Past performance is not necessarily indicative of future results. No assurance can be given that any investment will achieve its given objectives or avoid losses. Unless apparent from context, all statements herein represent GCM Grosvenor’s opinion.
Â
Select risks include: market risk, macroeconomic risk, manager risk, liquidity risk, interest rate risk, and operational risk.
While 2021 brought us record economic growth, storm clouds were already beginning to brew by the end of the year. It was clear that record GDP growth rates risked slowing as stimulus money from the COVID-19 crisis began to dissipate. Fiscal policy was becoming difficult to sustain, suggesting it was reaching its limits, and monetary policy began tightening. In fact, the beginning of 2022 has been a perfect storm of decades-high inflation, rising interest rates, geopolitical instability-turned-war, not to mention the persistence of the COVID-19 pandemic. These factors combined to generate extreme market volatility that persisted through much of the first quarter.Â
In our view, the combination and persistence of these factors means that investments reliant on beta are likely to continue to be very challenged. We therefore believe investors will need to seek alpha to drive returns and investing in alternatives can be a key source of such alpha. In the following, we highlight five areas within alternatives that we believe represent pockets of opportunity for alpha generation.Â
Current and potential forthcoming market conditions can be considered challenging but, in our view, opportunities still exist to generate returns. The importance of properly sourcing, structuring, and executing investments is going to be more important than ever before, as is overall portfolio construction and diversification. We believe investing in the broader markets is going to be highly challenging over the foreseeable future, and therefore investors should focus on alternatives where opportunities for alpha generation exist.
With approximately $72 billion in assets under management, GCM Grosvenor is one of the world’s largest and most diversified independent alternative asset management firms. We have the resources, experience, and long-standing relationships with elite managers to evaluate and implement investments flexibly across our open architecture platform.
Learn more about how we invest.Â
We briefly discuss the events of 2023 and share a video a recap from our Annual Forum, where several senior members of our Investment Team discussed where they are seeking opportunities throughout the remainder of the year.
We build on our perspectives from last year and address what we believe are three key themes for insurance investors entering 2024: maintain investment discipline, expand the investment universe, and extract incremental value from capital and partners.
Important Disclosures
For illustrative and discussion purposes only. The information contained herein is based on information received from third parties. GCM Grosvenor has not independently verified third-party information and makes no representation or warranty as to its accuracy or completeness. The information and opinions expresses are as of the date set forth therein and may not be updated to reflect new information.
We offer clients a broad range of tailored solutions across strategies, including multi-strategy, macro, relative value, long/short equity, quantitative strategies, and opportunistic credit. Levaraging our large scale and presence in the industry, we are able to offer clients preferntial exposure to hard-to-access managers and seek to obtain terms that can drive economic and structural advantages.
