Pavilion in the News

Morning Movers: Macy’s Jumps as Earnings Shine, 3M Slumps
Barron’s, May 16, 2018

The dollar may be just as important. It’s also been surging, and that could have an impact on global growth. “If a continued sharp rise in interest rates is accompanied by a stronger dollar, then we could reach the point of a U.S. and global slowdown much sooner,” writes strategists at Pavilion Global Markets.

Private equity firms seeing a lot to like with DC provider investments
Pensions & Investments, May 14, 2018

Technology plays a big role in what private equity firms can add to acquisitions, said Allen Waldrop, a Sacramento, Calif.-based managing director for Pavilion Alternatives Group, part of Pavilion Financial Corp. “There’s a lot of new technology that has the potential to reduce costs, improve synergies and increase scalability,”

The Kings of Commodities Have One Thing in Common: AIG
nstitutional investor, May 8, 2018

Raw materials should benefit from a reflationary wind blowing across developing markets as part of a synchronized global recovery, according to Alex Bellefleur, head of global macro research at Pavilion Financial Corp. in Montreal.

Calgary comes last in Moneysense ranking of best cities for real estate investment
The Star Calgary, April 18, 2018

A study done by Pavilion Investment House in Edmonton found that when compared with stocks and bonds over a 55 year period, real estate investments in our sister city did not see returns that were as high, and homeowners experienced higher investment risk.

Energy: Looks Like a Comeback
Barron’s, April 14, 2018

Stable—or even peaking—oil prices don’t mean the end of the energy-sector rally, however. U.S. oil producers have already started to lock in higher oil prices using futures contracts, explain Pavilion Global Markets strategists led by Alex Bellefleur.

Cost-cutting takes precedence in competitive environment
Pension & Investment, March 19, 2017

Preet Prashar, Chicago-based senior research analyst at Pavilion Advisory Group Inc., agreed: “If one target-date manager lowers fees, then there is certainly some pressure on other managers to lower fees if their funds are priced higher.”

Intraday Update: When the Dow Drops 250 Points, Everything Looks Like Trouble
Barron’s, March 14, 2018

Chinese companies’ balance sheets are showing price pressure, write Pavilion Global Markets strategists in a morning note. Even though sales growth has rebounded for industrial companies, profit margins have been narrowing.

After the Bell: Dow Gains 93 Points as Tariffs Cheer Market
Barron’s, March 8, 2018

Sentiment about the drought continues to deteriorate, and some of that pessimism is already beginning to leak into the agribusiness sector, weighing on agricultural machinery and fertilizer stocks. Weaker wheat production forecasts from the U.S. Department of Agriculture won’t help, warns Pavilion.

U.S. dollar likely to weaken as deficit rises, political uncertainty persists
Financial Post, February 23, 2018

“This deleveraging removes demand for dollars, particularly as U.S. rates rise,” Pavilion said. “While we do think there could be short-lived bouts of dollar strength, we see broader dollar weakness continuing.”

How investors can identify the best of the bunch.
Private Debt Investor, February 19, 2018

Private credit markets have seen rapid growth in recent years as many institutional investors seek a broader opportunity set to increase returns in their fixed income portfolios. Consequently, private credit is enjoying a strong fundraising market.

What fuelled the stock market roll coaster?
The National, February 17, 2018

“Companies have buyback policies that get reconsidered every quarter, so if you told shareholders that you’re going to buy back stock, and then a market blow-up that had no impact on your fundamentals made the price fall more than expected, maybe it’s not a bad thing to step in.”

2018 Year of the women
Shine UK Magazine, Spring 2018 (p50-51)

“For women it is difficult to balance it all and not feel guilty! We feel guilty about everything, parenting, taking time off, taking time for ourselves…how do we not feel guilty?! Maybe we can have it all; a high flying career, a happy family whilst looking the part but you will need a lot of support, especially from your spouse.”

Should investors expect another stock market selloff?
Financial Post, February 13, 2018

Pavilion Global Markets noted that the large “short-volatility” trade still exists in many parts of the world and in many asset classes. However, the outright shorting of VIX futures was turned on its head last week, forcing speculators in the VIX to cover their shorts and move to a net long position.

10 things you need to know before the opening bell (SPY, SPX, QQQ, DIA, SNAP, TSLA)
Business Insider, February 8, 2018

The idea that this was a rate-induced sell-off is incorrect, because “we would have seen the interest rate-sensitive sectors underperform broader equity indices severely, which was not the case,” Pavilion Global Markets wrote.

