The 13th edition of the World Economic Forum's Global Risks Report, undertaken with Marsh & McLennan Companies, examines the evolving macro-level risk landscape and highlights the systematic threats that may disrupt expectations.
Investment Management
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The 2017 Tax Cuts and Jobs Act significantly affects the ability of the managers of investment funds to receive long-term capital gains with respect to their carried interest. Under current law, the manager of an investment fund can receive a “profits interest” (also known as a “carried interest” or a “promoted interest”) tax-free. In addition, there is a three-year hold requirement for carried interests.
2018 Economic Outlook
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In this annual session, we discussed the U.S. and global economic outlook, with a particular focus on growth prospects, interest rates, and risks. Furthermore, we explored equity valuations and take a critical look at the underlying assumptions that lead to conclusions of over or under-valuation.
Operational improvements are a key lever for achieving value creation after a deal closes. There are three critical ways private equity firms can both protect and grow value through operations.
The Curse of Greed
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Detailed analyses and quantitative rigor go into every sound investment decision. To make matters more challenging, we are constantly battling our instincts, which can pull us in conflicting directions and get in the way of sound investment discipline.
The Tax Cuts and Jobs Act (TCJA) is here to stay and its provisions change the landscape of the private equity world going forward. The decrease in corporate rates coupled with new net operating loss limitations, corporate alternative minimum tax repeal, and accelerated expenditures will directly impact how the value and price modeling of deals are calculated. When all of the TCJA provisions roll out, deal teams will have many additional tax attribute facets to consider when acquiring or exiting an investment.
10-Year Capital Market Return Assumptions
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Research has shown that demographic trends have important relationships with many economic variables. As a nation’s population ages, the balance of capital tends to shift from debtors to creditors. The supporting data behind the phenomenon and other initial baseline assumptions outlines our capital market return forecasts for approximately 50 asset classes around the world for the next 10 years, and are intended to guide investors in developing their long-term strategic asset allocations.
There are currently more than 1,000 cryptocurrencies with a combined market capitalization of over $400 billion dollars.
FOX Foresight – Appeal of Direct Investing
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FOX Foresight – Appeal of Direct Investing shows the growing interest in private company investments. It tells the story of families who are pursuing this opportunity, highlighting the top themes from FOX's research and ongoing conversations with FOX members.
2018 Investment Outlook: Good, But Not as Good
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While 2018 will have a difficult time living up to 2017’s stellar returns, we believe the markets should still have a more-than-decent showing. Central to this generally optimistic view of the markets is our expectation that the global economy is fairly healthy. Broad-based synchronized growth, which began in 2017, should continue into 2018 and deliver real gross domestic product growth of 2.7% in the U.S. and 3.8% globally. With that growth, financial markets should be positioned to deliver a solid year of returns.