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The political environment is critical for an industry’s health and, in turn, for the success of sophisticated institutional investment and risk managers. 

Chinese AI (Artificial Intelligence) firm DeepSeek, founded in 2023, is challenging assumptions regarding AI, its development, and its applications.

The common view is that once sovereignty begins slipping, it inevitably continues to do so.

Whether we realize it or not, the environment has shifted dramatically over the past couple of years, making it nearly impossible for some businesses to thrive.

For many, California is the haven for free expression, beautiful climate, the entertainment industry, and a laissez-faire approach toward marijuana and other drugs.

We write this installment not with the aim of espousing one political system over another but to assist sophisticated institutional investors and risk managers in understanding recent developments and better-predicting outcomes.

This installment addresses our views on the underlying reasons and possible future implications — key considerations for any sophisticated institutional investor or risk manager.

Private debt has grown faster than most other capital sources over the past couple of years, inviting scrutiny from regulators.

A key attribute of most sophisticated institutional investors and risk managers is recognizing change early and adjusting accordingly.

Brands have been touted as the “special sauce,” creating insurmountable barriers to competition and ensuring financial soundness.

A centerpiece of the new administration’s platform is the introduction of tariffs in an effort to make American manufacturing more competitive. 

Sophisticated institutional investors and risk managers can be hit with bullets and bonbons (excuse the alliteration) over the next 12 months.

Credit Tenant and Ground Lease financings provide opportunities for some of the lowest-cost, long-term financing available.

From our perspective, one of the most interesting outcomes is the maturation of the prediction markets, which were both more accurate and more timely than the traditional polling markets for determining likely outcomes from the election.

Just as the Reagan years are remembered as a major positive shift for investors, the current transition has the potential for similar, if not greater, gains.

From time to time, there are massive, seemingly unpredictable shifts that have far-reaching implications. Our view is that one of those moments is upon us.

Rarely have the political parties been as divided as they were in this past election, with the massive exchange of insults and worse.

Fallen angels bedevil (double entendre intended) portfolio and risk managers. The purpose of this installment is to help readers hopefully avoid these portfolio disasters.

Because of converging technological developments, for better or worse, labor will increasingly be replaced by capital, with massive implications.

Companies regularly try to build acceptance and a competitive moat to limit competition and ideally, increase margins.

Historically, when an entrepreneur had a great idea, they would design a product, manufacture it, and sell it to as broad an audience as possible.

Diversification is generally understood, but the math is often lost on the less informed.

Invested capital in private debt has grown from $1.0 trillion in 2020 to $1.4 trillion as of 2024 and is expected to grow to $2.5 trillion by 2028

Many sophisticated investors (Bill Ackman, Ray Dalio, Stanley Druckenmiller, etc.) are sounding the alarms, warning of a pending cataclysm.

At 77 years of age, one would think a luminary such as Mario Draghi would be enjoying the sun someplace on the Amalfi Coast or on the shores of Lake Como.

The benefits of being a market leader are multifold, including greater profitability, typically greater sales gains, and early opportunities for innovation.

A duty of a healthy society is to address existential threats. In our opinion, Western countries have made a major miscalculation with long-lasting consequences.

Traditional lenders prefer hard assets and hard cash. However, as society has progressed, the less tangible assets have in many cases become more valuable.

The late Jack Welch, the longtime widely acclaimed CEO of General Electric, claimed that he wanted GE to be first or second in each industry.

Imagine a time in the not-too-distant future when “machines” are more effective than most humans at performing most tasks.

PACE is a mechanism for financing energy efficiency and renewable energy improvements on private property.

The aim of this installment is to identify and analyze events that could prove disastrous for many professional investors.

As of a few quarters ago, many were rooting for a decline in longer-term Treasuries.

Litigation finance is different from the practice of lending to law firms whereby credit quality is derived from the operating income of the law firm.

For a variety of reasons, the free trade mantra is breaking down with global implications.

We are on the verge of another revolution which is likely to similarly have a massive global impact.

The world is changing rapidly and the implications are massive.

Providing capital to funds can take a variety of different forms.

On the ratings side of our firm we have a saying which is to check your politics, religion, and sporting views at the door.

Economic forecasting is a well-established practice among credit and financial analysts.