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EWM Team

Dec 30
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How Public Pensions are Handling Private Equity in the Current Environment

By Uncategorized

A recent Pitchbook article provides some insight into public pension manager’s private equity allocation in the current market.  The past twelve years have seen rising institutional asset allocations to private equity as declining public market return assumptions, combined with fixed return mandates affected increased allocations to alternative assets.  However, PE investors see current macroeconomic environment and inflation as heightening the risk for the asset class for the two to three years. Such risks, along with valuations are causing some, but not all institutional investors to consider reducing their PE allocations.  That may be the wrong approach, as the best years for PE have historically often been in the few years following recessionary periods, as valuations are typically more favorable. Will it be different this time? Some argue that valuations are higher and the overall allocation to the space is higher than previous periods. The trend has been that more companies are remaining private for longer periods of time and with the current IPO market so narrow, investors seeking higher returns may need to continue to lean into the space. To see the full article, see Will public pensions stick to their PE targets in 2023? Pitchbook.com 12/13/2022.

Dec 16
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State Mandated Retirement Plans for Small and Medium-sized Businesses

By Retirement

SECURE Act 2.0 Legislation Overview

  • The retirement industry experts widely expect it to pass by the end of the year (2022).
  • Take away the option for auto-enrollment (for 401k and 403b retirement plans).
  • Increases the tax credits for starting a company retirement plan from between 75-100%
    • Currently 50%
  • New credits for employer contributions
    • Historically been tax deductible. Moving forward will get a dollar-for-dollar tax credit.
  • Increases mandatory RMD age from 72 to 75.

Stats for Americans in retirement: These are the primary reasons for current legislation

  • 25% of U.S. adults have no retirement savings.
  • The median for individuals nearing retirement (ages 55-64) is less than $1,000/month in available income.
  • 40% of working Americans are confident their retirement planning is on track (overconfident?).

Legislation mandates have been introduced in most states and are currently active in 16 states.

Of those active:

  • Employee eligibility starts at age 18
  • All post-tax, Roth IRAs
  • Free administrative cost

Program details:

  • Contribution Limits
    • 401(k): $22,500 ($30,000 if older than 50)
    • IRA: $6,000 ($7,000 if older than 50)
  • Deadlines/Compliance
    • Many state-run programs require employer compliance by a given deadline.
    • Deadlines may be staggered or based on number of qualified employees.
  • Fees/Penalties
    • Employers may receive fines for failure to provide a retirement savings option to eligible employees.
  • Administrative Duties
    • Employers are often required to bear the burden of paperwork and processing to ensure program compliance.
Dec 15
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2022 Study on Private Philanthropy Trends

By Uncategorized

A recently released report conducted by Foundation Source summarizes giving and investment trends for nearly a thousand private foundations. Key highlights of the report include:

Giving Trends:

  • Private foundation endowments experienced double-digit growth in both 2020 and 2021.
  • Strong returns in 2020 presented an opportunity for private foundations to increase their giving in 2021. Larger foundations ($50-500 million in assets) increased their giving by nearly 21% from years 2020-2021.
  • In 2021, foundations collectively distributed an average of 7.2% of their assets for charitable purposes, generously exceeding the minimum distribution requirement of 5%.
    • Smaller foundations ($1-10 million in assets) gave nearly twice the minimum distribution requirement of 5% in 2021.
  • The Education Sector was the largest recipient (21%) of foundation funding in 2021.

Investment Trends:

  • Larger foundations have nearly 5-times the exposure to alternative investments than smaller foundations, and the lowest allocation to equities at 47.1% in 2021.
  • Foundations of all sizes experienced double-digit annual growth in both 2020 and 2021, gross-of-fees, with larger foundations leading at 16.5% over this two-year time period.

Foundations gave more abundantly in 2021 as they looked to contribute to pandemic recovery efforts. Even through times of economic distress, private foundations have continued to increase their charitable giving as they pursue their respective missions.

Details to Note:

  • Endowment Wealth Management maintains a strategic relationship with Foundation Source. View our press release from 2020 Here.
  • Foundation Source has been releasing its annual report on foundations since 2008.

 

View the Full Report Here.

