End of the Commodities “Super Cycle”?

End of the Commodities “Super Cycle”?

August 2013
Investors allocating to commodities have often cited diversification benefits and inflation hedging properties as two of the primary attributes which make the asset class compelling. While Rocaton still believes a portfolio of commodities can provide these benefits, we are concerned about the prospects for returns in the near- and medium-term. In the attached Rocaton Insights, we review current supply/demand dynamics and discuss our outlook for the asset class.

 

Download PDF

Emerging Market Debt Update and Outlook

July 2013
Volatility returned to many fixed income markets during May and June, particularly the emerging market debt market. Through the end of June, heightened volatility remained and performance across all emerging market debt markets suffered. In the attached Rocaton Insights, we provide an update on performance and provide our outlook for the asset class.

 

Download PDF

Returns Wanted! Opportunities in Private Middle Market Lending

June 2013
Four years after the turmoil of the 2008 credit crisis, continued political and economic malaise has forced monetary policymakers to prolong and enhance their stimulus of capital markets. Yet, as successive waves of monetary stimulus have caused market participants across the board to pursue risky assets in pursuit of yield, a specific set of structural forces at work in the market for corporate credit has caused a bifurcation in the cost of capital for large versus small and medium sized creditors. Currently, the cost of credit for small and medium sized corporate borrowers in the private market is up to 4-5% higher than for large issuers of comparable credit quality issuing publicly traded bonds. For investors with an ability to accept illiquidity, strategies designed to capitalize on this lending opportunity offer an attractive premium over public bond markets. In this paper, we will lay out the options available for investors seeking to participate in private middle market lending. We then turn to a brief exploration of the forces that have created these conditions and why they are likely to persist for some time.

 

Download PDF

The Search for Yield Continues: A Re-introduction to Bank Loans

May 2013
The low interest rate environment continues to be a concern for many plan sponsors. Bank loans, an asset class that is relatively underutilized by many institutional investors, can offer modest levels of current income with little interest rate risk. The attached Rocaton Insights presents the case for why plan sponsors might want to consider making an investment in this asset class.

 

Download PDF

PBS FRONTLINE documentary “The Retirement Gamble”

April 2013
This program was fairly critical of DC plans in general, highlighting issues that have led to instances in which participants were unsuccessful in building adequate retirement savings balances. Although many of the issues highlighted in the program deserve attention, the program also failed to discuss the many positive developments in DC plans over the past few years. The attached Insights summarizes Rocaton’s response to the program and provides some talking points that might be useful in discussions with your DC plan participants.

 

Download PDF

Reasons to be Optimistic in 2013

March 2013
Attached please find a Rocaton thought piece on market sentiment entitled Reasons to be Optimistic in 2013. In recent days, domestic equity markets have reached new highs, yet investor sentiment remains clouded by the significant economic and political challenges ahead. We at Rocaton are not economists and are not prone to excessive optimism, however, we would like to challenge certain prevailing opinions and raise awareness of the concept of improving fundamentals. We have assembled a list of positive developments followed by a summary of the main challenges facing global economies and markets.

 

Download PDF

2012 Year in Review: The State of the Corporate Pension Market

January 2013
Recent years have been eventful in the world of pensions, and 2012 was no exception. While there is much to say about individual events and trends of the outgoing year, we wanted to take this opportunity to briefly summarize those which we believe were most significant.

 

Download PDF