Chronicles of an Allocator

Authored by Christie Townsend

Authored by Steven Novakovic, CFA, CAIA

Authored by Laura Merlini, CAIA, CIFD

Authored by Aaron Filbeck, CAIA, CFA, CFP®, CIPM, FDP

In this month’s issue of Chronicles of an Allocator, we take on the debate over including private assets in 401(k) plans. Chronicles contributor, Aaron Filbeck, CAIA, CFA, CFP®, CIPM, FDP, Managing Director, Head of UniFi by CAIA™ points out that the discussion is an ongoing one, and the conversation has only intensified since the Pantheon and Partners Group’s Letter to the Department of Labor in June 2020 argued for private equity’s inclusion in fund lineups.

Aaron delves into both sides of the case for integrating asset classes like private equity, real estate, and infrastructure into defined contribution schemes, and wraps it up with a possible path forward. Get a ringside seat to the debate!

Authored by Steven Novakovic, CFA, CAIA

In this month’s issue of Chronicles of an Allocator, we're taking a fresh perspective on ethics. While they might not be the most exciting water cooler topic, it's undoubtedly a cornerstone of what sets exceptional professionals apart in our industry.

Chronicles contributor, Steven Novakovic, CFA, CAIA, Managing Director, CAIA Curriculum explores why ethics matter now more than ever.

Authored by Christie Hamilton

We’ve all known that wherever there's an object of value, a secondary market emerges to provide solutions to asset holders. However, the more intriguing story may be how the underlying investment strategies within secondaries have evolved significantly in recent years.

Explore this fascinating evolution in our latest Chronicles edition, where Christie Hamilton, Director of Content and Research at CAIA Association, dissects the transformation of investment strategies and characteristics within the secondary market—the intricacies of historic fundraisings, innovative diversification strategies, and the emergence of GP-led solutions reshaping private asset markets. 

IN THIS ISSUE: 

• Myths and Reality in GP-Led Secondaries
• Jefferies Global Secondary Market Review 2024
• The Evolution of the Private Equity Secondaries Market (CAIS Group)

Authored by Christie Hamilton

With the recent publication of our seminal report, Innovation Unleashed: The Rise of Total Portfolio Approach, Christie Hamilton, Director of Content and Research at CAIA Association, explores the topic further in this issue of Chronicles to see how beyond the numbers lies a deeper truth: TPA represents a paradigm shift in how we think about and approach portfolio construction.

IN THIS ISSUE: 

• Capital Decanted: Episode 9 - Total Portfolio Approach: An Unexpected Journey with Ben Samild and Jayne Bok
• Thinking Ahead Institute's TPA content hub
• Gain a “behind the pages” perspective of our seminal report

Authored by Steven Novakovic, CFA, CAIA

In this month’s issue of Chronicles of an Allocator, contributor Steven Novakovic, CFA, CAIA, Managing Director, CAIA Curriculum brings us into the world of VC cycles where tough times might not be all bad news. Discover the silver lining as valuations return to Earth, and non-traditional players exit the stage. Are you ready to be contrarian and capitalize on opportunities amid challenges?

IN THIS ISSUE: 

• JP Morgan Growth Equity Outlook
• Pitchbook European VC Predictions
• Asia VC Outlook

Authored by Aaron Filbeck, CAIA, CFA, CFP®, CIPM, FDP

In this month’s issue of Chronicles of an Allocator, contributor Aaron Filbeck, CAIA, CFA, CFP®, CIPM, FDP, Managing Director, and Head of UniFi by CAIA™ offers a cinematic perspective on the democratization of alternatives, drawing parallels with the Star Wars Sequel Trilogy to explore the challenges and innovations in the alternatives space.

