Maximizing the Opportunity in Private Markets

2021 Private Markets Illustrations: Baseline and Bear Forecasts

Leveraging macroeconomic forecasts, Ben’s risk management team develops long-term capital market assumptions (CMA) on a quarterly basis. These assumptions inform proprietary private fund models, which are tailored to each alternative asset class. The team created a scenario analysis based on 2021 conditions and examined two forward-looking five-year projections, a baseline economic forecast and a potential downside scenario, considered a bear scenario.

"In order to demonstrate the benefits of portfolio construction in private assets we leverage our TPM framework to illustrate opportunities available to investors with access to diversified portfolios and liquidity options to execute rebalancing strategies. A key component of a healthy portfolio is the ability to actively rebalance based on available risk/reward trade-offs across market exposures, asset classes, and fund types."

—Yuri Mushkin Chief Risk Officer, Beneficient

Baseline Forecast

The baseline forecast assumes that the global economy remains stuck in a demand-deficient rut. It assumes that social distancing is relaxed while monetary policy remains accommodative with limited impact on demand and little room for further cuts. And it assumes that both inflation and interest rates will remain low.

Bear Scenario

The bear scenario explores the impact of a significant resurgence in the virus, associated restrictions on economic activity, a renewed wave of contraction in credit supply, and governments failing to sufficiently support the economy. The result is weak medium-term growth and poor equity market returns.

KEY FINDINGS

  • There is considerable dispersion in performance across market cycles, between individual private funds but also between private fund strategies.
  • Allocating to a specific strategy does not appear as rewarding when adjusted for risk and compared with a diversified portfolio of private assets.
  • Strategic rebalancing and tilting a portfolio towards certain fund strategies and sectors can be a source of outperformance.

Within Ben’s report, “Maximizing Opportunities in the Private Market,” the baseline and bear forecasts are fully illustrated, providing extensive chart details and discussion analysis on the possible opportunities for strategic rebalancing by utilizing Ben’s Total Portfolio Management framework to analyze the risk/reward profile of private assets under the forecasted market environment.*

 

*The information in this material is not intended to replace any information or consultation provided by a financial advisor or other professional nor shall be perceived to constitute financial, legal, accounting or tax advice.

The information in this material and/or any other documents or information provided by The Beneficient Company Group, L.P. (Ben) does not constitute an offer to sell or the solicitation of an of an offer to purchase any securities of Ben or any of its affiliates. Offers to sell or purchase any security can only be made through definitive Offering Materials and subscription agreements with the applicable investor.

Subject to Qualification. Securities products are offered through Emerson Equity, LLC. Member FINRA/SIPC. Ben and Emerson Equity, LLC are separate, unaffiliated entities.

Neither asset allocation nor diversification guarantee against loss. Neither Ben nor any of its affiliates or representatives (i) makes any express or implied representation or warranty as to the accuracy or completeness of the information contained in these materials, or (ii) shall have any liability resulting from your use of these materials. These materials are not intended to provide the sole basis for evaluating any transaction with Ben or any other matter.

The views and opinions expressed are those of the panelists and do not necessarily reflect the official policy or position of Ben or Oxford Economics. The information in this material is not intended to replace any information or consultation provided by a financial advisor or other professional nor shall be perceived to constitute financial, legal, accounting or tax advice.

These materials contain certain estimates, projections and forward-looking statements that contain substantial risks and uncertainties. The estimates, projections and forward-looking statements contained herein may or may not be realized, accurate or complete, and differences between estimated results and those realized may be material. Such estimates, projections and forward-looking statements are illustrative only and reflect various assumptions of Ben’s management concerning the future performance of Ben and its affiliates, and are subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond Ben’s control.

Except as otherwise noted, the materials speak as of December 2020. Neither Ben nor any of its affiliates or representatives undertakes any obligation to update or revise any of the information contained herein or to correct any inaccuracies which may become apparent.

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