Market Comment - March 16, 2023
Market Comment:
The latest market distress has been about asset / liability management by professional fiduciaries of investor capital. These ALM challenges have been bought about by higher interest rates and declining valuations impacting the deposit base for the venture and early-stage industries such as technology, and life sciences.
As the higher risk-free rate raises the bar for expected investment performance to deliver returns to investors, there will likely be continued declines in valuations of other asset classes that are not traditionally marked to market such as private equity. This will put more stress on the financial system, but also may lead to more systemic credit distress beyond ALM management issues.
Sign Up for Market Commentary: Weekly insights on global markets and commodities from Diamond Standard by Amelia Bourdeau
Disclaimer:
This report has been prepared by the Strategy Team of Diamond Standard Inc. (“Diamond Standard”). This report, while in preparation, may have been discussed with or reviewed by persons outside of the Strategy Team, both within and outside Diamond Standard. While this report may discuss implications of legislative, regulatory and economic policy developments for industry sectors, it does not attempt to distinguish among the prospects or performance of, or provide analysis of, individual companies and does not recommend any individual security or an investment in any individual company and should not be relied upon in making investment decisions with respect to individual companies or securities.
Opinions and estimates offered constitute our judgement and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions. Under no circumstances does the information contained within represent a recommendation to buy, hold or sell any security, and it should not be assumed that the transactions discussed were or will prove to be profitable.