One of the biggest narratives behind why the stock market just went haywire is wrong
Business Insider, February 7, 2018

Risk-parity funds, which invest in a combination of stocks and bonds based on factors including volatility, may have contributed to the sell-off as stock fea increased, Pavilion said.

A Retirement Draw Down Strategy Starts With Education
PlanSponsor, January 17, 2018

Darren Headley, consultant for Pavilion Advisory Group in Chicago says, “Plan administrators are investing in technology for participant use that will help them address the question of how much can they withdraw in retirement.

What Would 2018 Look Like for Private Equity Investors?
Funds Society, January 11, 2018

2018 is expected to have an increase in global growth and, according to William Charlton, Managing Director at Pavilion Alternatives Group, most institutional investors are maintaining or increasing their allocations to private equity.

The 4% rule: Withdrawal rates in review
Benefits Pro, January 4, 2017

With the demise of defined benefit plans and ascendancy of defined contribution plans, participants not only must make decisions regarding investment strategy, but must decide on a withdrawal strategy once they retire.

Seeking status
Vietnam Economic Times, January 1, 2018

Analysts at the Montreal-based Pavilion Financial Corp., a diversified global investment services firm, argue that Vietnam’s stock market is the best way to play the country’s growth story, noting that Vietnamese stocks had outperformed regional peers and other export-oriented economies up to 2016.

Cannabis goes legit, food fights and other themes investors will be talking about in 2018
Financial Post, December 29, 2017

“Presently, we see a nascent uptick in Canadian exports, which should bode well for Canadian industrials and materials sectors,” strategists at Pavilion Global Markets said in a recent report. “We think that investors will become more interested in Canadian value stocks as they search for some of the forgotten, less pricey markets, and as U.S. economic growth continues to solidify,” Pavilion said.

Loonie outlook for 2018 solid despite looming U.S. and domestic risks
Financial Post, December 26, 2017

Pavilion Global Markets strategists also noted the Canadian dollar has been trading based on domestic fundamentals, since they are the primary driver of future BoC rate decisions.

Auto features and deferral rates is where action will be in 2018
Pensions & Investments, December 25, 2017

DC consultant Jennifer Flodin also forecasts sponsors’ efforts to add more conservative options, in part to educate participants about the benefits of keeping their money in the plan after they retire. “They realize they have more retirees in their plans,” said Ms. Flodin, a Chicago-based managing director of Pavilion Advisory Group Inc.

Agriculture and timber 2018 outlook: Organic growth
IPE Real Asset, December 22, 2017

According to Jay Yoder, managing director at Pavilion Alternatives Group, institutional investors in recent years have shown little interest in timber, after its single-digit returns lagged other real assets sectors.

Infrastructure 2018 outlook: Investment volumes to rise?
IPE Real Asset, December 22, 2017

Yoder says that, given the high level of capital secured by infrastructure funds recently, it is no surprise that dry powder recently stood at a record $149bn. “Not coincidentally, competition for assets has also been growing,” he says.

Investment Committee Quiz Reveals Fiduciary Knowledge Shortfall
Plan Sponsors, November 30, 2017

Pavilion Advisory Group has released the results of its “Fiduciary Primer Quiz,” highlighting a variety of shortfalls in institutional investing fiduciary awareness at a time when the demand for excellence is increasing.

The Greenback Is Starting to Look a Bit Like a Petrocurrency
Bloomberg Quint, November 7, 2017

A shift in America’s status from oil consumer to major producer has the potential to upend global capital flows, Pavilion Global Markets Ltd said in July.

Everybody Wants to Invest Like Buffett. Here’s What It Takes
Bloomberg Markets, October 29, 2017

The field is largely limited to these big players, the industry’s precious few household names with a track record and bench of players deep enough for investors to trust them with their cash for two decades. “I think it will be a very limited number of people who can raise a fund of this duration,” says Jim Treanor, head of North America advisory services for Pavilion Alternatives Group LLC.

A Missing Piece of the Global Growth Jigsaw Starts to Fall Into Place
Bloomberg, October 29, 2017

For investors, the “green shoots” of greater business spending should prompt a better performance from U.S. industrial stocks and higher yields on 10-year Treasury notes, analysts at Pavilion Global Markets told clients in a recent report.

Italy’s fourth-biggest bank returns to the stockmarket
The Economist, October 26,2017

Things may be looking up. Pavilion, an investment services firm, suggests that new regulation and accounting rules will make life harder for Italian banks dealing with bad loans, but cyclical factors will offset this.