Oct 28
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Endowment Index Press Releases Discontinued

By Uncategorized

SEC Marketing Rule 206(4)-1, places new requirements on the distribution of hypothetical performance on investment advisers. To comply with the Rule, ETF Model Solutions will no longer provide Endowment Index® performance data via press release. Investment professionals, institutional investors, endowment managers, family office staff and accredited investors who wish to continue to receive Endowment Index® performance data should visit EndowmentIndex.com and sign up to receive future updates directly

The Endowment Index® represents the investable opportunity for managers of portfolios utilizing the Endowment Investment Philosophy® or who otherwise incorporate alternative investments within a comprehensive asset allocation. The Endowment Index® measures performance for a multi-asset, globally diversified, three-dimensional portfolio that includes Global Equity, Global Fixed Income, and Alternative Investments (like Private Equity, Hedge Funds and Real Assets). The Index applies an objective, rules-based construction methodology based upon portfolio allocation data obtained from over 700 educational institutions that collectively manage over $820 billion as of 6/30/21. Each of the 22 sub-indexes that currently comprise the Index are investable and contained within those sub-indexes are over 47,000 underlying securities.

ETF Model Solutions, LLC serves its clients as an ETF strategist, designing and managing ETF-based investment solutions for advisers, institutions, retirement plans and individual investors based upon the Endowment Investment Philosophy®. The Firm offers ETF-based diversified target-risk models, and asset class models for use by investment advisers and retirement plans. ETF Model Solutions, LLC also provides digital investment services to individual investors through the website, www.MyRoboAdviser.com.

Contact: Tim Landolt MBA, Managing Director, 920.785.6012
Info: www.ETFModelSolutions.com or www.EndowmentIndex.com

Disclosure: Information presented for educational purposes only and is not intended as an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies, nor shall it be construed to be the provision of investment advice. You cannot invest directly in an index. Indexes do not contain fees. Past performance is not necessarily indicative of future results. Investments involve risk and unless otherwise stated, are not insured or guaranteed. Performance information provided is net of any underlying exchange-traded fund expenses but does not include any other fees or expenses. A copy of the Firm’s disclosure document, Form ADV Brochure Part 2, is available upon request.

Oct 18
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Endowment Wealth Management’s Prateek Mehrotra Named to 2023 Wisconsin Titan 100

By General, News, Press Release

Titan CEO and headline sponsor Wipfli LLP are pleased to announce Prateek Mehrotra, Chief Investment Officer, Endowment Wealth Management as a 2023 Wisconsin Titan 100. The Titan 100 program recognizes Wisconsin’s Top 100 CEO’s & C-level executives. They are the area’s most accomplished business leaders in their industry using criteria that includes demonstrating exceptional leadership, vision, and passion. Collectively, the 2023 Wisconsin Titan 100 and their companies employ more than 100,000 individuals and generate $36 billion dollars in annual revenues.  This year’s honorees will be published in a limited-edition Titan 100 book and profiled exclusively online. They will be honored at the annual awards ceremony on January 12th, 2023 at Fiserv Forum, and will be given the opportunity to interact and connect multiple times throughout the year with their fellow Titans.

“The Titan 100 are shaping the future of the Wisconsin business community by building a distinguished reputation that is unrivaled and preeminent in their field. We proudly recognize the Titan 100 for their successes and contributions. We know that they will have a profound impact that makes an extraordinary difference for their customers and clients across the nation.” says Jaime Zawmon, President of Titan CEO.

As a visionary co-founder of Endowment Wealth Management and its affiliates, ETF Model Solutions, LLC and Global Alternative Investment Management, LLC, Prateek leads the investments team which is the backbone of the firm’s 3-dimensional Endowment Investment Philosophy®. Expanding a portfolio beyond just stocks and bonds, Prateek’s responsible for researching a virtually limitless expanse of investment opportunities including real assets, hedge strategies, private equity, venture capital, exchange-traded funds, private debt. He has led his firm to create a national index, an ETF strategist that designs and manages ETF portfolios, a private fund management firm that invests opportunistically on a global scale, and a digital investment platform for millennials and digitally-savvy investors.

 

“It is an incredible honor to be recognized as a Titan 100 and to be a part of this remarkable program.  While this is an individual award, it truly belongs to the great team we have at Endowment Wealth Management.  I am fortunate to be surrounded by a group of dedicated, hard-working, compassionate professionals.  I look forward to utilizing this opportunity to make meaningful connections with other accomplished, passionate, like-minded leaders to become an even better leader in my organization and our Wisconsin community.”

Prateek Mehrotra and the other award winners will be honored at the annual Titan 100 awards celebration on January 12th, 2023 at Fiserv Forum, home of the Milwaukee Bucks. This unique cocktail-style awards event will gather 100 Titans of Industry and their guests for an evening unlike anything that exists in the Wisconsin business community.

