Managing Investment Accounts

Historically, the U.S. dollar’s “safe haven” status has meant that selloffs in risk assets (e.g. equities) have coincided with purchases of U.S. Treasuries and therefore dollars – prompting a stronger dollar. But so far this year, the dollar has fallen alongside U.S. equities more than twice as often as over the prior decade. That’s a breakdown in one of the most relied-on cross-asset relationships. When U.S. equities sell off and the dollar doesn’t rally, the case for running unhedged exposure gets a lot weaker. The recent dollar weakness has reshuffled the FX calculus. This isn’t about making a macro call on the dollar – it’s about understanding how it behaves in a portfolio. Here’s how we’re thinking about it: For non-U.S. investors: High hedge costs aren’t a reason to stay unhedged. With the dollar falling and its correlations breaking down, the risk of doing nothing is rising. Consider a higher hedge ratio, particularly in fixed income. Partial hedges can help manage cost while reducing drawdown risk. For U.S. investors: The math cuts the other way. If you're investing abroad, especially in lower-beta markets (that is, where the assets are less volatile than the market) or defensive currencies like JPY and CHF, unhedged positions may offer more upside. The weaker dollar means FX could be a return lever – not just a risk. By region: European investors are already seeing better return outcomes from FX-hedged U.S. equities. In Japan, high carry still discourages full hedging – but that could change fast if the Fed cuts rates or the BoJ normalizes. Earlier in the cycle, a flat or inverted U.S. yield curve made things worse – forcing portfolio managers to use expensive short-term dollars to hedge longer-dated securities with limited yield pickup. While the curve has recently steepened, it remains relatively flat by historical standards, limiting the appeal of hedging long-duration U.S. bonds for foreign investors. At the same time, steep curves abroad – like in Japan – make holding local bonds more attractive on a relative basis. Those curve dynamics feed directly into FX positioning. We’re already seeing signs of how these dynamics play out in currency markets. The chart below shows that the euro carry index has fallen sharply since the start of the year, suggesting that carry trades funded with euros are no longer working – likely due to a stronger euro or a shift away from USD risk. Meanwhile, the yen carry index is rising, reflecting continued comfort with borrowing in yen to chase higher yields. The divergence underscores a broader market preference for using yen, not euros, as the funding currency of choice. The result? We could see even more volatility in currency markets – and in the returns of global portfolios.

What happens when African fund managers lead the investment strategy? In a recent CNBC Africa interview, DOROTHY NYAMBI, CEO of MEDA (Mennonite Economic Development Associates) shared powerful insights into how the Mastercard Foundation Africa Growth Fund is reimagining what it means to put African capital in African hands. The Fund demonstrates that capital can be reimagined and redirected to serve African fund managers, entrepreneurs, and especially women, using a gender-lens and locally led investment model that: 1. Rethinks gender-lens investing • It’s not about ticking diversity boxes- it’s about empowering women with real agency to influence investment decisions and strategy. • The Fund emphasizes patience and local context, shaping investment approaches to suit real-world African realities rather than imposing external templates. 2. Builds local ecosystems • Local leadership matters. The Fund invests in and supports African and female-led managers, ensuring they are not just invited to the table- but leading it. • It enables fund managers to spearhead strategy and draw in other stakeholders, strengthening the investment ecosystem from within. 3. Focuses on returns “on inclusion” • The Fund measures more than financial returns. It prioritizes social impact, like job creation and economic empowerment. • The goal: dignified, sustainable employment, particularly for African youth, moving beyond short-term fixes. 4. Is intentional about youth and women inclusion • The Fund challenges outdated narratives that investing in women is riskier, instead proving the financial viability of women-led enterprises. • It applies a holistic, end-to-end gender lens, supporting women as entrepreneurs, fund managers, and drivers of growth across the value chain. Impact so far: • ~US$150 million deployed across 18 African-led investment vehicles • 49 SMEs supported in 12 countries • 2,500 full-time jobs created, with 1,100 held by women • 75% of supported vehicles are female-led • Honored with the DEI Award at AVCA’s 20th Anniversary Conference In essence, African-led, gender-smart capital flows are delivering equity and economic resilience. Fund managers and entrepreneurs are shaping outcomes with a clear focus on inclusion, impact, and sustainability. This is a transformative model where African and female-led fund managers are no longer just recipients of capital, but drivers of it, reshaping the investment landscape to deliver both financial returns and lasting, meaningful change across the continent. Watch the full interview: https://lnkd.in/d9SuiuSj #Africa #GenderLensInvesting #InclusiveCapital #ImpactInvesting #Leadership #YouthEmployment

