Brooke Roach, CFA

For decades, Strategic Asset Allocation (SAA) has been the dominant organizing structure for institutional portfolios. Is it still right for today’s environment? In a recent paper, my KKR colleague Henry McVey and his team explain why broad market exposure alone may be less likely to deliver the outcomes it once did, and why a different mindset, the Total Portfolio Approach (TPA), is gaining traction. They provide an overview of TPA’s core mechanics, highlight how it differs from SAA, and explain why it may be particularly relevant for private market investors. Read the full piece to learn more: https://go.kkr.com/3NuNURo

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Over the past few weeks in my and Jon Lukomnik's Columbia | SIPA course on system-level investing, we’ve focused on how investors identify systemic risks and set goals. This week, we turned to a harder question: How do investors move from portfolio-level action to sector- and system-level influence? Session 6 of Sustainable Finance II: System-Level Investing is devoted to Field Building — one of the core technique sets in system-level investing. If system-level risks are collective in nature, then influence must be collective as well. We explored three distinct field-building techniques: ✅ Self-organization – Investors creating or strengthening collaborative institutions that build shared capacity across the market. ✅ Polity – Intentional engagement in public policy debates to shape the rules that govern markets. ✅ Interconnectedness – Increasing the flow, coherence, and usefulness of information across investors, stakeholders, and the public. These are not “add-ons.” They are structural levers. Collaborating with competitors is not a natural pivot for investors. Engaging in policy debates can feel uncomfortable. Sharing information across peers can expose blind spots. And yet — without these activities — system-level influence is almost impossible. We were fortunate to have Fran Seegull join us, sharing how the U.S. Impact Investing Alliance and Tipping Point Fund on Impact Investing approach field building through policy advocacy, movement building, grantmaking, and investor engagement. One slide in particular captured the moment we’re in: nearly 20 years into impact investing, the field has grown dramatically — but at ~$1.6 trillion, it still represents roughly 1% of global AUM. Point solutions are insufficient. Systems change requires infrastructure. The takeaway for students? If you want to influence systems, you have to think beyond your own mandate. You have to help build the scaffolding that makes collective action possible. Next week, we move from field building to investment enhancement techniques — bringing system-level thinking back into asset allocation, security selection, engagement, and manager due diligence. The conversation continues. #SystemsThinking #investing #impactinvesting

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Since it seems like private Credit is on (everyone's) mind as of late.... -Since 2015, bank lending to NDFIs (i.e. PE, private credit funds) has surged ~300%. -Traditional lending (consumer, residential, CRE) has stayed flat. -Banks are essentially lending to the lenders. -Post-GFC regulation (Basel III, Dodd-Frank) made direct lending more capital-intensive. -Private credit filled the gap and it’s now a $3T market. -Banks earn higher returns by financing collateralized private credit funds vs. lending directly to companies. -Risk exposure has shifted, not disappeared. -If private credit borrowers default, funds draw on bank credit lines therefore creating a potential liquidity feedback loop. -Private credit has seen its growth come in an environment of low rates and has not really been tested through a major recession. -Recent cases (e.g. Tricolor, First Brands) are raising questions about possible concerns in the system hence the selloff in banks. -Banks and private credit are now part of one interconnected ecosystem; if one stumbles, both feel the pain. More info per Moody's: https://lnkd.in/gqFRbj_5 #privatecredit #investing #banks #riskmanagement #loans #capitalmarkets #financialinstitutions #finance #lending