IN THIS ISSUE:

• The Tide Has Turned from BCG
• BlackRock’s long-term capital markets assumptions
• Capital Decanted: Democratization of Alts

Authored by Laura Merlini, CAIA, CIFD, Managing Director, CAIA EMEA

Embark on a captivating journey with Sindbad the Sailor and Alternative Investments: A Story of Two Seas in this month’s Chronicles of an Allocator. Laura Merlini, CAIA, CIFD, Managing Director, EMEA for CAIA Association draws parallels between the mythical adventures of Ulysses and Sindbad and the dynamic landscape of the Middle East's alternative investment industry.

IN THIS ISSUE:

• How global climate imperatives are re-shaping energy sectors across the globe
• Advancing Gender Equity in the Middle East Workforce by Bain & Company
• A brief outline of recent PE and VC performance

Authored by Christie Hamilton

This edition of Chronicles, we draw intriguing parallels between architecture and investing, and it's not your typical floorplan. From the transparent elegance of the Farnsworth House to the whimsy of Prada Marfa, this piece weaves a narrative connecting childhood Lego obsessions to a love for genius architects like Mies van der Rohe.

IN THIS ISSUE:

• Greenwich Roundtable Best Practices
• Artificial intelligence and machine learning in asset management
• Linking The Drivers of Total Returns to Fundamentals

Authored by John L. Bowman, CFA

This edition of Chronicles focuses on recent travels to Asia, providing a brief overview — like postcards from the edge, or perhaps paper boats, of my insights from various panels, conversations, and conferences.

IN THIS ISSUE:

• Asia's Private Markets Show Signs of Resilience
• KKR's Thoughts from the Road
• Pictet Group launches inaugural Megatrending - Opportunities Ahead study

Authored by Aaron Filbeck, CAIA, CFA, CFP®, CIPM, FDP 

We’ve all heard some variation of the phrase “a solid foundation is the key to success.” Most of the time, we’re talking about education, morals, or technical expertise. Of course, I agree with the statement when it comes to personal development, but right now I’d like to talk more literally.

IN THIS ISSUE:

• Themes and Opportunities

• Growth Prospects and Fundraising Trends in Infrastructure Investments

Authored by Christie Hamilton

On my first day of investment consulting, I was handed a copy of Pioneering Portfolio Management and told to get familiar with it. David Swensen had me at “rigorous investment framework,” and like many others in the industry, I adopted his model—including the dogmatic adherence to policy asset allocation primacy.

IN THIS ISSUE:

• Discovering Themes for Visual Learners and Graph Geeks

• An Unlikely Resource 

• 2023 Trends + Private Equity

Authored by Steven Novakovic, CAIA, CFA

In nearly 15 years, the universe of digital assets has grown from an idea presented in a whitepaper by an unknown author, to a global ecosystem full of promise, potential and tangible value.

IN THIS ISSUE:

• Unchained Podcast
• One-Two Punch Finally Registers SEC View on Binance, Coinbase, Rest of Crypto
• Are Crypto Markets Correlated with Macroeconomic Factors?

For this month’s edition of Chronicles, we turned to Laura Merlini, CAIA, CIFD, Managing Director, CAIA EMEA to contribute insight and perspective on the art market as an alternative investment class.

IN THIS ISSUE:

• The Art Market Report 2023 by Art Basel and UBS
• How Has Covid-19 Affected the Public Auction Market?
• The Hiscox report

For this month’s edition of Chronicles, we turned to Deborah McLean, President of the CAIA Foundation, and CAIA’s Global Head of Diversity, Equity, & Inclusion, to contribute insight and perspective on DEI initiatives throughout the industry.

IN THIS ISSUE:

• Diversity, Equity, and Inclusion Lighthouses
• Women in Alternatives
• The Path to Inclusive Capitalism

Authored by John L. Bowman, CFA

In this edition, CAIA Association is committed to continuing our global tour and conversation on the Total Portfolio Approach (TPA) to investing.

IN THIS ISSUE:

• The Journal of Portfolio Management
• Total Portfolio Approach Content Hub
• GIC's Total Portfolio Approach

Authored by Aaron Filbeck, CAIA, CFA, CFP®, CIPM, FDP

This edition of Chronicles focuses on alternative investments adoption in wealth management.