🔍 What if your $1B endowment could access the same investment firepower as Harvard or Yale—without moving to New York or Boston? That’s exactly what Rip Reeves and LSU Foundation did, and the results are impressive. 💡 The OCIO Advantage - LSU partnered with Cambridge Associates, giving them world-class research and access to top-tier investments—even from Baton Rouge. “You basically rent a global team of hundreds,” says Rip. 👉 Why? - Smaller pools can’t attract the same talent internally. OCIO lets you punch above your weight. 📊 Portfolio Magic - 40% stocks, 30% bonds, 30% alternatives. Sound familiar? It’s the Yale Endowment Model—evolved. 👉 Why? - Wide guardrails, not rigid rules. Flexibility is key for outperformance. 🌍 Global Access, Local Roots - Even with just $1B, LSU gets into deals and funds that would otherwise be out of reach—thanks to pooled allocations and volume discounts. 🤝 Building Relationships Rip Reeves shares how he vets managers: - In-person office visits (arrive early, listen to hallway chatter) - Sports games, dinners, and casual meetups (see how they really are) - Reputation checks (what do others say behind their back?) 💬 Best Practices for GPs - Be cool, not pushy. - Follow up with a warm call, not a cold pitch. - Join events where real relationships form. - Be transparent about your goals. 🚀 Why This Matters - 90% of portfolio performance comes from asset allocation—not manager selection. Are you optimizing yours? Or are you just chasing “sexy” managers? #Finance #Investing #AssetManagement #Investmentstrategy #Innovation #CIO Link to Podcast in Comments Below 👇

I used to think Africa’s LP base was one crowd. Then we mapped 300+ of them 🗺️ It’s actually at least four different groups (so far)! 𝗚𝗿𝗼𝘂𝗽 𝟭: 𝗗𝗲𝘃𝗲𝗹𝗼𝗽𝗺𝗲𝗻𝘁 & 𝗽𝗼𝗹𝗶𝗰𝘆 𝗺𝗼𝗻𝗲𝘆 🎋 Europe sets the tone. British International Investment / Proparco / KfW / FMO - Dutch entrepreneurial development bank / European Investment Bank (EIB) / EBRD anchor the DFI group, with the US present but not dominant. If your strategy needs concessional or blended layers, start here. 𝗚𝗿𝗼𝘂𝗽 𝟮: 𝗪𝗼𝗿𝗸𝗲𝗿𝘀’ 𝘀𝗮𝘃𝗶𝗻𝗴𝘀 👷 The Pension/Insurance room is unmistakably US-led. Large US schemes show up again and again, while South Africa is the continental anchor (Government Employees Pension Fund / Public Investment Corporation, plus sector funds). This is where long-duration, governance-heavy mandates live. 𝗚𝗿𝗼𝘂𝗽 𝟯: 𝗦𝘁𝗿𝗮𝘁𝗲𝗴𝗶𝗰𝘀 & 𝗰𝗼𝗿𝗽𝗼𝗿𝗮𝘁𝗲𝘀 🏢 A surprise: Japan is loud and ever present - Marubeni, ENEOS, TOPPAN, JGC - alongside the US on corporates and strategics LPs. South Africa tops the corporate count inside Africa. If you’re selling distribution, supply chains or JV logic, this group may answer you faster than you’d expect. 𝗚𝗿𝗼𝘂𝗽 𝟰: 𝗥𝗲𝗴𝗶𝗼𝗻𝗮𝗹 𝗳𝗶𝗻𝗮𝗻𝗰𝗲 🏦 The Investment Bank/Insurance corner looks more Levant & Maghreb than many assume, Lebanon/Egypt/Morocco feature repeatedly, with Nigeria and Taiwan/Hong Kong also in the mix. Across groups, Asset Managers, Foundations and Funds-of-Funds over-index in the US, while South Africa is the most frequent African HQ across types. And so far, we've only tracked a handful of Sovereign Wealth Funds with consistent commitments in the region. 𝗦𝗼 𝘄𝗵𝗮𝘁? • If you're fundraising, don’t “spray and pray”. Match LP type × HQ to your pitch. • Depending on your thesis, if you’re underweight Japan/South Africa corporates, you’re likely leaving money on the table. • Policy people: deepening local pensions/insurance is how we localise the capital stack. 𝗦𝗰𝗼𝗽𝗲 & 𝗰𝗮𝘃𝗲𝗮𝘁𝘀 This view covers 300+ prominent LPs that have funded or invested in Africa, from the 500+ we currently track and are building profiles for. I personally think by the time we are done, the LP universe may look closer to 1k+. Treat this as a floor, not the ceiling - and help us complete the map! LP Profiles are now live on the Stears platform with a full screener to search by type, preferences, mandate, historical commitments etc. DM for a walkthrough or to suggest additions. #Fundraising #LPs #GPs #PrivateCapital #Africa

