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EWM Team

Sep 01
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U.S. Markets “T+2” Shortened Settlement Begins Tuesday

By Financial Markets & Economy, General

When you return from the long Labor Day holiday, your securities transactions in equities, corporate or municipal bonds, unit investment trusts, and any securities comprised of these security types will be subject to a “trade date plus 2 days” ( “T+2″) shortened settlement, from the current”T+3”.  Thus, any trades executed on Tuesday will settle on September 7.

The move harmonizes U.S. markets with most major international markets.  It is also expected to reduce risk of trade defaults and streamline capital requirements for equity clearing.

The current T+3 settlement process has been in place since 1995.

To learn more about T+2,  link to the T+2 fact sheet or visit http://www.ust2.com/.

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Aug 25
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2017 Unicorn Report

By Unicorn Technology

The unicorn frenzy has slackened in the US when compared to 2014 and 2015, but still more billion-dollar companies are being created than are turning that valuation into cash for their investors. While several of these companies have completed successful exits this year, more value is locked in unicorn companies than ever before.

The 2017 Unicorn Report slices through data surrounding these billion-dollar companies to analyze trends ranging from step-ups to down rounds to exit prospects. Included in the report are detailed tables packed with the specific deal terms surrounding dozens of unicorns.

Click here to download the Pitchbook 2017 Unicorn Report: PitchBook_2017_Unicorn_Report

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Aug 18
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University Endowments Reporting Significantly Improved Investment Returns Over Past Fiscal Year

By Endowment Index™

Early reporting data from schools providing endowment performance for the fiscal year ended June 30,2017 suggest that university endowments boosted their investment returns significantly over the last fiscal year from 2016. The median gain for all colleges reporting is 11.3 percent, while the median gain for larger schools (over $500 million in assets) was 13.3 percent for the 12-month period ended June 30th as reported by the Wilshire Trust Comparison Service. Comparatively, the Endowment Index® gained 13.47 percent during the period. Read the full article by Janet Lorin at Bloomberg.com.ewm-e-logo-tm

Aug 07
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The United States of Unicorns

By Unicorn Technology, Venture Capital

Collectively, US unicorns are worth approximately $360B. Combined, these companies have raised just over $73B. To see the full list of US unicorns and associated data, check out the CB Insights blog.

The United States is home to 105 unicorn companies valued at $1B+. As of 7/25/2017, six private US companies are worth over $10B. The two most valuable unicorns in the US are Uber ($68B) and Airbnb ($29.3B). Palantir Technologies and WeWork, both valued at $20B, are tied for third.

Of the top four highest valued, only WeWork (which is based in NYC) is headquartered outside California. California has the highest unicorn “population” of any US state by far, with 62 billion-dollar startups inside its borders. New York ranks second with 15, followed by Massachusetts and Illinois with five each. Eight other states and the District of Columbia are also home to at least one company worth $1B+.

Using the CB Insights database and our real-time global unicorn tracker, we visualized the locations of every US-based unicorn in the map below.

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KEY INSIGHTS ABOUT THE COMPANIES IN THIS MAP:

  • Collectively, US unicorns are worth approximately $360B.
  • Combined, these companies have raised just over $73B.
  • After California, New York, Massachusetts, and Illinois, the next-highest unicorn populations are found in Utah (with four) and Florida (with three).
  • The top five most well-funded US unicorns are: Uber ($15.1B raised), Airbnb ($4.4B), WeWork ($2.76), Infor ($2.63B), and Lyft ($2.46B).
  • The oldest unicorn in the US is the greentech company Bloom Energy, which reached a valuation above $1B in 2009.
  • The newest unicorn in the US is 3D printing startup Desktop Metal, which became a unicorn in July 2017 after raising a $115M Series D.
  • The three most active investors in US-based unicorns, by total number of deals to these companies, are the VC firms Sequoia Capital, Andreessen Horowitz, and Tiger Global Management.

Learn about our Unicorn Technology Fund by registering here: https://endowmentwm.com/accredited-investor-signup/

Source: CBInsights

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Jul 20
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Multi-Asset ETF Portfolio Best Route for Smaller Endowments, Isenberg Professor Says

By Endowment Index™, ETF Related

Hossein Kazemi, senior adviser to the Chartered Alternative Investment Analyst (CAIA) Association and professor of finance at the Isenberg School of Management at the University of Massachusetts, is claiming that many endowments should skip investments in illiquid assets such as hedge funds and private equity in favor of a multi-asset ETF portfolio.

