For several previous quarters, we have described the omnipresent influence of central bankers around the world. Their words and actions have overwhelmed market fundamentals through the depression of interest rates, which has, in turn, pushed investors to take more risk in pursuit of return.
Much has been written lately suggesting that the benefits of diversification are fading or have become nonexistent. Numerous players in the institutional investing field have published material suggesting the diversified portfolio, often broadly called “the endowment model,” is dead. We at FEG are not subscribers to these claims, and cite a famous Mark Twain quote (or an adaptation thereof) as an eloquent, succinct, and appropriate response regarding the supposed end of the benefits of diversification: "Reports of my demise have been greatly exaggerated."
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.