Private Equity: A ‘generally normal’ market
Fund Europe, October 23, 2017

Fears of a bubble swelling to bursting point exercise some in the industry. Rhonda Ryan, managing director and head of Europe, the Middle East and Africa at Pavilion Alternatives, says: “I was around the last time we had a bubble. One problem with too much capital is we could end up with too high a price. Currently prices are high and getting close to their peak.”

Why you should remember Black Monday on its 30th anniversary
The Windsor Star, October 18, 2017

Disinflationary pressures have prompted the Fed to continually lower its expectations for the longer-term Fed funds rate, but Pavilion Global Markets believes U.S. inflation has begun a cyclical recovery that will push market pricing closer to a Fed funds rate of 2.5 per cent during the next two years.

How plan sponsors can keep their record keeper on track
Employee Benefit News, October 16, 2017

Plan sponsors tend to rely on their record keepers for everything, including information, and often assume that since they have had a long relationship with one organization that that entity is doing everything in the plan’s best interest. But that’s not always the case, says Rhonda Berg, senior defined contribution consultant with Pavilion Advisory Group in Chicago.

PANC 2017: The New Conflict of Interest
Plan Adviser, October 13, 2017

“The Department of Labor (DOL) has long been concerned about the fiduciary rule reform issue, and it has gotten tougher on this issue,” Stone observed. “As we all know by now, the department wants to provide a better set of guideposts for advisers and brokers to follow to minimize and disclose conflicts.”

Endowments Ditch Asset Class Silos in Bid to Boost Returns
FundFire, October 12, 2017

This shift is emblematic of investors’ increasing desire to have more concentrated portfolios, which forces investment teams to assess the strategies in a portfolio that make the most sense, says Texas Hemmaplardh, a managing director at Pavilion Advisory Group.

Five Types of Pensions Managers Should Know
FundFire, October 10, 2017

Scale obviously works for you when it comes to the ability to negotiate fees, but scale can work against you in terms of the ability to be nimble and access more capacity constrained asset classes,” says Nicole Delehanty, Managing Director at Pavilion Advisory Group.

Townsend sale a tale of the times
Pension & Investments, September 18, 2017

Acquisitions of alternative investment consultant firms also have picked up in recent years. Strategic Investment Solutions Inc. was bought by consultant and outsourced CIO firm Verus Advisory Inc. in 2016. In another deal, Pavilion Financial Corp. acquired Altius Holdings Ltd. in 2016 and LP Capital in 2014.

Private Equity Bubble? What Private Equity Bubble?
Wall Street Journal, September 11, 2017

Prices for U.S. and European leveraged buyouts were at or near record highs above 10 times earnings in the first half of 2017, according to Fitch Ratings. Soaring asset prices are a concern. A recent survey found that 86% of investors identified pricing as their main worry for the industry in 2017, according to Preqin.

Biotech: What’s Not To Like? Well…
Barron’s, September 1, 2017

Pavilion writes that biotechs, like other growth stocks, tend to outperform in disinflationary times, but the firm expects that we will reach a turning point on expected inflation at last, which could be a headwind for the group.

Trillion-Dollar Earnings Yield Keeping S&P 500 Out of Fed Reach
Bloomberg Markets, August 25, 2017

Adding that balance-sheet unwind to the equation could pose a greater threat to stocks than the initial string of rate hikes, according to Alex Bellefleur, head of global macro research and strategy for Pavilion Global Markets Ltd in Montreal.

Views: Less is more when designing a 401(k) plan
Employee Benefit Adviser, August 22, 2017

Behavioral finance has taught us a lot in recent years about how people make decisions. Just as importantly, it has taught us how plan sponsors can help participants make better decisions while still providing them with choices. However, providing people with too many choices can overwhelm them and lead to decision paralysis.

Today’s Selloff Is Testing One of 2017’s Top Stock Trades
Bloomberg Markets, August 10, 2017

“In an environment like today where people are shedding risk, they probably want to sell the stuff they own the most, and if they’re overweight high-flying growth shares that’s what they’ll dump,” said Alex Bellefleur, head of global macro research and strategy at Pavilion Global Markets in Montreal.

What U.S. Growth-Stock Gains Have to Do With Bonds’ Calm
Bloomberg Radio, August 9, 2017

Investors’ preference for U.S. growth stocks is as telling an indicator of “market complacency” as a lack of volatility in bonds, according to Pavilion Global Markets.

