2 paths for S&P500 ...
Demand & supply ...
I think Europe is pretty much back to where it was pre-Covid...
The US and Canada (and bits of the UK) are the outlier ... yes say it again ... outlier ... here ...
I think much of this has to do with the way in which people travel to the office - if you are running a long range (ie more than 45 min) commute (particularly if it is by car) ... you are much more likely to wfh 1.5 days ...
That's a pretty nasty number ...
It's a big decline ... and as we have said many times before turning points in jobs markets are almost always abrupt .... and the rate response is always bigger than the consensus believed it would be ...
Take a pause ...
Yikes ... quite uncanny!
Stirrings and signs of life ...
Let's also remember that REITs are up 26% in Europe since June last year ...
LP's deserve better...
This BB article highlights a group of funds who seem to be operating under the impression that CRE values did not go down when interest rates went up. Some of them are managed by some of the largest private asset managers on the planet... these people should know better ...
I just do not see how people can be hanging onto 'flat' NAV's in this way ... valuers will tell you until they are blue in the face that GAV is off 15-20% in most European portfolios ... so NAV should be off between 25% and 40% in these funds ... fact... anyone who tells you otherwise is not living in the real world.
The impacts of this are fairly obvious ... the market is bottoming and liquidity is returning ... so ...
- Funds who have marked down will get the benefit of the cyclical upswing ... but people in the funds who's NAV ahave flat-lined will not ... their NAV will keep flat lining ... so will their performance ...
- Funds who have a marked-down and offer a better basis for their clients will see new inflows and more importantly they will be able to trade assets at NAV or better and thus offer liquidity to their investors ... the 'flat-liners' cash will remain trapped...
- Funds who have marked down, receive inflows and then trade can reposition their portfolios for upside and may new investments at better prices ... so their upside can be maximised ... flat-liners will not get that boost and their portfolio will be positioned for yesterday's market not tomorrow's...
This is a really bad look and its going to be bad for their long run performance ... flatlining GP's need to step up ... LP's deserve better...
Thoughtful article ... worth a read...
Now that most of the ideologically obsessive Tories are gone perhaps its time for a thoughtful considered economic debate about the benefits of integration ...
Interesting chart ...?
Email me if you have an answer! I can think of a few factors that would be in play but I am still at a bit at a loss...
Europe still not in recovery...
