inst_investors

As a result of the financial meltdown five years ago, institutional investors, particularly pension funds, are facing a funding conundrum—if they don’t do something, they will run out of money in the foreseeable future. Therefore, they are turning to hedge funds to help close this gap. The result is a drastic change in hedge funds’ investor base, from high-net-worth individuals and family offices pre-crisis to institutions predominately today.

The shift seems benign, but it has the potential to greatly change the industry. It is not because of the issue of fees, but instead the issue of liquidity, and how frequently investors can redeem their money.

To find opportunities that are less correlated to the markets, hedge fund managers need to be creative, look in different places, develop contrarian viewpoints, etc. This is how they extract differentiated value via risk-adjusted returns. However, it takes time to extract the proper value, which means money will be locked up for a period of time.

Illiquid investments traditionally make pensions extremely nervous. Due to fears of another crisis, they want to know if they can get their money out when they want to in order to safeguard themselves from further depleting their already finite assets.

Continue Reading »


Share:
  • Facebook
  • Twitter
  • LinkedIn
  • email
  • Print

nba-logoThe NBA became fixated on promoting its star players over its great teams around the time that Michael Jordan entered the league.  Whereas great teams like the Lakers and Celtics seemed to define the league pre-Michael, once Michael became Air Jordan the league seemed to lose track of the value of great team play and instead focused all its marketing energy on promoting its stars.  From Michael to Shaq to Kobe to Yao to LeBron, star players are at the center of the NBA universe today.

The San Antonio Spurs have become a dynasty and an every-year contender for the championship and they do it despite not having anyone quite as popular as LeBron, Carmelo or Kevin Love.  The Spurs should be in the conversation as among the best teams ever.  Yet, little attention is given to their recent championship over LeBron's Miami Heat.  Instead almost all you hear about the NBA nowadays is front office, free agency drama.

Will LeBron remain a member of the Heat?  Should he go back to Cleveland? Will Carmelo go to Chicago?  Can the Knicks free up enough salary cap space to land Kevin Durant when he is a free agent?

Continue Reading »


Share:
  • Facebook
  • Twitter
  • LinkedIn
  • email
  • Print

Noteworthy events for the month ahead . . .

July4thItaly takes over the rotating EU presidency from Greece on July 1. More details on Italy’s priorities here.

The U.S. celebrates its 238th year of independence on July 4 and 155 million hot dogs are expected to be consumed on this day according to National Hot Dog and Sausage Council. Perhaps this is why July is also National Hot Dog Month.

The FIFA World Cup wraps up on July 13. Did you know that South American and European countries have won the World Cup 9 times and 10 times respectively? There has been no other continent which has produced a World Cup Champion. Other major sport events to watch in July and August include the Tour De France (July 5), the golf British Open (July 17), and the tennis US Open (Aug. 25).

President Barack Obama celebrates his 53rd birthday on August 4. Also celebrating a birthday this month is Prosek’s fearless leader, Jennifer Prosek. Happy birthday, Jen!

Want to learn more about Mexico and how “US companies can best leverage the $507 billion import-export market with Mexico?” The Economist hosts a free webinar on this topic on August 5.

Other important, if not quirky, events to take place in the months of July and August include International Joke Day (July a), World Population Day (July 11), National Tequila Day (July 24), National Cheesecake Day (July 30), Friendship Day (August 3), International Left Handers Day (August 13), Womens Equality Day (August 26), and International Bacon Day (August 30). End of Story


Share:
  • Facebook
  • Twitter
  • LinkedIn
  • email
  • Print

Media Navel Gaze

The Week Unpeeled

The World Cup seemed to dominate the news all week and even stopped business for a while when the US played Germany on Thursday, with Germany winning and the US advancing; no doubt the most headlines belonged to Luis Suarez from Uruguay who was eventually tossed from the remaining games for biting Italy’s Giorgio Chiellini, leaving quite mark on the games.

Elsewhere:

  • The 100-year anniversary of World War I also led coverage last week, particularly over the weekend, illustrating the vast geopolitical impact “The Great War” had on Europe;
  • American Apparel ousted chief Dov Charney managed to stay in the spotlight, fighting for his job and brand amid financial and
  • setbacks;
  • The Supreme Court ruled that Aereo violated programming copyrights, in effect shutting down the new-media start up that made it cheaper to watch broadcast network television;
  • In the UK, jurors acquitted Rebekah Brooks of the Murdoch empire on charges of phone hacking and bribery, among other allegations, but found Andy Coulson guilty of illegally intercepting voice-mail messages in the World of the News case;
  • The Court also ruled last week that police must obtain a warrant to search a cellphone for information, protecting privacy rights in America;
  • The US economy contracted in the first quarter by 2.9 percent, although stocks and other closely watched financial markets seemed to continued to show strength; economists remained upbeat about the economy despite the quarterly slip in growth; and
  • The Dow ended the week little changed, closing at 16,851;
  • ABC News is making changes with Diane Sawyer stepping down as anchor of the evening news, replaced by David Muir, while George Stephanopoulos will become lead anchor for all breaking news coverage.

Share:
  • Facebook
  • Twitter
  • LinkedIn
  • email
  • Print