Todd Hicks

joel guglietta, phd proprietary Labor Market Strength Index—a composite of Non-Farm Payrolls, the Unemployment Rate, the KC Fed Labor Market Conditions Index, and Jobless Claims—has taken a notable downturn in recent weeks. The value of this multi-factor indicator lies in its ability to capture broader trends. And right now, the trend has fallen to recessionary level. Popular indicators are supporting this view: the Sahm rule has been triggered, the three-month average for private payroll gains has also fallen to recessionary levels while DoubleLine CEO Jeff Gundlach unemployment rules have also been triggered, when the unemployment rate surpasses its 36-month moving average, it has historically signaled an impending recession. We increased long position in 2Y U.S. Treasuries. The decision reflects our view that softening labor markets could weigh on growth and, in turn, exert downward pressure on short-term rates. We refrain from turning outright bearish as some of our leading indicators (survey based) are pointing toward a potential US re-acceleration. These survey probably reflect the optimism around Trump policies and will have to be confirmed by real activity in the coming months. #InvestmentStrategy #MacroInsights #LaborMarket #Treasuries #RiskManagement

7

“Private credit and secondaries continue to emerge as key pillars of alternative asset allocation, pointing to a promising long-term growth outlook,” said Coller Capital’s CIO Jeremy Coller. Interesting research from Coller Capital underlining the continued allure to Institutional investors of both Private Credit and Secondaries. The author's primary business and vested interest notwithstanding, this very much mirrors our own experience of client demand in 2024. We have been extremely active hiring investment talent both in the UK and Europe within both Private Credit and Secondaries. Based on client dialogue and projects we expect to start in 2025, this trend looks likely to continue. https://lnkd.in/eNUZ44Ez

3

There's a glut of portfolio companies that are only going to return value if management can materially increase profitability, and cost-cutting alone won't get the job done these days, the top line has to go up too. This passage sums up the foundational argument in the article: "Yet the boom in private markets since the 2007-2009 financial crisis, especially in the big buyout category, was built on ultra-loose monetary policy. Most of the returns came not from enhancing the efficiency of portfolio companies, but from selling assets at ever-increasing market multiples and through leverage, which increases the return on equity relative to the return on assets." -Acquisition and exit strategy set to loose money -Explosion in the number of companies acquired in world of loose money -Loose money out, tight money in -Heightened calls for more oversight on valuation and transparency Which all adds up to a whole lot of fast adaptation required. One key #talent take away here is that this means greater focus on the mid-levels within the portfolio (Director-VP) where strategy gets translated to tactics and most of the day to day performance management is executed...where the rubber meets the road essentially. Assessment tools and tests that got put into the playbook for the way things were in #PE a decade ago need to give away ASAP for #talentacquisition and #succession processes that are more aligned with growth companies. So many of these assessments have zero to do with being a good middle management operator and yet I've seen so many people at VP/Director level get screened out over not being able to solve a set of complex math problems before a timer went off because "it's a PE company". And these were in sales, marketing, customer success, and product where there's a lot more important traits and experiences to be weighed than puzzle solving ability on a timer. The bottom line is that a big chunk of port-cos are going to need to start feeling less like traditional PE-owned companies and more like growth companies if they are going to deliver the value needed to satisfy investors.

16

1 Comment

December indigestion caused by the Federal Reserve's comments today? The S&P was humming along until the FOMC cut 25 bps as expected, and the changes to the statement were trivial (although the vote to cut wasn’t unanimous). Chairman Powell wasn’t a reassuring voice at this meeting, and the market’s confusion led to hawkish projections and speculations for 2025. The S&P 500 closed at the day's lows, -3%. Capital flow was heavy at 145%. Today's move lower in the stock market was significant. We’re below the 50-day moving average for the first time since September. We’re not oversold (yet), and we’re (only) back at mid-October levels. From a technical standpoint, the rest of December should be a race for the exits….but dip-buyers will (most likely?) do their thing. It's worked for the last 12+ years, so why stop now? Considering today’s drop is rooted in a market unprepared for a Fed that wasn’t gung-ho with spiking the punch bowl a lot more, it could mean that once investors relax and think, they won’t believe this is all that bearish. If that’s the case, watch for an enjoyable bounce back. In summary, the fundamental landscape isn’t radically altered; however, the emotional landscape temporarily is.