“On behalf of all the partners and associates at Wipfli we congratulate all the Titan 100 winners. It’s an honor to recognize this diverse group of leaders in Wisconsin. We appreciate the lasting impact each leader has made, and continues to make, in building organizations of significance both here in Wisconsin and abroad. Your ingenuity and creativity have set you apart, and the honor of being seen as an industry Titan is richly deserved,” says Gina Skibo, Partner at Wipfli.

Contact: Tim Landolt

Tim@EndowmentWM.com

920.785.6012

For more information, visit: https://www.titan100.biz/2023wisconsintitan100

Award recognition does not qualify as an endorsement of any particular index, investment, or investment strategy. The Wisconsin Titan 100 for 2023 was awarded 10/13/2022 by Wipfli. No solicitation payment was made to the award sponsor to be nominated or to qualify for the award. Prateek Mehrotra agreed to attend the award presentation and purchase tickets for the event as part of his acceptance of the award. Judging criteria for the award can be found at: www.titan100.biz.

Sep 13
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2022 Private Equity Insights

By Private Equity

The private equity asset class has seen a surge of new money as of late. Private equity funds raised a record $940 billion in 2021. Private equity managers now manage $10 trillion in assets, a sum that has quadrupled over the past 15 years. In the first quarter of 2022 US private equity funds invested roughly $222 billion across 1,418 deals. Of this $222 billion invested, the technology sector was the largest recipient with about $66 billion in funding (∼30%).

Jun 11
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Endowment Wealth Management CIO Prateek Mehrotra Named to Investopedia Top 100 Advisors List for 2018

By News

Appleton, WI – June 8, 2018 – Prateek Mehrotra, MBA, CFA®, CAIA®, Chief Investment Officer of Endowment Wealth Management, Inc. and ETF Model Solutions, LLC has been named to the Investopedia Top 100 Financial Advisors list for 2018.

The Investopedia 100 list celebrates financial advisors who have contributed significantly to conversations about financial literacy, investing strategies, life-stage planning and wealth management.

Investopedia’s 2nd annual rankings seeks to recognize advisors that are able to engage their audience across multiple platforms, measuring their reach and influence and quality of the information they produced and shared across a broad range of media platforms.

In developing their proprietary rankings, Investopedia’s data science and editorial teams reviewed the applications of hundreds of financial advisors to measure their impact and reach across Twitter, LinkedIn, personal and company blogs, and online publishers.  The strength of each applicant’s page rankings, followers, and citations of their work by other advisors, consumers and the financial media were all evaluated as part of their ranking process. The analysis seeks to identify not only the advisors with the largest followings, but also those who have dedicated their time to educating investors around the world.

For more information contact:

Endowment Wealth Management, Inc. 

www.EndowmentWM.com 

920.785.6010

Award recognition does not qualify as an endorsement. The Investopedia Top 100 Advisors for 2018 was awarded 6/8/2018 by Investopedia. No solicitation payment was made to the award sponsor to be nominated or to qualify for the award. Judging criteria for the award can be found at: https://www.investopedia.com/top-100-financial-advisors-4427912 .

Jan 29
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Things To Know About Kimberly-Clark’s 401(k) Plan and Voluntary Severance Package

By Retirement

Founded in Neenah, WI in 1872, Kimberly-Clark is a multi-national personal care corporation that employs approximately 43,000 people worldwide. While the company is now headquartered in Texas, Kimberly-Clark still has a major presence in Wisconsin. 

Last week, K-C announced they are laying off approximately 5,000 employees, many through a voluntary severance program.  

John Weninger, CFP® of Endowment Wealth Management researched the Company’s Plan and the severance package.  He compiled a list of important things to know about the company’s 401(k) plan, and also issues that K-C employees who are considering accepting the severance package should evaluate when making their decision. 

In his blog post, 10 Things to Know About the K-C 401(k) Plan, John comments on the Plan’s wide ranging benefits and features, including annual contribution limits, Roth conversion features, profit sharing, vesting benefits, investment options, loan provisions, asset reallocation, rebalance notifications, and withdrawal provisions for both existing and former employees.

In K-C Voluntary Severance Package 2018, John covers the basic items employees should consider when reviewing a severance offer.  Since 401(k) contributions cannot be made from severance pay, anyone thinking about accepting a severance should consider increasing their 401(k) contribution for their remaining employment.

John’s extensive reviews on this issue are posted to his blog at MyCompanyRetirementPlan.com.  If you work for a major employer and would like to request that John review your company’s retirement plan on a future blog post, send him an email.  

Educational purposes only.  Not legal or tax advice.  You should talk to an investment professional before making investment decisions.

