# Manhattan West — Full Content Index > Complete text of every published page, insight, perspective, portfolio company, and team bio on manhattanwest.com, generated at build time from the site's content directories. For a short curated overview, see https://manhattanwest.com/llms.txt. --- ## Site Pages - Articles: https://manhattanwest.com/articles/ — Long-form perspective from Manhattan West on private markets, portfolio construction, wealth strategy, and the macro forces shaping institutional capital. - Contact: https://manhattanwest.com/contact/ — Connect with the Manhattan West team. Whether you are evaluating a wealth management relationship or exploring private market access, the conversation starts here. - Form CRS: https://manhattanwest.com/form-crs/ — Manhattan West Asset Management - Insights: https://manhattanwest.com/insights/ — Short, timely commentary from Manhattan West on private markets, portfolio company news, regulatory shifts, and macro developments as they happen. - Manhattan West | Private Wealth Management & Select Private Market Investments: https://manhattanwest.com — Manhattan West combines tailored wealth management with direct access to select private market investments. Serving 800+ clients across 36 U.S. states and 28 countries. - Perspectives: https://manhattanwest.com/perspectives/ — Manhattan West perspectives: longer-form editorial views on private markets, wealth strategy, and the forces reshaping global portfolios. - Press: https://manhattanwest.com/press/ — Manhattan West coverage in leading financial and business publications, including Forbes and RIA Intel. - Team: https://manhattanwest.com/team/ — Meet the Manhattan West team: specialists in private wealth management, private markets underwriting, and investment advisory serving UHNW clients across 36 U.S. states and 28 countries. - Terms and Conditions: https://manhattanwest.com/terms-and-conditions/ — Manhattan West --- ## Portfolio Companies (30) - 100 Thieves — Discover MW Portfolio Companies that are global leaders in their sectors and help shape the economy of the future. — https://100thieves.com/ - Aman — Global ultra-luxury hospitality group operating resorts, hotels, and branded residences. — https://www.aman.com/ - Anduril (Exited) — Discover MW Portfolio Companies that are global leaders in their sectors and help shape the economy of the future. — https://www.anduril.com/ - Anthropic (Exited) — Discover MW Portfolio Companies that are global leaders in their sectors and help shape the economy of the future. — https://www.anthropic.com/ - Axiom Space — Discover MW Portfolio Companies that are global leaders in their sectors and help shape the economy of the future. — https://www.axiomspace.com/ - Better.com (Exited) — Discover MW Portfolio Companies that are global leaders in their sectors and help shape the economy of the future. — https://better.com/ - Databricks — Discover MW Portfolio Companies that are global leaders in their sectors and help shape the economy of the future. — https://www.databricks.com/ - Discord — Discover MW Portfolio Companies that are global leaders in their sectors and help shape the economy of the future. — https://discord.com/ - Epic Games (Exited) — Discover MW Portfolio Companies that are global leaders in their sectors and help shape the economy of the future. — https://www.epicgames.com/ - Function Health — Discover MW Portfolio Companies that are global leaders in their sectors and help shape the economy of the future. — https://www.functionhealth.com/ - Groq (Exited) — Discover MW Portfolio Companies that are global leaders in their sectors and help shape the economy of the future. — https://groq.com/ - Impossible Foods — Discover MW Portfolio Companies that are global leaders in their sectors and help shape the economy of the future. — https://impossiblefoods.com/ - Jetti (Exited) — Discover MW Portfolio Companies that are global leaders in their sectors and help shape the economy of the future. — https://www.jettiresources.com/ - Kalshi — Discover MW Portfolio Companies that are global leaders in their sectors and help shape the economy of the future. — https://kalshi.com/ - Klarna (Exited) — Discover MW Portfolio Companies that are global leaders in their sectors and help shape the economy of the future. — https://www.klarna.com/us/ - Kraken — Discover MW Portfolio Companies that are global leaders in their sectors and help shape the economy of the future. — https://www.kraken.com/ - Lambda School — Online technology-training school, formerly known as Lambda School, offering coding and AI-training programs historically financed through income-share agreements. — https://www.bloomtech.com/ - Marqeta (Exited) — Discover MW Portfolio Companies that are global leaders in their sectors and help shape the economy of the future. — https://www.marqeta.com/ - MasterClass — Discover MW Portfolio Companies that are global leaders in their sectors and help shape the economy of the future. — https://www.masterclass.com/ - Plaid — Discover MW Portfolio Companies that are global leaders in their sectors and help shape the economy of the future. — https://plaid.com/ - Polymarket — Discover MW Portfolio Companies that are global leaders in their sectors and help shape the economy of the future. — https://polymarket.com/ - Redwood Materials — Discover MW Portfolio Companies that are global leaders in their sectors and help shape the economy of the future. — https://www.redwoodmaterials.com/ - Relativity — Discover MW Portfolio Companies that are global leaders in their sectors and help shape the economy of the future. — https://www.relativityspace.com/ - Reonomy (Exited) — Discover MW Portfolio Companies that are global leaders in their sectors and help shape the economy of the future. — https://www.reonomy.com/ - Shield AI — Discover MW Portfolio Companies that are global leaders in their sectors and help shape the economy of the future. — https://shield.ai/ - SpaceX — Discover MW Portfolio Companies that are global leaders in their sectors and help shape the economy of the future. — https://www.spacex.com/ - TechStyle — Los Angeles-based parent company of direct-to-consumer membership fashion brands including Fabletics, JustFab, ShoeDazzle, and Savage X Fenty. — https://www.techstylefashiongroup.com/ - Vestigo Aerospace (Exited) — Developed the Spinnaker line of deployable drag sails used to deorbit small satellites and rocket upper stages; acquired by Applied Aerospace & Defense in February 2026. — https://www.applied-aerospace.com/ - Vise — Discover MW Portfolio Companies that are global leaders in their sectors and help shape the economy of the future. — https://vise.com/ - Zapp — London-based quick-commerce app delivering everyday essentials and convenience retail items in minutes. — https://www.justzapp.com/ --- ## Team (29) ### Angie Spielman — Founding Partner, Managing Director Angie Spielman is a Founding Partner and Managing Director at Manhattan West, where she provides tailored wealth management services to a select group of high-net-worth private clients, corporations, and non-profit institutions. Ms. Spielman works with clients and their outside advisors to manage assets and liabilities in order to provide comprehensive solutions to drive growth, organize finances, and plan for the future. She brings an extensive understanding of the financial services business to bear for clients, constantly striving for excellence in advice and counsel. Ms. Spielman has developed a niche in working with women facing various life events in securing their financial independence. As their trusted advisor, her focus is financial education and empowerment. As a result, her client base benefits from her deep experience across the financial service landscape, from the fixed income trading floors in New York to the top of the middle market banking industry in Southern California. Ms. Spielman brings a tailored, disciplined, and data-driven approach to identifying and helping clients make sound personal and business-related decisions for their long-term wealth creation or preservation. Ms. Spielman began her career in New York at Bloomberg before joining J.P. Morgan Asset Management, supporting their Chief US Economist in their Fixed Income group. Prior to joining Manhattan West, she worked in the Commercial Banking and Business Banking divisions at Bank of America and J.P. Morgan Chase, where she was recognized as one of the top professionals in her space. Ms. Spielman earned a bachelor’s degree in political science and economics from New York University. She serves as a member of the _Board of Trustees_ at the San Diego Jewish Academy, where both of her children attend school, and the Investment Committee of Temple Emanu-El. She grew up in Panama and enjoys spending time and travelling internationally with her husband and two boys. Angie Spielman is a Registered Representative of Finalis Securities LLC Member FINRA / SIPC. --- ### Aram Adajian — Executive Director, Venture Capital Mr. Adajian brings over a decade of experience in asset management, venture capital, and public/private partnerships to his role as Executive Director of Venture Capital at Manhattan West. Over the course of his career, he has managed a diverse portfolio of clients, investments, and funds, focusing on breakthrough technologies and international market strategies. His investment approach emphasizes support for high-impact companies at the forefront of Deep Technology including AI&ML, Defense, and Space Innovation. Prior to joining Manhattan West, Mr. Adajian worked across both public and private sectors, including a role on the Los Angeles Mayor’s International Trade and Investment team, where he supported global capital flow initiatives and public-private investment strategies. During his tenure, he collaborated with over a dozen international delegations and dignitaries from the UAE, ASEAN, EU, and the UK, helping position Los Angeles as a strategic gateway for innovation and global investment. Mr. Adajian earned a Bachelor of Arts in Geography from the University of California, Los Angeles, and holds dual graduate degrees from Indiana University: a Master of Business Administration with a concentration in International Business Relations, and a Master of Science in Finance with a specialization in Artificial Intelligence and Machine Learning. When not in the office, Mr. Adajian is an avid traveler, reader, and horologist. He is also a member of “Next Gen In” a mentorship and financial literacy initiative committed to preparing the next generation of students for impactful careers in STEM, Finance, and Entrepreneurship. --- ### Bill Ryan — Chief Compliance Officer Bill Ryan is the Chief Compliance Officer at Manhattan West, where he is responsible for ensuring the firm complies with all outside regulatory and legal requirements, as well as internal policies. Mr. Ryan began his career working in the client service group at Nuveen Investments where he worked closely with the Portfolio Managers and Compliance team to build marketing and client service presentations for the firm’s investment managers and institutional client base. Thereafter, Mr. Ryan worked in operations & compliance at Argosy Wealth Management and Steel Peak Wealth Management, where he worked as the Chief Compliance Officer. Mr. Ryan received a Bachelor of Arts degree in Psychology from the University of Arizona. In his free time, he enjoys cooking, playing golf, bicycling, and snowboarding. --- ### Blaize Leone — Senior Investment Operations Associate Blaize Leone is a Senior Investment Operations Associate at Manhattan West, where he assists with administrative and client support responsibilities of our alternative investments. Prior to Manhattan West, Mr. Leone worked at Morgan Stanley as a registered client service representative where he helped clients with daily transactions such as account opening, money movement, and preparing documents. Blaize graduated from the University of Colorado at Boulder with an emphasis in Finance. Born and raised in Los Angeles, Mr. Leone enjoys going to the beach, football, snowboarding, and traveling. --- ### Brandon Allen — Executive Director, Financial Advisor Brandon Allen is an Executive Director and Financial Advisor with over 18 years of experience advising high-net-worth individuals and families, business owners, and family offices. He provides strategic, objective guidance across complex financial profiles, liquidity events, and multigenerational planning needs. Mr. Allen focuses on holistic wealth management, integrating portfolio construction, asset allocation, and risk management into a cohesive long-term strategy. He has particular expertise working with concentrated equity positions, where he helps clients manage downside risk, create tax-aware liquidity, and thoughtfully diversify while maintaining alignment with broader financial and lifestyle objectives. Prior to joining Manhattan West, Mr. Allen spent a significant portion of his career at RBC Capital Markets and Morgan Stanley, where he advised clients through multiple market cycles and gained deep experience in sophisticated investment strategies, disciplined portfolio management, and risk-focused decision-making. This background informs his measured, process-driven approach to wealth preservation and growth. Mr. Allen earned a Bachelor of Arts in Economics from the University of Colorado at Boulder, with an emphasis on global markets and business. He applies a macro-aware, global perspective to client portfolios, with an emphasis on protecting capital, managing volatility, and positioning wealth to endure across market environments. Mr. Allen lives in Los Angeles with his wife and two children. Outside of work, he values family time, personal fitness, and maintaining balance, principles that mirror the long-term, intentional approach he brings to advising clients. --- ### Bryan Chay — Senior Analyst, Venture Capital Bryan Chay is a Senior Analyst on the Venture Capital team at Manhattan West, where he supports the firm’s investments in innovative growth companies across technology and emerging industries. He began his career at Manhattan West as an Alternative Investments Intern before joining the Venture Capital team full time. Bryan brings previous experience in investment banking and private markets, including work with Ant Group, with exposure to Asia-Pacific and Greater China financial markets. At Carnegie Mellon University, he completed a summer research experience developing a reinforcement learning–based algorithmic trading model for illiquid financial markets, using the Malaysian stock exchange as a case study. Prior to his career in finance, Bryan served in the Singapore Armed Forces as a Third Sergeant in the 24th Battalion, Singapore Artillery. He was Second-in-Command for an Artillery Reconnaissance & Survey Squad and later served as an instructor for artillery specialist courses and reserves training within the Artillery Formation. Bryan earned his B.S. in Business Administration with a concentration in Finance from the University of Southern California. His coursework emphasized artificial intelligence, machine learning, and entrepreneurial finance with a focus on venture capital. Outside of work, he enjoys playing golf, and snowboarding in Japan. --- ### Calvin Bui — Associate Portfolio Manager Calvin is an integral member of the Portfolio Management team at Manhattan West, collaborating closely with financial advisors to guide clients in achieving their financial objectives. Prior to joining our team, Calvin's professional experience includes banking and wealth management, where he successfully oversaw portfolios exceeding $1.5 billion in Assets Under Management (AUM). Holding a Bachelor of Science in Finance from California State University, Fullerton, Calvin actively contributed to the school’s Student Managed Investment Funds, showcasing his early interests and dedication to the field. He is currently pursuing his Chartered Financial Analyst (CFA) designation. Beyond office work, Calvin embraces the vibrant energy of Los Angeles through various outdoor activities such as skating, going to the beach, playing basketball and volleyball, and attending music festivals. --- ### Carol Yee — Client Relationship Manager Carol Yee is a Senior Client Associate at Manhattan West where she assists high-net-worth private clients and Financial Advisors with daily inquiries related to client onboarding, account setup, maintenance, and investment management. Ms. Yee works closely with the Manhattan West management team and client base to provide dedicated investment, banking, and lending support. Ms. Yee enjoys connecting with clients and collaborating with the team to ensure that needs and requests are met in a timely manner. She believes that there’s no request that is too small or too big to handle and that listening to clients and paying attention to details are essential to completing requests and keeping clients happy and satisfied. Prior to joining Manhattan West, Ms. Yee held roles at NWQ and several wealth management firms. She has a Bachelor’s degree from the University of Utah and a Master’s degree from Emerson College. --- ### DaNeisha Nichols — Senior Director of Real Estate DaNeisha Nichols is a Senior Director of Real Estate at Manhattan West where she is integrally involved in all aspects of the firm's real estate operations. Her primary focus is on managing and providing operational services to the Real Estate Team and the various underlying Funds. Prior to joining Manhattan West, Mrs. Nichols worked in various management roles for a publicly traded retail company for over 10 years. She was responsible for managing sales, budgets, and profit & loss results to ensure maximum growth. In addition, she provided payroll management, inventory control, operational audits and training services to ensure compliance with applicable policies and procedures. A graduate of Xavier University of Louisiana, Mrs. Nichols earned a Bachelor of Science degree in Psychology. In her free time, she enjoys traveling and spending time with her husband and daughters. [![](/images/team/white-mw-logo-500px-wide.png)](http://cx3.c83.myftpupload.com/home/) --- ### Francois Schramek, CFA — Partner Francois Schramek is a Partner at Manhattan West where he is a talented and experienced Financial Advisor who specializes in advising UHNW individuals and families across the globe. Throughout his career, Mr. Schramek has accompanied successful entrepreneurs to their exits and has spent significant time investing in growth companies himself. Mr. Schramek has more than 15 years of experience working for some of the most well-known banks on Wall Street, including J.P. Morgan, Merrill Lynch and Morgan Stanley as well as a +$150Bn Multi-Family Office. Prior to joining Manhattan West, Francois served as an Advisor to a number of ultra- high net worth individuals and families as well as large institutions around the world where he was responsible for his clients’ asset allocation, portfolio construction, and wealth plan implementation. Mr. Schramek began his career in the Investment Banking space where he advised corporations around the globe on acquisitions and capital market transactions on both buy side and sell side M&A assignments. Mr. Schramek earned a Bachelor of Science degree in Finance and Asset Management from the European Business School in Germany and a Master of Business Administration from the Marshall School of Business at the University of Southern California. Additionally, he passed the Financial Industry Regulatory Authority (FINRA) Series 7, 63, 65 exams, holds the Chartered Financial Analyst (CFA) designation, and is an active member of the CFA Institute and Los Angeles World Council. Originally from Europe, Francois speaks English, French, and German and enjoys piloting planes and traveling to exotic destinations around the world. --- ### Gabriel Garcia — Chief Financial Officer Gabriel Garcia is the Chief Financial Officer at Manhattan West where he is responsible for all aspects of the firm’s financial affairs. Mr. Garcia possesses an expert level of financial acumen in his day-to-day oversight of accounting, financial reporting, audit oversight and strategic planning for Manhattan West and its affiliated entities. With over a decade of experience in high level financial roles, Mr. Garcia is integrally involved in all aspects of Manhattan West’s global business. Mr. Garcia’s domestic and international experience across a wide range of asset classes in finance makes him ideally suited to oversee the complexity of Manhattan West’s operations. Prior to Manhattan West, Mr. Garcia worked for Los Angeles based Oakmont Corporation where he was responsible for the financial affairs of Cabo del Sol, a luxury master-planned real estate development in Los Cabos, Mexico. Prior to Oakmont, Mr. Garcia worked at Saban Capital Group, an $8 billion Los Angeles based private investment firm. At Saban, Mr. Garcia was responsible for managing a broadly diversified portfolio of investments in equities, fixed income, real estate, and alternatives. Prior to Saban Capital, Mr. Garcia worked in the private equity industry with Silver Canyon, a growth equity investment firm based in San Diego, California. He also worked at Platinum Equity, a global Private Equity firm based in Beverly Hills, California where he worked on M&A transactions, transformations of businesses in work outs and complex situations. A CPA by training, Mr. Garcia began his career at KPMG in Audit and Transaction Services. Mr. Garcia received a Bachelor of Arts degree in Business Economics from the University of California at Los Angeles and a Master of Business Administration in Finance and Entrepreneurship from The Wharton School of the University of Pennsylvania. Born and raised in Southern California, Mr. Garcia enjoys golf and international travel. --- ### Jim McCoy — Managing Director, Venture Capital Jim McCoy is Managing Director, Venture Capital at Manhattan West, where he is part of the capital raising and investor relations team for the firm's venture capital offerings, connecting client partners to Manhattan West's private market opportunities. Having founded and/or managed several investment firms over two decades, Mr. McCoy brings deep experience across the investment lifecycle to his work raising capital and building relationships on behalf of the firm's venture capital deals. Mr. McCoy began his career at J.P. Morgan and worked closely with traditional and alternative investment firms, where he provided research and capital markets expertise. Following his tenure with J.P. Morgan, he co-founded an alternative investment firm and, as Chief Operating Officer, successfully guided the firm and its investors through the 2008 Financial Crisis. He then held senior-level positions with several investment firms, primarily focused on operations and business development, before serving as Manhattan West's own Chief Operating Officer, an experience that gave him a firsthand understanding of the firm's platform and the investor relationships now central to his work on the capital raising team. His experience working with a variety of investors, including individual, family office, wealth management, and institutional investors, makes him a valuable contributor to capital raising across Manhattan West's venture capital deal flow. Mr. McCoy graduated with a double major, holding a Bachelor of Arts in Business and a Bachelor of Arts in English Literature from the University of Washington, where he played football and enjoyed two Rose Bowl Championships and a Co-National Championship. He has visited and/or transacted business in over 20 countries. In his free time, he enjoys reading, teaching financial literacy through Operation Hope, and trail running. --- ### Justin McCurdy, CFP® — Managing Director, Financial Advisor Justin McCurdy, CFP® is an Managing Director and Financial Advisor at Manhattan West, where he provides tailored wealth management services to clients across various industries. Mr. McCurdy takes pride in educating his clients so they can make informed financial decisions. He encourages those he works with to be inquisitive and curious in order to create a more transparent relationship. By leveraging the firm’s resources, Mr. McCurdy delivers focus-driven ideas to his clients.  