11

Hedge Fund Compensation Trends for 2025 Hedge fund compensation is on the rise. Recent data suggests that the average total compensation for professionals in this sector will increase by approximately 7% in 2025 (source: Institutional Investor). This jump is driven by a combination of robust fund performances and a competitive talent landscape. This year, analysts are expecting base salaries to grow by 5%, while bonuses are anticipated to see an even steeper incline of up to 10% (source: Hedge Fund Research, Inc). These rising compensation trends are not just limited to portfolio managers but also extend to roles in compliance, risk management, and technology, reflecting the holistic growth of the industry. Additionally, a notable trend is the increasing adoption of performance-based incentives. Over 60% of hedge funds are now structuring compensation packages that heavily favor bonuses tied to fund performance metrics (source: Preqin). This strategy aims to align the interests of the employees with the overall success of the funds they manage. If you're in the financial sector, especially in recruitment, it's crucial to stay updated on these trends. At Ramax Search, we specialize in placing high-caliber financial professionals, and understanding these shifts helps us provide competitive opportunities. Visit ramaxsearch.com to learn more about how we can assist with your career or hiring needs. 🗸 Competitive Pay 🗸 Performance Incentives 🗸 Comprehensive Roles #HedgeFunds #Compensation #FinanceJobs #ramaxsearch

1

Hedge Fund Compensation Trends for 2025 Hedge fund compensation is on the rise. Recent data suggests that the average total compensation for professionals in this sector will increase by approximately 7% in 2025 (source: Institutional Investor). This jump is driven by a combination of robust fund performances and a competitive talent landscape. This year, analysts are expecting base salaries to grow by 5%, while bonuses are anticipated to see an even steeper incline of up to 10% (source: Hedge Fund Research, Inc). These rising compensation trends are not just limited to portfolio managers but also extend to roles in compliance, risk management, and technology, reflecting the holistic growth of the industry. Additionally, a notable trend is the increasing adoption of performance-based incentives. Over 60% of hedge funds are now structuring compensation packages that heavily favor bonuses tied to fund performance metrics (source: Preqin). This strategy aims to align the interests of the employees with the overall success of the funds they manage. If you're in the financial sector, especially in recruitment, it's crucial to stay updated on these trends. At Ramax Search, we specialize in placing high-caliber financial professionals, and understanding these shifts helps us provide competitive opportunities. Visit ramaxsearch.com to learn more about how we can assist with your career or hiring needs. 🗸 Competitive Pay 🗸 Performance Incentives 🗸 Comprehensive Roles #HedgeFunds #Compensation #FinanceJobs #ramaxsearch

1

👻 A "Not-So-Spooky" Employment Report 🎃 💼 Labor Market Remains Robust.  So much for concerns about the labor market – the latest batch of data confirms that what we’ve been seeing over the past few months is a normalization process, not outright deterioration. The unemployment rate ticked down to 4.1% and nonfarm payrolls of +245k (plus +72k in revisions), blowing past expectations for September. 🚘 Under the Hood on Unemployment. Beneath the surface of the unemployment rate calculations, the underlying data in the household survey was the best of both worlds. The number of unemployed persons fell 281k and the civilian labor force increased by 150k. The numerator of the unemployment rate now shows fewer people out of work and the denominator shows a populace increasingly willing to engage in the labor force, which should be a boon for companies that have consistently noted a dearth of available labor. 😲 October Surprises for October Report? A couple of early October developments such as Hurricane Helene and the port strikes could be factors that influence next month’s jobs report (though the suspension of those strikes may prevent the latter from having a material effect). It’s common after major hurricanes to see initial jobless claims rise in the weeks immediately thereafter, which should give some insight to the economic impact of Helene. However, those impacts tend to be relatively transitory and are ultimately factors that investors should see through. ✂ Fed Reaction Function. The Fed should be in no rush now in its campaign to get rates closer to neutral over the next year, as the bottom does not appear to be falling out of the labor market. The Fed gets one more of jobs report before it needs to make its next rate decision at the November FOMC. If the October report looks anything like this one, a quarter-point rate cut is the overwhelming base case. Investors should expect the Fed to take a slow and steady approach to rate cuts, with some optionality to accelerate that process if concerns pop up that require more accommodation. #economy #jobs #employment #FederalReserve #RateCuts 