Canada’s economy at 150: How we shook off the oil shock
The Globe and Mail, July 4, 2017

“Commodity prices are low compared to their long-term trend and versus financial assets. However, they can stay low for years – historically, over five years – before reverting to trend,” says analyst Antoine Naly of Pavilion Global Markets in Montreal.

Enhancing your institution’s governance model
Pensions & Investments, June 21, 2017

The challenges of investing are both technical and human. To excel, endowment stewards must be as attentive to potential land mines in governance as they are to those in global markets.

S&P 500 Profit Generators Under Threat From Peak Inflation
Bloomberg, June 20, 2017

“The rolling over of inflation expectations and commodity prices presents unique risks for sectors that were large contributors to better earnings expectations,” said Alex Bellefleur, head of global macro research and strategy at Pavilion Global Markets Ltd. in Montreal. “The risk is that markets begin to reassess the forward earnings picture and turn a little less optimistic.”

Do tax cuts automatically lead to economic growth?
MarketPlace, June 6, 2017

But what if investors and companies don’t want to invest in more machines and factories? Aidan Garrib, a macro strategist with Pavilion Global Markets in Montreal, said that in the past, corporate tax cuts have been used to benefit shareholders. “To pay dividends and issue share buybacks,” Garrib said.

Tech Bubble Talk Is a Dot-Com Flashback
Bloomberg, June 1, 2017

And while investors aren’t paying stratospheric prices as they did in the late ’90s dot-com bubble, enterprise values of a broad collection of tech companies relative to their profits are higher than they have been since early 2004, Pavilion Global Markets calculated last week.

Short Sellers Resist Covering as S&P 500 Retakes Record in Week
Bloomberg, May 26, 2017

“The market appears relatively cautious by historical standards,” Pavilion Global Markets Ltd. strategists led by Alex Bellefleur wrote in a note. “The bullish view is that some of these shorts will have to be covered at some point, lengthening the rally.”

Five things you should know before you start your work day on May 19
The Financial Post, May 19, 2017

A slump in oil prices has hurt demand for property in Alberta, the country’s big cities are seeing rents fall far behind price gains, which dents revenue, and online shopping has shrunk traffic at malls. Finally, in times of broad market stress, REITS behave more like stocks rather than safer bonds, according to Pavilion Global Markets Ltd.

In a fight between large and small managers, who wins ?, May 18, 2017

“The belief that small managers outperform is […] an alternative fact,” says Alex Da Costa, the first debater, to audience laughter. He’s managing director of hedge funds at Pavilion Alternatives Group. “Globally, managers running over $1 billion control 90% of industry assets,” he says. “Investors have voted with their dollars.”

Greek, Portuguese Bonds Lead Resurgence of Europe’s Periphery
Washington Post, May 18, 2017

The balance of risks points to further upside for Greek debt in the next few months, with gradual economic improvements and the potential for inclusion of its bonds in the ECB program, according to Pavilion Global Markets Ltd.

Equities in a rising rate environment
Pension & Investment, May 9, 2017

As markets prepare for likely interest rate hikes from the Federal Reserve, concern has grown regarding the possible implications for equity valuations. While no one can say with certainty what will happen, a combination of history and theory provides some guidance.

S&P 500 Limps to Record While ETF Investors Turn Sour on Stocks
Bloomberg, May 5, 2017

“People have shifted so quickly into bonds, and they’re probably doing it by selling equities,” Alex Bellefleur, head of global macro research and strategy at Pavilion Global Markets in Montreal, said by phone. “Maybe people are looking at protection, given stocks are at all-time highs.”

Cracks are emerging’ in one of the riskiest parts of the market
Business Insider, May 5, 2017

These rising yields are widening the gap between high yield and comparable bonds. “Cracks are emerging in the high yield credit space that have the potential to blow out spreads in similar fashion to what occurred in 2014,” Pavilion Global Markets said in a note on Friday.

Will Home Capital Dent Canada’s ‘Boring-but-Stable’ Reputation?
Bloomberg News, May 2, 2017

“Canada’s reputation as a boring-but-stable financial system took a bit of a hit this week,” Alex Bellefleur, head of global macro research and strategy at Pavilion Global Markets Ltd. in Montreal, wrote in a note Friday. He predicts lending will slow across the industry, hurting cash flow into housing, and weakening inflation and the Canadian dollar.

Midsized firms feeling squeeze in a landscape of big and small
Pensions & Investments, May 1, 2017

Ryan Anderson, senior consultant and director, manager research, at Pavilion Advisory Group Inc., Montreal, agreed. “Clients are looking to reduce the number of relationships they have and looking to reduce fees, which is a big issue,” Mr. Anderson said. “Because of the environment we’re in, clients are asking their managers to do multiple things for them, so obviously the big firms have the resources to do that.”