Mr. McCurdy brings a tailored, disciplined, and data-driven approach to wealth management. As a CFP (Certified Financial Planner), Mr. McCurdy takes pride in guiding clients in all financial planning related matter such as, retirement planning, tax planning, estate planning, budgeting, cash management, and investment management. Prior to joining Manhattan West, Mr. McCurdy began his career in financial services at Morgan Stanley Wealth Management before joining Advice Period.  In addition to his financial service practice, Mr. McCurdy founded Pro Skills, a preeminent youth mentorship and club basketball program based in Southern California. A graduate of the University of Southern California, Mr. McCurdy earned a Bachelor’s degree in Communications and a minor in Accounting/Finance. Active in his community, Mr. McCurdy continues to mentor young athletes through his basketball organization. He currently lives in Sherman Oaks and enjoys spending time with his wife Leanna and daughter Layla. --- ### Kaden Funk — Vice President Kaden Funk is a Vice President on the Private Equity team at Manhattan West. His key functions involve leading industry and market research, analyzing potential investment opportunities, transaction execution, and portfolio management and operations. Prior to joining Manhattan West, Mr. Funk worked in Mergers and Acquisitions at Wasserman Media Group, a global leader in sports, entertainment, media, and consumer. Before joining Wasserman, Mr. Funk worked as an investment banker at Credit Suisse, where he specialized in leverage finance, covering financial sponsors and real estate and gaming transactions. During his time at Credit Suisse, he underwrote +$5 billion worth of financing for private equity firms pursuing leverage buyouts in sports, gaming, technology, healthcare, and consumer related businesses. Mr. Funk graduated from The Wharton School, at the University of Pennsylvania with a double concentration in Finance and Management. During his time at the University of Pennsylvania, he competed on the Men’s Varsity Tennis Team. Born and raised in Florida, Mr. Funk enjoys spending time at the beach with his wife and can be found cheering on any Philadelphia sports team. --- ### Kate Kurz — Founding Partner, Chief Operating Officer Kate Kurz is the Chief Operating Officer and Founding Partner of Manhattan West, where she oversees the firm's operations, human resources, technology, client service, vendor management, and business processes. She is responsible for driving operational excellence, enhancing the client experience, and building the infrastructure that supports the firm's continued growth. With more than 20 years of experience in the financial services industry, Ms. Kurz leads the firm's day-to-day operations, develops scalable processes, and partners across the organization to improve efficiency, implement strategic initiatives, and support the firm's long-term growth. Prior to joining Manhattan West, Ms. Kurz held leadership and operational roles at Lehman Brothers, Bank of America Private Bank, Deutsche Bank Securities, and J.P. Morgan Securities. Ms. Kurz earned a Bachelor of Science in Chemistry from Boston College. --- ### Larry Rollins — Managing Director, Financial Advisor Larry Rollins, CFP® is a Managing Director and Financial Advisor with Manhattan West, where he provides integrated wealth management and investment services to his clients. Mr. Rollins has more than 30 years of experience, delivering customized guidance to a diverse array of clients, including hedge fund managers, private equity partners, business owners, C-suite executives, and wealthy families. As a Certified Financial Planner (CFP®), Mr. Rollins takes pride in a comprehensive analytic outlook to address the integration needed for long-term financial success. He has expertise guiding clients in all financial-planning–related matters, including retirement planning, tax planning, estate planning, cash management, and investment management. Through a blend of customized information gathering, data analysis, and risk assessment, Mr. Rollins works to ensure that there are no gaps in his clients’ financial plan. He understands that personal milestones and life events can present unique challenges that require specialized financial knowledge and strategy. Mr. Rollins draws on his technical skills and client-focused approach to address short-term goals while aligning outcomes with long-term needs. He works to ensure that his core values of respect, customer service, and thoroughness are evident in his work and in his ongoing, confidential relationships with his clients. Mr. Rollins utilizes his extensive experience in financial services at Manhattan West, where he curates a modern integration of investment and wealth management expertise with estate and tax planning. After more than a decade as a resident of Southport, CT, Mr. Rollins recently established residency in Florida while continuing to maintain an active presence in Connecticut. He remains committed to supporting civic and social causes in the communities he serves. He is a member of the Estate Planning Council of Lower Fairfield County, the Exit Planning Exchange, and the National Association of Divorce Professionals. He also coaches low-income families at the Connecticut Association for Human Services and is an involved parishioner at Fairfield’s St. Pius X in Fairfield, Connecticut and the Cathedral Basilica of St. Augustine, Florida. Prior to joining Manhattan West, Mr. Rollins held leadership roles, on both coasts, at A.G. Edwards & Sons, Inc. and Fidelity Investments. Mr. Rollins earned a B.S. in Political Science and Government from California State University, Northridge. He and his wife, along with their three children, enjoy the many outdoor activities offered throughout Florida, Connecticut, and the broader East Coast region, including golf, kayaking, sailing, and biking. Securities offered through Finalis Securities LLC Member **FINRA/SIPC**. Manhattan West and Finalis Securities LLC are separate, unaffiliated entities. ## Managing Director, Financial Advisor --- ### Liz Avalos — Office Administrator Liz Avalos is the Office Administrator at Manhattan West, responsible for the front desk and the day-to-day office operations. Ms. Avalos is a dedicated and detail-oriented professional with over 20 years of experience in office administration. As the Office Administrator, she oversees various responsibilities, including greeting clients and guests, assisting in onboarding new employees, and organizing company events. From coordinating meetings to managing office supplies, Ms. Avalos ensures that every detail is taken care of and that everything runs smoothly not only at the front desk but also behind the scenes. Born and raised in Los Angeles, Ms. Avalos, likes to cook, travel, and spend quality time with her family. --- ### Lorenzo Esparza — Chief Executive Officer, Founding Principal Lorenzo Esparza is the Chief Executive Officer and Founding Principal at Manhattan West, where he drew on his legal, corporate, and financial experience to build the modern version of an investment firm. With an investor-centric mindset, Mr. Esparza manages the firm's strategic direction while overseeing day-to-day operations. He is focused on building the firm using a top-down approach to working with clients across a broad suite of services and investment categories. Leading a culture of excellence and inclusion at Manhattan West, Mr. Esparza seeks to deliver returns for clients, partners, and shareholders. Embracing the core values of integrity, respect, and honesty, his efforts seek to position the firm as a leader in the investment industry serving ultra-high-net-worth clients, family offices, and institutions across the United States. A respected investor in his own right, Mr. Esparza chairs the firm's Investment Committee. He has capitalized and led numerous private investment funds in real estate, venture capital, and private equity/credit, in addition to overseeing liquid portfolios across a broad set of asset classes. Mr. Esparza serves as the general partner or managing member of over 30 investment funds with portfolio investments across the country. He sits on the board of numerous portfolio companies and serves as Special Advisor to several large institutions. Mr. Esparza began his career in financial services at AllianceBernstein before joining JP Morgan Securities. He launched Manhattan West immediately following his tenure at JP Morgan. An avid philanthropist, he supports numerous causes that benefit underprivileged youth. Active in the community, he is a former Board Member of the Richstone Family Center, the former Board Chair of the Cancer Support Community–Benjamin Center in Santa Monica, and a former Board Member of the Stroke Association of Southern California. Mr. Esparza received a Bachelor of Arts degree from the University of California at Santa Barbara and a Juris Doctor degree from Loyola Law School at Loyola Marymount University in Los Angeles. A workout enthusiast, golfer, and surfer, he resides in Los Angeles with his wife and two sons. --- ### Matt Gibbons — Managing Director, Private Equity Matt Gibbons is the Managing Director of Private Equity at Manhattan West. He oversees the firm’s Private Equity practice and is responsible for developing investment strategies, managing companies in the portfolio, and determining suitable investments for the firm. Mr. Gibbons looks for opportunities to invest in companies that are led by strong management teams and positioned to benefit from strategic enhancements, operational improvements, and attractive industry tailwinds. As an active investor, he leverages his industry relationships and sector experience to help create value at each of the Private Equity portfolio companies. He currently serves on the board of The F1 Exhibition, Round Room Live, and Vino Vault. Prior to founding Manhattan West’s Private Equity division in 2019, Mr. Gibbons worked at Saban Capital Group, the Los Angeles-based private investment firm of billionaire Haim Saban, where he managed private equity investments across the media, entertainment, business services, and consumer sectors. During his tenure at Saban Capital, Mr. Gibbons completed the sale of Saban Brands (the holding company of Power Rangers and other major entertainment brands) to Hasbro for over $500 million, managed the firm’s key investment in Univision Communications (the largest Spanish-language media company in the U.S.), executed the formation of both Saban Music and Saban Experiential operating companies, and spearheaded the IPO and attempted merger of Saban Capital’s special purpose acquisition company. Before joining Saban Capital, Mr. Gibbons worked as an investment banker at Houlihan Lokey, one of the largest middle-market investment banks, where he helped structure numerous transactions including acquisitions, divestitures, and debt financings across a wide range of industries including manufacturing, retail, and business services. Mr. Gibbons graduated from Harvard University with a degree in Economics. As a member of the Harvard Lightweight Crew, he helped the program achieve a 28-0 undefeated multi-season record. Born and raised in Southern California, he enjoys the outdoors, playing tennis, golfing with his wife, and spending time with his two sons. --- ### Mike Galanowsky, CFA — Managing Director, Portfolio Management Michael Galanowsky is a Managing Director of Portfolio Management at Manhattan West where he leads the portfolio management department specializing in public equity and fixed income. Mr. Galanowsky works with the firm’s financial advisors to deliver customized portfolio management solutions to our clients. Prior to joining Manhattan West, Mr. Galanowsky was a Director – Senior Portfolio Manager at One Capital Management serving on the investment committee and as co-manager for two exchange traded funds. He began his career at Promethean Asset Management, a New York based hedge fund, eventually serving as Head Trader. Mr. Galanowsky earned a Bachelor of Science degree in Business Administration from Villanova University – majoring in Finance with a minor in Management & Information Systems. Additionally, he holds the Chartered Financial Analyst (CFA) designation and is an active member of the CFA Institute. Outside of work, Mr. Galanowsky enjoys golf, basketball and cycling. He is a founding member of Prostate1000 – a philanthropic organization that raises awareness and funds for prostate cancer research, by organizing sponsored cycling challenges. --- ### Natalie Bullard — Executive Assistant Natalie Bullard is the Executive Assistant at Manhattan West where she oversees the daily functions of the operation. Her main focus is on creating an efficient and welcoming environment for clients and the Manhattan West team. She takes pride in finding ways to streamline operations and create productive systems. Prior to joining Manhattan West, Ms. Bullard held several operational roles in ever increasing levels of responsibility. She held Managerial positions in Real Estate, Education and Entertainment. Most recently, Ms. Bullard worked at a fast-paced television production company in Hollywood where she was tasked with ensuring compliance with best-in-class operations. A graduate of Loyola Marymount University in Los Angeles, Ms. Bullard holds a Bachelors Degree in History. In her free time, she enjoys travel and spending time with her triplet siblings. --- ### Patrick McDonald, CFP® — Managing Director, Financial Advisor Patrick McDonald is a Managing Director – Financial Advisor at Manhattan West where he provides comprehensive financial planning services to corporate executives, business owners, and high-net-worth clients. Mr. McDonald worked in tax preparation for most of his career and utilizes his tax expertise to purposely manage all the core areas of a client’s financial situation. Before joining Manhattan West, Mr. McDonald served as a Senior Wealth Advisor at MAI Capital Management and a Wealth Advisor at Goldman Sachs in their executive counseling business. Born and raised in Southern California, Mr. McDonald received his Bachelor of Science with a specialization in finance from California State University, Fresno, and a Master of Business Administration (MBA) from the University of California, Irvine. He is also a CFP® professional and is pursuing the Enrolled Agent certification. --- ### Rob Wussler — Executive Director, Financial Advisor Rob Wussler is an Executive Director and Financial Advisor at Manhattan West where he provides tailored wealth management services to a select group of high-net-worth private clients. He brings a disciplined data-driven approach to identifying and helping clients make sound personal and business-related decisions to achieve long-term wealth creation and capital preservation. Mr. Wussler’s financial acumen is complemented by a diverse professional background in media, technology and analytics where he held senior level positions with several global media enterprises. He is a Senior Advisor with two vertically integrated technology companies where his experience and guidance drove numerous financial innovations and created new revenue initiatives.  Mr. Wussler has been an investor with Manhattan West since its formation and has successfully completed the development of eight residential real estate projects. Mr. Wussler earned a Bachelors Degree from Hobart College.  He is an active Mentor at American Corporate Partners, a 501 nonprofit organization dedicated to assisting United States Veterans in their transition from the military to the civilian world.  Mr. Wussler resides in Greenwich, Conn., where he is raising his two daughters. --- ### Simone Ysaguirre — Client Service Associate Simone is a Client Service Associate at Manhattan West. Her key responsibilities include managing asset movement, onboarding new clients, and delivering attentive service to support ongoing client needs. She began her career in financial services as a Client Service Associate and Credit Specialist, where she built a solid foundation in relationship management. She later advanced into a Financial Planning Analyst role, giving her a well-rounded perspective on wealth management. She holds a B.A. in Economics from Loyola Marymount University and an MBA in Finance from California State University, Los Angeles. Outside of the office, Simone enjoys exploring LA’s hiking trails, experimenting with interior design, and discovering new coffee shops. She brings the same curiosity and creativity to her personal life that she applies to helping clients achieve their financial goals. --- ### Tera Singh, MSHR — Human Resources Business Partner Tera Singh is a Human Resources Business Partner at Manhattan West, where she will be managing all HR functions for the firm and supporting stakeholders. Mrs. Singh has more than eight years of Human Resources experience within the financial services, medical, luxury retail, and business consulting industries.  Most recently, she worked at Kay Properties & Investments, an alternative investment firm in Torrance where she developed and implemented the company’s HR platform, communicated policies and procedures, and managed the employee experience. Prior to that, she was employed with Korn Ferry International, a global consulting firm, in Century City. Originally from Kansas City, Mrs. Singh obtained her Bachelor of Science degree in Organizational Management and Leadership from Friends University.  She later earned her Master’s degree in Human Resources Management from Chapman University.  Tera enjoys cooking, hiking, listening to podcasts, and being a stage mom.  She lives in Los Angeles with her husband and three children. --- ### Terry Tsolakis — Client Service Associate Terry is a Client Service Associate at Manhattan West. His primary duties involve coordinating asset movements, facilitating the onboarding of new clients, and ensuring the delivery of services that address ongoing client requirements. Before joining Manhattan West, Terry spent over fifteen years at Wells Fargo Advisors, where he served as a Senior Registered Client Associate and Branch Liaison. In these roles, he developed extensive expertise in asset and wealth management, client service, and office administration. Terry completed his education in Australia, graduating from Blaxland High School in New South Wales. He then pursued a career in electrical work, becoming an apprentice and attending Mount Druitt Technical College. Outside of work, Terry is passionate about music, particularly studying the guitar. He is also an avid fan of rugby and soccer. --- ### Tiffany McGuirk — Director of Operations Tiffany McGuirk is the Director of Operations at Manhattan West. She joined Manhattan West from a boutique long volatility quantitative registered investment advisory firm, where she helped institutionalize the business as the Director of Trade Operations. Mrs. McGuirk has almost 30 years of client service and operations experience on both the buy-side and sell-side. She previously worked on the Client Portfolio Management team at Nuveen, a TIAA Company and as the Operations Manager at Steal Peak Wealth Management. Prior to that, she helped start the West Coast Prime Brokerage division as Director of Account Management at Barclays and was the Vice President of Account Management at Pershing, an affiliate of The Bank of New York Mellon. Mrs. McGuirk began her career as a Bear Stearns Prime Services Senior Relationship Manager after she was the Operations Manager at a $5 billion hedge fund specializing in convertible securities. She holds a Bachelor of Arts degree in Political Science and International Relations from the University of Southern California. An avid traveler, boater, and skier, she resides in Malibu with her husband and two sons. --- ### Tiffany Sum — Client Service Associate Tiffany is committed to delivering a seamless client experience in collaboration with each financial advisor and cross-departmental personnel at Manhattan West. She began her career with an early opportunity at a hedge fund, where she contributed across multiple roles: supporting administrative operations, driving attendee outreach for webinars, and fostering strong client relationships. Since then, she has continued to grow in client-facing roles at two additional RIA firms, where she has embraced more responsibilities over the last several years serving as a key liaison between clients and advisors to ensure a responsive and personalized service experience. Tiffany graduated from Loyola Marymount University with a Bachelor’s degree in Entrepreneurship & International Business. She has since returned to LMU to pursue her MBA with a concentration in finance. Beyond her academic and professional pursuits, Tiffany maintains a disciplined fitness routine, enjoys baking, and is a passionate traveler always eager to experience new cultures, cuisines, and fashion from around the world. --- ### Yolanda Hirang — Controller Yolanda Hirang is the Real Estate Controller at Manhattan West where she has operational oversight of all real estate financial operations, investment accounting and reporting, and regulatory compliance. Ms. Hirang is focused on providing timely, accurate and comprehensive financial information and in building a strong accounting team that can provide the highest level of reporting and service to the company’s real estate investors and partners. Ms. Hirang brings with her over 20 years of real estate finance and accounting experience.  