Is this you? As a journalist, you can create a free Muck Rack account to customize your profile, list your contact preferences, and upload a portfolio of your best work.
Claim your profile
Articles by Christopher Schelling
High Beef Prices Test Consumers This Grilling Season
Why do people pay exorbitant prices for a 1963 Ferrari that is permanently parked in a garage, a bottle of Bordeaux that sits in a cellar, or even a rare Picasso that just hangs on the wall? The obvious answer is that these things provide something beyond mere financial value. Their owners derive pleasure, status, identity, nostalgia, and perhaps most importantly, the satisfaction of ownership itself from these assets.
How AIDS Killed My Gay Synthpop Superfandom
A French houseguest changed my life in the summer of 1986. "What are you listening to?" I asked, indicating his large Walkman (even the "slim" models were chunky bricks back then). But I couldn't parse the response through his accent. "Air Ranger"? "Ear Azure"? He gave a self-conscious snort at my incomprehension, deliberately spelled out "E-R-A-S-U-R-E," slipped the headphones over my dire '80s hair and hit play.
Three Pivotal Trends Impacting Growth
The wealth management industry appears to be fixated on the first decline in mergers and acquisitions activity in more than a decade, capturing the attention of industry experts eager to understand the factors behind this shift. DeVoe & Company’s report highlights that the main factors impacting a decrease in volume included high interest rates, extended due-diligence efforts, evolving deal structures, and an increased emphasis on scrutinizing valuations.
Forget ChatGPT and Robo-Advisors - Recommendation Engines Are the Future of Wealth Management
Every day, a new article proclaims that artificial intelligence will transform wealth management. While some tout AI-based “solutions” that are highly suspect, most of these articles reduce to vague explanations of how AI will enhance robo-advisors and how generative AI like ChatGPT will improve research and client service.
It’s Time for Advisors to Call BS on Active Managers
In 1996, The Onion published a satirical column entitled “Amish Give Up” that read: “After centuries of enduring harsh, spare living conditions and voluntarily shunning modern amenities such as microwave ovens and red clothing, Amish leaders announced Monday that Amish across the U.S. will abandon their traditional ways and adapt to modern American life.” “Said Amish Father Ezekiel Schmid at a Lancaster press conference, ‘This is pure bulls**t.’” I reference this humorous column because...
Don’t Be a Buckethead
I recently sat on a panel discussing how to sell alternatives to registered investment advisers. One of the panelists ran a hybrid strategy, and he discussed his frustration with trying to market to investors who never knew how to classify his fund. Was it a hedge fund? Was it private credit? And since the RIAs didn’t know where to put it, they were less likely to use it in client portfolios.
You’ve Heard About Behavioral Finance. But What About Physical Finance?
Over the last ten years, the amount of research on behavioral finance — or BeFi — has exploded to the extent that anything said about the subject today seems almost trite. To summarize: People are not perfectly rational economic machines when it comes to making financial decisions. Now the fact that the decisions we make don’t match the mathematically optimal outcomes of traditional economic decision-making models isn’t a function of purely psychological factors.
This Private Equity Trend May Not Be So Troubling After All
Many limited partners — myself included — have expressed skepticism of general-partner-led secondaries. Among the top concerns: potential conflicts of interest, perverse incentives, and adverse selection bias. But perhaps these concerns are unfounded. First, some numbers: Private equity secondary volume last year remained pretty robust, as approximately $100 billion of transaction volume traded hands.
Why Private Equity Gets Valuations Right
With the S&P 500 down approximately 20 percent year to date, virtually every investor is feeling the pain of unrealized losses. Unfortunately for most investors, bonds have not provided the ballast for portfolios that they typically do. Interest rates have risen 300 basis points or so in 2022, leaving core bond portfolios down roughly 20 percent as well. There has been nowhere to hide. Well, except maybe private markets.
Stuck on an Investment Problem? It Might Be Time for a Change.
Late one night the other week, I turned on the television as a diversion from thinking about a unique investment structure I was researching. This private investment opportunity had the potential to generate substantial distributions, as well as upside appreciation, with a possibly perpetual holding period. With several types of investors interested — from family offices to pensions and funds of funds — there was significant debate around the appropriate fund structure.
Is Private Credit a Bubble, or Just a Little Frothy?
Is Private Credit a Bubble, or Just a Little Frothy? The asset class has exploded in popularity over the past two decades — but that doesn’t mean it’s about to blow up, argues our columnist. Read Full Article »
Is Private Credit a Bubble, or Just a Little Frothy?