 

Jan 24
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KKR’s 2018 Global Macro Outlook: “Investors may not be able to get what they want, but can still get what they need”

By Financial Markets & Economy

KKR today released the 2018 Global Macro Outlook piece by Henry McVey, Head of Global Macro and Asset Allocation (GMAA). In “You Can Get What You Need,” McVey outlines his perspective on the current investing environment.

“As we are poised to enter the 104th month of economic expansion amidst the second longest bull market on record in the United States, it is definitely harder to get ‘what you want’ when it comes to uncovering new and compelling investment opportunities. The good news is that our work shows that investors can still ‘get what they need’ in order to generate returns in excess of their liabilities.”

Overall, a major underpinning to Henry McVey and the GMAA team’s view for 2018 is that overly optimistic investors are currently overpaying for growth and simplicity in many instances, while at the same time ignoring stories with complexity, uncertainty, and/or cyclicality. Therein lies a huge, long-tailed investment opportunity to arbitrage the notable bifurcation that has already begun to occur across many parts of the global markets, according to the team.

Against this backdrop, the report outlines several actionable investment themes that multi-asset class investors should consider weaving into their portfolios in 2018 and beyond, including:

1. Equities Having More Potential Upside Than Credit

2. The Move Towards Mid-Cycle Phase of Emerging Markets Recovery

3. Central Bank Normalization

4. Shifting Preferences in Private Credit

5. Buy Complexity, Sell Simplicity

6. Experiences Over Things

7. Arrival of a Different Kind of ‘Political Bull Market’

In addition to the aforementioned themes, the report details specific macro influences that factor into the GMAA team’s updated asset allocation model for 2018, including GDP targets around the globe as well as outlook for earnings, rates, oil, cycle duration and expected returns. 

Read/Download KKR’s 2018 Global Macro Report

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Dec 26
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Tax Law Changes Make Year-End Tax Planning More Important This Year

By MoneyTips

Changes in the Tax Bill Are Likely to Impact Your Tax Obligations. Consider Taking Immediate Action Before December 31st

Last week the US Federal Tax Codes had a major overhaul and the broad changes will impact almost everyone’s 2018 tax returns and beyond.  Since there is limited time left in 2017, everyone should take stock of their income and expense patterns, talk to their financial advisor and their tax planner and make any necessary changes before December 31st. You should review the list below and consider taking action if any apply to your tax situation:

  • If you typically itemize your deductions, consider paying all your 2017 property taxes by year end 2017 to capture this deduction in 2017 which could be lost in 2018.*Itemized State and Local tax (SALT) deductions will be capped at $10k in 2018, but are uncapped in 2017.  Therefore, if your state and property taxes are normally over $10k, you should consider moving as much of these payments as possible into 2017.
  • Pre-pay or pay your estimated 2017 STATE Income Taxes by December 31, 2017 to capture the deductions in 2017 which could be lost in 2018. *Itemized State and Local tax (SALT) deductions will be capped at $10k in 2018, but are uncapped in 2017.  Therefore, if your state and property taxes are normally over $10k, you should consider moving as much of these payments as possible into 2017.
  • Consider increasing your charitable deductions in 2017 to include your 2018 charitable donations to capture the deductions in 2017 which may not be available to you in 2018.
    Start family foundation account to hold these current charitable contributions which allows you to get the 2017 tax deduction and then allows you distribute donations over future years to the charities as you so desire.  Note time is limited to establish a Family Foundation account.
  • Donate appreciated stock to your family foundation to avoid paying taxes on the stocks appreciation  while capturing your full charitable donation equal to the market value of the shares in 2017
  • Defer any income until 2018 if possible.
  • You can still fund your IRA’s for 2017 up to April 15, 2018

Please note that this is a very general list of strategic tax steps which you should consider in 2017.  Everyone has their own personal tax issues and if your tax professional tells you differently please follow their specific instructions.

Read White Paper on the Potential Impact of Tax Reform 

Content presented is for informational and educational purposes only and is neither an offer nor a solicitation to buy and/or sell securities nor is it an offer to provide, nor shall it be construed to be the provision of, individualized investment advice in any state where Endowment Wealth Management, Inc. is not registered or notice filed and does not qualify for an exemption from such registration and notice filing requirements. Endowment Wealth Management is not soliciting or recommending any action based on this material. Any tax advice included in this written or electronic communication was not intended or written to be used, and it cannot be used by the taxpayer, for the purpose of avoiding any penalties that may be imposed on the taxpayer by any governmental taxing authority or agency.  

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