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EWM Team

Jun 25
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Radio Podcast: Family Office Services Support A Family’s Mission To Preserve Wealth, Legacy and Values

By Family Office

On June 22, 2015, Prateek Mehrotra, MBA, CFA®, CAIA®, Chief Investment Officer, and Wendy Orth, Investment Adviser Representative of Endowment Wealth Management join “Money Matters with Christopher Hensley” radio show. In an informative 30-minute interview, Prateek and Wendy provide an informative interactive discussion that describe the multitude services that a family or multi-family office is designed to support your family’s wealth and legacy within the family’s value system.

Money Matters

 

 

 

 

 

 

 

 

 

 

 

This 30-minute podcast provides an informative discussion that covers the services, organization, purpose, mission and support that a family office or multi-family office provides to its client.  Prateek and Wendy join the show at the 5:30 mark on the podcast.

A traditional family office is a business run by and for a single family. Its sole function is to centralize the management of a significant family fortune. Typically, these organizations employ staff to manage investments, taxes, philanthropic activities, trusts, and legal matters. The purpose of the family office is to effectively transfer established wealth across generations. The family office invests the family’s money, manages all of the family’s assets, and disburses payments to family members as required.  The family office structure takes into account nurturing the human capital within the family along with their financial wealth with a multi generational perspective.

The Family Office itself either is, or operates just like, a corporation (often, a limited liability company, or LLC), with a president, CFO, CIO, etc. and a support staff. The officers are compensated per their arrangement with the family, usually with overrides based on the profits or capital gains generated by the office. Often, family offices are built around core assets that are professionally managed.

 

Jun 18
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Largest University Endowments Afford Their Schools Competitive Advantage

By General

A recent article by CNBC economics reporter John W. Schoen provides an in-depth look into reasons behind the rising cost of higher education in the U.S. It’s a complicated issue, with many moving parts. The after-effects of the 2008 recession, expanding student services, required budgetary expansion in state budgets, such as pensions, healthcare and Medicaid, and other issues have forced schools to increase the student tuition costs.

The improved economy and recovering markets have helped private institutions repair the losses to their endowments caused by the Great Recession.  However, the wealthiest schools with the largest endowments are more successful in fund raising and are receiving an increasingly greater share of donations.The top 40 richest schools received nearly 60 percent of all gift revenue last year, according to Moody’s. Comparatively, most schools have far less money to help subsidize the cost of higher education. The median endowment size for the largest 50 schools is $3.5 billion, while the median college endowment for the entire endowment universe was just $113 million.

That leaves schools with smaller endowments at a disadvantage competing for the best and brightest applicants. For example, at wealthier schools, the share of tuition paid by students is about 15 percent, while the average share of tuition paid for at all private colleges is 75%.

The entire article can be read at: http://www.cnbc.com/id/102746071

May 21
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Average holding time for companies sold in 2015 is 5.5 years, Preqin reports

By Alternative Investments

Highlights from the report:

  • In 2014, the average holding period peaked at 5.9 years for companies exited.
  • Last year, 1,686 exits valued at a total of $442 billion took place, indicating that general partners were still capitalizing on suitable exit opportunities for their investments.
  • The lowest average holding period was 4.1 years for deals sold in 2008.
  • European companies sold this year had the longest average holding period, 5.7 years, compared with 5.3 years for North America companies sold in 2015.
  • Since 2006, energy and utilities companies have had the shortest average holding period, 4.3 years, while companies in the industrial sector and consumer and retail had the longest one, 5.3 years.
  • Deals of $1 billion or more underwent the biggest change in average holding periods since 2006, from a low of three years in 2008 to a high of seven years in 2014.
  • Average holding periods for deals in the $250 million-to-$999 million range increased from 3.2 years in 2006 to 6.4 years for portfolio companies fully exited in 2014, and for deals of less than $250 million, it increased from 3.5 years in 2008 to 5.8 years in 2014.

