WELCOME TO OUR MONTHLY NEWSLETTER.
Designed to serve as your primary source for navigating the world of alternative investments.
For investors looking at direct lending, an important part of the investment thesis has been the attractive yields that come with higher interest rates. With the Fed lowering its benchmark rate by a half percentage point in September, is it time to revisit this thesis? Perhaps, but when assessing the forward outlook, it’s important to acknowledge the current market position that direct lenders occupy in the broader capital markets.
Private credit is now a genuine alternative to bank lending and the syndicated market. While credit quality varies, many private lenders set up their direct loans with enhanced protection and have proven to have lower defaults over the long term.
And with interest rates, what matters more is where rates settle, not a singular rate change. Should this be in the 2% to 4% range, rather than 0% to 2%, the core tenants for an allocation to direct lending remain in place: enhanced income potential, diversification benefits, and lower correlation to broader fixed income assets.
To learn more about private credit fund opportunities available at iCapital, please contact our sales team (
) or log in to the 
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Thank you for your continued partnership and support.
Dan Vene
Co-Founder and Managing Partner,
Co-Head of iCapital Solutions
CHART OF THE MONTH
Should benchmark interest rates settle in the low to mid-single-digit range over the medium term, direct lenders should still benefit from greater absolute yields and improved risk-adjusted returns.
NEW FROM iCAPITAL
We recently held a Q3 2024 Market Update webinar with Anastasia Amoroso, Joe Burns, Peter Horacek, and Kunal Shah.
Watch the replay to gain access to the latest market information, leading indicators, and macroeconomic factors that shape and influence the direction and investment outlook of alternative assets.
MONTHLY MARKET ROUNDUP
A 1031 Exchange is an IRS-recognized tax deferral strategy that allows an investor to sell an investment property and acquire a similar property while deferring capital gains. Use this guide to better equip yourself with the expertise to strategically structure 1031 exchanges, optimize tax deferral and offer an enhanced investment approach.
Investors require adequate diversification to protect portfolios from volatility. Over time, direct real estate has exhibited low or negative correlation to the S&P 500. This diversification may be more valuable than ever as episodes of higher stock/bond correlations have increased. Although real estate/equity correlations have spiked during prior recessions, they tend to then reverse quickly and sharply to restore diversification properties. Real estate also tends to have low volatility and produces stable cash flows.
With the expansion and broad adoption of private assets, investors and regulated fund managers are seeing increased access to investments once reserved for large, highly sophisticated institutional investors. Investment vehicles offering enhanced liquidity such as mutual funds and interval funds, however, face valuation challenges for underlying private investments which are illiquid in nature.
ANNUITIES
discusses the many decisions that go into choosing the appropriate strategy within a fixed indexed annuity (FIA).
MARKET PULSE
Despite the current market uncertainty, we believe seasonality is not an excuse to sell. The truth is sometimes seasonality works, sometimes it doesn’t. Rather, we have to couple seasonality with what we otherwise fundamentally believe will drive markets. And what we fundamentally believe is the economy is slowing but still growing and the AI growth story is still intact. Read more for ideas on where to steer portfolios in September and beyond. Learn more from Chief Investment Strategist Anastasia Amoroso’s Market Pulse.
CEO SPOTLIGHT
The Money Management Institute (MMI) announced that Lawrence Calcano, iCapital Chairman and CEO, has been awarded its prestigious Industry Leadership Award. The official recognition will take place during the 2024 MMI Annual Conference on October 15 in Charlotte, NC.
IMPORTANT INFORMATION
The material herein has been provided to you for informational purposes only by Institutional Capital Network, Inc. (“iCapital Network”) or one of its affiliates (iCapital Network together with its affiliates, “iCapital”). This material is the property of iCapital and may not be shared without the written permission of iCapital. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission of iCapital.
This material is provided for informational purposes only and is not intended as, and may not be relied on in any manner as, legal, tax or investment advice, a recommendation, or as an offer or solicitation to buy or sell any security, financial product or instrument, or otherwise to participate in any particular trading strategy. This material does not intend to address the financial objectives, situation, or specific needs of any individual investor. You should consult your personal accounting, tax and legal advisors to understand the implications of any investment specific to your personal financial situation.
ALTERNATIVE INVESTMENTS ARE CONSIDERED COMPLEX PRODUCTS AND MAY NOT BE SUITABLE FOR ALL INVESTORS. Prospective investors should be aware that an investment in an alternative investment is speculative and involves a high degree of risk. Alternative Investments often engage in leveraging and other speculative investment practices that may increase the risk of investment loss; can be highly illiquid; may not be required to provide periodic pricing or valuation information to investors; may involve complex tax structures and delays in distributing important tax information; are not subject to the same regulatory requirements as mutual funds; and often charge high fees. There is no guarantee that an alternative investment will implement its investment strategy and/or achieve its objectives, generate profits, or avoid loss. An investment should only be considered by sophisticated investors who can afford to lose all or a substantial amount of their investment.
iCapital Markets LLC operates a platform that makes available financial products to financial professionals. In operating this platform, iCapital Markets LLC generally earns revenue based on the volume of transactions that take place in these products and would benefit by an increase in sales for these products.
The information contained herein is an opinion only, as of the date indicated, and should not be relied upon as the only important information available. Any prediction, projection or forecast on the economy, stock market, bond market or the economic trends of the markets is not necessarily indicative of the future or likely performance. The information contained herein is subject to change, incomplete, and may include information and/or data obtained from third party sources that iCapital believes, but does not guarantee, to be accurate. iCapital considers this third-party data reliable, but does not represent that it is accurate, complete and/or up to date, and it should not be relied on as such. iCapital makes no representation as to the accuracy or completeness of this material and accepts no liability for losses arising from the use of the material presented. No representation or warranty is made by iCapital as to the reasonableness or completeness of such forward-looking statements or to any other financial information contained herein.
Securities products and services are offered by iCapital Markets, an SEC-registered broker-dealer, member FINRA and SIPC, and an affiliate of iCapital, Inc. and Institutional Capital Network, Inc. These registrations and memberships in no way imply that the SEC, FINRA, or SIPC have endorsed any of the entities, products, or services discussed herein. Annuities and insurance services are provided by iCapital Annuities and Insurance Services LLC, an affiliate of iCapital, Inc. “iCapital” and “iCapital Network” are registered trademarks of Institutional Capital Network, Inc. Additional information is available upon request.
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