IN THIS ISSUE:

• Top Trends in Wealth Management
• The State of Alternative Investments in Wealth Management
• Alternative Investments - Their Rising Prominence in Asia's HNW Portfolios

Authored by Steven Novakovic, CAIA, CFA

In this edition of Chronicles, we highlight a handful of resolutions we believe are worthy of keeping.

IN THIS ISSUE:

• The Illusion of Trust in Asset Management
• Don't be Fooled by Your Office Building Appraisal
• Four Investment Mistakes to Avoid in 2023

This month's issue of Chronicles is by guest author Jo Murphy, who contributed insight and perspective on 2022 as a year of sustained momentum for the APAC region.

IN THIS ISSUE:

• Asia Sails Into Headwinds From Rate Hikes, War, and China Slowdown
• Asia-Pacific Private Equity Report
• The Rise of India's Private Equity Market

Authored by Aaron Filbeck, CAIA, CFA, CFP®, CIPM, FDP

While none of us have a crystal ball and can perfectly predict the future, diversification is a long-term value proposition that’s showing its benefits today. In this edition, we’ve compiled a short collection of articles that can help you take advantage of the chaos while simultaneously improving long-term outcomes.

IN THIS ISSUE:

• Q3'22 Venture Pulse Report
• Private Equity Fundraising Challenges Set Up A Tough 2023
• The Denominator Effect

Authored by Steven Novakovic, CAIA, CFA

This month's edition highlights our paper, "A Renewed Professionalism", outlining six guiding principles for investment professionals to implement the portfolio for the future.

Authored by John L. Bowman, CFA

Late last year, the industry couldn’t get enough ESG. It was a feeding frenzy across LPs, GPs, academics, consultants, and even professional bodies. This month’s edition of Chronicles is dedicated to exploring and equipping you with the latest from the front line of this evolution.

IN THIS ISSUE:

• ESG, CIOs on Crash Course with Politics
• Time to Put the Fossil-Fuel Industry Into Hospice
• What Does ESG Need to Work?

For this edition of Chronicles, CAIA explores the growing demand for access to alternative assets within the world of wealth management.

Authored by Roger Urwin, Thinking Ahead Institute

For this edition of Chronicles, we're highlighting Roger Urwin feature in Portfolio for the Future™ and discussing how strong cultural values within an investment organization will ultimately lead to greater long-term success for the client.

Authored by Ashby Monk, Stanford University

For this edition of Chronicles, we're highlighting Ashby Monk’s feature in Portfolio for the Future™ and unpacking how to develop strategies that will yield the most alpha in today’s volatile investment arena.

Authored by Andrea Auerbach, Cambridge Associates

For this edition of Chronicles, we're highlighting Andrea Auerbach’s feature in Portfolio for the Future™ and discussing why a solid financial footing could mean a less liquid approach.

Authored by Ariel Babcock, CFA, FCLT Global

In this month’s edition, we focus exclusively on the Portfolio for the Future™ report, which simultaneously represents a “back to basics” mantra and a forward-looking view of where our industry and capital markets are headed.

Authored by Navneet Munot, CAIA

This month’s guest author is Navneet Munot, Managing Director, and CEO of HDFC Asset Management who details India’s claim to fame on the capital market stage.

This edition of Chronicles is dedicated to property technology (PropTech), or the application of automated tools in real estate and property management.

This edition of Chronicles focuses on some of the most interesting forward-looking pieces we’ve seen to start 2022, after the manic year that was 2021!

This edition of Chronicles includes content focusing on the important intersection of climate change and capital markets.

IN THIS ISSUE:

• Can Capital Markets Save the Planet?
• You Can't Manage What You Can't Measure
• Climate in African Private Capital

This edition of Chronicles covers the innovative world of decentralized finance (DeFi). We’ve curated a short list of content pieces that we believe provide relevant and current information on this space, regardless of where you are in your journey.

