No. of Recommendations: 7
supporting some earlier articles, all alt asset managers will be relying more upon their retail sales charm&ability for most future growth. the law of large numbers assume absolute growth rates must slow with scale anyway.
already some the 'smart' money is replacing alternatives with public bonds. but can these alt managers really shake any significant retail crowdflow away from their infatuation (and thus misunderstanding) of market-weighted index funds?
["...Debt yields relative to equity are as high as they have been in over a decade. And the investors who most focus on debt, insurance companies, have reacted. For the first time in years, the bond share of investments on insurance company balance sheets increased in 2022. This is also evident from the earnings calls of large insurance companies. Insurers are once again embracing debt and locking in higher rates over longer periods. For example, Allstate is extending duration. In their own words, 'this duration extension locks in higher yields and income for longer, while positioning the portfolio to benefit from potential future reductions in interest rates.' The longer rates stay high, the more we would expect this shift to continue. The traditional purview of insurance companies (rated, high quality credit) becomes more attractive relative to the alternatives when rates are higher. This is particularly true because insurance companies are penalized for unrated or low rated investments like common equity or many alternatives. In our opinion, insurance companies no longer need to venture far afield to increase return..."]
verdad capital 2023 july