S&P 500 Profit Generators Under Threat From Peak Inflation
Bloomberg, April 21, 2017

“The rolling over of inflation expectations and commodity prices presents unique risks for sectors that were large contributors to better earnings expectations,” said Alex Bellefleur, head of global macro research and strategy at Pavilion Global Markets Ltd. in Montreal. “The risk is that markets begin to reassess the forward earnings picture and turn a little less optimistic.”

Could Gulf States Be Forced To Devalue Their Currencies Against The Dollar?
Forbes, March 24, 2017

Fears of a devaluation first emerged in early 2016. Although the authorities in Riyadh and elsewhere have done their best to quash such speculation, the idea is again being discussed among some analysts, with Pavilion Global Markets suggesting that the Saudi authorities “will be forced to either increase interest rates or devalue the currency”.

Will Saudis Devalue Currency With Oil At $50?
Barron’s, March 23, 2017

OPEC countries depend on oil revenue, but they have been forced to cut production to keep prices near $50 per barrel, and the chief among them — Saudi Arabia — could be the oil markets’ biggest loser, Pavilion Global Markets writes today.

Passive investment train overtakes active in corporate DC plans
Pensions & Investments, March 20, 2017

In their investment lineups, “sponsors have been offering a passive sleeve to give more choice,” said Ms. Flodin, the Chicago-based managing director and co-DC practice leader for Pavilion Advisory Group Inc.

The positives and negatives to larger private equity fund sizes
The Alternative Assets Network, February 27, 2017

GPs raising increasingly large funds can be a double-edged sword for potential LP backers.

Gold Hedge vs Dollar: Chart Of The Day
Barron’s, February 24, 2017

The Montreal-based analysts at independent research house Pavilion Global Markets think that gold isn’t getting enough attention in the post-election rally even as members of the new administration talk down the strength of the dollar.

What Happens When Two Bankers and an Engineer Get a Billion Dollars? How Global Infrastructure Partners turned a sleepy sector into one that has investors clamoring for more.
Bloomberg Markets, February 16, 2017

“These assets are big and complicated and require ­expertise that some managers don’t have. The complexity is often underestimated,” says Jay Yoder, a managing director who oversees real asset investments at Pavilion Alternatives Group, an adviser to institutional investors. “That’s what has helped firms like GIP raise money and generate good returns.”

Indonesia & Commodities: The ‘Resilient’ Emerging Market
Barron’s, February 10, 2017

With Indonesian real rates (about 2%) not as high as those of other EMs, we think that Indonesian bonds remain relatively unattractive. We would rather look into equities rather than bonds to benefit from the country’s still-strong domestic fundamentals and rebounding PMIs…”

Junk May Slam Into $1 Trillion Wall as Maturities Hit Record
The Washington Post, February 8, 2017

Tighter monetary policy, higher volatility, elevated valuations and unfavorable changes to U.S. tax law could all contribute to pressure on spreads and underperformance in the sector, according to a separate report from Pavilion Global Markets, the Montreal-based trading and research firm.

The hedge funds where computers call the shots
Financial News, January 31, 2017

The situation seems to be improving, slowly. Alex Da Costa, director of hedge fund research and consulting at Pavilion Advisory Group, said: “Years ago, AI or ‘neural networks’ as they were sometimes called carried quite a bit of stigma among managers and investors.

How to invest if you think Donald Trump will be good for the U.S. economy
Canadian Business, January 18, 2017

While Aidan Garrib, global macro strategist for Pavilion Global Markets in Montreal, likewise doubts the Trump administration’s ability to effect his plans in the time frame that investors’ widely expect, one area he thinks will get some traction is financial industry deregulation.

Was Emerging Markets’ Trump Selloff Overdone?
Barron’s, January 17, 2017

Trump’s election briefly curtailed markets’ interest in EM assets late last year. As markets get a clearer picture of the outlook for the U.S. economy, we see them rotating back into EM assets … we think there is an interesting entry point into EM U.S.-dollar bonds and into more cyclical EM equity sectors …

Five trends to watch in 2017
Private Equity international, January 5, 2017

As of supply, early indications are that the U.S. fundraising market will continue to be strong in 2017, according to William Charlton of Pavilion Alternatives Group, but “far fewer” European fund managers will come back to the market, with many having raised capital in the last 18 months.