Prior to Manhattan West, Ms. Hirang worked at Staley Point Capital, where she was part of the team who executed and managed investments of over $500 Million in addition to legacy assets from Magellan Group of over $400 Million.  Prior to Staley Point, Ms. Hirang worked at MJW Investments who owned over five thousand multifamily and student housing units.  Prior to Staley Point Capital, Ms. Hirang worked at Cohen Asset Management, a commercial/industrial real estate firm with JV funds and real estate transactions of over $1 Billion. Ms. Hirang is a licensed CPA in the Philippines and holds a Bachelor of Science degree in Business Administration and Accounting from the University of Nueva Caceres.  Ms. Hirang loves to hike, read books, and travel overseas. --- ## Insights (37) ### Prediction Markets Cross $25B in Annual Volume as Institutional Players Enter the Asset Class (2026-08-31) https://manhattanwest.com/insights/prediction-markets-institutional-signal-layer/ Private Markets | CNBC, April 14, 2026 Prediction markets have moved well past novelty. In 2025, total trading volume across CFTC-registered prediction markets exceeded $25 billion, per the Federal Register — and in just the first months of 2026, two leading regulated platforms generated more than $60 billion in combined volume, already surpassing the full-year 2025 figure.[^1] In August 2026, Cantor Fitzgerald launched prediction-market trading specifically for institutional investors, adding a primary dealer to the growing list of professional-grade participants.[^2] Bernstein analyst Gautam Chhugani now projects total event-contract volumes will reach approximately $240 billion by year-end 2026 — a 370% increase over 2025 — and compound at roughly 80% annually to reach $1 trillion by 2030.[^3] The mechanics of that growth are worth understanding on their own terms before assessing what they mean. ## What Prediction Markets Actually Do A prediction market is a derivatives exchange where participants trade contracts tied to the binary outcome of a future event: a rate decision, an election result, an economic print, a geopolitical development. The price of a contract reflects the collective probability that the stated outcome occurs — a contract trading at $0.72 implies the market assigns roughly 72% odds to that outcome resolving "yes." The mechanism is structurally similar to how options markets price volatility or how credit default swaps price default probability. What distinguishes prediction markets is that they aggregate dispersed, heterogeneous information from a large and diverse population of traders, including participants who hold information or judgment that does not travel through consensus analyst channels. The result is a probability-weighted price that, across a range of events and studies, has generally tracked realized outcomes at least as well as institutional forecasts — often better in domains with thin or conflicted expert coverage. The CFTC, which classifies these instruments as derivatives, has acknowledged as much. The Commodity Exchange Act identifies derivatives as serving a national public interest by "providing a means for managing and assuming price risks, discovering prices, or disseminating pricing information."[^4] The CFTC's own rulemaking documents cite price discovery as a core function — not merely a theoretical one. ## The Regulatory Structure Is Maturing, Not Settled The regulatory picture is active. In February 2026, the CFTC withdrew a 2024 proposed rule that would have broadly restricted political event contracts, with CFTC Chairman Michael Selig stating the prior proposal "reflected the prior administration's frolic into merit regulation."[^5] In March 2026, the agency published an Advance Notice of Proposed Rulemaking soliciting comment on core principles, prohibited contract categories, and cost-benefit considerations.[^6] On June 10, 2026, the CFTC issued a Notice of Proposed Rulemaking amending Rule 40.11 to establish a formal public-interest framework for reviewing which event contracts regulated platforms may list.[^7] The central unresolved tension, identified by legal analysts at TS Imagine in July 2026, is jurisdictional: the CFTC classifies prediction market contracts as derivatives; state gaming commissions classify them as gambling. Both cannot simultaneously be right, and ongoing litigation is forcing resolution.[^8] That tension is a material risk to platform-level business models, but not to the underlying function: the price signal produced by a liquid, regulated event-contract market does not require settled regulatory classification to be informative. ## Why Sophisticated Investors Are Paying Attention The institutional pull is not primarily about trading the contracts. It is about the signal layer they produce. A liquid market on, say, the probability of a June FOMC rate cut — priced continuously, in real time, by thousands of participants with real money at risk — carries different information than a survey of economists or a median dot-plot reading. The market incorporates what participants actually believe enough to bet on, not what they are willing to say in a survey or publish in a forecast. That is a structurally different input. Bernstein's Chhugani wrote in April 2026 that the institutional market is expected to develop around "economics, business and political contracts, as investors seek more direct and discrete exposure to events," with hedging demand anticipated from corporates and insurance firms with specific event-risk exposure.[^9] The composition of trading is already shifting to reflect this. Sports contracts currently represent approximately 62% of industry volume, per Bernstein — but the firm projects that share falling to roughly 31% by 2030 as macro, political, and economic contracts gain traction.[^10] That rotation toward financially relevant contract categories is what drives the institutional relevance of the asset class, not the sports-betting surface area that dominated early headlines. Volume alone does not validate a signal layer. The research question — one that regulators, academics, and institutional allocators are now engaging seriously — is whether prediction market prices improve decision-making relative to available alternatives, and under what conditions crowded positioning or insider-information risk degrades their epistemic quality. An April 2026 paper in *arXiv* flagged that expanding institutional participation with unlimited position sizes may improve market liquidity while simultaneously degrading the quality of the public probability signal, a tradeoff the paper argues regulators should weigh explicitly.[^11] That remains an open empirical question, and the answer will determine how broadly these markets get integrated into institutional workflows. What is not an open question is that the infrastructure is becoming permanent. When primary dealers, major brokerages, and the CFTC itself are all developing formal frameworks for prediction markets in the same twelve-month window, the marginal question for institutional investors is no longer whether to pay attention — it is how to weight what the prices are actually saying. [^1]: [Federal Register, "Prediction Markets; Public Interest Determinations," June 12, 2026](https://www.federalregister.gov/documents/2026/06/12/2026-11854/prediction-markets-public-interest-determinations) [^2]: GlobeNewswire, August 25, 2026 [^3]: [CNBC, April 14, 2026](https://www.cnbc.com/2026/04/14/prediction-markets-will-grow-to-1-trillion-by-2030-bernstein-says.html) [^4]: [Federal Register, "Prediction Markets; Public Interest Determinations," June 12, 2026](https://www.federalregister.gov/documents/2026/06/12/2026-11854/prediction-markets-public-interest-determinations) [^5]: [Norton Rose Fulbright, "CFTC Advances Regulatory Framework for Prediction Markets," 2026](https://www.nortonrosefulbright.com/en-us/knowledge/publications/fed865b0/cftc-advances-regulatory-framework-for-prediction-markets) [^6]: [Federal Register, "Prediction Markets," March 16, 2026](https://www.federalregister.gov/documents/2026/03/16/2026-05105/prediction-markets) [^7]: Ropes & Gray, "Rewriting the Rulebook: CFTC Proposes Rule Changes for Prediction Market Contracts," June 16, 2026 [^8]: TS Imagine, "Prediction & Event Market Regulation 2026," July 3, 2026 [^9]: [CNBC, April 14, 2026](https://www.cnbc.com/2026/04/14/prediction-markets-will-grow-to-1-trillion-by-2030-bernstein-says.html) [^10]: CoinDesk, April 15, 2026 [^11]: arXiv, "Price as Focal Point: Prediction Markets, Conditional Reflexivity, and the Politics of Common Knowledge," April 2026 --- ### One Big Beautiful Bill Act Makes $15M Estate Tax Exemption Permanent: What Changes, and What Doesn't (2026-08-24) https://manhattanwest.com/insights/obbba-estate-tax-exemption-permanent-wealth-transfer-mechanics/ Wealth Strategy | Davis+Gilbert LLP, July 22, 2025 ## The Sunset Clock Has Stopped For the better part of three years, estate planners and their UHNW clients operated under a hard deadline: use the elevated lifetime exemption before December 31, 2025, or watch it fall from roughly $14 million per person to approximately $7 million. The One Big Beautiful Bill Act, signed into law on July 4, 2025, permanently increased the lifetime gift, estate, and generation-skipping transfer exemptions that had been temporarily elevated under the Tax Cuts and Jobs Act of 2017.[^1] Beginning January 1, 2026, the federal exemption stands at $15 million per individual and $30 million for married couples, indexed annually for inflation, eliminating the TCJA's sunset entirely.[^1] Unlike the increase under the TCJA, the increase under the One Big Beautiful Bill Act is not subject to a sunset.[^2] The increased basic exclusion amount will not be decreased unless a future Congress and President enact and sign legislation to scale back or change it.[^3] The immediate planning implication is straightforward: the "use it or lose it" urgency is resolved. The strategic implication is more nuanced: for families above $15 million in net worth, the exemption's permanence does not eliminate the planning imperative. It changes its shape. ## What Hasn't Changed: The Mechanisms That Work at Every Exemption Level The OBBBA did not modify the annual exclusion, direct tuition and medical payment rules, or 529 superfunding mechanics. These tools compound regardless of where the lifetime exemption sits. **Annual exclusion gifts.** The IRS confirmed the annual gift tax exclusion at $19,000 per recipient in 2026, the same as in 2025, and gifts within this amount do not use any portion of the donor's lifetime exemption.[^4] For married couples, the annual exclusion effectively doubles to $38,000 per recipient.[^5] A couple with four adult children and eight grandchildren can move $456,000 per year entirely outside the estate with no gift tax return required: no exemption consumed, no clock running. At scale, across a decade, that is a material transfer of wealth. The compounding effect on gifted assets that continue to appreciate outside the taxable estate is the point. **Direct tuition and medical payments.** Federal law allows unlimited payments for qualified educational and medical expenses, provided payments are made directly to the educational institution or medical provider, and these payments do not count against the annual exclusion or lifetime exemption.[^6] This exclusion applies to tuition only, not room and board, books, or other fees, meaning a family could pay $50,000 of a grandchild's college tuition directly to the institution and still give another $19,000 tax-free under the annual exclusion in the same year.[^5] For multi-generational families running this strategy across several beneficiaries simultaneously, the aggregate transfer can be substantial. **529 superfunding.** A powerful planning strategy for education is the ability to "superfund" a 529 plan by contributing five years of annual exclusion gifts at once, currently up to $95,000 per beneficiary.[^7] The tradeoff: the donor cannot make additional annual-exclusion gifts to the same beneficiary during the five-year period without triggering gift tax reporting. The mechanism works because assets inside a 529 grow free of federal income tax and distribute tax-free for qualified education expenses; front-loading the account maximizes the time those assets compound outside both the donor's estate and the income tax system. ## What the Permanence Actually Changes The disappearance of the sunset removes one specific pressure: the need to accelerate large lifetime gifts to lock in a higher exemption before it fell. The permanent increase eliminates the year-end cliff that previously encouraged large lifetime gifts.[^1] That removes a source of planning distortion: families no longer need to gift earlier than their liquidity situation or family dynamics warrant just to preserve exemption capacity. What permanence does not change: the 40% federal transfer tax rate on estates above the exemption. A taxpayer's estate is subject to a 40% tax to the extent it exceeds the basic exclusion amount.[^8] For families whose estates are projected to grow well above $15 million (or $30 million for couples), the case for lifetime gifting strategies, trust structures, and systematic use of the annual exclusion remains intact. Many high-net-worth individuals may still benefit from making strategic gifts now to lock in asset growth outside their estates.[^1] The other shift worth noting: trusts drafted with the TCJA sunset in mind may reference outdated language or structures, and those documents warrant a review under the new rules.[^9] Families that made large defensive gifts in 2024 or early 2025 specifically to beat the anticipated sunset should confirm with counsel that those transfers remain optimally structured given the current exemption landscape. The mechanics (annual exclusions, direct payments, superfunding) have always worked independently of where the lifetime exemption sits. The OBBBA's permanence removes a distorting deadline. The fundamentals of systematic wealth transfer remain unchanged. --- [^1]: [Davis+Gilbert LLP, July 22, 2025](https://www.dglaw.com/after-the-one-big-beautiful-bill-estate-tax-updates/) [^2]: [Israeloff, Trattner & Co. CPA's, May 26, 2026](https://www.israelofflawcpa.com/wills-estate-planning/the-2026-tax-landscape-for-hnwis-why-your-sunset-plans-are-now-permanent/) [^3]: [Pierce Atwood LLP, August 19, 2025](https://www.pierceatwood.com/alerts/one-big-beautiful-bill-act-and-estate-planning-what-you-need-know) [^4]: Morgan Lewis, October 28, 2025 [^5]: [Mercer Advisors, January 29, 2026](https://www.merceradvisors.com/family-finance/tax-free-gifting-in-2026-what-financial-givers-should-know/) [^6]: OSU Farm Office, February 17, 2026 [^7]: MAI Capital Management, December 15, 2025 [^8]: Harris Beach Murtha, January 5, 2026 [^9]: Bankers Life, March 16, 2026 --- ### JPMorgan CEO Raises Private Credit Concerns in Annual Shareholder Letter, Then Walks Them Back (2026-08-20) https://manhattanwest.com/insights/dimon-private-credit-warning-april-2026/ Private Markets | GlobeSt, April 29, 2026 ## What Dimon Actually Said In his April 6 annual shareholder letter, JPMorgan Chase CEO Jamie Dimon flagged the $1.8 trillion private credit market as a structural vulnerability.[^1] His concerns centered on three interlocking risks: understated credit losses, limited valuation transparency, and the potential for amplified selling pressure in a downturn.[^2] Specifically, he argued that actual losses in leveraged lending are already running ahead of what current market conditions would ordinarily produce, and that loan valuations lack the rigor and transparency of public markets, meaning investor exits can begin well before real credit deterioration surfaces.[^3] Then, speaking at the Norges Bank Investment Management conference in Oslo on April 28, Dimon reiterated those concerns, and softened them simultaneously.[^4] He noted that more than 1,000 firms now operate in the space, flagging the sheer fragmentation as a vulnerability, while suggesting the systemic risk is limited by the market's size relative to investment-grade bonds ($13 trillion) and residential mortgages ($13 trillion).[^5] On his April 14 earnings call with analysts, he was blunter: "I'm not particularly worried about it."[^6] That is a meaningful evolution from the shareholder letter's tone, and the gap between the two registers deserves attention. ## Where Dimon Is Right The opacity critique is well-founded, and it predates Dimon's letter. Because private credit loans are not marked to market daily, valuation lags are structural, not a temporary artifact of the current cycle. Wellington Management observed that among publicly traded Business Development Companies (BDCs), median non-accrual rates increased from 0% in 2022 to 0.33% in Q1 2026, with the 75th percentile rising from 0.61% to 1.37% over the same period.[^7] That dispersion is not noise; it is evidence that underwriting quality across the manager universe is uneven, and that the aggregate numbers mask significant portfolio-level divergence. The fragmentation point also holds. With over 1,000 managers competing in the space, not all of them will have the same covenant discipline, sponsor relationships, or workout experience when a credit cycle arrives.[^8] The weakest underwriters in an expanding market are the ones who survive the longest without detection, and the ones who produce the worst outcomes when conditions tighten. The question for allocators is always which part of the distribution they are in, not what the average looks like. ## Where He Overstates The systemic risk framing is the wrong lens, and Dimon himself abandoned it by April 14. At $1.8 trillion, private credit is a fraction of the broader fixed-income market.[^9] Moody's projects AUM exceeding $2 trillion in 2026 and approaching $4 trillion by 2030, but that growth trajectory does not automatically translate to systemic fragility.[^10] Growth and risk are not synonymous; the question is where the capital is going and on what terms. The more important distortion in the public commentary is treating private credit as a monolith. PwC's 2026 private credit survey notes that the asset class now spans corporate direct lending, asset-backed finance, infrastructure debt, real estate debt, distressed debt, and specialty finance.[^11] Dimon's concerns about loosening underwriting standards apply most acutely to the middle-market direct lending segment, where competition for deal flow has been most intense. They apply considerably less to senior secured, asset-backed, and infrastructure-adjacent strategies, where collateral coverage and structural protections have remained more disciplined. ## What It Changes for Allocators Dimon's commentary does not change the investment case for private credit as an asset class. It does sharpen the due diligence questions that sophisticated allocators should already be asking. The performance dispersion Wellington documents (a BDC non-accrual spread of 1.37% at the 75th percentile versus 0% at the 25th percentile) illustrates that manager selection in this cycle is not a refinement, it is the primary risk variable.[^12] Regulatory trajectory is the open question Dimon flags most credibly. He anticipated that insurance regulators would move toward stricter valuation and markdown standards: a development that would force affected funds to increase capital buffers and potentially accelerate forced selling.[^13] That is a structural shift, not a cyclical one, and it would affect the liability side of private credit vehicles well before it shows up in reported performance figures. Allocators with existing private credit exposure should understand exactly how their managers' loan books are valued, how frequently marks are reviewed, and what their redemption mechanics look like under stress, not because a credit recession is imminent, but because the answers to those questions now determine the range of outcomes more than the underlying credit fundamentals do. --- [^1]: GlobeSt, April 29, 2026 [^2]: [HedgeCo Insights, April 7, 2026](https://hedgeco.net/news/04/2026/jamie-dimons-triple-warning-on-private-credit.html) [^3]: Yahoo Finance / Quartz, April 6, 2026 [^4]: GlobeSt, April 29, 2026 [^5]: [PYMNTS, April 6, 2026](https://www.pymnts.com/news/banking/2026/jpmorgan-ceo-says-private-credit-likely-isnt-a-systemic-risk/) [^6]: [Yahoo Finance, April 14, 2026](https://finance.yahoo.com/markets/currencies/article/jpmorgan-ceo-jamie-dimon-downplays-private-credit-concerns-not-particularly-worried-143401075.html) [^7]: [Wellington Management, 2026](https://www.wellington.com/en/insights/private-credit-outlook) [^8]: GlobeSt, April 29, 2026 [^9]: [PYMNTS, April 6, 2026](https://www.pymnts.com/news/banking/2026/jpmorgan-ceo-says-private-credit-likely-isnt-a-systemic-risk/) [^10]: [Moody's, Private Credit Outlook 2026, January 21, 2026](https://www.moodys.com/web/en/us/insights/credit-risk/outlooks/private-credit-2026.html) [^11]: [PwC Private Credit Survey 2026, May 26, 2026](https://www.pwc.com/gx/en/industries/private-equity/private-credit-survey.html) [^12]: [Wellington Management, 2026](https://www.wellington.com/en/insights/private-credit-outlook) [^13]: Yahoo Finance / Quartz, April 6, 2026 --- ### Private Markets at an Inflection: Where Each Sub-Asset Class Stands at Mid-2026 (2026-08-03) https://manhattanwest.com/insights/private-markets-inflection-mid-2026/ Private Markets | PitchBook-NVCA Venture Monitor, Q2 2026; Lord Abbett, June 2026; Jefferies Global Secondary Market Review, February 2026; Invesco Alternative Opportunities Outlook, July 2026 Private markets are approaching $20 trillion globally, per Elliott Davis's February 2026 alternative investment outlook, drawing capital from institutional and individual investors alike.[^1] But the headline figure masks a more fractured picture: each sub-asset class is moving through a distinct phase of a cycle reset, and the positioning decisions they demand are different enough that treating "alternatives" as a single allocation is no longer a useful frame. ## Private Credit: From Spread Compression to Manager Dispersion The structure of private credit shifted materially in the first half of 2026. After direct lending yields fell below 10% for the first time in three years late in 2025, per CreditSights' February 2026 review, spreads have begun to widen.[^2] Lord Abbett's June 2026 midyear outlook, drawing on PitchBook data as of March 31, 2026, observes that spreads are roughly 50 to 100 basis points wider since late 2025, with improved covenant terms and documentation.