After a difficult end to 2018, the Crow Point Partners Liquid Alternative Funds lineup posted very solid returns during the first quarter of this year. In spite of weak investor sentiment and negative market volatility, Crow Point’s outlook going into the first quarter remained sanguine on risk assets as we believed that the strong economic backdrop in the United States remained in place and that equities had reached very inexpensive levels, which warranted our attention. Worrisome risk factors such as credit spreads and volatility peaked in late December and improvement of those variables helped form our constructive viewpoint on risk assets, broadly and in equities, particularly. This positive viewpoint played itself out during the first quarter resulting in strong returns across our alternatives platform.
Going forward, Crow Point Partner’s outlook remains generally positive as the US economy continues to exceed investor expectations in terms of job growth, consumer confidence and spending and ultimately corporate profit growth.
As outlined above, not all economic and investment variables are flashing green. Yet, enough remain positive to validate our optimistic view, particularly in the United States. International markets remain a mixed bag in terms of economic and investment opportunities. Europe and Japan continue to underperform, and Emerging Markets offer higher economic growth rates but ongoing policy related problems remain. A likely resolution to the China-US trade negotiations will further benefit the global economy and ultimately equity investments.
As investors, we remain highly cognizant of risks in the economy and risks inherent in our portfolios; which we look to manage on an ongoing and progressive basis. Yet unlike many other managers in the alternatives space, we believe that not capitalizing on a positive investing environment is a risk in and of itself and we look to differentiate ourselves by taking a balanced view of both risks and opportunities. This past quarter is representative of the benefit of a dynamically managed investment and risk framework, which Crow Point Partners employs across our various Liquid Alternative Funds.
- A multi-strategy fund that strives to deliver a low volatility, strong risk adjusted return stream
- Low correlation to traditional asset classes which may help diversify a portfolio
- Utilized as a core alternatives strategy within a broader asset allocation
- Directional, macro driven investment strategy incorporating global equities, debt, commodities, currencies and market hedging tools
- Tactical yet disciplined investment process designed to adjust to an ever-changing market environment
- Utilized as a portfolio completion tool to efficiently enact near term asset allocation decisions
- Fixed Income diversification strategy designed to complement traditional bond portfolios
- Macro overlay mitigates significant portfolio drawdowns
- Utilized to improve and diversify bond return sources away from pure interest rate risk
ABOUT THE AUTHOR
David Cleary, CFA is a Partner and Portfolio Manager at Crow Point Partners
Previously he spent 23 years at Lazard Asset Management where he held a series of senior portfolio management roles over multi asset and global fixed income strategies. He additionally served as the firm’s global head of fixed income, a $26 billion platform. Prior to Lazard, Mr. Cleary worked at UBS and IBJ Schroder, mostly in fixed income asset management roles. Mr. Cleary began working in the asset management field in 1987 upon his graduation from Cornell University, with a BS in Business Management and Applied Economics. Mr. Cleary is a CFA charterholder.
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