Q&A with Joncarlo Mark, Founder of Upwelling Capital Group
This is a Q&A with Joncarlo Mark, Founder of Upwelling Capital Group. Prior to forming Upwelling Capital Group, Joncarlo was a Senior Portfolio Manager in the Alternative Investment Management (AIM) Program at the California Public Employees Retirement System (CalPERS), with approximately $240 billion in overall assets.
1. What are some of the greatest risks you see in the long-term future for public investors exposed to alternatives?
The asset class has become more efficient and continues to attract capital. Although new markets have opened up (Asia, Latin American, Central & Eastern Europe, Africa), the bulk of the viable opportunities exist in the US and Western Europe and the overhang of dry powder is significant. Most people believe that the net result is lower returns for PE, especially in an overall low global growth environment. Therefore, more thought must be put into strategy development, active portfolio management and manager selection. This takes focus, skills and resources, which many institutions lack due to budgetary constraints. Not done right can lead to significant under performance.
Depending on liquidity needs, having significant locked up capital in alternatives may put tremendous strain on the organization; public investors must be prepared to play for the long term return prospects; however, the increased ability to utilize the secondary market for rebalancing one’s alternative investment portfolio does help mitigate some of this risk.[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]
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