[^3] Private credit direct lending may benefit from several distinct tailwinds: a regulatory and tax regime that favors business expansion, lower interest rates providing companies with more cash flow to support leverage and growth, and constraints on regional bank lending that continue to sustain demand for private debt financing. At the same time, Northleaf's Q1 2026 market update notes that elevated redemptions in retail-oriented vehicles have led some large private credit lenders to moderate investment activity, contributing to more attractive supply and demand dynamics for well-capitalized lenders backed by institutional capital. The second half of 2026 is likely to be defined by dispersion. Investors should focus less on broad asset-class headlines and more on where managers are lending, how loans are structured, how much free cash flow borrowers generate, and whether portfolios have the right balance of income, downside mitigation, and selectivity. That is not a generic caution; it is what the spread widening actually implies: the asset class no longer rewards passive exposure. Manager selection is doing the work that beta was doing in 2023 and 2024. ## Venture: Record Dollars, Extreme Concentration The top-line venture numbers are historic. U.S. venture capital deal value hit $412.7 billion in the first half of 2026, nearly 30% more than investors put to work in all of last year, according to the Q2 2026 PitchBook-NVCA Venture Monitor. Artificial intelligence companies took $355.9 billion of the total, 86% of every venture dollar spent in the six months. The concentration beneath that figure is the more important data point. Q1 deal value of $267.2 billion exceeded every full-year total except 2021 and 2025, and exit value hit $347.3 billion, the highest quarter on record. Yet without the five largest deals and exits, those figures fall by 73.2% and 86.6%, respectively. Concentration has defined the post-pandemic VC market, but Q1 marked a new extreme. Capital is flowing into top AI startups faster than they are demanding it: in Q1 2026, every $0.90 demanded by a venture-growth-stage AI startup was met by $1 in supply, and the hottest companies are using that leverage to be highly selective about who gets on their cap tables. For LPs chasing exposure to marquee AI names, access depends not just on a GP's willingness to share deal flow, but on company approval, available allocation, and the ability to move on timelines as short as 14 months between rounds. The access question is not a marketing distinction; it is a structural one that determines whether a given investor participates in the category at all. First-time fund formation is on pace for its lowest year since 2016. Fundraising is consolidating into established franchises at the same time that dealmaking is consolidating into established companies. Both dynamics favor investors with pre-existing relationships over those entering the asset class cold. ## Secondaries: Volume Is Real, but the Market Is Still Undercapitalized Preqin forecasts a record $250 billion secondary market in 2026. Secondary transaction volume exceeded $220 billion in 2025. GP-led transaction volume grew roughly 50% year-over-year in 2025. Based on transaction backlog alone, first-half 2026 volume is expected to exceed $100 billion. Jefferies expects continued supply of LP portfolios and GP-led transactions, supported by sustained liquidity needs, continued sponsor adoption of continuation vehicles, and a well-capitalized buyer base. As of 2025, nearly 80% of the top 100 sponsors by assets under management had completed a continuation vehicle transaction. GP-led secondaries represented approximately 14% of all sponsor-backed exit volume in 2025, even as traditional M&A and IPO activity improved in the second half of the year. That figure signals how structurally embedded GP-led transactions have become: not a response to a closed IPO window, but a persistent feature of how top sponsors now manage portfolio liquidity. The market will remain undercapitalized relative to opportunity, signalling significant runway for expansion. First-lien loan portfolios now trade in the 90s (approximately 90% of full value), with some clearing at par, making liquidity decisions far less punitive for sellers. The combination of improving pricing and structural undersupply of secondary capital is what creates entry conditions worth examining. ## Real Assets: Infrastructure Gains Share as Real Estate Stabilizes Private wealth clients shifted away from private credit and into private equity, infrastructure, and hedge funds in late 2025 and early 2026. Growth and inflation-protected strategies, particularly infrastructure, are the clear share gainers on the iCapital platform, while evergreen funds now represent 43% of platform assets, per iCapital's June 2026 Alternatives Decoded report. Following a first half marked by geopolitical uncertainty, interest rates that remain at elevated levels, and a gradual recovery in corporate activity, Invesco's H2 2026 Alternative Opportunities Outlook considers that select alternative investments continue to present attractive opportunities for income generation, portfolio diversification, and exposure to structural growth trends. Although the macroeconomic environment remains constrained by the trajectory of inflation and geopolitical tensions, improving financial conditions and strong private sector balance sheets support a constructive outlook for specific strategies within private markets. ## The Common Thread Each of these markets is rewarding the same thing: prior relationships, institutional-quality diligence, and selectivity at the individual deal level. Broad index-like exposure to any of these categories, whether in credit, venture, secondaries, or real assets, is not the same as access to the part of each market that is generating the returns that justify the illiquidity. That gap between the asset class headline and the investable opportunity is wider in 2026 than it has been at any point in the last decade. --- [^1]: [Elliott Davis, February 19, 2026](https://www.elliottdavis.com/insights/alternative-investment-outlook-2026) [^2]: [CreditSights, February 2, 2026](https://know.creditsights.com/insights/u-s-private-credit-2026-outlook-2025-review/) [^3]: [Lord Abbett, June 4, 2026](https://www.lordabbett.com/en-us/financial-advisor/insights/investment-objectives/2026/2026-midyear-investment-outlook-private-credits-lender-friendly-reset.html) [^4]: [Northleaf Capital, May 28, 2026](https://www.northleafcapital.com/news/private-credit-market-update-q1-2026) [^5]: [PitchBook-NVCA Venture Monitor Q2 2026, via SiliconAngle, July 9, 2026](https://siliconangle.com/2026/07/09/pitchbook-us-venture-funding-hits-412-7b-first-half-ai-deals-dominate/) [^6]: PitchBook-NVCA Venture Monitor Q1 2026, PitchBook [^7]: PitchBook Analyst Note: LP Co-Investments in US VC, Q2 2026 [^8]: PitchBook-NVCA Venture Monitor Q2 2026, PitchBook [^9]: Preqin / The Fund CFO, June 18, 2026 [^10]: [Jefferies 2025 Global Secondary Market Review, February 10, 2026](https://www.jefferies.com/insights/the-big-picture/2025-global-secondary-market-review-another-record-breaking-year/) [^11]: [Coller Capital, April 14, 2026](https://www.collercapital.com/secondaries-capitalising-on-the-wave/credit-secondaries/) [^12]: [iCapital Alternatives Decoded, June 2, 2026](https://icapital.com/ad/alternatives-decoded-june-2026/) [^13]: [Invesco Alternative Opportunities Outlook H2 2026, Funds Society, July 31, 2026](https://www.fundssociety.com/en/news/markets/invesco-backs-private-credit-and-real-assets-for-the-second-half/) [^14]: [Goldman Sachs Asset Management, November 25, 2025](https://am.gs.com/en-us/advisors/insights/article/investment-outlook/private-markets-alternatives-2026) --- ### 94% of HNW Investors Now Allocate to Private Markets, Per Annual Benchmark Study (2026-07-29) https://manhattanwest.com/insights/hnw-private-markets-allocation-2026-long-angle/ Private Markets | Long Angle, 2026 High-Net-Worth Asset Allocation Report, March 2, 2026 94% of high-net-worth investors now hold private or alternative assets, according to Long Angle's 2026 High-Net-Worth Asset Allocation Report, released March 2, 2026.[^1] The fifth annual benchmark study surveyed 233 community members with an average net worth of $17M and a range from $2M to over $100M, a sample that skews toward active, self-directed allocators rather than the broader HNW population. That context matters for interpreting the numbers, but does not diminish what they show: participation in private markets at this wealth tier has become close to universal. ## The 60/40 Is Gone. The 60-10-30 Is Here. The study's most structural finding is the death of the traditional balanced portfolio. The average respondent now holds 51% of net worth in public equities, 28% in private and alternative assets, 11% in home equity, 5% in bonds, and 5% in cash.[^2] Bonds and cash together represent a smaller share of net worth than private company equity alone, which stands at 12%.[^3] That inversion reflects a deliberate allocation decision, not drift: the 60/40 has been replaced by something closer to a 60-10-30 model, with illiquid alternatives occupying the space that fixed income once held. The shift is more pronounced at higher wealth levels. For respondents above $25M, private and alternative allocations reach 34% of net worth, driven by private company equity that represents 21% of net worth at that tier, more than triple the 6% share among respondents in the $2M–$10M range.[^4] Scale enables access, and access drives concentration. ## Where Adoption Remains Shallow Not all categories within private markets have reached the same saturation. Only 23% of respondents allocate to private credit, the least-penetrated institutional asset class in the study, even as GP fundraising in the category has grown substantially.[^5] That gap is structural, not attitudinal: private credit has historically required institutional-scale minimums, and the vehicles designed to broaden access at the HNW level are still relatively new. The 23% figure suggests most HNW investors are participating in private equity and venture while leaving a major diversifying category essentially untapped. One more data point worth noting: 42% of respondents now hold crypto, edging out private equity funds (39%) as the second most widely adopted alternative asset class.[^6] Whether that reflects genuine portfolio diversification or speculative positioning is a separate question, but the rank ordering signals that adoption of alternative assets increasingly runs ahead of familiarity with their underlying mechanics. ## What It Means Near-universal participation in private markets changes the strategic question for HNW investors. The question is no longer whether to allocate: the data suggests that decision has largely been made. The relevant questions are which categories, at what sizing, through what access points, and how the illiquid positions integrate with total net worth reporting and liquidity planning. The Long Angle study, with its 233-respondent sample, captures the behavior of a specific type of engaged, self-directed allocator; the population of HNW investors broadly defined is likely behind these numbers. But the directional trend it documents, away from the 60/40 and toward a heavier private markets allocation, is consistent with a structural reorientation, not a cyclical one. [^1]: [Long Angle, 2026 High-Net-Worth Asset Allocation Report, March 2, 2026](https://www.longangle.com/research/high-net-worth-asset-allocation) [^2]: [Long Angle, 2026 High-Net-Worth Asset Allocation Report, March 2, 2026](https://www.longangle.com/research/high-net-worth-asset-allocation) [^3]: [Private Markets Insights, March 2, 2026](https://www.privatemarketsinsights.com/post/94-of-hnw-investors-now-allocate-to-private-markets-surpassing-institutional-benchmarks) [^4]: [Long Angle, 2026 High-Net-Worth Asset Allocation Report, March 2, 2026](https://www.longangle.com/research/high-net-worth-asset-allocation) [^5]: [Private Markets Insights, March 2, 2026](https://www.privatemarketsinsights.com/post/94-of-hnw-investors-now-allocate-to-private-markets-surpassing-institutional-benchmarks) [^6]: [Private Markets Insights, March 2, 2026](https://www.privatemarketsinsights.com/post/94-of-hnw-investors-now-allocate-to-private-markets-surpassing-institutional-benchmarks) --- ### CFTC Invokes Emergency Authority to Block State Court Interference with Executed Prediction Market Trades (2026-07-21) https://manhattanwest.com/insights/cftc-emergency-authority-prediction-market-trades-michigan/ Regulation | CoinDesk, July 14, 2026 ## What Happened On July 14, 2026, the CFTC did two things that, individually, would each be unusual and together are noteworthy: it stayed an emergency rule self-filed by a regulated exchange, and then affirmatively ordered that exchange to honor contracts it had already proposed to unwind. The trigger: a Michigan state court order that the CFTC determined raised questions of federal preemption under the Commodity Exchange Act, specifically a July 6, 2026 directive from the Circuit Court for Michigan's 30th Judicial District ordering that trades entered into by Michigan-based users be "voided, cancelled and refunded." The agency noted that Michigan is the first state to attempt to interfere in transaction activity directly, a meaningful distinction from the cease-and-desist letters and state enforcement actions the CFTC has contested elsewhere. Retroactively unwinding executed contracts on a federally designated exchange is a different category of intervention than prospectively prohibiting new activity.[^1] ## The Jurisdictional Argument The CFTC's legal theory is not new, but its application here is more aggressive than prior actions. The Commodity Exchange Act requires the CFTC to provide a uniform national market in derivatives transactions. A Third Circuit majority concluded in April 2026 that the CEA grants the CFTC "exclusive jurisdiction" over swaps traded on federally registered exchanges, preempting state laws that would otherwise regulate the same activity. The Michigan action tests whether that preemption principle extends to post-execution settlement, a point no appellate court has yet resolved.[^2] Congress long ago decided that a national framework for commodity derivatives markets was preferable to a fragmented patchwork of state regulations. The Michigan confrontation surfaces what that preference looks like in practice: a federal regulator ordering a private exchange to defy a state court directive rather than comply with it. CFTC Chairman Michael Selig has been unequivocal about the agency's posture. "The commission will not allow states or state courts to bully registered entities into violating the Commodity Exchange Act and CFTC regulations," he said in his statement alongside the order. Selig has also stated the agency will defend its authority over prediction markets "all the way up to the Supreme Court" if necessary. ## What Remains Unresolved The legal question is not settled, and that matters for anyone assessing the regulatory risk in this asset class. The Third Circuit's ruling is a significant win for prediction market platforms, but it is not the final word: the court affirmed the preliminary injunction, but this remains a preliminary ruling, not a final judgment. The CFTC has filed lawsuits against Arizona, Connecticut, Illinois, Kentucky, Minnesota, New Mexico, New York, Rhode Island, and Wisconsin over their efforts to restrict prediction market activity, a scope that signals the jurisdictional dispute is structural, not episodic. Separately, Senators Curtis and Schiff introduced the Prediction Markets Are Gambling Act in March 2026, which would amend the CEA to reclassify sports and casino-style event contracts as gambling outside CFTC jurisdiction: legislation that, if enacted, would eliminate the ambiguity at the heart of the preemption dispute. For investors in federally regulated prediction market platforms, the Michigan action establishes that the CFTC will use its emergency powers to protect the integrity of executed contracts against state-level interference. That is a meaningful data point. Whether the courts will ultimately sustain that position at the appellate and Supreme Court levels is the variable that defines the long-term regulatory environment for this asset class. [^1]: [CoinDesk, July 14, 2026](https://www.coindesk.com/policy/2026/07/14/u-s-cftc-moves-to-stop-kalshi-from-canceling-trades-as-ordered-by-michigan-court) [^2]: Holland & Knight, April 2026 --- ### Q3 2026 State of the Market Update: The Beautiful Game (of Investing) (2026-07-21) https://manhattanwest.com/insights/q3-2026-state-of-the-market-update-the-beautiful-game-of-investing/ Market Outlook **The Beautiful Game (of Investing)** Every four years, the FIFA World Cup reminds us that championships are rarely won by the most talented team alone. They are won by the team that adapts to changing conditions, survives moments of adversity, and remains committed to its game plan. Investing is remarkably similar. Markets spent the quarter moving from one headline to the next - trade negotiations, inflation data, geopolitical conflict, fiscal policy debates, earnings reports, and ever-changing expectations surrounding interest rates. Like a World Cup match played at a frantic pace, every possession seemed to carry enormous significance. ### AI Theme Heads into Extra Time Artificial intelligence remained one of the dominant investment themes, continuing to reshape expectations for productivity and corporate profitability. Capital spending on AI infrastructure accelerated, while companies across nearly every industry raced to demonstrate how they intend to benefit from the technology. Meanwhile, earnings growth broadened beyond the handful of mega-cap leaders that carried markets for much of the past two years. Broader participation is generally a healthier sign, suggesting the economic expansion may have more support than headline indexes alone would indicate. ![](/images/insights/state-of-the-market-q32026-eps-growth-estimates.png) ###### Source: State Street Investment Management Chart Pack, Underlying Data: FactSet, as of May 29, 2026. ### Yellow Cards Inflation hasn’t been sent off the pitch, but it certainly received another caution as price pressures that had been moderating suddenly reversed course. ![](/images/insights/state-of-the-market-q32026-headline-cpi.png) ###### Source: Bloomberg LP Earlier in the year, prices continued to moderate, allowing investors to increasingly anticipate eventual Federal Reserve rate cuts. Policymakers have remained cautious, reminding markets that declaring victory too early could result in another flare-up. New Federal Reserve chairman Kevin Warsh appeared to strike an anti-inflationary tone in his early days at the Fed. Like a player sitting on a yellow card, the Fed has had to remain disciplined - balancing muted job growth with renewed inflation concerns - knowing another policy misstep could change the direction of the match. ![](/images/insights/state-of-the-market-q32026-fed-cuts-priced-in.png) ###### Source: iShares Market Trends - June Edition, Underlying Data: Bloomberg, as of 6/10/2026. Implied forecasts as represented by Fed Funds Futures. Consumers also earned a yellow card. Spending has remained healthy overall, but cracks have begun to appear among lower-income households as higher borrowing costs and persistent price levels weigh on budgets. Consumer resilience has been impressive, but not unlimited. ### Red Cards The quarter also reminded investors that geopolitical events can quickly alter the game. The war with Iran continues with no easy resolution on the horizon. Iran effectively controls the Strait of Hormuz – blocking the transport of oil and continuing to roil global energy markets. ![](/images/insights/state-of-the-market-q32026-gasoline-price.png) ![](/images/insights/state-of-the-market-q32026-diesel-price.png) ###### Source: BCA Research, Iran Conflict Daily Dashboard as of 7/13/26 Financial markets have been surprisingly resilient, pricing in a near-term end to the war as U.S. midterm elections approach and the administration feels the pressure to address affordability concerns before voters head to the ballot boxes. Republicans up for reelection are keen to end this war before they are issued a red card by their constituents and removed from office. The market also issued a figurative red card to companies that failed to meet lofty earnings expectations and took on debt to fund capital expenditures. After several years of exceptional performance from mega-cap technology companies, investors became far less forgiving of even modest disappointments. Return on invested capital will become increasingly important to near-term equity returns the longer the AI buildout continues. ### The Market’s “Own Goals” Several of this quarter’s biggest market headwinds were largely self-inflicted – resembling classic “own goals”. In a 6-3 decision, the Supreme Court struck down President Trump's sweeping global tariffs, ruling that the 1977 International Emergency Economic Powers Act (IEEPA) does not grant the president authority to unilaterally impose tariffs. In response, Trump promptly implemented a new 10% global tariff under Section 122 of the 1974 Trade Act. Renewed tariff rhetoric and evolving trade policy created unnecessary uncertainty for businesses planning capital expenditures and supply chains. ![](/images/insights/state-of-the-market-q32026-ieepa-tariff-refunds.png) ###### Source: Cato.org - IEEPA Tariff Refunds Update: Good Progress, but Still a Ways to Go, 7/9/26 Glass half full - tariff refunds are already being issued to companies large and small, returning billions of dollars collected that should begin to show up in earnings and provide a tailwind to the economy. Glass half empty – these refunds are also lost government revenue that was offsetting Washington’s growing fiscal deficits and rising interest costs that are becoming increasingly difficult to ignore, even if markets have largely looked past them for now. ### Full Time...But Not the Final Whistle As we enter the second half of the year, investors will continue watching familiar storylines: inflation, Federal Reserve policy, corporate earnings, fiscal sustainability, geopolitical developments, and the ongoing evolution of artificial intelligence. There will undoubtedly be moments that resemble breakaways, questionable penalty decisions, and even the occasional red card. Markets, like football, have a remarkable ability to test conviction precisely when remaining disciplined matters most. The teams that lift