Source: Prequin

Apr 17
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EWM Monthly Commentary: Spring Seeds of Hope

By Uncategorized

After a long and difficult winter, many investors are wondering whether the Spring thaw will bring with it enough sustenance to reinvigorate the economy. First quarter data was less than upbeat, and despite a modestly positive start to April, several questions remain:

  1. Has oil reached a bottom?
  2. Does the US dollar have enough support to continue its upward trajectory?
  3. Has the Federal Reserve Bank (Fed) planted enough seeds for domestic growth?

Oil prices continue to weigh heavily on the stock market, as the price for a barrel of crude has precipitously fallen from a peak of $98 in September 2014 to $56 as of yesterday’s close. It dipped as low as $45 dollars a barrel in March but has rebounded back in recent weeks, supported by a strengthening in fundamentals and a tightening in supply.Global quantitative easing along with impending interest rates hikes have buoyed U.S. dollar strength.

The 10 year yield fell to 1.9% yesterday (4/16/15), hovering near all-time historical lows. Prior to 2011, the last time the 10 year yield was under 2% was February 23, 1951. Since that time, it has fluctuated regularly between 1.43% and 3.75%, falling below 2% on 357 of 1,073 trading days over the past four years.

As the Fed lays the groundwork for raising rates, it will have to consider when and at what pace. Although Janet Yellen did not rule out a June hike in the March meeting, the consensus handily favors September. Inflation is expected to remain low, and job growth slowed in March— driven in part by cuts in the energy sector which has historically been a key driver in non-farm job creation. Nonetheless, unemployment remains relatively stable at 5.5%, and the first quarter marked twelve consecutive months of job gains in excess of 200,000—the longest streak in nearly two decades.

So the big question is, does the recovery have legs, or will the engine stall? The signals are mixed. Following Wednesday’s disappointing industrial production numbers, estimates of real GDP growth fell to as low as 0.1% according to Atlanta Federal Reserve’s new GDPNow1 indicator; this comes in sharp contrast to GDP growth of 2.2% in Q414. Industrial production has been on the decline for the past three months, and March’s decline of 0.6% marked the largest decrease since 2012. A strong U.S. dollar is crippling exports, and weak oil prices have encumbered the operations of energy stalwarts.

On the positive side, consumer spending remains high, and housing starts are on the rise. Residential housing rebounded last month, although by less than expected.  The stock market is showing areas of opportunity, particularly in small- and mid-cap, with healthcare demonstrating solid gains.  It is worthwhile to note that at this juncture last year, Q1 2014 GDP also contracted, but the economy quickly recovered making positive strides for the rest of 2014. Although first quarter growth may similarly stall, the long term picture should remain robust, as we decelerate from an above trend environment to one of more moderate growth.

1 – The growth rate of real gross domestic product (GDP) is a key indicator of economic activity, but the official estimate is released with a delay. The GDPNow forecasting model provides a “nowcast” of the official estimate prior to its release.

Source:  https://www.frbatlanta.org/cqer/researchcq/gdpnow.cfm

Mar 11
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Endowment Index™ Named A Finalist for Index of the Year for 2014 by ETF.com

By News

March 11, 2015 08:53 AM Eastern Daylight Time

APPLETON, Wis.–(BUSINESS WIRE)–The Endowment Index™ (symbol: ENDOW) calculated by Nasdaq OMX®, has been honored as a finalist for “Index of the Year” by ETF.com for 2014. The rules-based Endowment Index™ tracks the performance of the average university and college endowment portfolio. The Index represents the investable opportunity for managers of portfolios that utilize the Endowment Investment Philosophy® by incorporating alternative investments within their asset allocations. The Endowment Index™ was co-created by ETF Model Solutions LLC and its affiliate, Endowment Wealth Management, Inc.

ETF.com’s Index of the Year is awarded to the index that has done the most to provide new ways of considering investment strategies, opportunities or ideas. The five finalists were selected from approximately 50 nominees. The other Index of the Year finalists are: Bloomberg Dollar Index, EMQQ Index, MSCI ACWI Low Carbon Target Indexes and the S&P 500 Index. The winner will be announced at an awards dinner, which takes place March 19 in New York City.

