May 2023
WELCOME TO OUR MONTHLY NEWSLETTER.
This newsletter is designed to serve as your primary source for navigating the world of alternative investments.
In January, we highlighted distressed credit as one of our top five ideas for 2023 , a view that we believe is further supported by the current market environment.
The days of easy money are over – access to credit at favorable terms has become limited, driven by Fed tightening, slower corporate growth, and overleveraged balance sheets.?As debt maturities approach, many companies will face higher cost of debt servicing and stricter loan agreements. Tighter loan standards, in conjunction with higher borrowing rates, have already led to an increase in default rates in the first half of the year.[1]
The market for below-investment-grade credit has tripled in the last 15 years.[2]?Distressed is a cyclical strategy that performs well during an economic slowdown when credit availability tightens.?We believe we are in the midst of?a significant distressed investing opportunity.?Even if default rates reach only half the level witnessed in 2008, the distressed credit market presents an opportunity set even larger than during the GFC.
Distressed investing opportunities tend to be episodic. We believe we are currently in a window of investing opportunity.
Chart of the Month
Spotlight: Beyond 60/40: Episode 2
Anastasia Amoroso , iCapital Chief Investment Strategist, discusses commercial real estate with Gary Rozier of Oak Street Real Estate Capital LLC ; and Lawrence Calcano , iCapital Chairman and CEO, shares his views on leveraging education and automation to increase access to alternative investments.?
Monthly Market Roundup
Last year’s historically large and rapid tightening is starting to constrict the financial system and slow the economy. Learn why this is necessary and will need to be sustained to restore equilibrium conditions.
For the second year, Blackstone and?SHOOK? Research partnered to measure how top-ranked[3] advisors are using alternatives today. Key findings include: 60% of surveyed advisors raised their allocations to alts in 2022, and more than 45% plan to increase allocations in 2023.?
Discover how current market dynamics in the commercial real estate (“CRE”) debt market have created attractive near-term investment opportunities.
Find out the three reasons for investors to be optimistic that, despite a slowing economy and higher rates, credit could help portfolios outperform.
In Case You Missed It
Learn how private credit can add enhanced risk adjusted returns and income potential to your portfolio. Read more.
领英推荐
With more investors seeking diversification in their portfolios, there is a compelling case for advisors to explore the unique characteristics of hedge funds. Read more.
We break down private equity with the primary investment strategies, a typical fund life cycle, and the key benefits and considerations. Read more.
Monthly Alts Pulse
Make sure to catch the first episode of Monthly Alts Pulse , a new program where Lawrence Calcano , iCapital Chairman and CEO, and Alt Goes Mainstream host Michael Sidgmore take the pulse of the private markets.
Market Pulse
Despite potential downside risks to the market, find out why we see bright spots in mega-cap tech stocks in Chief Investment Strategist Anastasia Amoroso 's Market Pulse .
New at iCapital
We're honored to be recognized on the?WealthTech100 list as one of the world's most innovative companies addressing the challenges and opportunities in the wealth and asset management industries.
[1] Source: Moody’s, “Corporate defaults jump with higher interest rates, slowing GDP growth and financial-stability risks,” April 14, 2023.
[2] Source: Marathon Asset Management, “The 2023-2024 Credit Cycle: Public & Private Credit Outlook & Opportunities,” Q1 2023.
[3] “Top-Ranked” as defined by SHOOK Research. For more information on SHOOK’s ranking methodology, please see?https://www.shookresearch.com/a-methodology.html
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