Arctos

For over two decades (from 1995 to 2015), buyout managers acquired assets at a meaningful discount to their public market proxy (the Russell 2000 Index). However, this discount has compressed over the last decade and, since 2020, we have observed an inversion. This “inversion” could meaningfully erode the second-largest driver of buyout returns over the last decade – multiple expansion. Read More: https://lnkd.in/gwC6eEif Request Our 3Q 2024 Keystone Market Update: https://lnkd.in/gkGJj9z9

For over two decades (from 1995 to 2015), buyout managers acquired assets at a meaningful discount to their public market proxy (the Russell 2000 Index). However, this discount has compressed over the last decade and, since 2020, we have observed an inversion. This “inversion” could meaningfully erode the second-largest driver of buyout returns over the last decade – multiple expansion.

Current U.S. public market valuations are historically expensive across every metric. The outsized impact of technology stocks has led to the overvaluation of the broader S&P 500, as shown in the chart below. What does this mean for private markets? We discuss this and more in our chart of the week and our recently published 3Q 2024 Keystone Market Update. Read More: https://lnkd.in/g7Y9twkQ Request Our 3Q 2024 Keystone Market Update: https://lnkd.in/gkGJj9z9

Current U.S. public market valuations are historically expensive across every metric. The outsized impact of technology stocks has led to the overvaluation of the broader S&P 500, as shown in the chart below. What does this mean for private markets? We discuss this and more in our chart of the week and our recently published 3Q 2024 Keystone Market Update. Request Our 3Q 2024 Keystone Market Update: https://lnkd.in/gkGJj9z9

This week, Arctos' Co-Founder and Co-Managing Partner Ian Charles took the stage at the CAIS Alternative Investment Summit in Los Angeles. Speaking alongside fellow alternative asset managers to an audience of independent financial advisors, the panel covered the evolving media landscape around sports, similarities and differences between North American and European leagues, the impact of data science on team operations, and where opportunities may lie for investors in the sports ecosystem.   #sportsbusiness #privateequity #CAISSummit 

In late September, we shared with our investors our 2024 Annual Media Update. In this note, we address the fallout from the decline of RSNs. To understand what is happening to RSNs, it is critical to understand how RSNs were able to out-earn their fundamentals due to several factors that are now moot. At the same time, we believe that: (i) local game inventory has durable value in steady state, even within the existing RSN ecosystem; and (ii) if some or all these games are harvested nationally, there could be further upside. Read More: https://lnkd.in/gKQVRq5M Request Our 2024 Annual Media Update: https://lnkd.in/gG2Nxdvu

In late September, we shared with our investors our 2024 Annual Media Update. In this note, we address the fallout from the decline of RSNs. To understand what is happening to RSNs, it is critical to understand how RSNs were able to out-earn their fundamentals due to several factors that are now moot. At the same time, we believe that: (i) local game inventory has durable value in steady state, even within the existing RSN ecosystem; and (ii) if some or all these games are harvested nationally, there could be further upside.

Arctos is delighted to welcome Barry Griffiths as a Senior Advisor supporting our #ArctosInsights business. With more than 25 years of experience pioneering quantitative analysis in private markets, Barry’s knowledge will further enhance our robust research and risk management capabilities. We also extend a warm welcome to Om Kanwar and Deep Patel who join the Arctos Insights team as Senior Data Scientist and Software Engineer, respectively. The arrivals of Barry, Om, and Deep underscore Arctos’ commitment to data-driven research and innovative technologies, both of which are integral to our investment strategy and value creation processes. https://lnkd.in/eFfDZTpC #privateequity #privatemarkets #datascience

Quarterly distribution yield, or distributions as a percentage of starting NAV, has remained below the long-term stable range of 4-8% per quarter for nearly two years. While the GP-led market has provided another avenue for GPs (and LPs) seeking distributions, we believe the true severity of the lack of liquidity in private markets has been partially masked by the recent increase in “inorganic” distribution activity. Read More: https://lnkd.in/gksge2-9

Quarterly distribution yield, or distributions as a percentage of starting NAV, has remained below the long-term stable range of 4-8% per quarter for nearly two years. While the GP-led market has provided another avenue for GPs (and LPs) seeking distributions, we believe the true severity of the lack of liquidity in private markets has been partially masked by the recent increase in “inorganic” distribution activity.