Matt Hougan, President of ETF.com commented: “The ETF.com Awards aim to recognize the firms that are driving the ETF business forward and creating better outcomes for investors. The Endowment Index™ certainly meets that definition, offering a standardized benchmark that incorporates equity, fixed income and alternatives exposure into a coherent whole. I’m pleased to see them nominated for our Index of the Year award. They are certainly one of the more intriguing, innovative and important new indexes out there.” Founded in 2001, ETF.com (formerly IndexUniverse) offers investors trusted insights through its leading publications, events, analysis and data.

ETF Model Solutions, LLC designs ETF-based investment solutions for advisers, institutions, retirement plans and individual investors based upon the Endowment Investment Philosophy®. The firm is the investment manager for the Endowment Multi Asset ETF Collective Investment Fund, a Collective Investment Trust (CUSIP 26923F105) available for use in 401(k) Plans.

Info: www.ETFModelSolutions.com or www.EndowmentIndex.com

Disclosure: You cannot invest directly in an index. Indexes do not have fees. Award recognition does not qualify as an endorsement of any particular index, investment, or investment strategy. ETF Model Solutions, LLC does not make any solicitation payments to award sponsors in order to be nominated or to qualify for nomination of an award.

Contacts

ETF Model Solutions, LLC
Tim Landolt, Managing Director
920.785.6012
Tim@ETFModelSolutions.com

Feb 19
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2,209 Private Equity Funds Seeking $811 billion

By Venture Capital

Palico released new data showing that there currently are 2,209 private equity funds targeting $811 billion. That’s a new record in terms of number of funds, topping the 2,043 funds that were seeking $787 billion last February. For dollars, today’s aggregate target remains lower than the all-time high of $884 billion being sought by 1,590 funds back in 2009.

Jan 20
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2014 VC Investment Tops $48B

By Alternative Investments, Venture Capital

Venture capitalists invested $48.3 billion in 4,356 deals in 2014, an increase of 61 percent in dollars and a 4 percent increase in deals over the prior year, according to the MoneyTree™ Report by PricewaterhouseCoopers LLP (PwC) and the National Venture Capital Association (NVCA), based on data from Thomson Reuters. In Q4 2014, $14.8 billion went into 1,109 deals. Internet-specific companies captured $11.9 billion in 2014, marking the highest level of Internet-specific investments since 2000.  Additionally, annual investments into the Software industry also reached the highest level since 2000 with $19.8 billion flowing into 1,799 deals in 2014. Dollars going into Software companies accounted for 41 percent of total venture capital investments in 2014, the highest percentage since the inception of the MoneyTree Report in 1995. “With the fundraising environment improving in 2014 and non-traditional investors increasingly joining venture capital firms in later-stage funding rounds, more capital was deployed to the startup ecosystem in 2014 than any year since 2000,” said Bobby Franklin, President and CEO of NVCA. “

Read the full article here: http://bit.ly/EWM2014VCInvestment

(Source: PWC)

Dec 18
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U.S. Inflation Watch-November 2014

By Inflation Watch

The Labor Dept. reported yesterday that the index of consumer prices was down 0.3% in November and was up 1.3% year over year vs. 1.7% in October. Much of the decline was due to falling gasoline prices which make up about 5% of the index and were down 11% year over year. This was the biggest one month drop since December 2008.

Excluding food and energy core CPI rose 0.1% in November and 1.7% year over year.

With gasoline prices expected to fall further this index is most likely on a downward path in the near future. One metric to watch is wage growth. A separate report Wednesday showed Americans’ wages are picking up as the labor market strengthens. Americans’ real average weekly earnings rose 0.9% in November from the prior month. That reflected a 0.6% rise in inflation-adjusted hourly earnings and a 0.3% increase in the average workweek.

(Source: WSJ)