IN THIS ISSUE:

• • DeFi and the Future of Finance
• What are the Major Token Types?
• Centralized Decentralization
• Balancing Regulation and Innovation

This month’s edition of Chronicles covers the exploding world of alternative data.

IN THIS ISSUE:

• Alternative Data in Private Markets Series
• Choosing a Raw Data Diet
• Move over, GDP & CPI
• Blurred Lines Between Private and Public Equity

Can your ideas change the world? In this edition of Chronicles goes deep into the topic of Venture Capital. We cover some of the recent trends and look at how they are affective VC ecosystems in Europe and Asia.

In this issue of Chronicles, we look at past trends and future outlooks related to real estate investment and share how investors might think about niche subsectors—such as student accommodation, cold storage, and R&D facilities—that have been affected by the pandemic.

Not everyone has to be a master coder or a world-class quant, but it’s becoming increasingly important for investors of all stripes to understand how data science, artificial intelligence (AI), and machine learning (ML) will impact investment processes. Across asset classes, more managers are utilizing these tools to generate differentiated sources of return, but allocators also see the incremental benefits of the operational efficiencies and scale that AI and ML have introduced.

This issue of Chronicles features articles and webcasts that explore the state of DEI in asset management and the ways that the industry can better welcome and advance new, more diverse voices and talents.

This edition of Chronicles, we’ve brought together recent research and commentary examining a known favorite of inflation-wary investors around the world: real assets.

In this edition of Chronicles we’re sharing resources from around the industry on the far-reaching and evolving digital assets ecosystem. If you haven’t already, we invite you to start by reading CAIA’s whitepaper, written collaboratively with BNP Paribas and Liquefy, and additional resources on the tokenization of alternative assets3.

This edition of Chronicles seeks to provide some helpful resources to aid in the due diligence process. Starting with the results of CAIA Association’s recent research (informed by hundreds of CAIA Members), which focuses on the drivers behind manager selection, we then delve into some relevant industry insights from fellow practitioners. These resources can help you take a closer look at due diligence and further explore some of the less quantitative—though arguably more influential—aspects of the process.

A sense of desperation is rising for those investing on both sides of the traditional 60/40 split, as public equities (at least partially spurred by “meme stock” speculation) continue to set lofty all-time records and as bond yields (while gradually creeping upward) remain historically low. Amid previous market environments, investors looked toward niche alternatives as risk-on sources of alpha. Today, certain under-the-radar alts asset classes may also fulfill the roles once reserved for traditional fixed income: diversification, cash yields, and capital preservation. In this issue of Chronicles, we feature some of the newer or less adopted alternative asset classes that, if effectively managed, could help satisfy the growing voids in once purely traditional portfolios.

Looking back, the year 2020 wasn’t exactly a great year for many, but as vaccines are rolled out, economies recover, and stability is restored, there’s still plenty of issues to grapple with as we look to the future. From a market standpoint, the case for diversification has never been stronger as equity markets have largely rebounded to unsustainably high valuations.

As we’ve shared in previous issues, the traditional 60/40 portfolio is facing a structural headwind in most developed nations, as interest rates sit at rock bottom, or even negative in some countries, and public market valuations appear stretched. Consequently, many investors are forced to re-evaluate saving habits and their asset allocations and increasingly turning to alternative sources of return. We cannot underscore the importance of investment and operational due diligence, especially for those new to alternative investments.

Despite the uncertainty in the foreground today, the rise of sustainable investing is still alive and well in the background. To be sure, the road ahead remains an uphill task, especially with the US, the world’s largest economy, officially no longer part of the Paris Agreement. But ESG, the closest available toolkit for a better societal outcome, is here to stay and continues to gain traction. We are excited to share excellent pieces on private equity, cryptocurrency, and the role of intangibles in corporate valuation.