the World Cup are rarely those who play the perfect match. They are the ones who consistently make sound decisions over the course of an entire tournament. Our objective has never been to win every trading day, every quarter, or even every year. Our objective is to build portfolios capable of advancing through every stage of the tournament - regardless of weather, venue, or opponent - and ultimately reaching our clients' long-term financial goals. Thank you, as always, for your continued confidence and trust. Manhattan West Asset Management, LLC (“MWAM”) is an SEC registered investment adviser located in California. MWAM may only transact business in those states in which it is notice filed or qualifies for an exemption or exclusion from notice filing requirements. This summary should not be construed by any consumer and/or prospective client as MWAM’s rendering of personalized investment advice. Any subsequent, direct communication by MWAM with a prospective client shall be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides. For information pertaining to the registration status of MWAM, please contact the United States Securities and Exchange Commission on their web site at www.adviserinfo.sec.gov. A copy of MWAM’s current written disclosure brochure discussing MWAM’s business operations, services, and fees is available upon written request. ## We provide a team of specialists thoughtfully selected to align with your goals. [Contact Us](https://manhattanwest.com/contact/) --- ### Family Office or Private Wealth Relationship: Where the Threshold Actually Falls (2026-06-15) https://manhattanwest.com/insights/family-office-vs-private-wealth-threshold-v2/ Wealth Strategy The family office question surfaces around the same inflection points: a liquidity event, a generational transfer, a portfolio that has grown beyond what a traditional advisory relationship can manage. The instinct to formalize, to hire staff, build infrastructure, and operate independently, is understandable. It is also frequently premature. ## What a Family Office Actually Costs A single-family office requires, at minimum, a chief investment officer, a CFO or controller, legal and compliance infrastructure, and an operations layer to handle reporting, custody, and vendor management. Average annual operating costs scale sharply with assets under management: family offices with less than $250 million in AUM spend roughly $900,000 a year on average, rising to $1.7 million for offices between $250 million and $500 million, and $6.6 million for those above $1 billion, up from $6.1 million the year before[^1]. That math has an implication: at $50 million in assets, the $900,000 average consumes roughly 1.8% of the portfolio before a single investment is made. At $100 million, it's closer to 0.9%. Costs fall further in percentage terms above the $250 million mark, where the $1.7 million average represents well under 1% of assets at the top of that tier[^1]. Below roughly $250 million, families are typically paying for a capability they could access more efficiently elsewhere. ## What the Threshold Is Really Measuring The question isn't just assets under management: it's what you need the structure to do. Families considering a family office are usually trying to solve for one or more of the following: consolidated reporting across complex holdings, access to institutional-grade investments, coordination across tax, legal, and estate planning, and governance infrastructure for a multi-generational wealth transfer. A private wealth relationship with genuine institutional access solves most of those problems at a fraction of the overhead. The ones it does not solve are narrow: families with operating businesses requiring active management, complex multi-jurisdictional structures that need dedicated legal staff on retainer, or governance needs that require a formal board and investment committee with independent fiduciary accountability. That last category represents a small fraction of families who inquire about the SFO model. Most are better served by a private wealth relationship that can deliver the same investment access and reporting transparency without the staffing cost and operational complexity. ## Where Manhattan West Sits in That Framework Manhattan West operates as a registered investment adviser serving UHNW families and family offices across 36 U.S. states and 28 countries. For families below the SFO threshold, we provide access to leading private companies across artificial intelligence, aerospace and defense technology, and data infrastructure, access that most independent family offices spend years building relationships to obtain. That access comes integrated with goals-based wealth management, estate and tax coordination, and consolidated reporting through MW Wealth IQ. For existing family offices, we serve a different function: co-investment access and deal flow for offices that have the governance infrastructure but lack the private company relationships to execute at the cap table level. The decision to build a single-family office should be driven by the specific capabilities a family cannot source externally, not by asset size alone. For most families under $250 million, those capabilities are available, at institutional quality, without the overhead. The question worth asking before committing to the SFO model: what specifically will we do internally that we cannot get from a well-resourced private wealth relationship? If the answer is unclear, the timing is probably wrong. Families working through this decision are welcome to speak with our team directly. The analysis takes less time than the overhead it might prevent. [^1]: [privatebank.jpmorgan.com](https://privatebank.jpmorgan.com/nam/en/insights/reports/2026-family-office-report) --- ### How to Invest in Crypto: A Framework for Disciplined Investors (2026-05-15) https://manhattanwest.com/insights/how-to-invest-in-crypto-a-framework-for-disciplined-investors/ Portfolio Construction Cryptocurrency has matured from its speculative origins into a recognized digital asset class. For many investors, the question is no longer whether to participate, but how to do so in a way that aligns with a disciplined portfolio approach. Institutional adoption is growing, with 73% of institutional investors[^1] reportedly planning to increase their digital asset holdings. But participation requires more than conviction; it requires a structured framework for evaluating access points, risks, and fit within a broader portfolio. ### 1\. Direct Exposure The most straightforward entry point is buying digital tokens directly, whether through major cryptocurrencies, stablecoins, or gaining exposure through an ETF that holds the underlying assets on your behalf. Direct ownership gives investors full control: the ability to transfer, spend, or hold assets using blockchain technology. ETFs[^2] offer a simpler alternative for those who prioritize ease of access and do not plan to actively use the underlying crypto. For most investors, direct exposure can be the most practical starting point and provides a clear, intuitive link between market movement and portfolio impact. However, simplicity should not be confused with stability. Crypto markets remain highly volatile relative to traditional asset classes. Leading cryptocurrencies, for example, declined approximately 40% in a single day[^3] in March 2020. Unlike traditional fixed income or dividend-paying equities, direct crypto exposure lacks an inherent income component, so returns depend primarily on price appreciation. As a result, investors are fully exposed to market fluctuations, without the structural downside protection that may be present in other investment strategies. For many investors, direct exposure serves as the foundation for understanding how digital assets behave within a broader allocation framework. ### 2\. Venture Capital and Private Equity in Crypto Some investors seek exposure not only to token prices, but also to the broader infrastructure supporting the digital asset ecosystem. [Venture capital](https://manhattanwest.com/private-markets/) and private equity strategies in crypto typically focus on companies, platforms, and technologies built around blockchain adoption. Common investment areas include exchanges, custody providers, payment infrastructure, settlement systems, and blockchain development platforms. These strategies differ from direct token ownership because returns are often tied more closely to innovation, adoption trends, and the long-term growth of the ecosystem rather than solely to daily movements in cryptocurrency prices. This can create differentiated return drivers relative to direct token exposure, although these investments remain influenced by broader crypto market sentiment and capital flows. However, these strategies introduce a different set of tradeoffs. Private investments generally require long holding periods with limited liquidity prior to realization events. Outcomes are also highly uneven[^4]. In many cases, a relatively small number of successful investments generate the majority of overall returns, while other investments may materially underperform or fail entirely. As with traditional venture capital investing, manager selection becomes one of the most significant determinants of long-term outcomes. ### 3\. Hedge Fund and Active Crypto Strategies As digital asset markets have matured, more sophisticated investment strategies have emerged that focus less on directional price appreciation and more on market structure, inefficiencies, and execution. Hedge funds and active crypto strategies generally seek to generate returns through trading, arbitrage, relative value positioning, and market-neutral approaches rather than relying exclusively on rising cryptocurrency prices. Some strategies attempt to capitalize on pricing inefficiencies across exchanges or related instruments, while others balance long and short exposures to reduce sensitivity to broader market direction. The objective is not necessarily to predict where crypto markets will move next, but to exploit structural inefficiencies in rapidly evolving markets. These approaches can offer differentiated return streams compared to direct exposure, but they also introduce substantial complexity. Evaluating these strategies often requires specialized knowledge of market structure, trading infrastructure, counterparty exposure, and operational controls. Performance dispersion between managers can also be significant, with large differences between top and bottom performers over time. In addition, fees for actively managed crypto strategies are often materially higher than those for passive exposure vehicles, underscoring the importance of manager selection and execution consistency. ### 4\. Yield-Oriented Strategies Traditional crypto exposure is largely dependent on price appreciation. Yield-oriented strategies attempt to introduce an income-generating component through activities such as lending, staking, and other blockchain-based participation mechanisms. For some investors, these strategies may provide an alternative source of return beyond simple asset appreciation. However, the underlying mechanics differ substantially from traditional income-producing assets such as bonds or dividend-paying equities. The risks associated with these strategies can be complex and highly specialized. Counterparty exposure remains a significant consideration, particularly when assets are deposited with centralized lending platforms or intermediaries. Structural risks also exist, as many yield-generating mechanisms remain relatively new and have not been tested across multiple full market cycles. In addition, the regulatory environment surrounding digital asset lending and staking continues to evolve, creating uncertainty around accessibility, structure, and long-term viability in certain jurisdictions. As a result, yield-oriented strategies require careful due diligence and should not be viewed as direct substitutes for traditional fixed income investments. ### Why Institutional Investors Look Beyond Direct Exposure As institutional adoption has expanded, digital asset investing has evolved beyond simple token ownership. Many institutional investors now approach crypto through multiple layers of exposure, including infrastructure investments, active trading strategies, venture capital, and yield-oriented approaches. The rationale is not necessarily to reduce risk, but to diversify the sources of risk and return within the broader digital asset ecosystem. Different strategies may benefit from different stages of adoption, technological development, or market structure evolution. However, it is important to recognize that diversification within crypto does not eliminate risk. Instead, it changes the nature of the risks being assumed. Illiquidity, counterparty exposure, operational complexity, and manager selection risk often replace some degree of pure price exposure. The objective is diversification of return drivers rather than the elimination of volatility. ## Fitting Crypto Into a Portfolio For most investors, crypto-focused strategies are most appropriately evaluated within a broader [alternatives](https://manhattanwest.com/press/making-alternative-investments-a-priority/) allocation rather than treated as a standalone portfolio category. Position sizing should generally reflect the complexity, volatility, and operational considerations associated with digital assets rather than short-term return expectations. Several principles often guide portfolio integration: - Allocations should remain appropriately sized relative to the investor’s overall alternatives exposure. - Investment horizons should generally be measured in years rather than market cycles - Manager diligence is critical, particularly within private, active, and yield-oriented strategies. Crypto-focused strategies are not appropriate for every investor and should be evaluated alongside broader portfolio objectives, liquidity requirements, operational capabilities, and risk tolerance. These strategies may be more suitable for investors who already have experience with alternative asset classes and who are comfortable evaluating less-transparent[^5] structures, illiquidity, and manager-specific risks. Conversely, these approaches may be less appropriate for investors seeking simplicity, immediate liquidity, or highly predictable income streams. ### Conclusion For many investors, direct exposure remains the clearest and most accessible way to gain familiarity with digital assets. Exposure through popular cryptocurrencies or related ETFs provides a straightforward connection between crypto markets and portfolio performance. More sophisticated approaches, including venture capital, hedge fund, and yield-oriented strategies, introduce differentiated sources of return but also significantly greater complexity. Ultimately, investing in crypto should not be approached as a shortcut to return or a speculative trend. Like any alternative investment category, digital assets are best evaluated within the context of disciplined portfolio construction, long-term objectives, and a clear understanding of the risks involved. ## We provide a team of specialists thoughtfully selected to align with your goals. [Contact Us](https://manhattanwest.com/contact/) [^1]: [ey.com](https://www.ey.com/en_us/financial-services/institutional-digital-assets-survey) [^2]: [investor.gov](https://www.investor.gov/introduction-investing/investing-basics/glossary/exchange-traded-fund-etf) [^3]: [forbes.com](https://www.forbes.com/sites/investor/2020/03/13/bitcoin-crash-2020/) [^4]: [theblock.co](https://www.theblock.co/post/64151/crypto-vc-portfolio-construction-the-lps-perspective) [^5]: [reuters.com](https://www.reuters.com/sustainability/boards-policy-regulation/g20-risk-watchdog-warns-significant-gaps-global-crypto-rules-2025-10-16) --- ### What’s Happening in Private Markets Right Now (2026-04-28) https://manhattanwest.com/insights/whats-happening-in-private-markets-right-now/ Private Markets Many investors with private market exposure are asking the same question: are my private investments really worth what they’re marked at, and why aren’t they moving the way my public portfolio is? The answer is straightforward: this is exactly how private markets are designed to work. Private markets today are not frozen, they’re repricing. Public investments reprice every day, visibly. Private investments reprice through transactions, on a longer cycle. The gap investors notice right now, public portfolios climbing while private marks appear static, is a normal structural feature, not a signal of concern. For ultra-high-net-worth portfolios, where private market allocations often range from 30% to 60%, this dynamic is particularly relevant, making liquidity management a central consideration rather than a secondary one. Understanding what’s actually happening beneath the surface reveals a more dynamic environment than the surface suggests. ## The Valuation Gap in Private Market Investments Public equities rebounded quickly after 2022 as multiples stabilized, earnings held, and sentiment recovered. By design, private markets didn’t reprice at the same speed. Due to fewer transactions clearing, price discovery is taking longer, and GPs tend to smooth short-term volatility rather than mark an incomplete picture. As public markets rallied from 2023 to 2025, it set the stage for a gradual reset in private valuations. That reset is now occurring through real transactions rather than financial models, which rely on periodic, assumption-driven estimates based on comparable companies, prior transactions, and projected cash flows. ### The Denominator Effect When public markets fell in 2022, private allocations appeared to rise as a percentage of the total portfolio value, a related dynamic that affected many portfolios. It was not due to new investments, but rather to a shrinking total portfolio value. Since then, public markets have recovered strongly, and the denominator effect is naturally reversing. **Investor Example** Consider a $100M portfolio split between $60M in public assets and $40M in private market investments. After a 25% public markets drawdown, public assets fell to $45M, while private marks held at $40M. The private allocation rose from 40% to 47%, purely mechanical, requiring no portfolio action. As public markets recovered and the denominator grew, the private allocations normalized on their own. For investors with available capital, this normalization is also creating room to deploy into private markets at a point where entry conditions compare favorably to recent peak vintages **Secondaries: Turning The Dynamic Into Opportunity** An investor acquires a secondary interest at 80 cents on the dollar, not because of weakening fundamentals, but because of the seller’s near-term liquidity need. The buyer may gain access to a seasoned portfolio at a discount, with the potential for additional time for underlying companies to mature, depending on the structure and timing of the transaction. ## What Happens Next for Private Market Investments Valuation gaps close through transactions, not valuation models. When companies need capital or investors need liquidity, assets trade and establish real market-clearing prices. Four mechanisms are currently driving this repricing, each one a potential entry point for well-positioned investors. Down Rounds A private company raises new capital at a lower valuation than its previous round, typically driven by slower-than-expected growth or revised profitability targets. Companies requiring capital may accept an adjusted valuation to secure funding, which resets the pricing baseline for the asset. While existing investors may face some dilution, down rounds re-anchor valuations to current fundamentals and often signal broader repricing across comparable assets. This creates a cleaner entry point for incoming investors. Structured Equity New capital can be raised without explicitly changing the headline value, provided meaningful investor protections are in place. Protections can include preferred shares, liquidation preferences, or ratchets. This type of repricing occurs economically rather than nominally. In uncertain environments, investors can negotiate increased downside protection that wasn’t available during the peak cycle. Structured equity is a quieter form of repricing, but no less meaningful in practice. Continuation Vehicles When assets are transferred from an older fund into a new vehicle, they attract new investors at updated pricing. These transactions are structured to reflect current market conditions, including discounts or revised terms. Existing investors receive the option of partial liquidity or continued exposure. Continuation vehicles have grown significantly as traditional exit routes via M&A or IPO remain constrained, allowing GPs to extend hold periods for high-conviction assets rather than being forced to exit at suboptimal valuations. Secondaries Investors sell existing fund interests or direct assets to new buyers at real, executable prices. The secondary market serves as the most direct mechanism for price discovery in private markets, establishing market-clearing valuations, enabling portfolio rebalancing, and providing liquidity independent of public market movements. For buyers, it creates access to seasoned assets at transaction-based pricing rather than peak-cycle valuations. #### Liquidity Is Returning, Just Differently In 2026, liquidity events haven’t disappeared, they’ve just changed. Traditional exits such as IPOs and M&A remain part of the picture, but timelines have lengthened and a more sophisticated and resilient ecosystem has emerged, enabling capital to move without relying on public market windows. Secondary Market Growth Secondary market volume has grown substantially as LPs facing overallocation, slower distributions, or near-term capital needs transact directly with one another. Liquidity is happening investor-to-investor rather than company-to-market, establishing real transaction-based pricing in the process. For buyers, the secondary market may offer a clear way to access high-quality private assets at reset valuations. It sometimes offers a shorter effective holding period than a traditional primary investment. GP-Led Continuation Funds When a GP transfers high-conviction assets into a new vehicle, it creates a structured liquidity event within the private markets. Existing investors can choose to sell at the updated pricing, while new investors gain access to assets that have already moved beyond the early development stage. GP-led continuation funds are becoming more common as GPs balance exit timing with fund life constraints. For investors, they represent a growing, increasingly important entry channel