It seems that every investment shop out there is coming to market with a private credit fund. In fact, as I write this column, two more firms — an asset management firm and a global investment bank — issued press releases touting the launches of their first private debt vehicles. Institutions and individual investors alike have flocked to the asset class. Estimates from various sources indicate that the private credit industry today has total assets under management of about $1.2 trillion.
There’s an Easier Way to Win in Alternatives
With retail investors joining the tide of capital flowing into the largest managers, investing in private equity is about to get even more competitive. But it’s still possible to win — if investors play the game right. Today, U.S. capital markets total about $100 trillion in investable assets. The rise of the retail investor means institutions now account for less than half of this, and that share is falling.
Themes, Memes, and Shiny Things
In European folklore, magpies, the colorful birds recognized for their intellect, love to steal jewelry and trinkets, winging away with the shiny baubles as decorations for their nests. The belief goes that, although the sparkly objects have no real intrinsic value to the birds, they just can’t help themselves. Glitz and glitter capture their attention. Whether or not this tale is true, we humans do have a tendency towards similar behavior.
Asset Allocators Are Mired in Bureaucracy - But They Don’t Have to Be
Adapted from Better Than Alpha: Three Steps to Capturing Excess Returns in a Changing World There’s a saying in real estate that the three things that matter most when buying property are location, location, location. Well, the three things that matter most to the success of an institutional investor are governance, governance, governance. What does governance mean? If you ask ten people, you might well get ten different answers.
There’s a Science to Manager Selection - But It Also Helps to Go With Your Gut
Adapted from Better Than Alpha: Three Steps to Capturing Excess Returns in a Changing World On the age-old question of whether investing is more art or science, luminaries of the industry have long squared off on opposing sides of the argument. On one side are flexible value investors like Seth Klarman of Baupost Group and Howard Marks, co-founder of Oaktree Capital Management, who tend to describe building portfolios as a craft, with the investor as artisan.
The Art - and Imperfection - of Due Diligence
Due diligence is as much about process as art. In trying to select which alternative investment managers to work with, due diligence professionals must analyze many characteristics, all with the intent of finding the perfect partner. However, most things a due diligence analyst digs into represent a series of trade-offs, balancing the pros versus the cons. There often is no right or wrong answer to many of them. Take, for one, the size of a fund. Is it better to be big or small?
The Best Managers Aren’t in It Just for the Money
The Best Managers Aren’t in It Just for the Money The key to motivating investors comes from something deeper than performance fees. Read Full Article »
The Best Managers Aren’t in It Just for the Money
Past behavior is often called the best predictor of future behavior, but it’s well known that incentives drive behavior. Too often allocators believe these incentives come purely from dispassionate compensation structures and contractual protections at their investment managers. Although alignment of interests is indeed important, human beings are not machines. The key to true motivation and self-fulfillment at work comes from something deeper.
Cathie Wood Was Last Year’s Hottest Investor. But Is There a Lesson for Her Fans in a Forgotten 1990s Icon?
On a Tuesday in January, a rising investment superstar made their Public Broadcasting Service debut on an episode of the show Frontline. After a run of incredible returns in tech stocks, this internet whiz was being compared to legendary investors like Warren Buffett or mutual fund manager Peter Lynch, but for the new economy.
Hedge Funds (Almost) Always Win
Hedge Funds (Almost) Always Win And as GameStop shows, individual investors competing against well-capitalized professional investors (almost) always lose. Read Full Article »
Hedge Funds Always Win
Over the last week, financial media has exhaustively covered GameStop’s wild ride from roughly $77 on January 25th to $70 — where it trades as I type — roundtripping a move as high $483 per share in between. As we all know, a social media fueled trading frenzy sent the share price surging in the most extreme short squeeze I have personally ever witnessed. But all that juice looks to have been squeezed by now.
Dear IRR: It’s Not You, It’s Me.
Dear IRR, It seems like every time I see the letters “IRR” in an investment article or on a financial news site, the story is about how terrible you are. Internal rates of return are misleading, inaccurate, and untrustworthy. You are not directly comparable to a compound rate of return, and you don’t represent what investors actually earn. I may be guilty of airing some of the same criticisms as well.
Stress Is Bad for Investing. What To Do When It Never Ends
Stress Is Bad for Investing. What To Do When It Never Ends Rese arch shows that both short-term and chronic stress can negatively impact investment decisions. But there are ways to avoid making bad choices under duress. Read Full Article »
Stress Is Bad for Investing. So What Do You Do When There’s No End in Sight?