Kazemi argues that most endowments should not attempt to mimic the Harvard or Yale Endowment portfolio mix by including a vast array of alternative investments, because few of them have the kind of access to top-tier managers that they do, which can lead to “pretty pricey underperformance”.

Kazemi goes on to say that smaller endowments should pursue a specific ETF mix that can provide a more stable return with less of the cost. This mix, according to Kazemi, should provide “similar exposures as a combination liquid/illiquid portfolio, minus many of the expenses associated with illiquid assets”.

Link to full articleewm-e-logo-tm

Jul 18
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The Other 496 S&P Stocks

By News

In an article from the Wall Street Journal, Justin Lahart describes how the immense growth of Amazon, Apple, Google parent Alphabet, and Facebook has been propelling a substantial portion of the S&P 500’s gains.

The article also touches on how the S&P 500 Growth index has outperformed, while the S&P 500 Value index has under-performed. It goes on to discuss the S&P 500 Equal Weight Index and its inability to outperform the S&P 500, indicating that midsize and small company shares, within the growth and value categories, have been under-performing.

Given the fact that the stock market is currently driven by a small amount of stocks, it could be setting itself up for trouble. According to Lahart, “it might not take much for investors to suddenly pine for all the stocks and styles they have abandoned“.

Link to full article

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Jul 17
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3-D Endowment Investment Philosophy®

By Endowment Index™

By Robert L. Riedl, CPA, CFP®, AWMA®

Endowment Wealth Management (“EWM”) is named after our trademarked Endowment Investment Philosophy®, and applies our investment approach, which was pioneered by university endowments seeking to improve their risk-adjusted returns. EWM is a fee-based, Registered Investment Advisor (RIA) that serves as a fiduciary adviser, putting the best interests of our clients first.
We differentiate our firm’s wealth management services from other advisers by combining our unique 3-D Endowment Investment Philosophy® with three layers of unique investment options. Our firm provides our clients access to a combination of low cost passive ETF’s, specialty active satellite managers and illiquid accredited & qualified private equity and debt investment options.
Our goal is to enhance the traditional two-dimensional 60/40 stock-bond portfolio to a three-dimensional allocation by adding a third bucket. This bucket, which it calls “risk-managed” is comprised of real assets, private equity and hedge strategies. That third risk managed allocation grew out of how Yale and Harvard have institutionally managed their university endowments for the past 20 to 30 years.
Our firm’s Endowment Investment Philosophy® is also encapsulated in our Firm’s proprietary Endowment Index® calculated by NASDAQ OMX® (symbol “ENDOW”), a rules-based benchmark based on the asset allocations of over 800 college and university endowments. The Index has garnered national attention from ETF.com, WealthManagement.com and others.

As professionals specializing in family wealth management, we appreciate that our clients trust our professional judgment not just to manage their investments, but to also help sustain the economic future of their most valuable-asset –their family. The word ‘family’ in ‘family wealth’ always comes before wealth. Having a family wealth plan is critical to the whole financial planning process and achieving sustainable multi-generational family wealth, unity and legacy. Only when a family has a comprehensive knowledge of their financial holdings, the worth of those holdings, and the related correlations between all of the holdings, can they effectively implement an investment process leading to sustainable long-term family wealth.

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Jul 13
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U.S. Private Equity Breakdown-2Q-2017

By Alternative Investments

In the 2Q US PE Breakdown report by Pitchbook & Merrill, it examines each phase of the industry’s cycle and investigates the factors most relevant to investors.

Key takeaways in the report:

  • PE fundraising through June 2017 has mirrored that of the 2007 boom. Capital commitments are on pace to surpass $220 billion.
  • After clocking in at 10.7x in 2016, US M&A EBITDA multiples have regressed slightly in the first half of the year, to 10.5x. Meanwhile, the median debt percentage has increased to 56.3% as high-yield bond spreads reached a three-year low.
  • Deal flow held steady in 2Q 2017, though it is still slightly below last year’s pace. Across the US, 886 deals were completed, totaling $153.6 billion in value.
  • PE exits continued their slowdown with $102.3 billion in exit value over 474 deals. The industry’s selling rate appears to be entering a new normal following the sale of excess company inventory from the last recession.

Download the full report here: PitchBook_2Q_2017_US_PE_Breakdown