into private markets. Private Credit Replacing Venture Capital Companies are turning to private credit to fund operations and growth, rather than raising new equity at a lower valuation. With private credit, founders avoid dilution, and existing equity holders avoid a down round. It creates a compelling entry for investors into senior secured private credit, with yields, covenant protections, and structural seniority that traditional equity doesn’t offer. The deal flow is expanding as credit is increasingly filling the role that equity once played. ### Repositioning Private Market Investments for the Next Cycle Maintain Patient Capital In this environment, the advantage lies with investors who can provide liquidity to constrained sellers. Investors can acquire high-quality assets at discounted valuations, typically[^1] 5–30%[^2] \+ below prior marks, depending on the asset itself and the seller’s urgency. The discount helps compensate for longer holding periods and limited liquidity, while also providing access to assets that were not available at these prices during the 2020–2021 cycle. Focus on Companies That Need Capital, Not Exits Capital scarcity gives investors genuine pricing power. Rather than waiting for exit conditions to improve, the opportunity is to act as the capital solution, structuring investments with preferred terms, downside protection, and alignment between risk and return. While exit markets remain uncertain and time-dependent, the ability to define terms at entry is available today. Lean Into Secondaries, With Discipline Secondaries can provide one of the most effective access points to discounted private market investments, but they require disciplined execution. This requires rigorous underwriting to current, not historical, values, careful assessment of the seller’s motivation, and access to quality deal flow. Motivated sellers may hold information advantages; so managers’ due diligence and strong network quality are non-negotiable. In 2026, private market investments are repricing in a constructive, disciplined manner. Reduced competition, stronger structuring terms[^3], and more attractive secondary pricing[^4] are creating entry conditions that compare favorably to recent peak vintages. For investors with patient capital, this is a shift from a momentum-driven market to one where selectivity and pricing discipline matter. The opportunity is not simply about gaining access, but about deploying capital with intention alongside the right partners and taking advantage of what the current cycle has to offer. This environment rewards investors who are patient, selective, and disciplined. ## We provide a team of specialists thoughtfully selected to align with your goals. [Contact Us](https://manhattanwest.com/contact/) [^1]: [equidam.com](https://www.equidam.com/secondary-markets-price-discovery-venture-capital/) [^2]: [wallstreetprep.com](https://www.wallstreetprep.com/knowledge/illiquidity-discount/) [^3]: [carmignac.com](https://www.carmignac.com/en/articles/the-secondary-market-a-fertile-hunting-ground-for-the-value-focused-investor-3333-11546) [^4]: [northerntrust.com](https://www.northerntrust.com/canada/insights-research/2025/point-of-view/beyond-liquidity) --- ### Q1 2026 State of the Market Update: One Battle After Another (2026-04-10) https://manhattanwest.com/insights/q1-2026-state-of-the-market-update-one-battle-after-another/ Market Outlook The 98th Academy Awards recently awarded Best Picture to “One Battle After Another,” which we feel is a fitting metaphor for the market’s current mood. ![](/images/insights/one-battle-after-another-sotm-q12026.jpeg) Much like Leonardo DiCaprio’s Bob Ferguson, investors have endured a steady barrage of challenges: geopolitical shocks, fiscal uncertainty, trade tensions, technological disruption, and episodic market selloffs – all the while this multi-year bull market struggles to press forward. Below we break down each of the principal risks shaping the current landscape: ### The Iran War The now month-long conflict involving the U.S., Israel, and Iran has led to the effective closure of the Strait of Hormuz, disrupting the flow of roughly 20 million barrels of oil and refined products per day. ###### ![](/images/insights/disruptions-in-oil-flow-since-strait-of-hormuz-closure-1.png) ###### Source: Bloomberg News, “The Strait of Hormuz Oil Shock Is Now Heading West”, Bloomberg L.P., 3/29/26 Iran’s primary leverage lies in its continued threat to target oil tankers transiting the strait, driving energy prices higher. However, the implications extend well beyond oil and gas. The disruption also constrains the global supply of fertilizers (urea, potash, ammonia), petrochemicals (methanol, ethylene), and helium. Given that approximately one-third of global fertilizer and helium flows pass through this chokepoint, the downstream effects could impact food production, semiconductor manufacturing, and medical equipment. ![](/images/insights/mw-sotm_bca-research-1.jpg) ###### Source: BCA Research – BCA’s Iran Conflict Daily Dashboard, 4/8/2026 While comparisons to the inflationary oil shocks of the 1970s are understandable, today’s energy market is far more diversified. U.S. shale production, strategic petroleum reserves, and alternative energy sources help mitigate the impact of supply disruptions. A more relevant comparison may be the early 1990s Gulf War. During that period, rising oil prices initially lifted inflation expectations and delayed Federal Reserve easing, while higher input costs weighed on consumption and corporate margins. These pressures ultimately pushed the economy into recession, prompting the Fed to cut rates aggressively and contributing to George Bush’s loss in the 1992 election. Recent experience also recalls the 2022 energy price shock, when Russia’s invasion of Ukraine intensified already elevated inflation pressures. Today, the setup differs in important ways. Softer labor market conditions mean that a prolonged energy shock could weigh more heavily on economic growth, reducing both consumer purchasing power and industrial output. While a full-blown U.S. recession may not be in the cards due to the offsetting tailwinds of artificial intelligence, deregulation and tax cuts, international economies dependent upon energy imports – particularly in Asia where they are already taking emergency energy conservation measures – are bracing for potentially more dire consequences. The recently agreed two-week ceasefire, which should reopen the Strait of Hormuz, is expected to provide some relief to global energy markets. The sooner a permanent agreement is reached, the more limited the economic fallout will be. However, a persistent risk premium is likely to remain in energy markets, and prices are unlikely to return to pre-war levels for an extended period. ### Tariffs Tariffs continue to function as a tax on economic activity. Despite the Supreme Court’s February ruling limiting the use of the International Emergency Economic Powers Act (IEEPA) for tariff implementation, the administration has pivoted to alternative legal mechanisms, including Section 122 of the Trade Act of 1974, to maintain current tariff levels. ![](/images/insights/yale-budget-lab-chart-erin-davisaxios-visuals.png) ###### Source: Yale Budget Lab; Chart: Erin Davis/Axios Visuals While businesses and consumers have thus far absorbed these costs with relative resilience, tariffs continue to work their way through the economy and represent an additional layer of friction in an already fragile macroeconomic environment. ### US Federal Budget Deficit The tariff ruling also introduces fiscal implications, including the potential for up to $165 billion in Treasury refunds, undermining a key component of deficit reduction efforts. More broadly, the trajectory of U.S. fiscal policy remains a structural concern. Federal debt has risen from approximately $23 trillion pre-pandemic to roughly $38 trillion today, a 65% increase in just six years. Despite periodic calls for fiscal discipline, there has been limited political appetite to meaningfully address the issue. ![](/images/insights/u.s.-department-of-the-treasury.-fiscal-service-via-fred-1.png) ###### Source: U.S. Department of the Treasury. Fiscal Service via FRED® Elevated deficits and rising debt-to-GDP levels increase the long-term risk of U.S. dollar debasement. While not an immediate threat, this dynamic reinforces the importance of maintaining exposure to real and risk assets over time, rather than relying solely on cash holdings vulnerable to erosion in purchasing power. ### “SaaS-pocalypse” Software-as-a-service (SaaS) equities have experienced notable multiple compression in recent months, driven by concerns that artificial intelligence may render legacy software models obsolete. ![](/images/insights/source-bloomberg-l.p.png) ###### Source: Bloomberg L.P. We believe the market’s reaction has been overly indiscriminate. There is a meaningful distinction between simple, single-user tools that may be vulnerable to AI displacement and deeply embedded enterprise platforms characterized by high switching costs, proprietary data, and mission-critical functionality. In many cases, the current environment reflects short-term multiple compression rather than permanent impairment of business value. We have selectively added to software positions where we believe companies are well-positioned not only to withstand AI disruption, but to leverage it as a competitive advantage. ### Private Credit Concerns in public SaaS markets have spilled over into private credit, where software companies represent approximately 20% of borrowers. Recent headlines highlighting liquidity pressures and redemption caps have raised concerns among retail investors, particularly given lingering sensitivities from the Global Financial Crisis. It is important to distinguish today’s private credit market from the pre-2008 financial system. The modern $3 trillion private credit ecosystem emerged in response to post-crisis banking regulations, which constrained traditional lenders. Private credit structures typically include negotiated covenants, private equity sponsorship, and lower levels of structural leverage than the securitized mortgage products that drove systemic risk in 2008. Redemption caps in private credit vehicles (typically 5% per period) have been triggered across several funds that have catered to retail investors. These redemption caps are not a sign of market disfunction but rather structural design features intended to align investor liquidity with the underlying illiquid assets – avoiding fire sales and protecting remaining investors during periods of elevated redemption demand. Should the economy enter a slowdown or recession, default rates will surely rise and private credit (like many other risk assets) will experience more modest returns. There will undoubtedly be some funds that run into trouble due to high levels of leverage, loan concentration and sub-par underwriting. Remember Warren Buffett’s famous quote: ![](/images/insights/warren-buffet-quote-large.jpeg) At this stage, however, the financial health of these borrowers does not support the alarmist headlines and does not pose a systemic risk. ### What To Do Each of these risks warrants monitoring, but few rise to the level of an existential threat for diversified, high-quality portfolios. We recommend maintaining adequate liquidity, prioritizing balance sheet strength, and selectively capitalizing on dislocations as they arise. While periods of war and geopolitical conflict are understandably unsettling, history has shown that markets have consistently recovered and continued their long-term upward trajectory despite these crises. ![](/images/insights/first-trust-sp-capiq-bloomberg.-monthly-index-levels.jpeg) ###### Source: First Trust, S&P CapIQ, Bloomberg. Monthly index levels from 1928 – 2025. **As always, we appreciate your continued trust and partnership.** [**Click to download.**](https://docsend.com/view/ttbbwswsedk3yuxp) Manhattan West Asset Management, LLC (“MWAM”) is an SEC registered investment adviser located in California. MWAM may only transact business in those states in which it is notice filed or qualifies for an exemption or exclusion from notice filing requirements. This summary should not be construed by any consumer and/or prospective client as MWAM’s rendering of personalized investment advice. Any subsequent, direct communication by MWAM with a prospective client shall be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides. For information pertaining to the registration status of MWAM, please contact the United States Securities and Exchange Commission on their web site at www.adviserinfo.sec.gov. A copy of MWAM’s current written disclosure brochure discussing MWAM’s business operations, services, and fees is available upon written request. ## We provide a team of specialists thoughtfully selected to align with your goals. [Contact Us](https://manhattanwest.com/contact/) --- ### Building a Portfolio for a Risk-Averse Investor in Today’s Market (2026-03-27) https://manhattanwest.com/insights/building-a-portfolio-for-a-risk-averse-investor-in-todays-market/ Portfolio Construction Risk-averse investors prioritize predictable returns over higher potential gains that come with greater volatility. Although this investing mindset exists across all social and financial backgrounds, it is becoming increasingly prevalent among high-net-worth investors as higher interest rates and market volatility reshape the investment landscape. Risk-averse investors do not avoid growth altogether. Instead, they seek to balance long-term capital appreciation with strategies that prioritize capital preservation and downside protection. ### Your Capital & Investing Objectives For many high-net-worth investors, portfolio construction begins by segmenting capital based on time horizon and their purpose. Rather than viewing wealth as a single pool of assets, sophisticated investors often divide their capital into distinct categories: 1. Near-term liquidity 2. Lifestyle & income needs 3. Long-term growth & legacy Segmenting capital in this way allows investors to align exposure with the time horizon of each pool of assets. Generally, capital with longer investment horizons can tolerate greater market volatility while funds needed in the near future should prioritize stability and liquidity. Ultra-high-net-worth investors should avoid the “one-size-fits-all” portfolio approach because their financial situations, constraints, and goals are typically more complex than those of the average retail investor. Many UHNW investors have accumulated their wealth through a concentrated position, such as founder equity, [private company ownership](https://manhattanwest.com/using-the-qsbs-tax-strategy-in-a-u-s-business-sale-a-case-study/), inheritance, or a single successful investment. In many cases, the same concentration that created wealth becomes the primary risk that must be managed afterward. Because a large portion of wealth may be tied to one asset or industry, portfolios must be designed to diversify that exposure rather than simply follow a generic allocation model created for the masses. Once capital has been segmented and major concentration risks addressed, the next step in constructing a resilient portfolio is determining the appropriate balance between liquidity, income, and growth assets. ### The Role of Cash and Short-Term Assets in a Higher-Rate Environment In a higher-rate environment, cash and short-term assets have reemerged as a strategic component of portfolio construction rather than simply idle capital. Competitive yields provide income while preserving liquidity, giving investors the flexibility and optionality to respond to changing market conditions. In today’s higher-rate environment, money market funds and Treasury bills are once again generating meaningful income while preserving liquidity[^1]. While cash can offer stability and immediate liquidity, excessive cash allocations can [erode purchasing power](https://manhattanwest.com/when-cash-liquidity-becomes-a-liability/). At 3% inflation, $1 million in cash loses roughly $250,000 in purchasing power over ten years if left uninvested. Investors must strike a balance between preserving liquidity while ensuring that capital remains positioned for long-term growth. #### Fixed Income Is a Foundation, Not an Afterthought As interest rates have risen in recent years, fixed income has remained a core stabilizer that offers investors balance in their growth-oriented assets such as equities or [private investments](https://manhattanwest.com/private-markets/) with securities that provide more predictable returns. In addition to generating income, fixed income can help stabilize portfolios during periods of equity market volatility[^2], acting as a counterbalance to more growth-oriented assets. For many HNW households, this income can support their living expenses, philanthropic commitments, and even reinvestment opportunities without requiring the sale of their assets. Positioning within fixed income requires careful consideration of several factors, including: - Duration and interest-rate sensitivity - Credit quality vs. yield - Bond laddering for cash flow visibility By providing a portfolio anchor, investors can take calculated risks elsewhere. ### Defensive Equity Exposure with an Emphasis on Quality Maintaining equity exposure remains important for investors seeking long-term growth, stability, and protection against inflation. While equities can introduce a certain level of volatility, they also provide the potential for capital appreciation that preserves overall purchasing power over time. By avoiding overly concentrated positions or highly thematic investments, investors can limit unnecessary risks and support a more diversified portfolio. Investors would be wise to emphasize quality when allocating to equities. Companies with strong balance sheets, stable earnings, and durable competitive advantages often demonstrate greater resilience during economic slowdowns. #### Enhancing After-Tax Returns Through Municipal Bonds For high-income investors, municipal bonds can play a valuable role in building a more tax-efficient portfolio. In addition to their traditional benefits, capital preservation and a consistent income stream, they offer a meaningful advantage: interest income that is generally exempt from federal income tax and, in many cases, from state and local taxes as well. These tax benefits can materially increase the effective yield relative to taxable fixed income investments. To make an accurate comparison, investors often evaluate the tax-equivalent yield[^3] (TEY): the pre-tax return a taxable bond would need to generate to match the after-tax income of a tax-exempt bond. The formula is as follows: Tax-Equivalent Yield = Municipal Bond Yield ÷ (1 − Marginal Tax Rate) By way of illustration, consider a municipal bond[^4] yielding 4.0% for an investor in the 37% federal tax bracket. On a tax-equivalent basis, this translates to approximately 6.35%: 4.0% ÷ (1 − 0.37) = 6.35% In practical terms, a taxable bond would need to yield 6.35% to deliver the same after-tax income. As tax rates increase, so does the relative attractiveness of municipal bonds. This advantage can be even more pronounced for investors in high-tax states such as California, where in-state municipal bonds may provide additional state tax exemption, further increasing their tax-equivalent yield. For investors seeking to optimize after-tax returns without materially increasing portfolio risk, municipal bonds represent a compelling combination of income, stability, and tax efficiency. ### Tax Efficiency as a Core Component of Risk Management For high-income investors, taxes can represent the largest drag on portfolio returns. Taxes are also one of the few variables investors can partially manage and plan for. By incorporating tax considerations as you construct your portfolio, investors can preserve more of their investment over time. For high-income investors, after-tax returns, not headline returns, are often the most meaningful measure of a portfolio’s performance. Tax-efficient rebalancing can help manage portfolio adjustments without triggering unnecessary tax liabilities. Investors should coordinate their portfolio strategy with their broader financial planning such as charitable giving, estate planning, and tax-effective wealth transfer strategies. ## Portfolio Construction in Practice: What a Risk-Averse Allocation Looks Like Today A well-constructed portfolio maintains a balanced exposure[^5] across several asset categories, including cash and short-duration assets, high-quality fixed income, and defensive equity strategies. Each of these components plays a distinct role in supporting the overall portfolio stability while still allowing for participation in new investment opportunities. With this balance, the allocation is designed to reduce overall volatility, generate consistent income, and preserve capital during [market uncertainties](https://manhattanwest.com/navigating-tariffs-protecting-your-investment-portfolio-in-uncertain-markets/). At the same time, maintaining exposure to equities allows the portfolio to retain its long-term potential, supporting long-term wealth preservation and maintaining purchasing power over time. ### Conclusion: Designing for Stability in an Uncertain Environment In uncertain markets, effective portfolio construction is less about predicting the market’s future and more about building resilience. By balancing income, growth, liquidity, and risk management, investors can better support long-term financial objectives. A well-constructed portfolio emphasizes structure over speculation, quality over complexity, and flexibility to individual needs over generic investing models. By building customized portfolios designed for resilience, risk-averse investors can maintain the clarity and discipline required to stay focused on long-term wealth preservation and growth despite short-term market volatility. ## We provide a team of specialists thoughtfully selected to align with your goals. [Contact Us](https://manhattanwest.com/contact/) [^1]: [planadviser.com](https://www.planadviser.com/risk-averse-investors-face-looming-risk-of-low-returns/) [^2]: [chicagobooth.edu](https://www.chicagobooth.edu/review/why-are-financial-markets-so-volatile) [^3]: [bankrate.com](https://www.bankrate.com/investing/what-is-tax-equivalent-yield-on-municipal-bonds/) [^4]: [investopedia.com](https://www.investopedia.com/terms/t/taxequivalentyield.asp) [^5]: [investor.gov](https://www.investor.gov/additional-resources/general-resources/publications-research/info-sheets/beginners-guide-asset) --- ### Stop Waiting for the Fed: How To Get A Better Mortgage Rate Now (2026-03-18) https://manhattanwest.com/insights/stop-waiting-for-the-fed-how-to-get-a-better-mortgage-rate-now/ Wealth Strategy The 30-year mortgage rate recently fell below 6%, its lowest level since September 2022, renewing interest among homebuyers and homeowners considering refinancing. While many borrowers assume mortgage rates move directly with Federal Reserve policy and wait for signals from the Fed before locking in a rate, the relationship between the Fed Funds Rate and 30-year mortgage rates is more complex. By understanding how mortgage rates are actually determined, buyers can identify opportunities to secure more favorable financing rather than relying on [sensationalized headlines](https://manhattanwest.com/compounding-dies-by-a-thousand-headlines/). ## What is the Fed Funds Rate & Why Does it Matter? The Fed Funds Rate is the short-term interest rate at which banks lend to one another overnight. The Federal Reserve adjusts this rate every 6 weeks[^1] to influence inflation and economic growth. While it shapes the broader interest-rate environment, it does not directly determine the interest rates on credit cards, business loans, or mortgages. ### What Affects Your 30 Year Mortgage Rate? Banks don’t use the Federal Funds Rate to determine mortgage rates. They factor in their own credit risk, funding costs, and overall profit margins when setting consumer rates, meaning a fed funds cut doesn’t automatically translate into a lower interest rate for borrowers. 