When looking beyond the short-term demand factors, there are several long-term secular themes that are positive for specialty assets. Most notably among them, growing populations, increasing spending power of the emerging market middle class, and rising urbanization.
The set of factors and circumstances which together produced 2017's robust investment returns might be described as a "Goldilocks" scenario, one in which the positive forces pressing on the global economy and financial markets were warming noticeably, but not so hot already as to prompt dramatic cooling efforts from central bankers.
What will the world look like in 2040 if vital natural resources become scarce?
The 13th edition of the World Economic Forum's Global Risks Report, undertaken with Marsh & McLennan Companies, examines the evolving macro-level risk landscape and highlights the systematic threats that may disrupt expectations.
The 2017 Tax Cuts and Jobs Act significantly affects the ability of the managers of investment funds to receive long-term capital gains with respect to their carried interest. Under current law, the manager of an investment fund can receive a “profits interest” (also known as a “carried interest” or a “promoted interest”) tax-free. In addition, there is a three-year hold requirement for carried interests.
In this annual session, we discussed the U.S. and global economic outlook, with a particular focus on growth prospects, interest rates, and risks. Furthermore, we explored equity valuations and take a critical look at the underlying assumptions that lead to conclusions of over or under-valuation.
Operational improvements are a key lever for achieving value creation after a deal closes. There are three critical ways private equity firms can both protect and grow value through operations.
Detailed analyses and quantitative rigor go into every sound investment decision. To make matters more challenging, we are constantly battling our instincts, which can pull us in conflicting directions and get in the way of sound investment discipline.
The Tax Cuts and Jobs Act (TCJA) is here to stay and its provisions change the landscape of the private equity world going forward. The decrease in corporate rates coupled with new net operating loss limitations, corporate alternative minimum tax repeal, and accelerated expenditures will directly impact how the value and price modeling of deals are calculated. When all of the TCJA provisions roll out, deal teams will have many additional tax attribute facets to consider when acquiring or exiting an investment.
Research has shown that demographic trends have important relationships with many economic variables. As a nation’s population ages, the balance of capital tends to shift from debtors to creditors. The supporting data behind the phenomenon and other initial baseline assumptions outlines our capital market return forecasts for approximately 50 asset classes around the world for the next 10 years, and are intended to guide investors in developing their long-term strategic asset allocations.