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A Framework to Drive ESG Financial Discipline

Environmental, social, and governance (ESG) factors have become central tenets in the capital allocation process for both the providers of capital, or investors, and the users of capital, or corporations. While initial rounds of ESG investment have largely received undiscerning praise from stockholders and stakeholders alike, most organizations fail to articulate the value proposition of […]
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Book Review: Corporate Governance and Responsible Investment in Private Equity

Corporate Governance and Responsible Investment in Private Equity. 2021. Simon Witney. Cambridge University Press (International Corporate Law and Financial Market Regulation Series). Private equity as an investment class is older than many of those reading this review. It is a faster-growing part of the investment universe than publicly listed companies, which are decreasing in number. […]
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Fixed-Income Allocations: Where To?

As the US economy reopens following the COVID-19-induced recession and bond yields finally tick up, how should investors shift their fixed-income portfolios to take advantage of the coming economic recovery? Most assume that as the United States emerges from recession, there is no better place for their debt allocation. But, in fact, our analysis reveals that […]
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The Next Frontier of Sustainable Investing: Measuring Impact

“When we’re talking about ESG in investment management, what are we talking about?” — George Serafeim That question prefaced an expert panel discussion at the Alpha Summit by CFA Institute last month. As Serafeim, the Charles M. Williams Professor of Business Administration at Harvard Business School, explained it, capitalism has created enormous wealth and lifted […]
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Blockchain and DeFI: Drivers of Change in Asset Management

“The future of assets is tokenized.” That’s what Mona El Isa, the founder and CEO of Avantgarde Finance, told the audience at the Alpha Summit by CFA Institute last month. “If you make that assumption, you can totally re-imagine the infrastructure that finance is built on,” she continued. “You can see a totally automated operational […]
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Institutional Portfolio Benchmarks: Slow Rabbits?

Accurate performance readings of public pension funds, endowments, and other institutional investors are critical to their trustees and stakeholders. Fund performance is usually evaluated by comparing the portfolio rate of return to that of an index-like benchmark. The following analysis reviews the benchmarking practices of US public pension funds and finds them wanting: In effect, […]
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Counting the Cost of Capital and Seeding Network-Based Accounting

Your potential alpha isn’t just where the map differs from the territory. It’s where the map differs from the territory and where other investors are misusing that map. Continuing in the wake of the previous memo, let’s examine the balance sheet. Counting the Whole Balance Sheet Equity and debt investors are the most common sources of capital, but […]
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Tax-Smart Management of Your Muni Portfolio

In “The True Value of Your Muni Portfolio,” I considered alternative ways of quantifying the investor-specific value of a taxable portfolio. The market value is not suitable, because liquidating the portfolio would have tax consequences, and therefore the liquidation value would be different from the market value. Instead of the market value, I recommended the […]
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Permanent Capital: The Holy Grail of Private Markets

In the 1970s, when trailblazers Henry Kravis and Teddy Forstmann helped launch one of the most successful financial products of the past half-century, leveraged buyouts (LBOs) were conducted on a deal-by-deal basis. The process was cumbersome. To expedite and bring more discipline to the equity funding stage, LBO specialists soon established investment structures to secure […]
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