A global pandemic. Massive job losses. Consumer product shortages. Police brutality. Unsettling images of violent riots juxtaposed against peaceful civil disobedience. 2020 has been one thing after and another, and to say it has created a lot of stress for many people would be an understatement. However, despite these stressors, life goes on. Decisions — big and small, significant or trivial — must still be made. Unfortunately, we are not the greatest at making complex decisions at the best of times.
Confessions of a Lapsed Allocator
At 12:00 p.m. on Friday, March 13th, less than a week after I submitted my notice to leave a job at the Texas Municipal Retirement System, our CIO called us around a conference table to deliver some news. As a result of the then rapidly spreading coronavirus, he said, TMRS would immediately close its doors to all non-essential workers. The investment team would be working from home indefinitely. And just like that, I had a half-day to pack up my personal effects and say goodbye.
The Site-Visit Fetish
Unless you’re the Governor of Georgia, you know we are not going back to normal. But where are we going? If you’re an allocator, probably nowhere. Contrary to the beliefs of some right-wing ideologs, Covid-19 is highly contagious and is killing people. It will continue to kill people for some time.
Coronavirus Is Our 21st Century Dust Bowl
Andhere's what will be hit the hardest.
The Dust Bowl Ravaged 1930s America. Coronavirus Is Today’s Equivalent.
The past few weeks have seen unprecedented changes in our lives as the coronavirus pandemic has brought the economy to a near standstill. The U.S. already leads the world in cases, with nearly 400,000 people diagnosed (although the numbers out of China should be taken with a healthy dose of skepticism at this point).
The World Is One Big Carry Trade
The World Is One Big Carry Trade Up the escalator, down the elevator.
The World Is One Big Carry Trade
As I watched a 2,000-point sell-off in the Dow Jones Industrial Average on Thursday, March 12, I realized that Tim Lee — the founder and chief economist at piEconomics — had got it all figured out before he recently retired.
How to Work from Home
An example of how not to do it. Photo by Dillon Shook on Unsplash Whether you’re starting your own business or surviving a pandemic, working from home is a logical option. Just remember that despite occupying the same space, “work” and “home” still need to be separated. I came up with these five tips years ago and they have only gotten more annoying, which means they may help.
The Dangerous Democratization of Alternative Investments
The Dangerous Democratization of Alternative Investments | RealClearMarkets
The Dangerous Democratization of Alternatives
Alternative investments like private equity and hedge funds have long been the near-exclusive purview of ultrarich people and large institutions. Over the past two decades, massive inflows — particularly from big institutional allocators — have powered enormous growth. Since 2000 private equity, private credit, and hedge funds have surged from just a trillion dollars combined to $8.3 trillion, compounding assets at roughly 11 percent per annum.
The Truth About Private Equity Fund Size
As the end of the year approaches, institutional investors in private markets are wrapping up work on the last few funds we need to invest in to hit our targeted annual commitment levels. You see, private equity is sort of like a treadmill. Money is always going out and coming back. Just to just keep your allocation the same, you have to keep committing new capital to more funds. In other words, like a treadmill, you have to keep running just to stay in the same place.
A Mysterious Force Took Over Investing. I Know What It Is.
A Mysterious Force Took Over Investing. I Know What It Is. Recently I've been pondering the continued outperformance of growth strategies versus value — and this has led me to some startling discoveries. Read Full Article »
A Mysterious Force Took Over Investing. I Know What It Is.
Recently I’ve been pondering the continued outperformance of growth strategies versus value — and this has led me to some startling discoveries. Since the 2008 crisis, the Standard & Poor’s 500 Growth Total Return Index has beaten its Value Total Return counterpart in eight of 11 years, including 2019 for the year to date. Growth has put up average annualized returns of 9.4 percent in the decade since the crisis, versus just 5.6 percent for value.
When EBITDA Is Just BS
One of the trends that you’d have been hard pressed to miss over the past decade has been rising valuations across virtually all markets. Developed and emerging, equity and credit, public and private —prices for everything have marched inexorably upward. In private markets, the most commonly cited measure of average valuation is called the EBITDA multiple.
I Am a Character in Literature
Author photo copyright © 2010 by Augusten Burroughs This is not an online quiz (“I’m a Mr. Darcy!”) or a rumination on life imitating art. My husband is the memoirist Augusten Burroughs, and I appear in some of his books. I am literally literary. If his publisher is running a promotion, several of my most intimate details can be had for as little as $1.99. Augusten and I met when I became his agent in 1999.
