January 31, 2015
I’ve always been a fan of “Sweet Baby James,” also known as James Taylor, or the original “J.T.” (I also appreciate the music of Justin Timberlake, the “J.T.” of Generation Y). I do not possess the talents of either J.T., but I have attempted to “Bring Sexy Back” to the credit markets in these annual missives. James Taylor probably never intended to write songs about the credit markets. Nevertheless, Steamroller Blues, which he wrote back in 1970 (well before the public high yield bond and bank loan markets existed), unintentionally paints a portrait of credit strategies such as high yield bonds, bank loans, and most credit hedge funds. These strategies tend to be long-biased, and suffer from return patterns with fat tails and negative skew.
FEG's Research Review brings you the monthly economic and market commentary, as well as an in-depth focus on a current topic of significance.
December 31, 2014
It is that time of year when every publication takes stock of the old and prognosticates on the new. I confess to being jealous of the apparent certainty expressed by the newsstand publications. With so much complexity, so many variables, how do they know? I am comforted to be in good company. Former U.S. Treasury Secretary Robert Rubin wrote in his book, In an Uncertain World, “Some people are more certain of everything than I am of anything.” Contemplating the unknown or unknowable is a worthwhile exercise when investing, although perhaps the antithesis to selling headlines. So, what went right and what went wrong in 2014? Events impacting the private capital markets in 2014 generally fell in line with expectations—until the shock in oil prices late in the year. Liquidity remained plentiful, public equity returns attractive, and global interest rates remarkably low.
FEG's Capital Quarterly Review delves into alternative investments such as natural resources, private equity, and private real estate.