direct deals, capitalizing on their expertise and aiming for higher returns.
Upcoming Focus: 41% of family offices indicate an increased allocation towards private equity funds, while a third eye directs private equity deals. Only 23% plan to boost their public stock holdings, with some (15%) planning to reduce them, suggesting a strategic pivot towards private investments.
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Alternative Assets in Sight: Family offices are also keen on diversifying into alternative assets like real estate and commodities. With recession risk and geopolitical tensions on the radar, they are cautiously optimistic, holding 9% in cash to seize future opportunities.
Private Debt: Is It Really Illiquid?
Private credit funds are moving towards "evergreen" structures that allow investors to take money out more easily. This addresses a common criticism that investors' cash is locked up for too long.
Firms like Carlyle and KKR offer evergreen funds, where investors can periodically add or redeem capital. This provides more flexibility vs locking up cash for 10 years.
Investors want more control over their investments as private debt matures as an asset class. Evergreen funds provide access and liquidity.
The evergreen investment model is increasingly popular. It lets managers deploy capital more nimbly.
Evergreen structures can help private debt appeal to a wider range of institutional investors going forward. Flexibility and control are key.
At Kilde , we have been issuing evergreen deals with quarterly liquidity since the start. The investors can deploy capital anytime and redeem at pre-determined liquidity windows.
Asia's Soaring Private Credit: Singapore Takes the Lead!
Despite a challenging year for fundraising in Asia in 2023, Singapore's alternative investment industry remained resilient with a number of global alternative asset managers setting up their offices in the country. Private equity deals in Singapore and Indonesia attracted the bulk of investment capital for Southeast Asia, and the private credit market is gaining popularity due to its floating-rate investments that provide real-time interest rate protection compared to fixed-rate bonds.
According to Preqin, the Asian private credit market has grown by almost 30 times in the last two decades, from only US$3.2 billion in 2000 to over US$90 billion in June 2022. Private credit investments allocated to Southeast Asia global general partners as of June 2022 were US$65.4 billion, representing an increase of 52% from US$43.1 billion in 2020. Singapore is seeing more private credit managers entering the market, and many alternative managers, including Apollo, Blackstone, HPS, and Oaktree, have established or expanded their private credit capabilities here to tap into opportunities in the region.
Private credit solutions are filling the void created by the slowdown in traditional bank lending, particularly in the fast-growing technology sector, and by banking the underserved SME space. With the increasing popularity of private credit, it's an exciting time to be in the industry
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About Kilde
Kilde is an investment platform tailored for individuals and institutions, providing access to private credit deals supported by cash-generating assets. We offer up to 13.5% annual returns to our investors, surpassing similar risk investments yielding around 8%. We are licensed by the Monetary Authority of Singapore. Find out more: https://www.kilde.sg/
Director | Family Office Research | Global Thought Leadership | Executive Leadership | Senior Advisory
8 个月Thanks for sharing this valuable insight, Kilde Appreciate you mentioned Campden Wealth and RBC North America Family Office findings and I'm here to dive deeper into any discussions sparked by this post.