Here’s exactly what we’re telling clients to do given current market volatility…. Keep a fully stocked Emergency Fund. If you feel that a layoff is likely, consider stockpiling excess cash for a transition fund. Keep funds for short term goals out of the market. If you're nearing becoming work-optional, keep a significant portion of your portfolio in high quality shorter duration bonds so that you can draw from your bond portfolio to support income until equities recover. For long term goals, continue to invest for the long term. Market corrections are opportunities to buy equities at a discount, if you will, so continue portfolio contributions as planned. If you are deploying a large amount of cash into the market, consider whether you might want to dollar-cost-average over time. If equity compensation is a large portion of your annual income (which is the case for most of our late-stage private and public company clients), manage your spending so that decreases in your company stock price won't impact your ability to pay your bills. (This is why we often recommend a lower price point for a home purchase than might otherwise be possible to leave a healthy margin of safety for stock price drops.) If you have RSUs vesting on an ongoing basis, we generally recommend that you continue to sell shares as they vest (although there are exceptions - follow whatever Cyndi or I has laid out for you in our planning work together). This is because your RSUs are ultimately a bonus paid in stock, and we do not typically recommend using your bonus to buy your company's stock. Instead, we recommend using your RSUs to fund your goals or support your cash flow. ***This is being shared for informational and educational purposes only. This is NOT investment advice. Every situation is unique so please consult with a professional about your specific situation to see what makes sense for you.***

How to Underwrite Expected Future Interest Rates Real estate loans are tied to an underlying benchmark with a spread determined by the lender. For this example, we'll use 1-Month Term SOFR. 👉Today's Index Rate: 5.32% 👉Lender Spread at 70% LTV: 200 bps 👉Borrower Rate: 7.32% In this oversimplified example, the borrower has a few options: 👉Ask for the cost of discount points to lower the rate. 👉Ask for a quote from a lower index that may better align with the borrower's hold period/lender's cost of capital (5-yr,7-yr,10-yr treasury) 👉Play with LTV relative to how much capital the borrower has available/can raise from private investors. 👉Get quotes from multiple lenders (always do this and consider hiring a debt broker to save time & often money). 👉At the end of the day, if the debt quote makes sense for the deal, accept the quote and move forward to closing. If a borrower chooses floating rate debt for flexible pre-payment terms or in hopes that interest rates will go down, financial risk management firms like Chatham Financial or Pensford provide daily downloads of interest rate forward projections for the next 10 years. Most private equity and institutional groups rely on risk management providers to make informed decisions about future capital market conditions. Everyone understands there will be some margin of error, so that's where the art meets science. If the real estate investor chooses to use floating rate debt, they should do the following: 👉Create a "forward curve drop" in the model. 👉Download a forward curve and drop it into the model. Update regularly throughout the acquisitions process to always have an idea of the direction and magnitude of interest rate movements. 👉Create a line in the Sources & Uses budget for "Interest Rate Cap". 👉These risk management providers also have a calculator to calculate the cost of the interest rate cap. Use this as a plug until you receive final pricing from your lender. From an underwriting perspective, the investor now has three options: 👉Conservative: Allow the interest rate to float until it reaches the capped rate and set the cost of debt to the capped rate going forward. 👉Expected: Same as the conservative approach but to the extent the forward curve brings the cost of debt down below the capped rate at any time, allow the interest rate to float along with the index rate. 👉Aggressive: Don't pay for a interest rate cap and expect interest rates to come down over time. It could happen, but probably not the best risk-adjusted play. Interest rates are difficult to predict. It's best practice to either use fixed rate debt or to use floating rate debt with an interest rate cap. If interest rates do come down, that's a great benefit to the borrower; if they don't, then the interest rate cap acts as a protection against adverse capital market conditions. #realestate #financing #interestrates https://lnkd.in/e6qeu58s