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🧬 Alexandria Real Estate Equities, Inc. Plans Property Sales Amid Slower Biotech Demand 🧱 Key Earnings Highlights (Q3 2025) * Net Loss: $234.9M, vs. $164.7M profit a year earlier. * Funds From Operations (FFO): $377.8M, down from $407.9M YoY. * Occupancy: 90.6%, slightly down from 91%. * Leasing Volume: 1.2M SF in Q3 — including a record 466K SF lease with Novartis at San Diego’s Campus Point Mega-Campus. * Impairment Charges: $485.6M YTD, largely from non-core assets in Long Island City, Boston, and San Diego. * $206M write-down on a 52%-leased LIC property. * $99M sale of a Boston retail center with no gain or loss. 🧩 Strategic Shifts Underway * Scaling Back Speculative Development: Delaying groundbreakings in weaker submarkets. * Refocusing on Build-to-Suit & Mega Campuses: Prioritizing long-term tenants and customized lab environments. 🏞️ Portfolio Streamlining: * $508M in asset sales through Oct. 27. * Land dispositions expected to represent 20–30% of total sales in 2025. * Strong buyer interest from residential and mixed-use developers. * Considering joint ventures with residential components in select markets. 🧠 Market Context: Why Demand Is Cooling * Biotech Slowdown: Early-stage firms remain cautious amid high rates, tighter venture funding, and delayed FDA approvals due to the federal shutdown. * High Cost of Capital: Overbuilding from 2020–2022 now weighing on rents and valuations. * Oversupply Concerns: Many non-specialized developers converted generic offices into lab space during the boom, flooding key markets like Boston and San Diego. 🧫 Tenant Mix Resilience: * 53% of portfolio leased to large pharma, including 18 of the world’s top 20 drugmakers. * Long-term leases continue to stabilize cash flow despite near-term softness. 💬 Management Commentary * “This brought an unwanted, unnecessary oversupply of many of the innovation submarkets,” said Joel Marcus, Founder & Executive Chairman. * “They’re learning painful lessons that this niche is unique.” * “It matters if the government is shut down or not operating efficiently,” Marcus added, noting delays in drug approvals and federal funding flows. 🔮 Outlook & Takeaways * Refocused Growth: Leaner, build-to-suit development model prioritizing creditworthy pharma tenants. * Asset Recycling: Continued sales of non-core or underperforming holdings to bolster liquidity. * Short-Term Pressure: Occupancy dips, impairments, and sluggish small-biotech leasing likely to weigh on near-term FFO. * Long-Term Thesis: Life sciences remains a structural growth sector — but ARE’s strategy reset reflects a pivot toward stability over speed. https://lnkd.in/gG8xS7fS

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The $40 trillion private credit market is emerging as a fixed income replacement strategy. Akila Grewal, Apollo’s Global Head of Product, explains why, as investors rethink how much liquidity they truly need and how private investment grade can enhance yield while still maintaining quality. Learn more on the latest episode of The View from Apollo.

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How will structural shifts impact your clients' portfolios? Our Capital Market Assumptions 2026 highlights key trends like slower labor growth, persistent inflation, and the rise of AI, shaping asset allocation for the next decade. Read the full report for actionable insights. https://lnkd.in/eYyHBHHW #FinancialAdvisors #AssetAllocation #InvestmentInsights #VoyaIM #CapitalMarkets

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Vanguard Active Fixed Income Perspectives Q4 2025: Caught in the crosswinds Key takeaways Performance #Bonds have delivered this year. Higher coupons combined with price appreciation from a decline in yields and further spread compression has boosted bond returns across sectors. Year to date as of September 30, the broader U.S. bond market as measured by the Bloomberg US Universal Index has produced returns of 6.31%. Our outlook anticipates that conditions for strong performance will continue. The big picture The #labor market is realigning to a lower trajectory, and the impact from #tariffs will build into 2026. However, positive growth drivers are on the horizon, which should help the #economy over the coming quarters. With additional rate cuts on the way, we see an opportunity for investors to lock in durable yields further out on the curve. Our approach Strong investor demand has pushed spreads even tighter in taxable credit, despite near-record September issuance. We expect credit to continue to perform well and are leaning into segments that have lagged in recent tightening. In municipals, investor flows have returned and there's considerable value further out on the curve and in coupon and call selection. #fixedincome #strategy #markets #investing

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🚩 PE Fundraising Challenge: The First-Time Fund Credibility Gap Having worked through private equity fundraises, one reality becomes clear: Capital doesn’t stall because of strategy decks. It stalls because of credibility gaps. For emerging managers, fundraising timelines stretch not due to lack of ambition, but due to LP concerns around: • Repeatability of execution • Decision-making under pressure • Team cohesion when markets turn We ’ve seen LP conversations shift decisively once three things were in place: 1️⃣ Strategy discipline over narrative breadth The funds that progressed fastest weren’t the most creative. They were the most narrow and explicit about where they win — and where they don’t play. 2️⃣ Early anchor alignment Anchor LPs didn’t just bring capital. They validated governance, pacing, and downside protection — accelerating every subsequent discussion. 3️⃣ Conservative fund sizing Resisting the temptation to “raise to market appetite” protected early performance and built long-term trust. The pattern is consistent: In private equity fundraising, credibility compounds faster than scale. Scale is the outcome — not the input. #PrivateEquity #FundRaising #EmergingManagers #PELeadership #InvestmentProfessionals #InvestmentStrategy #CorporateGovernance #BoardLeadership #MergersAndAcquisitions #DueDiligence #OperationalExcellence #RiskManagement

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