17

What is Power-to-X and how can it fill the gaps in the renewable energy journey and help technologies extend into new sectors in the future? Read our latest digital article. #nuveeninfra

5

Despite the recent Non-Farm Payroll (NFP) reports being lauded as "strong" and "solid," a critical underlying metric tells a different story. The Implied Hiring Rate has actually plummeted in the last two NFP reports, exposing a glaring disconnect between surface-level praise and deeper labor market dynamics. Is this time different?

8

=> The U.S. labor market report produced a knee-jerk reaction among major FX – but MXN, COP, BRL, and ZAR are bucking the trend => MXN clearly likes the idea of a stronger growth in the U.S. Further, President Sheinbaum continues to send orthodox policy signals (including the post-election fiscal adjustment), and there is now a possibility that parts of controversial judicial reform might be revised => BRL/COP/ZAR’s outperformance is even more interesting – Domestic factors still getting noticed? (chart’s source - Bloomberg LP)

13

It‘s exciting to see Broadridge's President, Chris Perry, leading an engaging discussion at the Tiburon CEO Summit, exploring the future of WealthTech M&A, alongside industry leaders. They shared insights into:  · Emerging trends influencing M&A  · The role of AI in wealth tech  · Consolidation · Actionable strategies to raise capital, or prepare for acquisition Thank you to Tiburon for hosting this discussion!  #WealthTech #MergersAndAcquisitions #CEOInsights #WealthManagement 

8

In this month’s First Eagle Alternative Credit update, Portfolio Manager and Senior Alternatives Strategist Larry Holzenthaler explains how repricing drove spread compression in 2024 and where the team is seeking relative value while keeping overall credit quality at fairly prudent levels. https://bit.ly/3DwAiiY

2

The S&P 500 is now up more than 20% year to date through the third quarter. Underlying the strong return of the index are signs of a healthier – and more balanced – equity market. Read our expert analysis. #stockmarket #investors #SP500

1

If you think portfolio risk management is just about diversification, think again. This article sheds light on some surprising strategies that challenge common perceptions. Here are some thought-provoking takeaways: - Did you know that reducing the number of investments in a portfolio can sometimes actually decrease risks? It's all about strategic selection. - Contrary to popular belief, actively managing risk doesn't necessarily mean more frequent trading. In fact, a hands-off approach can be a smart move. - One of the key points discussed is the importance of understanding the correlation between investments, a factor often overlooked in risk management strategies. - Asymmetric risk and the role it plays in portfolio management is explored, offering a fresh perspective on balancing risk and return. - Ever considered tail risk hedging? This article dives into this lesser-known strategy that can enhance risk management effectiveness. Share your thoughts and feelings on these unconventional risk management strategies. https://lnkd.in/ecgSpH93

Mike Sanders, Head of Fixed Income at Madison Investments, explains why he expects the Fed to continue cutting rates if markets remain bullish, in his interview with Oliver Renick on the Schwab Network. He also highlights the impact of geopolitical risks in the energy sector, along with the Fed's focus on inflation, labor data, and market trends as key factors in rate decisions. Watch the full interview here: https://lnkd.in/gvwiDZ9E #FederalReserve #Economy #InterestRates

5

Check out the Travillian NEXT debut of our new Head of Bank Strategy - Michael Perito. Discussing critical topics for #communitybank #earnings

1