Andrew Hyland

Interesting article from Douglas Appell in Pensions & Investments about the post-ZIRP, “higher for longer” interest rate environment that boils down to advocating for the pursuit of satisfactory investment outcomes that are relevant to asset owners’ actual spending needs and goals, rather than continuing the historically common practice – and expected future folly – of tethering one’s equity beta to that of an equity benchmark whose performance from today’s elevated levels is widely expected to be sluggish and insufficient to fund minimum liabilities (ie: payout rates, actuarial hurdles, spending goals, etc.).   Quoting the inimitable Ben Phillips, “In that world, the relevant benchmark becomes the client’s required cash flows.”   Fresh perspectives and new ideas are warranted. Satisfactory outcomes not benchmarks.

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How to counterattack short sellers and force them to cover: Wall Street has become trench warfare with bully groups of short sellers on the attack. Do you think they will cover by writing a strong Press Release? That is not the case with 80% of Newsworthy Companies. There is one sure way to ambush short sellers and that is with "psychological keywording": Unlike in the 20th century, The Markets are now run by computers/robots and AI so it's not the investors to get your stock to cover, it is all AI and just a few words will in fact cause the short sellers to become your best friend. www.kinsleystreet.com

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The graph in this article shows the WACC and the percentile rankings of 41 US BSL #CLO managers based on their average percentile across at least 10 of their deals from the 2013 to 2023 vintages, according to asset prices as of May 28, 2024. It is interesting to note that managers with a primary CLO blended DM print of below 190 bps are represented across the performance percentiles. In other words, managers in both the top and bottom quartiles managed to print their CLO liabilities with a blended DM of less than 190 bps. If you’re an investor in the CLO market, we invite you to register with us using your business email address to gain complimentary access to our freemium content.

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All areas of commerce are benefitting from data analysis, and our industry is no different. And when it comes to hard data, Henry Schwartz is among the very best. Good, punchy interview here fresh from the OIC on many hot topics in the listed options space, including the rise of the "ProTail" customer using options strategically. #Options #OptionsStrategies #Cboe #SPX #VIX #XSP #OIC #0DTE

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We are delighted to announce that Managed Asset Portfolios, LLC (MAP) has achieved Top Guns status for its U.S. Multi-Cap Value Strategy for Q2 2024. 🏆📈 Read press release: 👉 https://lnkd.in/eqDHD8Kp #ManagedAssetPortfolios #Investing #StockMarket #Awards #ValueStrategy #BestMoneyManagers #TopGunsManager

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It was great to be back in Boston last week, reconnecting with returning Institute members and meeting new market and investment leaders! We are excited for the events and research areas we have coming up in the next few months! #ocio #investmentsolutions #investmentmanagement #investmentconsulting

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Is there opportunity for high yield in today’s new economic era? Konstantin Leidman, CFA, Portfolio Manager at Wellington Management, explores how to find the right balance between targeting emerging areas of opportunity and seeking to protect portfolios. #neweconomicera #fixedincome #highyield #wellington For professional investors only. Capital at risk.

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As we observe the current market dynamics, we anticipate a robust growth trajectory for commercial real estate in New York City.

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What’s Black and Yellow And Red All Over? 1740 Broadway. In a departure from rates, we consider a recent and noteworthy commercial real estate sale in NYC. In a harbinger of what may come in the distressed urban commercial office sector, the debt secured by the vacant office tower at 1740 Broadway between 56th and 55th Streets in New York City has sold for a reported $200 million or roughly $300 per square foot. By way of background, Blackstone acquired the fully leased property in 2014 for approximately $600 million and conservatively financed it with a $300 million CMBS loan. Around the Pandemic, the property lost its tenants and the loan went into default in 2022. While loan buyers were sought, the asset languished. Yellowstone Real Estate recently acquired the loan for just under a reported $200 million (or about 66% of face, excluding accrued interest and advances), and as reported by The Real Deal is considering a conversion to residential. The transaction is interesting for a number of reasons. First, it is one of a handful of distressed office sales that have been widely forecasted and could point to a perceived bottoming out of the market. Second, if converted to residential, it could serve as blueprint for other office conversions. Third, it creates approximately a $150 million loss for the CMBS trust, historically unusual in SASB. In any case, it is a counterpoint to “urban doom loop” scenarios being broadly discussed. Hopefully, a second life for this iconic New York City tower, originally the Mutual of New York or “MONY” building. Of historical note, the MONY sign atop the tower apparently served as the inspiration for Tommy James and the Shondells' 1968 hit single "Mony Mony;” it was also a motif in the film “Midnight Cowboy.”

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Apart from the 12 'underwater' deals previously mentioned, there are 29 additional US BSL #CLO deals, as outlined in this premium article. These would experience impairment in their single-B tranches under a scenario where underlying assets... (This article is behind a paywall. If you're interested in learning about the pricing for premium content, please don't hesitate to email me at [email protected].)

