NEWSLETTER of June 2, 2023

The following content has been added at finexpert:

BCG
THE TIDE HAS TURNED: GLOBAL ASSET MANAGEMENT 2023
The asset management industry has reached a turning point that will require rethinking the business model that has served it so well in the past. Market performance has been responsible for 90% of the industry’s revenue growth for nearly two decades. In 2022, however, rapidly rising interest rates caused both stock and bond values to plummet. The result was the second-largest single-year decrease in global assets under management (AuM) since 2005. Global AuM fell by $10 trillion, or 10%, to $98 trillion—near 2020 levels. The net flow rate of assets also fell below 3% for the first time since 2018, reaching 1.6% of total AuM at the beginning of 2022, or $1.7 trillion. >more

PGIM Real Estate
2023 GLOBAL OUTLOOK: FINDING VALUE AFTER THE GREAT RESET
Real estate repricing is occurring at different speeds around the world and will be different across both regions and sectors. In our report, we identify the distinct and highly varied structural and cyclical investment opportunities that exist within each region around the world. >more

White & Case
GLOBAL IPOS: SEEKING SIGNS OF STABILIZATION
It was clear in the opening months of 2022 that the winds had changed for the global IPO market as compared to the prior year, a rocky path that continued throughout the year and into the first quarter of 2023, but with a few notable bright spots. >more

Goldman Sachs
DAUNTING DEBT LIMIT DYNAMICS
Concerns about a failure to raise the US debt limit have subsided, but this chapter will still go down in history as just one in a growing line of contentious debt limit episodes in recent decades. Whether this repeated brinkmanship around raising the debt limit could ultimately undermine the value proposition of U.S. assets is Top of Mind. >more

GREEN TILTS
Lubos Pastor, Robert F. Stambaugh, and Lucian A. Taylor
2023
We estimate financial institutions’ portfolio tilts that relate to stocks’ environmental, social, and governance (ESG) characteristics. We find ESG-related tilts totaling 6% of the investment industry’s assets under management in 2021. ESG tilts are significant at both the extensive margin (which stocks are held) and the intensive margin (weights on stocks held). The latter tilts are larger. Institutions divest from brown stocks more by reducing positions than by eliminating them. The industry tilts increasingly toward green stocks, due to only the largest institutions. Other institutions and households tilt increasingly toward brown stocks. UNPRI signatories tilt greener; banks tilt browner. >more

DO YOU EVEN CRYPTO, BRO? CRYPTOCURRENCIES IN HOUSEHOLD FINANCE
Michael Weber, Bernardo Candia, Olivier Coibion, and Yuriy Gorodnichenko
2023
Using repeated large-scale surveys of U.S. households, we study the cryptocurrency investment decisions and motives of households relative to other financial assets. Cryptocurrency holders tend to be young, white, male and more libertarian relative to non-crypto holders. They expect much higher rates of returns for crypto and perceive it as relatively safer than do other households. They also view it as a better hedge against inflation. For those holding cryptocurrencies, changes in Bitcoin prices translate into their purchases of durable goods. Finally, exogenously-provided information about historical returns of cryptocurrencies leads individuals to increase their desired crypto holdings and makes them more likely to actually purchase cryptocurrency subsequently. We compare these views and behaviors to those of households toward other financial assets and argue that cryptocurrency is unique in many of these respects. >more