When Diversification Does More Harm Than Good
Harry Markowitz, the creator of modern portfolio theory, is credited with saying diversification is “the only free lunch in finance.” He showed that by adding risky assets that are less than perfectly correlated with each other to a portfolio — the less correlated, the better — you can reduce total portfolio risk without reducing returns. In some cases you can even increase portfolio return while still lowering risk, the holy grail of investing.
The Essential Harv: Two Dozen Things About Harvey Mayes (1944–1993)
My first boyfriend died before the Google Age, so there’s not a lot about him online. Today would have been his 75th birthday, so I’m celebrating with a list of things the world should know about him. Harvey Steven Mayes was born in Brooklyn on June 7, 1944, raised in the Bronx. His formidable mother was named Bertha, and she had an equally daunting sister named Mildred, known publicly as Aunt Mil, privately as Aunt Dread. Dread, Bert and Lil Harv 3.
How Good Science Can Weed out Bad Managers
Illustration by Jeremy Leung/II In The Logic of Scientific Discovery, Austrian philosopher Karl Popper argued that the only way of truly testing a hypothesis was to form a view and then search for evidence that could empirically falsify the hypothesis, as opposed to looking for evidence to support it. You can never prove something right, but you can certainly prove something wrong.
Why Your Superstar Manager May Be Toxic
Recently, my boss T.J. Carlson was named Chief Investment Officer of the Year by Institutional Investor, an award voted on by other allocators. (There’s a point to this, other than blatant brown-nosing. Okay, so maybe a little brown-nosing, but stay with me.) His thank-you speech was short and sweet, not surprisingly. T.J.’s not one for verbose pontificating, but what he does have to say is always worth listening to. And also not surprisingly, the first thing he mentioned was his team.
What Would LDI Look Like for Public Pensions?
There’s an old saying that history never repeats itself, but it often rhymes. I’ve frequently found myself searching for the rhymes amongst analogues when investigating applicability of various investment strategies. When institutional investors think of liability-driven investing (LDI), the most frequent paradigm that comes to mind is allocating an increasing amount of the fund into long-duration bonds. The objective is relatively simple, although the math can be complicated.
Why Are Allocators in the Manager Selection Stone Age?
Selecting asset managers is an essential part of every allocator’s job. It’s an admittedly imperfect process, especially in asset classes with broad dispersion of manager returns and higher risks, and one that has remained largely the same since 1969, when Russell Investments hired its first manager analyst. Improving the process — improving the accuracy of the selection and increasing the efficiency of the process — is quite literally a fiduciary duty.
When Finance Turns Parasitic
At its best, finance is productive — but all too often, excess intermediation results in the transfer of risk to those least able to understand it. Here’s what to do about it. Andrew Haldane, the chief economist of the Bank of England, once stated finance has the “ability to both invigorate and incapacitate large parts of the nonfinancial economy.” In theory, finance represents a simple function.
How to Lose a Sale in Ten Days
The best marketers are helpful, responsive, honest. The worst end up on our “do not call lists.” Here’s what not to do when pitching your fund to an institutional investor. I estimate I’ve taken about 2,000 meetings with investment management firms over the past decade or so, 200 per year on average. While that’s a pretty robust schedule of meetings, I realize it’s not because of my scintillating wit or sparkling personality.
Private Equity’s Indisputable Problem
Private equity has been the best-performing asset class for most institutional investors for decades, outperforming public equity markets by 3 percent to 5 percent after fees. This achievement has not come for free, nor has it been free from certain challenges.
A Hedge Fund Helps Power a Wind Farm Off Coastal Rhode Island
Located 3.8 miles off the coast of Rhode Island, Block Island Wind Farm consists of five deep-water wind turbines capable of delivering up to 125,000 megawatts an hour of energy to Rhode Island residents. It is the first commercial offshore wind farm in the United States and operates out of sight from Rhode Islanders. The farm commenced operations late last year and was built by Providence-based Deepwater Wind, whose principal owner is a unit of the $35 billion New York hedge fund, D. E.
In Between Dogs | The Bark
I'm in the Palatial Tampa Theater with my husband, eating fistfuls of hot popcorn and watching Oscar-nominated animated film shorts. This is just one of the activities he has planned for us while we’re in Florida, in what will be a series of valiant efforts to get my mind off my grief. The last entry, Mr. Hublot, is an 11-minute film about a charming little robot man who lives alone in a house full of clocks and mechanical plants.
Show More
loading
Actions
Is this you?
As a journalist, you can create a free Muck Rack account to customize your profile, list your contact preferences, and upload a portfolio of your best work.Get in touch with Christopher
Contact Christopher, search articles and posts on X, monitor coverage, and track replies from one place.
Learn more about Muck Rack