Max Severijns

Steffen Pauls led KKR in Germany for over eleven years before becoming CEO of Moonfare. In 2015, he left the American investment company with a new goal: making private markets accessible to individuals. He understands all too well this target group sometimes has ethical concerns regarding this sector.

The returns generated by private credit funds seem to primarily benefit fund managers, not investors. According to a recent study published by three economists from the American National Bureau of Economic Research (NBER) there is no extra return left for investors after accounting for costs and risks.

The study “Risk-Adjusting The Returns To Private Debt Funds” analyzes cash flow data from 532 private credit funds established between 1992 and 2015. The researchers compared incoming capital to distributions to investors.

While it must frequently adjust its predictions, the market yet anticipates two reductions in the Federal Reserve’s rates within the year. Should these occur, the implications for the S&P 500 are a matter of considerable speculation.

“At some point a kind of repetition creeps in, fatigue too, like over that eternal ECB watch, whether a comma has shifted somewhere. Take US interest rates. Do you remember whether or not it was raised in March 2018?”

As the U.S. presidential election nears, the markets are bracing for heightened volatility, particularly within the S&P 500, signaling the first significant movement in the Volatility Index (VIX) in several months. Investors are turning their gaze toward the Chicago Board Options Exchange (CBOE) Volatility Index futures, anticipating notable fluctuations in the S&P 500 as election day approaches.

The Securities and Exchange Commission (SEC) has revised its climate reporting requirements under pressure from politicians and the business community.

• Cocoa prices soar; shortage from weather, disease impacts
• Record deficit, over-sold futures cause price spikes
• Stabilisation attempts; high prices challenge producers, buyers

The cocoa market is reeling. Failing harvests are sending futures prices vertically upwards, and a solution seems far away. Daredevils looking to get in now are taking the risk of investing in a derailed market. 

Better ESG scores of listed companies do not necessarily lead to higher equity returns. Contrary to the claims of numerous asset managers, this link cannot be scientifically proven, according to researchers from Erasmus University and Boston University.

Increasing numbers of analysts are now forecasting that the Federal Reserve will not implement any rate cuts before 2025. This follows an unexpected rise in US inflation in February, suggesting that the Federal Reserve may postpone any thoughts of reducing rates. Despite previous market expectations of an interest rate cut in June, experts at Vanguard, Apollo, and other institutions are now suggesting that the Fed could maintain current interest rates throughout the year.

US President Joe Biden has outlined his ambitions for comprehensive tax reforms targeting large corporations and private equity funds, with the market’s attention remaining steadfastly on interest rates.

President Biden’s ideal scenario would see businesses shouldering higher tax burdens, a reduction in executive compensation, and a quadrupling of the costs for shareholder buybacks.

Private investment-laden portfolios of US university funds achieved a net return of 7.7 per cent in FY2023, but the gains were almost entirely due to public equities.  

Historically, university funds with larger endowments tend to achieve better one-year investment returns than funds with smaller endowments due to significant allocations to private investing. The rise in the US stock market and disappointing returns on alternative investments reversed the trend in 2023.