As the world turns its attention to the United States presidential election and its implications for the global economy, capital markets, and geopolitical trade winds, investment professionals must remain steadfast. Politicians, whatever their creed, come and go; professionals are here to stay. As a collective, we exist to serve investors and deliver appropriate investment outcomes, regardless of governmental influence around the world. CAIA Association aims to defend this purpose, while also seeking to mitigate the shortcomings that continue to plague our industry’s reputation and relationships with clients. This edition of Chronicles is loaded with excellent pieces on sustainable investing, converting alternative data to alpha, and the dynamic future of private capital.

As we’ve said before, the relationship between public and private markets continues to shift, which has prompted investors, managers, and regulators alike to discuss the importance of access. While this discussion has been initiated in the United States, the outcome is likely to impact other areas of the world in the future. A few weeks ago, the Securities and Exchange Commission officially voted to extend the definition of an “accredited investor” from a wealth-based requirement to an education-based requirement. While a select few now have access, CAIA Association argues that not much has changed for the end-investor and the education requirements are far from rigorous. We believe that a combination of shifting capital formation and the thrust of responsibility on the end investor for their own retirement savings brings a sense of urgency to the situation. These pieces are a “best of” compilation of insights we believe are most relevant to you as allocators of capital.

Whether we are focusing on the culture of an investment organization, embracing technological innovation to empower investor decision making, or advocating for more diversity and inclusion in this profession, we must recognize that people are our biggest asset in this industry. Moving forward, culture will increasingly become a major differentiator not only for intangible factors like engaging talent but also for tangible factors like performance. In addition to culture, this edition of Chronicles features topics on private equity, inflation, and democratization.

While climate has reemerged as an area of interest for investors, the spotlight has seemingly refocused on the stakeholder, supported by rising furloughs and unemployment around the world. At the same time, allocators continue to scrutinize their allocations to private assets, whether it’s the impact of remote work on real estate valuations or the role private equity can play in infusing capital back into the private economy. Finally, the discussions around democratization have escalated again in the United States, as the Department of Labor recently approved limited inclusion of private equity funds in retirement plans. The industry, and world, is holding their breath as the SEC mulls even wider revision of the accredited investor definition.

While a lot has changed in recent weeks, the value proposition of diversification has certainly remained constant. What also remains steady is the continued debate among investment professionals and regulatory bodies surrounding the potential relaxation of the accredited investor rule in the United States. While this debate is currently mainstream in the U.S., the results of any regulatory changes have vast implications for other capital markets. There is no clear answer, with strong proponents for and against democratizing access to private capital. As always, CAIA Association seeks to be an objective voice in this debate.

In this edition of Chronicles, we want to highlight our new flagship report titled The Next Decade of Alternative Investments complete with a wealth of data on the growth of the space, insights into where alternatives are heading in the decade to come, and a four-point call to action for all industry practitioners. While the themes of diversification and democratization of product, wrapped in education, and even higher levels of transparency are evergreen, they are even more important for us to rally around during this challenging phase.

This edition of Chronicles is a “best of” compilation of what we believe is most relevant to you as allocators of capital. They fall under four themes: democratization of alternative investments, the current state of the industry, artificial intelligence, data science, and environmental, social and governance (ESG) issues.

We’re excited to introduce the inaugural edition of Chronicles of an Allocator. This monthly newsletter has been carefully curated to provide you with a selection of thought leadership pieces, designed to assist and inform the capital allocation process. As we continuously journey through our now 100 country reach, we have the privilege of interacting with some of the largest and most influential allocators and managers around the world. The dialogue and debate generated in these interactions are invaluable and result in a broad array of blogs, webinars, events, articles, and white papers. We know that navigating the sea of content from the CAIA Association, along with other sources, can be overwhelming. That’s where Chronicles can help. On a monthly basis, our Content Strategy team will choose a handful of the most relevant industry material to help you chart your own course. Regardless of your current seat, LP or GP, buy-side or sell-side, consultant, or service provider, traditional or alternative, we aim to equip all investment professionals to think like an allocator.