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.
May 31, 2015
The U.S. equity markets have been on a tear. I am not referring to the short-term performance year-to-date, but the short-term performance of the past three years. U.S. equities, regardless of the index selected, returned approximately 20% annualized since June 2012. Despite double-digit returns from developed international equities over the same period, weakness in emerging markets and just about everything else has led many to question their holdings. Much like those investors that felt left out and wanted to jump on the tech-fund bandwagon during the late 1990s (we know how that ended), many investors have similar reactions to recent performance today and have considered abandoning diversification for an S&P 500 Index fund, if only for a minute. I would not be surprised if many of these investors also considered abandoning equities during the financial crisis, because these reactions are only natural, and no one is immune.
FEG's Capital Quarterly Review delves into alternative investments such as natural resources, private equity, and private real estate.
June 1, 2015
Private equity has frequently been in the news in 2015. There were positive headlines, “Private Equity Exit Volume Hits Record Level in 2014,” and those less flattering, “Pension Funds Can Only Guess at Private Equity Cost.” Increased attention on the industry should not be a surprise. The asset class grew to the equivalent of 4% of the global stock market capitalization at the end of 2014, up from 1.5% in 2000, and regulators have stepped up oversight in the Dodd Frank era. The most informative headline might have been McKinsey & Company’s report, “Private equity: Changing perceptions and new realities,” published in April 2015. The report highlights private equity’s historic outperformance of public equities on a risk-adjusted basis, but notes the ability to consistently produce that outperformance has become harder than ever.