2023 Investment Forum Recap

The 2023 Investment Forum took place in Huntington Beach, CA, and brought together seasoned professionals across the investing landscape. Hosted by Hightower’s Investment Solutions team, led by Chief Investment Strategist and Portfolio Manager Stephanie Link, the Investment Forum was filled with unforgettable moments and actionable ideas that Hightower advisors and investment professionals can bring back to their clients.

Some of the key insights, spanning two full days of content include:

Favorite Sectors: Stephanie Link is drilling into industrials and sees onshoring as an under-appreciated major tailwind that will remain a decade-long theme. Mike Shea believes it is best to adapt to the market’s offerings. There are plenty of long-term opportunities – the S&P 500 holds far more than just the “magnificent seven” large cap tech stocks. There is potential to build diverse portfolios of 40-50 stocks, enabling access to world-class businesses across all sectors – opportunities abound in every corner.

Macroeconomic Environment: Neil Dutta believes the current economic conditions are like a Goldilocks scenario – not too hot, not too cold. Rather than predicting the distant future, it’s crucial to focus on the present, and according to Neil, things are looking pretty good at the moment.

Fixed Income: A panel moderated by Lee Majkrzak, senior portfolio manager, and featuring Paul McGinn, Michael Denligner and Kewjin Yuoh identified opportunities within fixed income and shared ideas on how to add some positive convexity to a portfolio. Two of the three panelists expressed confidence in a barbell municipal bond strategy, while the other suggested capitalizing on the yield curve volatility and buying AAA-rated asset-backed securities.

Long-term Growth: Kenneth Kuhrt shared his philosophy on long-term growth: Invest in companies with solid balance sheets and skilled management teams, focusing on 3–5-year horizons. Avoid value traps by grasping a stock’s history and its fundamental drivers for lasting value.

Asset Allocation: Warren Pies challenged traditional asset allocation. In the last 20+ years, bonds thrived on the worst stock days. He advised to look to new assets and stay nimble in allocation, reiterating that maintaining a strategic asset allocation, not just quarterly rebalancing, is vital. Brad Olson highlighted the enduring importance of energy in asset allocation, citing Norway’s electric vehicle success. Gasoline fell 60%, but crude oil remains strong due to petrochemicals and distillates. Norway’s surge in electricity use also boosts natural gas. Energy diversification is key!

Artificial Intelligence: Dani Fava and Dan Ives foresee AI reshaping all industries. Dani predicts a 30% productivity surge over the course of the next 5 years. Dan believes AI will lead to a future filled with possibilities, specifically highlighting the potential for higher enterprise value in tech companies that are ahead of the AI curve.

Democratization of Private Markets: Robert Picard, head of alternative investments, discussed the historical divide in alternative investments, sharing that the average individual investor allocates less than 5%, while billionaires and endowments go beyond 50%.¹ However, change is coming. Technology’s role and the democratization of private markets are reshaping the landscape, and a new era of investment possibilities is on the horizon.

Investing in Yourself: WNBA legend Candace Parker took the stage to discuss her own strategies for success and how she continues to invest in herself, as well as those around her. Candace shared her most critical attribute to reaching success: curiosity. Creating an environment that encourages curiosity leads to knowledge, power and strong relationships. How to do that? Don’t just work hard – work smart.

Investing in Social Influencers: Daniel Strauss rocked the stage by unveiling the power of centering a marketing strategy around social influencers and brand partnerships. This is an investing trend that is starting to accelerate and has potential to tap into a large ecosystem with favorable returns.

Private Market Preferences: We asked a panel of renowned investors to give lightning-round gameshow-style responses to share their preferences on investing opportunities within different asset classes. What we heard: private debt over private equity, 2024 vintage over 2022, commercial real estate debt for now (and CRE equity later), and a nod to investing in sports teams over art. Decisions, decisions…

Global Wealth Investment Playbook: Paula Campbell Roberts, managing director and chief investment officer at Private Wealth Partners, took the stage to provide insight into their global wealth investment playbook. The key takeaways include:

1. In a new era of higher inflation and rates, real growth remains positive amid big shifts.
2. Manager selection is upmost importance across any private strategy – including private credit and private equity.
3. Infrastructure and select real estate can provide returns and protect purchasing power in a higher inflation environment.
4. Portfolios should be structured with diversification that can achieve different client needs – depending on risk tolerance, income needs, and existing asset class exposures.
5. Now is an opportune time to position as opportunities arise. Delaying may be costly.

Investing in Sports Teams: Marc Lasry, CEO of Avenue Capital and former co-owner of the Milwaukee Bucks, and Jay Stein, owner of the Colorado Rockies and Seattle Sounders FC, sat down with Robert Picard and shared their thought processes, challenges and joys of investing in sports teams. Among all sports, Lasry ranked football to be his top preference to invest in, followed by baseball/basketball and hockey (in that order). According to Nielsen ratings data reported by sportico.com, the NFL accounted for 82 of the 100 most-watched U.S. TV broadcast programs in 2022. However, Lasry and Stein both agreed there are all kinds of opportunities outside of mainstream sports – for example, bull riding. Who knew?

The 2023 Investment Forum was a wealth of knowledge and inspiration, hosted by Hightower’s Investment Solutions team, now overseeing more than $4 billion in assets under management, a remarkable growth from just $800 million in 2020. In addition, each leader within the team has an average of 30+ years of experience in the industry. The Investment Forum has been an opportunity to showcase the breadth of insights, strategies and opportunities that Investment Solutions brings to the table. As we conclude this year’s Forum, we invite you to be a part of our journey. Contact a member of Hightower’s Investment Solutions team to learn more.

Sources

1. Willis Towers Watson, “Global Pension Assets Study,” 2022; National Association of College and University Business Officers, “TIAA Study of Endowments,” 2021; Cerrulli, “U.S.Intermediary Distribution 2021,” 2021. For Endowments, the alternative asset allocation is for the Public College, University or System only and represented by allocations to Other equities (includes marketable alternatives, private equity and venture capital) and Real assets (includes TIPS, REITs, commodities / futures, publicly traded Master Limited Partnerships (MLPs), public traded natural resource equities, private energy and mining, and private agriculture and timber). Averages provided are dollar-weighted. For Individuals, the alternative asset allocation includes “Alternatives” (e.g., long/short, market neutral, currency) and “Other” as defined as UITs, listed and unlisted closed-ended funds and private funds. Responses are weighted based on the average asset allocation of a moderate client.