Market Narratives

This episode explores the impact of institutional investors moving up the risk-return spectrum into higher-risk asset classes – such as leveraged buyout private equity, high yield bonds, leveraged loans, collateralized loan obligations, and venture capital. However, with huge sums of capital flowing into these asset classes, there is a rising concern about weakening underwriting standards, high levels of global indebtedness, a divergence from fundamentals, and risks of bubbles and defaults. From an ESG perspective, many would argue it is not just investors who take the risk with these structures. 

Companies with highly leveraged capital structures may need to cut costs relating to the quality and affordability of goods and services or quality jobs to service debt or entirely restructure – shifting unwelcome and uncompensated risk to workers and communities. Moreover, as institutional investors grow in size, there is a risk that efforts to allocate capital efficiently (e.g. to larger fund managers) may inadvertently contribute to both fund manager and corporate consolidation, thereby further reducing diversification and opportunity in the real economy and market. This session will also explore how such investment practices can contribute to systematic risks for Universal Owners and reduced chances of returning to normalised interest rates. 

All views expressed on this podcast are subject to change and do not necessarily reflect the views of Conexus Financial. This podcast is for educational purposes only and should not be relied upon as investment advice.

Better than Alpha: Three Steps to Capturing Excess Returns in a Changing World

The concept of beating markets is just a lot of hype. Successful investors don’t find “alpha,” they find value―and that’s what this book helps you do. Better Than Alpha provides the perspective, insights, and tools you need to retrain your focus away from searching for alpha and toward actions that produce superior investment outcomes. 

https://www.amazon.com/Better-than-Alpha-Capturing-Changing/dp/1264257651

All views expressed on this podcast are subject to change and do not necessarily reflect the views of Conexus Financial. This podcast is for educational purposes only and should not be relied upon as investment advice.

James Kosmatos is currently an independent investment analyst working full time within the cryptocurrency industry, focusing on fundamental analysis of cryptocurrencies within the Decentralised Finance (DeFi) sector. James has been researching and investing in this asset class since early 2017; he has recently started his current role after seeing the significant growth and innovation of technology being implemented within the DeFi sector.

James previously worked at Frontier within the consulting and debt research team, providing advice on portfolio construction, asset class configuration and fund manager due diligence for various institutional investors. Before Frontier, James worked within PwC Wealth Services, assisting high net worth families with portfolio construction, fund manager due diligence and implementation.

Recommended reading: "DeFi Beyond the Hype"; An overview of Defi with case studies comparing projects with traditional financial services and real-world financial market structures. https://wifpr.wharton.upenn.edu/wp-content/uploads/2021/05/DeFi-Beyond-the-Hype.pdf

All views expressed on this podcast are subject to change and do not necessarily reflect the views of Conexus Financial. This podcast is for educational purposes only and should not be relied upon as investment advice.

This episode explores how the market structure has changed over the past decades to become more institutionalised. While institutional investors have been able to take advantage of their size to negotiate improved corporate governance reforms from companies, they are also under pressure to efficiently deploy large sums of capital, contributing to asset manager consolidation and, therefore, corporate consolidation. Such consolidation can have several negative impacts, such as squeezing out diverse and emerging fund managers and SMEs, monopsony dynamics, reduced innovation, and erosion of the quality and affordability of goods and services, and poor investment diversification opportunity, which in turn contributes to procyclical investment behaviour and increased systematic risk. The episode concludes with ideas for how institutional investors can de-consolidate their capital flows to contribute to a healthier real economy and market.

All views expressed on this podcast are subject to change and do not necessarily reflect the views of Conexus Financial. This podcast is for educational purposes only and should not be relied upon as investment advice.

All views expressed on this podcast are subject to change and do not necessarily reflect the views of Conexus Financial. This podcast is for educational purposes only and should not be relied upon as investment advice.

At U Ethical, Désirée leads the evolution of the ethical investment framework and active engagement with investee companies, in collaboration with U Ethical’s investment team, key stakeholders and industry peers. Since 1985, U Ethical has developed a reputation for unwavering commitment to ethics-driven performance while contributing the majority of operating surplus to social justice advocacy and community programs. As a certified B Corporation, U Ethical views clients as partners on important ethical matters and does not shy away from holding companies to account for controversial issues

All views expressed on this podcast are subject to change and do not necessarily reflect the views of Conexus Financial. This podcast is for educational purposes only and should not be relied upon as investment advice.

All views expressed on this podcast are subject to change and do not necessarily reflect the views of Conexus Financial. This podcast is for educational purposes only and should not be relied upon as investment advice.

All views expressed on this podcast are subject to change and do not necessarily reflect the views of Conexus Financial. This podcast is for educational purposes only and should not be relied upon as investment advice.

All views expressed on this podcast are subject to change and do not necessarily reflect the views of Conexus Financial. This podcast is for educational purposes only and should not be relied upon as investment advice.

All views expressed on this podcast are subject to change and do not necessarily reflect the views of Conexus Financial. This podcast is for educational purposes only and should not be relied upon as investment advice.