A variety of factors influence FEG’s approach to identifying, evaluating, and recommending buyout funds.Chief influences include our collective experience over the last 15+ years of covering private equity markets, our view on the keys to success over the next ten years (the term of the average buyout fund), and published industry research. Based on our experiences, analysis of industry data, and academic research, several factors emerge for successful private equity firms that are able to generate premium returns.
One of the great benefits we enjoy at FEG is direct access to some of the best and brightest minds in the investment industry. I was reminded of this fact yet again while spending two days with Nobel laureates...The discussion was lively, dynamic, and continued well past the 8:00-5:00 workday. In fact, some of the most interesting conversations lasted long into the night. While the topics were too varied to cover in detail here, there were two subjects of particular interest to FEG and our clients: manager selection and public equity investing styles.
On March 21–23, Fund Evaluation Group, LLC (FEG) welcomed more than 500 attendees to the seventh FEG Investment Forum, Revitalization: Meaningful Change Through Mission, Vision, and Strategic Investing. Held in downtown Cincinnati, the Forum featured three days of networking, primary speakers, a main stage debate, and numerous breakout sessions that discussed strategies to help revitalize organizations’ investment programs.
The strengthening U.S. dollar (USD), a trend that began in 2011 and gathered steam in 2014, cooled during the first quarter of 2016. One of the primary factors driving down the value of the USD included numerous dovish remarks by Federal Open Market Committee (FOMC) Chair Janet Yellen and other Federal Reserve officials, who focused on the future path of monetary tightening.
The U.S. stock market posted a tepid positive return that masked a drop of over 10% at one point during the quarter. Emerging markets outperformed developed markets both domestically and abroad. Long duration fixed income securities rallied as rates dropped while absorbing a more dovish U.S. Federal Reserve policy. REITs remained strong, commodities ended essentially flat, and the struggles facing MLPs continued. Skillfully managed global macro strategies within the broader diversifying strategies category posted solid returns.