This month, I’ve seen a significant shift in financing strategies, with many deals originally planned for 5–10 year fixed-rate financing now pivoting to shorter-term floaters. In September, when interest rates were nearly 1% lower, many buyers placed hard deposits on multifamily properties. With rates rising since then, these deals have become more challenging—interest rate-to-cap rates are now inverted, and DSCR constraints have increased equity requirements. Rather than locking in long-term debt at today’s higher rates with yield maintenance prepayment penalties, many borrowers are exploring more flexible short-term solutions. Interestingly, market dynamics have created new opportunities. Historically, bridge lenders focused on properties with a value-add or upside story, avoiding stabilized deals. Now, with heightened competition and abundant liquidity, debt funds are aggressively pursuing stabilized multifamily assets. For the right deals and sponsors, lenders are stepping up with competitive terms: higher proceeds, attractive rates, and—most importantly—flexible prepayment options. Here’s a recent example that illustrates the difference between a 5-year fixed-rate loan and the terms we achieved by pivoting to a 3-year floater.

EPFO Announces New Update for 2025: Transfer PF Accounts Without HR Approval The Employees' Provident Fund Organization (EPFO) has introduced a major update to simplify the process of transferring PF accounts. Previously, employees needed HR approval for their transfer requests, which often added delays and complexity. However, as per a circular issued by the EPFO on 15th January 2025, transfer requests validated via OTP will now be sent directly to the PF field officer for approval, bypassing HR involvement entirely. Eligibility criteria for direct PF transfer claims: Transfers within the same UAN (issued on or after 1st October 2017): Employees with a single UAN linked to multiple Member IDs and Aadhaar can request transfers directly. Transfers between different UANs (both issued on or after 1st October 2017): Employees with multiple UANs associated with the same Aadhaar will be identified as the same individual, allowing transfers without employer intervention. Transfers within the same UAN (issued before 1st October 2017): For older UANs, transfers can proceed if the UAN is Aadhaar-linked and personal details like name, date of birth, and gender are consistent across Member IDs. Transfers between different UANs (at least one issued before 1st October 2017): Transfers involving older UANs are permissible when both UANs are Aadhaar-linked and personal details match. This streamlined process is expected to significantly improve efficiency, with projections indicating that 94% of all PF transfer requests—around 1.20 crore out of 1.30 crore claims annually—will be processed without the need for employer approval. This initiative aims to save time and simplify PF management for employees, ensuring a more user-friendly experience.

Two investors start withdrawing from $100,000 portfolios. Same portfolio. Same 4% average return. Same $5,000 annual withdrawals. 15 years later, one has $105,944. The other has $35,889. That's a $70,055 difference. Why? Sequence of returns risk. Let me show you what happened and how to protect yourself: 1) Understand the Hidden Threat The order of your returns matters more than the average. Bad years early in retirement can permanently damage your portfolio, even if markets recover later. 2) See the Real Impact Investor Blue retired into an up market. Good years first, bad years later. Investor Green retired into a down market. Bad years first, good years later. Same average return. Wildly different outcomes. 3) Know Your Danger Zone The 5 years before and 10 years after retirement are critical. This is when sequence risk hits hardest. One bad stretch can cost you decades of savings. 4) Build a Cash Buffer Keep 2-3 years of expenses in cash or short-term bonds. This lets you avoid selling stocks during downturns. You ride out the storm instead of locking in losses. 5) Make Withdrawals Flexible Don't blindly take the same amount every year. Cut spending after down years. Increase after strong years. This simple adjustment can extend your portfolio by years. You can't control market timing, but you can prepare for it. 📌 P.S. Want to know how prepared you are for retirement?     See comments to take our 5-minute assessment to see where you stand.

A few lessons learned investing in short duration, senior-secured CRE credit over two decades: - When interest rates are higher for longer, relative value moves up the capital structure. - Floating rate debt with rate floors and minimum yield covenants protect you against mark-to-market and interest rate risk. - Short duration loans, particularly in volatile times, provide you with a unique ability to adapt to changing economic conditions. - Contractual cash flows backed by tangible real estate at conservative leverage reduces downside risk, even when business plans fail and liquidity dries up. - Structure loans with current cash interest payments. It keeps your borrowers honest, de-risks your position and helps you monitor your exit. - Beat up valuations and stress test for adverse economic conditions. As a lender, you are not being compensated for upside. Your first and last priority is to protect and preserve capital. - Lending at the top of the capital stack means getting paid first and controlling any enforcement action. Control is key to risk management. - Focus on inflation protection. Supply-constrained real estate (e.g., multifamily, logistics centers) tend to appreciate, with rents adjusting to sustained demand. - Relationships are everything. Lead with integrity, honesty and accountability to build long-term and repeat relationships with your borrowers. Make sure your interests are aligned. Celebrate their wins (particularly when they pay off your loan)!