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After Europe and Asia Pacific, we have published a research paper on the North American Living markets. Please see below a link to this document and find out more in these real estate markets Clemens Kramp MSc FRM Melle Simonis

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PitchBook Q3 2024 Breakdown showing Add-ons, Carveouts & Divestitures are leading the way to 2024E being 22.5% higher than 2023 in deal value. While that estimate would be below 2022 it's a great first step in the right direction . . . #privateequity E78 #privatecredit

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𝗜𝘀 𝗤𝘂𝗮𝗹𝗶𝘁𝘆 𝗣𝗿𝗶𝗰𝗲 𝗦𝗲𝗻𝘀𝗶𝘁𝗶𝘃𝗶𝘁𝘆 𝗙𝗶𝗻𝗮𝗹𝗹𝘆 𝗕𝗮𝗰𝗸? 𝗧𝗵𝗿𝗲𝗲 𝗠𝗮𝗿𝗸𝗲𝘁 𝗦𝗶𝗴𝗻𝗮𝗹𝘀 𝗬𝗼𝘂 𝗖𝗮𝗻'𝘁 𝗜𝗴𝗻𝗼𝗿𝗲 The credit market is telling us something profound through the office sector. Consider this week's stark contrast: T𝗵𝗲 𝗤𝘂𝗮𝗹𝗶𝘁𝘆 𝗣𝗿𝗲𝗺𝗶𝘂𝗺 𝗶𝘀 𝗡𝗼𝘄 𝗠𝗮𝘁𝗵𝗲𝗺𝗮𝘁𝗶𝗰𝗮𝗹: • JPM is syndicating $3B CMBS for The Spiral (94% leased to Pfizer, TPG, HSBC)....$BXMT will get a full repayment • Moody's October data: >8% debt yield = 86% success rate • <8% debt yield = 0% refinancing success (down from 41% in 2023) This isn't just bifurcation - it's the market developing a precise mathematical definition of quality. 𝗧𝗵𝗲 𝗖𝗼𝘀𝘁 𝗼𝗳 𝗕𝗲𝗶𝗻𝗴 𝗔𝘃𝗲𝗿𝗮𝗴𝗲 𝗶𝘀 𝗕𝗿𝘂𝘁𝗮𝗹 𝗥𝗲𝗮𝗹 𝗻𝘂𝗺𝗯𝗲𝗿𝘀 𝗳𝗿𝗼𝗺 𝗿𝗲𝗮𝗹 𝗮𝘀𝘀𝗲𝘁𝘀: • Gas Company Tower: $630M → $215M • Peachtree AAAs trading at 55 cents • Average refinancing needs 33% new equity • 600 California St: $6M missed interest • Aspiria: $14M missed payments 𝗧𝗵𝗲 𝗙𝗼𝗿𝘄𝗮𝗿𝗱 𝗖𝗮𝗹𝗲𝗻𝗱𝗮𝗿 𝗧𝗲𝗹𝗹𝘀 𝘁𝗵𝗲 𝗥𝗲𝗮𝗹 𝗦𝘁𝗼𝗿𝘆: • 16.77B office loans maturing in 12 months • 77.7% showing distress • Only >9% debt yields clearing consistently • Three straight months of $1B+ maturities The Bigger Picture: We're not just seeing a flight to quality - we're watching the market develop precise mathematical thresholds for what "quality" means. When JPM can syndicate $3B while AAA bonds default across the street, that's not market dysfunction - it's price discovery working exactly as it should! Question is: What happens when other credit markets start demanding this level of precision? #Banking #CreditRisk #CMBS #CRE  https://lnkd.in/e7bEgr4K

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Novogradac released a report last week highlighting how value still remains in Opportunity Zone investments, despite the approaching 2026 deferral deadline on capital gains. Looking ahead to 2025, experts predict a potential uptick in OZ activity, with Alex Flachsbart of Opportunity Alabama noting that “people who are investing now are doing it for the 10-year hold benefits.” On the topic of the Opportunity Zones Transparency, Extension and Improvement Act, Flachsbart remains hopeful that OZ reform will be included in 2025 tax legislation. 

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https://lnkd.in/enDPvJBH Once this process starts in CRE it becomes self reinforcing … and getting invested and allocated becomes the overwhelming priority for GPs and LPs … 

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Active vs. passive: The tectonic shift 🫨 in one chart! Long/short equity managers James Hanbury & Jamie Grimston of Lancaster Investment Management with commentary on the impact the shift to passive investing is likely to have in a major market correction 📉scenario: "As passive investing continues to gain share by definition it drives momentum investing. While this has been a very successful style over the past decade or so (partly in a self fulfilling way) it gets more and more precarious as a greater percentage of the market follows suit. Most investors buying a passive fund have no idea they are on a momentum trade and clearly they are adding to the weight of money that does not understand what it owns. The trouble with 'buying blind' is the difficulty to buy more when the price falls and with human nature, it is often the reverse that plays out." ⚠️ As a consequence, Lancaster IM sees the market vulnerable to a major correction as passive investing is likely to exhibit momentum style not just on the way up but also on the way down. Source: Minack Advisors (via Lancaster Investment Management) (+++Opinions are my own. Not investment advice. Do your own research.+++) #markets #investing #wealthmanagement #hedgefunds #absolutereturn Tap the bell 🔔 to subscribe to my profile & you'll be notified when I post. 💸

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