30-year mortgage rates are more closely tied to the 10-year Treasury yield[^2], which serves as a benchmark for long-term interest rates in the U.S. financial system. Mortgage rates are typically priced relative to Treasury yields because investors compare mortgage-backed securities to government bonds when determining the returns they require. Mortgage lenders typically price loans based on bond market yields plus a risk premium, which means mortgage rates generally move in the same direction as the 10-year Treasury, but they are not identical. Although mortgage rates follow Treasury yields closely, they can diverge when: - Inflation expectations change. - Demand for mortgage-backed securities shifts. - Housing markets become volatile. - Banks adjust lending standards. ![MW_Mortgage_Rates_and_Treasury_Yields](/images/insights/mw_mortgage_rates_and_treasury_yields.png) ###### Source: Federal Reserve Bank of Richmond Economic Brief of August 2023 If markets believe inflation will fall or economic growth stalls, long-term Treasury yields can decline, even if the Fed Funds Rate is still holding short-term rates high. Additionally, Treasury yields can rise even before the Federal Reserve actually raises rates if investors expect tighter policy ahead. A clear example recently occurred in September 2024. The Federal Reserve[^3] lowered the Federal Funds Rate by 0.5 percentage points, yet mortgages rose. The average 30-year mortgage rate increased from 6.09% in September to a peak of 6.84% by late November because bond markets were adjusting their inflation and growth expectations in response to strong economic data and inflation that proved more stubborn than originally forecasted. ### 6 Ways To Secure A Lower Interest Rate Homebuyers have several ways to improve the mortgage rate they receive, regardless of where interest rates are in the broader market. **1\. Improving Your Credit Score** Lenders price mortgages based heavily on credit quality. Borrowers with credit scores above 740 typically qualify for the lowest available mortgage rates. **2\. Increase Your Down Payment** A 20% down payment reduces lender risk, lowers the loan amount, and eliminates private mortgage insurance, which can significantly reduce monthly costs. On a $1M home at 6%, putting 20% down can save over $230,000 in interest over the life of the loan while also reducing the monthly payment by about $1,200. **3\. Compare Multiple Lenders** Mortgage rates can vary significantly between lenders. Shopping for multiple quotes can reduce borrowing costs. Homebuyers should compare large commercial banks with local credit unions. **4\. Consider Discount Points** Borrowers can pay upfront fees to reduce their interest rate. **5\. Lock In Your Lower Rate** If rates fall below key thresholds, locking the rate protects buyers from market volatility. **6\. Choose Shorter Loan Terms** 15-year mortgages typically carry lower rates than 30-year mortgages. #### Conclusion The Fed Funds Rate is more than a policy lever. It reflects economic priorities and drives borrowing costs, investment behavior, and financial conditions worldwide, but does not directly set the rate on your mortgage. Mortgage rates are influenced by many factors beyond Federal Reserve policy, including bond markets, inflation expectations, and lender risk assessments. For homebuyers, the most important takeaway is that securing a better mortgage rate depends not only on market conditions but also on borrower decisions. Improving credit, increasing down payments, comparing lenders, and monitoring interest-rate trends can all meaningfully reduce borrowing costs over time. Those who take the time to understand the Fed Funds Rate, 10-year Treasury Yields, and their ripple effects will be better positioned to make confident, informed, and long-term financial decisions. ## We provide a team of specialists thoughtfully selected to align with your goals. [Contact Us](https://manhattanwest.com/contact/) [^1]: [federalreserve.gov](https://www.federalreserve.gov/monetarypolicy/fomccalendars.htm) [^2]: [bankrate.com](https://www.bankrate.com/mortgages/federal-reserve-and-mortgage-rates/) [^3]: [federalreserve.gov](https://www.federalreserve.gov/newsevents/pressreleases/monetary20240918a.htm) --- ### Beyond The Headlines: How the One Big Beautiful Bill Reshapes Personal and Corporate Tax Incentives in 2026 and Beyond (2026-02-19) https://manhattanwest.com/insights/beyond-the-headlines-how-the-one-big-beautiful-bill-reshapes-personal-and-corporate-tax-incentives-in-2026-and-beyond/ Tax Planning On July 4th, 2025, the “One Big Beautiful Bill” (OBBB) was signed into law. The key changes were part of a major federal budget and tax package aimed at both extending key tax cuts and introducing new deductions, especially for working families, seniors, and low/middle income workers. The OBBB made several provisions of the Tax Cuts and Jobs Act (TCJA), originally enacted in 2017, permanent. Before the TCJA, roughly 70% of taxpayers claimed the standard deduction. Today, that figure has risen to nearly 90%[^1]. Both individuals and corporations will be affected by the OBBB, as major tax updates are set to take effect this year. ### OBBB Tax Updates For Individuals **Individual Income Tax Changes** Before OBBA made several permanent individual income tax cuts from the Tax Cuts and Jobs Act (TCJA) in 2017, they were set to expire at the end of this year. That means seven tax brackets ranging from 10% to 37% remain in place instead of reverting to higher pre-TCJA rates as originally scheduled. The standard deduction[^2] increases for 2026: - Single filers: ~$15,750. - Married filing jointly: ~$31,500. Both amounts will continue to be indexed for inflation. Other expanded tax benefits[^3] include new expanded tax benefits for workers: 1. No tax on qualified tip income. 2. No tax on qualified overtime pay. 3. Senior bonus deduction (e.g., an extra standard deduction for taxpayers 65+). 4. Car loan interest deduction (up to $10,000 on new auto loans). **Family & Household Provisions** The Child Tax Credit has been increased to account for inflation. The new base amount is $2,200 per qualifying child starting in 2026. The increase was $200. President Trump has created “Trump Accounts,” a new type of savings account for children that allows after-tax contributions of up to $5,000 per year until the child turns 18. In an effort to jump-start the program, every American child born between January 1, 2025, and December 31, 2028, is eligible to receive $1,000 through the Pilot Program Contribution[^4]. The SALT cap is increased to $40,000, a major rise from the previous $10,000 limit, helping taxpayers in high-tax states deduct more. Charitable deduction changes are affecting both itemizers and non-itemizers. There is a new limit on all itemized deductions. For example, if you are in the 37% federal income tax bracket, the value of your charitable deduction is now capped at 35%. Your donation will still count in full, but your tax break will be slightly smaller. For those who take a standard deduction, you can now deduct up to $1,000 (single filers) or $2,000 (married couples filing jointly). **AMT, Estate and Tax Gift Updates** The Alternative Minimum Estate Tax (AMT) has been adjusted for inflation and extended. This means fewer taxpayers are subject to the ATM. The estate and gift tax exemption remains high (around $15 million in 2026 and indexed), protecting more of an estate’s value from federal tax. For individuals, there are multiple tax items to help combat inflation for 2026 and beyond, including: For most taxpayers, the net effects for the 2026 tax year include: - Lower or stabilized tax rates compared with what was scheduled - Bigger standard deduction and child credits - Looser SALT deduction cap - Inflation-adjusted brackets and thresholds - High estate and gift tax exemptions ### New Corporate Tax Incentives and Provisions Businesses were not left out of One Big Beautiful Bill. Instead of an entire overhaul of the corporate tax system, most changes reflect a legislative choice to freeze or soften scheduled adverse rate changes and to preserve business tax features from the 2017 Tax Cuts and Jobs Act. Beginning with the corporate statutory tax rate[^5], it shall remain at 21% for taxable years beginning in 2026. **Business Deductions & Investment Incentives** 100% bonus depreciation is made permanent, meaning corporations can write off the full cost of most new and used qualifying business assets (machinery, equipment, etc.) immediately rather than amortizing them over years. A new rule on charitable deductions goes into effect: a deduction is allowed only if contributions exceed 1% of taxable income, and excess amounts may be carried forward in limited circumstances. **International Corporate Tax Provisions** The OBBB maintains and refines the GILTI and FDII regimes that were designed to balance U.S. corporate competitiveness with anti-profit-shifting safeguards. Key deductions were preserved that help manage tax exposure on foreign earnings while incentivizing U.S. based intellectual property and export income. BEAT ( Base Erosion and Anti-Abuse Tax[^6]) continues into 2026 with a slight increase (around 10.1% – 10.5%), lower than the originally scheduled 12.5% jump. This will primarily affect large multinationals with significant related-party payments, such as interest and royalties. **Other Business-Related Provisions** The 20% Qualified Business Income (QBI) deduction for pass-through businesses such as S-corps, LLCs, and partnerships is made permanent. Those with a small corporation or pass-through tax entities will be taxed at the owner level[^2]. A 15% corporate Alternative Minimum Tax (AMT) still applies to large corporations (generally those with high financial statement income). This provision was enacted earlier and continues to affect big, profitable companies. Within the OBBB, the Advanced Manufacturing Investment Credit will continue to provide a refundable tax credit for qualified investments in the U.S. based advanced manufacturing facilities, particularly semiconductors and critical supply chain technologies to support domestic production, resilience, and long-term competitiveness in the industry. The Low Income Housing Tax Credit now offers expanding incentives for [private investment](https://manhattanwest.com/private-investments/) in affordable housing development and preservation, with the goal of accelerating low-income housing supply and easing constraints for those seeking affordable housing options. **Key Updates for Large Corporations:** - Rate stability: No statutory rate jump; stays at 21%. - Stronger incentives for investment (bonus depreciation, R&D expensing). - International tax relief relative to what would have happened without the legislation (GILTI/FDII deductions remain). - Continuing minimum tax regimes (BEAT, corporate AMT) still bite at the larger end. - Some deduction rules (e.g., charitable contributions) become more complex. ### Conclusion Ultimately, the 2026 tax landscape will favor those who plan deliberately. The One Big Beautiful Bill brings clarity and durability to the U.S. tax framework by making key provisions permanent while expanding targeted relief to the average American worker. With rate stability, elevated exemptions, and expanded deductions now locked in, both individuals and businesses are better positioned to make informed decisions around income, investment, [estate planning](https://manhattanwest.com/transfer-wealth-not-worry-preparing-the-next-generation/), and growth. The challenge, and opportunity, will be translating these provisions into proactive strategies that align tax efficiency with broader financial goals. ## We provide a team of specialists thoughtfully selected to align with your goals. [Contact Us](https://manhattanwest.com/contact/) [^1]: [irs.gov](https://www.irs.gov/statistics/soi-tax-stats-tax-stats-at-a-glance) [^2]: [forbes.com](https://www.forbes.com/sites/kellyphillipserb/2025/10/09/irs-announces-2026-tax-brackets-standard-deductions-and-other-inflation-adjustments/) [^3]: [economictimes.indiatimes.com](https://economictimes.indiatimes.com/news/international/us/trumps-big-beautiful-bill-reshapes-2026-tax-refunds-salt-deduction-relief-and-why-homeowners-may-benefit-most-as-new-rules-could-raise-april-checks/articleshow/126124330.cms) [^4]: [form.trumpaccounts.gov](https://form.trumpaccounts.gov/) [^5]: [irs.gov](https://www.irs.gov/newsroom/irs-releases-tax-inflation-adjustments-for-tax-year-2026-including-amendments-from-the-one-big-beautiful-bill) [^6]: [morganlewis.com](https://www.morganlewis.com/pubs/2025/06/one-big-beautiful-bill-act-tax-proposals-select-highlights-and-implications) --- ### Q1 2026 State of the Market Update: Compounding Dies by a Thousand Headlines (2026-01-27) https://manhattanwest.com/insights/compounding-dies-by-a-thousand-headlines/ Market Outlook In our [Q3 2024 State of the Market Update](https://manhattanwest.com/q4-2025-state-of-the-market-update-echoes-of-the-past-signals-for-the-future/), we urged investors to take a deep breath and zoom out, anchoring decision-making to long-term goals rather than reacting to an onslaught of market-moving headlines. To say that this simple advice has grown more important over the past year would be an understatement. Consider this sampling of headlines: “Trump says U.S. will run Venezuela after U.S. captures Maduro” – Reuters “Trump Declares Anything Less Than U.S. Control of Greenland Is ‘Unacceptable’” – Time “Market risk mounts as Supreme Court weighs Trump’s emergency tariff powers” – Reuters “On the verge of strikes in Iran, the US held off. What happens next is up to Trump” – CNN “Minnesota and the Twin Cities sue the federal government to stop the immigration crackdown” – Associated Press “DOJ launches criminal investigation into Fed Chair Jerome Powell” – ABC News “Why Banks Are So Worried About a 10% Credit Card Rate Cap” – The New York Times “Trump signals plan to ban institutional investors from buying single-family homes” – Kiplinger “Trump’s order for Freddie, Fannie to buy $200 billion mortgage bonds raises IPO doubts” – Reuters “Trump Administration Takes Aim at Home-Builder Stock Buybacks” – The Wall Street Journal “Trump says he will not permit dividends and stock buybacks for defense companies” – CNBC “Trump calls for US military spending to rise more than 50% to $1.5tn” – BBC You would be forgiven for assuming these were excerpts from a “2025 Year in Review.” They are not. Every one of these headlines was published in the first two weeks of 2026 alone. Unsurprisingly, this torrent of news has driven sharp, often violent, moves across equities, commodities, currencies, and interest rates, frequently in both directions within days, or even hours. So what is our team at Manhattan West doing to navigate this firehose of information? In many cases, we are doing very little. Deliberately. A natural question follows: How can an active manager afford not to trade on headlines like these? The short answer is simple: reacting reflexively to headline risk is one of the most reliable ways to destroy long-term capital. Modern markets are dominated by algorithmic and event-driven strategies, many of which are explicitly designed to scan platforms like Truth Social and X (formerly Twitter) and trade instantly on new proclamations. The problem is not speed; it is signal quality. Initial market reactions are frequently reversed by follow-up statements, clarifications, or outright contradictions, sometimes within the same trading session. We saw a textbook example of this dynamic on January 7th. Following a 2:08 p.m. (EDT) Truth Social post, stocks in the Global X Defense Tech Index declined 2.3%. ![](/images/insights/sotmu_visual1.png) ###### Source: Truth Social Just over two hours later, a second post, issued at 4:17 p.m. (EDT) shortly after the market close, reversed the narrative. ![](/images/insights/screenshot-2026-01-26-at-11.54.58-am.png) ###### Source: Truth Social An investor who sold in response to the first post and repurchased following the second suffered a loss of more than 5% in less than 24 hours. Repeat this behavior often enough and the compounding engine that drives long-term wealth creation is steadily eroded. ![](/images/insights/sotmu_visual3.png) ###### Source: Bloomberg Recent history reinforces this lesson. Investors who abandoned their long-term plans during the “Liberation Day” market drawdown in April 2025, driven largely by tariff fears, permanently impaired their compounding potential. The S&P 500 went on to gain approximately 38% over the remainder of the year, returns that were missed by those who chose reaction over discipline. ![](/images/insights/sotmu_visual4.png) ###### Source: Bloomberg To be clear, we are not suggesting that policy outcomes are irrelevant. They are not. Policies that are ultimately implemented can and do have meaningful consequences for economies, industries, and individual businesses. For example, proposed changes to the 2026 tax code (including increases to the standard deduction, a higher SALT cap, elimination of taxes on tips, deductibility of car loan interest, and full expensing of corporate research and development costs) could provide a meaningful tailwind to economic activity and corporate profitability. At the same time, ongoing tariff uncertainty acts as a tax on consumers and complicates corporate planning, forcing management teams to make long-term capital allocation decisions amid constantly shifting rules. This tension, between fiscal stimulus and policy uncertainty, is precisely why short-term trading is such a poor response. The outcomes are unknowable in the moment, and markets are already heavily discounting each new headline in real time. So what can we do as active managers in this environment? The answer lies not in short-term trades, but rather a long-term philosophy. We focus on owning high-quality businesses with strong balance sheets, ample liquidity, durable competitive advantages, and management teams capable of adapting to a changing economic and regulatory landscape. Financial flexibility matters. Business model resilience matters. Valuation discipline matters. In an era where markets are increasingly driven by noise, patience and selectivity remain among the few durable edges available to long-term investors. **As always, we appreciate your continued trust and partnership.** Manhattan West Asset Management, LLC (“MWAM”) is an SEC registered investment adviser located in California. MWAM may only transact business in those states in which it is notice filed or qualifies for an exemption or exclusion from notice filing requirements. This summary should not be construed by any consumer and/or prospective client as MWAM’s rendering of personalized investment advice. Any subsequent, direct communication by MWAM with a prospective client shall be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides. For information pertaining to the registration status of MWAM, please contact the United States Securities and Exchange Commission on their web site at www.adviserinfo.sec.gov. A copy of MWAM’s current written disclosure brochure discussing MWAM’s business operations, services, and fees is available upon written request. [**Click to download.