Investment Strategy Extra Time First Quarter 2018

Also Interesting

• Private Equity – A new equilibrium
• Searching for direction.
• Defined Contribution Investments On Trial

Executive Summary

Another quarter of decent growth could support bottom-up strategies, though less than before and with more frequent bumps. As governments take up the relay with central banks to support the recovery, fresh themes could open alpha opportunities in the U.S. and Europe once election risks have eased. We would reweight U.S. L/S Equity funds, but rich valuations favor deep-value and tactical styles. The deepening European recovery could boost diversified funds, though with political delays. We are overweight (O/W) diversified funds in Japan. By contrast, we are underweight (U/W) UK funds in markets paced by Brexit. We remain U/W Quant funds as long as factors are unsettled by broader themes. With regulation risks in the picture again, M&A operations are no longer “done deals”. This means more risk but more juice for merger specialists. We keep our O/W on Special Situations funds, which are nicely balanced between riskier companies at an early cycle stage and more mature companies driven by corporate activity. Expect more volatility