Key highlights

  • Many of our investors have never invested in an inflationary regime, and they are coming to grips with the thought that they need strategies that can perform better in a structural inflationary regime.
  • Investors have significant concerns about economic growth. We have potentially above trend inflation and below trend economic growth, that stagflation boogeyman that investors are so concerned about. We see a lot of disruptions in the market, when you look at the beta performance in long duration, fixed income and credit and equities. There have also been some pretty violent rotations within factors in the market.
  • We’re seeing pressure from investors to invest in the energy transition, which is driving demand for some assets, such as metals used in batteries.
  • Many people invest in China on a beta basis, relying on massive economic growth and market appreciation. But China is more nuanced than that.
  • There are some really compelling structural alpha trends in credit that we're excited about. The first is the ongoing disintermediation of banks. If it's complex loan, if there is a loan with urgency, the banks are just not there in the way that they used to be prior to financial reform. And subsequently, there's been a huge void that's been stepped into by hedge fund managers like us. We have the ability to extend credit and get really good covenants, really good collateral protections.

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