**](https://docsend.com/view/k8tnx5rxp9yusrug) ## We provide a team of specialists thoughtfully selected to align with your goals. [Contact Us](https://manhattanwest.com/contact/) --- ### Why Prediction Markets Aggregate Knowledge Better Than Experts (2026-01-20) https://manhattanwest.com/insights/why-prediction-markets-aggregate-knowledge-better-than-experts/ Market Outlook Ever since prediction markets entered the American mainstream in the fall of 2024, their rapid adaptation reflects something deeper than a novelty. The success of the prediction market space has revealed a powerful mechanism: extracting scattered information and aligning incentives so that truthful beliefs surface, even if they are unpopular. ### Information Aggregation: Why Markets Can Predict Better Than Experts A study[^1] found that, across the five United States presidential elections between 1988 and 2004, prediction markets provided a more accurate estimate of the voting result than 74% of the studied opinion polls. How can a group of diverse, independent people outperform individual expert analysts? Market predictions succeed not because each individual is smarter, but because of the information people may be unwilling or unable to say directly. The “wisdom of crowds,” a term coined by James Surowiecki[^2], describes how a group of strangers can be more accurate than seasoned professionals by properly aggregating the information. Prediction markets operate on a simple but impactful premise: individuals possess limited, fragmented, and often private information. When participants are rewarded for honesty, markets aggregate the fragments into a single probability sign that often outperforms polls, surveys, and so-called experts. ### Incentives Matter: Why Markets Reveal What People Actually Believe The distinctive feature of prediction markets is the alignment of incentives. Participants are rewarded for being right, not for being agreeable or loud, not by what they hope will happen. By offering anonymous participation, reputation risk is reduced. This simple structure transforms subjective opinions into objective signals. ## Corporate Prediction Markets: Internal Knowledge, Externalized Prediction markets are not a new concept. Forward-thinking organizations have created and deployed internal prediction markets for over 30 years to surface hidden insights, improve decision-making, and ensure capital allocation. Corporate prediction markets work like this: Employees and, potentially, outsiders make their guesses over the Internet using virtual currency, polling anonymously. They guess on what they think will actually happen, not what they hope will happen or what the boss wants. **Booming Electronics Retailer:** In 2006, a booming electronics retailer’s annual revenue was estimated at ~$33.7B, and it conducted an employee-only internal experiment that correctly predicted that a new store in Shanghai would not open on time. “The potential is that prediction markets may be the thing that enables a big company to act more like a small, nimble company again,” said Jeffrey Severts, a vice president at the booming electronics retailer, who was later quoted. **Large International Hotel Chain:** In 2007, a large international hotel chain with over 3,500 hotels spanning 100 countries ran an internal prediction market with 1,000 technical and analytical employees using virtual tokens. The premise was simple: green tokens backed strong ideas and red tokens flagged weak ideas. The hotel chain reported that it has initiated projects driven by the market’s highest-confidence ideas, including enhancements to website search and booking functionality. **Leading Tech Company:** Over a three-year experiment in the 1990s involving a dozen prediction rounds, the company discovered that its internal prediction market outperformed the finance department’s official forecasts 75% of the time. Reflecting on the period, a senior executive who would later become CEO of the $16.4 billion company remarked that had the organization understood then what it knows now, it could have been three times as productive. **Global Medical Tech & Pharmaceutical Diagnostics Conglomerate:** Prediction style workshops were used to internally evaluate employee ideas for new healthcare software. Their process revealed new ideas and the strength of employees’ collective belief in them. The outcome included new patents filed and projects launched directly from market-ranked concepts. ### Looking Forward: From Opinions to Probabilities As complexity increases and centralized forecasting breaks down, prediction markets offer a scalable way to translate decentralized knowledge into decisions. By offering a way for uncomfortable truths to surface without affecting hierarchy or politics, prediction markets are more valuable than just in their prediction results. ### Conclusion Prediction markets succeed not because people are inherently wise, but because they are structured to extract, aggregate, and reward accurate information wherever it exists. When incentives are properly aligned, truthful beliefs surface, decentralized knowledge is transformed into clear probability signals, and decisions are driven by evidence rather than opinion. ## We provide a team of specialists thoughtfully selected to align with your goals. [Contact Us](https://manhattanwest.com/contact/) [^1]: [sciencedirect.com](https://www.sciencedirect.com/science/article/abs/pii/S0169207008000320) [^2]: [en.wikipedia.org](https://en.wikipedia.org/wiki/James_Surowiecki) --- ### Transfer Wealth, Not Worry: Preparing the Next Generation (2025-12-19) https://manhattanwest.com/insights/transfer-wealth-not-worry-preparing-the-next-generation/ Wealth Strategy You’ve spent your life creating something meaningful. What you have built represents more than financial security – it represents difficult decisions, sacrifices, late nights, and your values. Unfortunately, 70% of families lose control[^1] of their wealth by the second generation and 90% by the third. The reason isn’t market volatility or escalating tax policy; it’s something you might have complete control over: communication. ### Life Doesn’t Wait. There will never be a perfect time to talk about finances. Illness, unexpected losses, shifts in family dynamics, and other unforeseen circumstances are the harsh realities that we must prepare for. While some may have exhaustive planning in place, communication is the most overlooked aspect of family wealth planning. Some heirs[^2] may not be fully aware of their financial situation, while others may be completely caught off guard, leaving more questions than answers. Hesitating to share your plans may stem from a place of love, but the silence can be the root cause of frustration to your heirs. You might worry that knowing about their inheritance can reduce your heir’s motivation or that they will make choices that don’t follow your own values. While these fears are valid, the alternative is far more chaotic. Your heirs will be vulnerable and inherit confusion, conflict, and even unexpected external pressures. Some heirs will discover that it’s too late to ask the questions that matter most. Would you rather your values guide them through years of conversation and gradual responsibility, or would you rather have them figure it out alone after you’re gone? ## Three Foundations For Generational Success There are simple steps you can take to reduce uncertainty and help prepare your heirs for their inheritance. Whatever the expectations are for your family’s wealth, it’s important to be transparent about your wishes. 1. **Start early:** Family meetings and investment education can foster confidence and stewardship in your heirs. These family meetings can be as structured and as official as you’d like. Some hold the meetings in their family home office or around the [kitchen table](https://manhattanwest.com/press/some-financial-advisors-make-house-calls-why-giving-advice-at-the-kitchen-table-is-smart/). By removing as many distractions as possible, you can create an authentic environment where questions are welcomed without judgment. By normalizing conversations about finances, values, and aspirations, ongoing communication will help build a foundation of trust and understanding, making it easier to navigate the complexities of an inheritance.Sharing your journey that helped guide your financial decisions, how you balanced your current needs with future security, how you determined what’s worth investing in, and the lessons learned from financial failures. It’s not about bragging; you are passing down a compass, not just a map, by creating a foundation of trust and transparency, even the most complex wealth transfer will feel like a natural continuation of who you are as a family. 2. **Write it down:** As with any significant investment, proper documentation and organization are key, and investment policy statements and governance documents can clarify your intent. Whatever the circumstance, when your heirs are presented with their inheritance, the clarity will be a precious gift. During these moments, emotions can run high and escalate family dynamics, and proper documentation can serve as “the voice of reason” by offering clear instructions, therefore avoiding confusion[^3] or unnecessary disagreements. While some see investment policy statements, governance documents, and financial information as “sterile legal requirements”, when clearly communicated, they will serve as a parting gift to your family. By clearly organizing your wishes and making them accessible, you are protecting your most cherished relationships from unnecessary stress. 3. **Give responsibility gradually:** It’s important to engage heirs in philanthropy or small allocations to build ownership and gain experience with lump-sum money. Just as you wouldn’t hand someone the keys to a complex machine without training, however, families often do this with wealth. Some families expect heirs to immediately manage what took you a lifetime to accumulate, while others prepare their successors. By gradually assigning responsibilities to your heirs, they will learn confidence, stewardship, and a sense of ownership. Most importantly, they will understand how to manage finances and will be able to ask for your guidance while you are still available. Some investors take it a step further and include their heirs in philanthropic decisions. By letting heirs research causes, donate on your behalf, and see the positive impact of thoughtful giving, it can be the beginning of their strong financial journey. ### Your Advisory Team As Family Stewards [Financial advisors,](https://manhattanwest.com/private-wealth/) estate planners, and legal counselors who understand their role as family stewards can facilitate the conversations you need to have. They provide objective perspectives when family dynamics make objectivity difficult. They can assess your heirs’ readiness without the emotional charge that might accompany a relative’s evaluation. They help translate your values into structures that will outlive you. This isn’t about outsourcing your legacy. It’s about surrounding your family with wisdom that complements your own, ensuring that when the time comes, everyone you love has the support they need when they need it. #### Conclusion “Transferring wealth well means transferring values, vision, and voice not just numbers on a statement.” While receiving an inheritance may provide your heirs with financial security, it can also come with pressure and uncertainty, especially if they are unprepared to receive it. Unfortunately, the uncertainty and pressure can become a burden rather than a blessing if your heir is unprepared. Preparing your heir begins with a single conversation. It’s not about your account balance, tax strategies, or asset allocation; it’s about what matters most to you and what you hope your family will carry on. At [Manhattan West,](https://manhattanwest.com/) our advisors can help you assess where your heirs are now, what gaps require your attention, and how to structure your estate plan. [Together](https://manhattanwest.com/contact/), we can create a framework that honors your legacy and your family’s future. ## We provide a team of specialists thoughtfully selected to align with your goals. [Contact Us](https://manhattanwest.com/contact/) [^1]: [nasdaq.com](https://www.nasdaq.com/articles/generational-wealth%3A-why-do-70-of-families-lose-their-wealth-in-the-2nd-generation-2018-10) [^2]: [theatlantic.com](https://www.theatlantic.com/family/archive/2019/10/big-inheritances-how-much-to-leave/600703/) [^3]: [edwardjones.com](https://www.edwardjones.com/us-en/why-edward-jones/news-media/press-releases/great-wealth-transfer-research) --- ### The New Private Wealth Playbook: Integrating Private Markets Into Traditional Portfolios (2025-12-12) https://manhattanwest.com/insights/the-new-private-wealth-playbook-integrating-private-markets-into-traditional-portfolios/ Private Markets A 60/40 portfolio of stocks and bonds has long been considered the gold standard, offering predictable returns during periods of stable inflation, and limited access to alternatives. However, with persistent inflation[^1], increased market volatility, and growing access to private markets, the investor landscape has fundamentally shifted. Portfolios must evolve to meet these modern financial challenges. Manhattan West brings institutional caliber [private investments](https://manhattanwest.com/) into clients’ traditional portfolios, creating a more resilient, return-focused strategy for the decades to come. ### The Shift: In the past, private equity and [venture capital](https://manhattanwest.com/private-investments/venture-capital/) investments were accessible only to large institutions, endowments, and ultra-high-net-worth investors. Now, there is greater accessibility for accredited investors through feeder funds and interval funds, driven by regulatory and technological advances. In order to collectively invest in larger institutional funds like a [major private equity](https://manhattanwest.com/private-investments/private-equity/) or venture capital fund, feeder funds are created to allow accredited investors to pool their investments together. Typically, minimums are very high, usually in the millions, but by using feeder funds, the minimum can be reduced to as little as 100k. A wealth management firm or a fund platform acts as a third-party sponsor for the feeder fund and handles administrative duties, including fund creation, investor onboarding, and reporting. Feeder funds help investors gain exposure to institutional-quality strategies without needing an institutional-sized capital contribution. Interval funds, on the other hand, are SEC-registered, closed-end funds that invest in private market strategies while offering periodic liquidity. Investors can buy shares similar to mutual funds, often with minimal to no performance-based fees. The fund manager allocates capital to private assets over time, and depending on the fund’s structure, accreditation may not be required. Unlike traditional PE funds that typically have a 7 to 10 year freeze period, interval funds may offer periodic liquidity. Lastly, Interval funds have greater transparency and regulatory oversight from the SEC[^2]. ## Why Should You Include Private Markets in Your Portfolio Private markets have grown into a vital component of modern portfolio construction, offering exposure to companies and sectors beyond the reach of public exchanges. By thoughtfully integrating these assets, investors can unlock new performance drivers and balance overall risk. Private assets’ unique benefits that can enhance overall portfolio performance: - **Higher Return Potential:** The historical performance of private equity[^3] and venture capital has exceeded[^4] that of traditional public markets. - **Diversification Benefits:** Private assets often have a lower correlation to public markets and can reduce overall portfolio risk. - **Stability in Volatile Markets:** Due to less frequent pricing and long-term investments, private assets can smooth portfolio volatility and reduce emotional decision-making during market downturns. ### Critical Considerations for Private Market Investing: Investing in private markets can be rewarding, but it is not without complexity. These investments require patience, a long-term mindset, and a deep understanding of the structures and risks involved. Before committing capital, it’s important to consider the following key challenges: - **Illiquidity:** Your capital is locked for extended periods of time with limited redemption windows. Private market investments are best suited for long-term strategies. - **Opaque Valuation Cycles:** Private markets are not priced daily like public stocks. Investors must trust and accept the periodic valuation that relies on internal assessments. - **Manager Dispersion:** Your performance can vary significantly based on your management selection. Your manager’s individual strengths, skills, and strategy can significantly impact your overall outcomes. Thorough due diligence and careful manager selection are critical. ### The Role of an Advisor Modern advisors curate access for their clients by filtering investments that meet the investor’s overall goals and timelines and removing investments that do not. By blending liquidity and performance, advisors can construct a “hybrid” portfolio and better meet their investors’ overall needs. ### Conclusion Modern advisors are reshaping the investment landscape by thoughtfully integrating private markets into diversified portfolios. This approach strikes a balance between liquidity and long-term performance while opening access to opportunities once reserved for large institutions. By incorporating private assets into traditional frameworks, advisors and investors can build greater resilience through market cycles and capture higher returns. The future of wealth management is clear: institutional access delivered with personalized insight. Advisors who embrace this model aren’t just adapting, they are redefining what is possible for the next generation of investors. ## We provide a team of specialists thoughtfully selected to align with your goals. [Contact Us](https://manhattanwest.com/contact/) [^1]: [cnn.com](https://www.cnn.com/2025/10/24/economy/us-cpi-consumer-prices-inflation-september) [^2]: [sec.gov](https://www.sec.gov/) [^3]: [msci.com](https://www.msci.com/research-and-insights/blog-post/tracking-private-equity-closing-the-performance-gap?) [^4]: [caia.org](https://caia.org/blog/2024/04/23/long-term-private-equity-performance-2000-2023) --- ### Is Cash Still King? When Cash Liquidity Becomes a Liability (2025-12-10) https://manhattanwest.com/insights/when-cash-liquidity-becomes-a-liability/ Wealth Strategy After a prolonged period of volatility, it is understandable that many investors have found comfort in increasing their cash positions. Cash can offer stability, immediate liquidity, and freedom from the day-to-day fluctuations that can weigh on sentiment. In an uncertain market, seeing a fixed number on a statement can offer a limited emotional comfort. However, experienced investors know that long-term financial outcomes are not driven by emotional comfort, but are driven by real, after-tax returns. Today, the increasing gap between real-time inflation and nominal cash yields is presenting a growing challenge for wealth preservation. While cash liquidity plays a vital role in any portfolio, allowing it to be the primary or only strategy introduces risks that are often overlooked or simply ignored. ## The Cash Trap – When Liquidity Becomes Liability High-net-worth families face a unique challenge: capital often accumulates faster than it can be thoughtfully deployed. [Business sales](https://manhattanwest.com/using-the-qsbs-tax-strategy-in-a-u-s-business-sale-a-case-study/), stock option exercises, real estate exits, and concentrated position liquidations can generate substantial cash liquidity that, without a systematic redeployment framework, can linger in money market accounts far too long. While maintaining cash liquidity for immediate needs, living expenses, and dry powder for opportunistic investments is prudent, many investors inadvertently hold excess cash, creating opportunities for liabilities. Even in a higher-rate environment, cash yields frequently trail real inflation. When inflation[^1] runs above the yield on deposits or money market funds, investors experience a negative real return, meaning the purchasing power of their wealth declines over time. At 3% inflation, $10M in cash retains only $7.4M in purchasing power after a decade, effectively losing $2.6M to inflation. Cash provides accounting stability while guaranteeing economic erosion, a distinction critical when striving for wealth preservation ### Opportunity Cost During Market Dislocations Historically, markets recover well before investor sentiment improves. The strongest performance periods often occur early in rebounds, long before conditions feel comfortable. Family offices and endowments understand this pattern; they often deploy capital into dislocations while others wait for confirmation. Remaining substantially in cash during these inflection points can meaningfully reduce long-term, compound returns. The goal of wealth preservation is not to avoid all volatility but to ensure capital participates in the full market cycle, including recovery that drives long-term wealth creation. Preserving capital should not come at the expense of forfeiting compounding opportunities. ### Reinvesting Intelligently: Strategic Alternatives to Cash Reallocating excess cash does not require assuming disproportionate risk. Today’s markets offer vehicles that balance income generation, capital preservation, and asymmetric return potential. Short-Duration Fixed Income Short-duration bonds provide attractive yields with lower price sensitivity to interest rate movements. For investors seeking a measured step out of cash, this segment offers compelling risk-adjusted return potential. High-Quality Dividend-Paying Equities Dividend-focused strategies offer two sources of return: income today and long-term capital appreciation. Companies with sustainable dividend growth histories have demonstrated an ability to outpace inflation across market cycles while maintaining operational resilience. Private Credit and Yield-Oriented Alternatives Private credit has emerged as a meaningful component of institutional portfolios, delivering higher income streams and low correlation to traditional markets. For qualified investors, these strategies can enhance portfolio yield without requiring a shift into higher-volatility assets. The objective here is not to assume more risk, but to reintroduce capital into areas where it can work more effectively. ## Multi-Decade Purchasing Power Analysis Below are some examples of a $1,000,000 portfolio allocated in 1994 across different strategies (30-year period, through 2024): - 100% Cash (Money Market): ~$1,800,000 gross value - Real purchasing power in 1994 dollars: ~$928,000 - Result: Despite 80% nominal growth, lost 7% in real purchasing power - 30% Stocks, 60% Bonds, 10% Cash: ~$4,200,000 gross value - Real purchasing power in 1994 dollars: ~$2,165,000 - Result: 2.3x real purchasing power increase, even with conservative allocation - 60% Stocks, 30% Bonds, 10% Cash: ~$6,800,000 gross value - Real purchasing power in 1994 dollars: ~$3,505,000 - Result: 3.5x real purchasing power increase, balanced growth approach - 90% Stocks, 10% Cash: ~$9,200,000 gross value - Real purchasing power in 1994 dollars: ~$4,742,000 - Result: 4.7x real purchasing power increase, aggressive but sustainable for long horizons The all-cash position left you with less purchasing power than what you originally started out with. Even the most conservative invested portfolio (30/60/10) gave 2.3X more real purchasing power than cash alone. This example showcases why sitting on top of cash isn’t just a“safe and slow” investment; it can fall behind inflation, leaving you with less purchasing power[^2] than what you started out with. ### Emotional Return vs. Financial Return During periods of heightened uncertainty, cash feels safe, predictable, and intuitive. Yet behavioral finance research[^2] consistently demonstrates that avoiding short-term volatility often comes at substantial long-term cost, particularly when measured on a risk-adjusted, after-tax, and inflation-adjusted basis. The most durable portfolios are not constructed to eliminate risk entirely, but to align specific risk factors with the investor’s goals, liquidity requirements, time horizon, and tax circumstances. This is the approach employed by leading endowments, sovereign wealth funds, and multi-generational family offices. Disciplined asset allocation, supported by a long-term perspective and systematic rebalancing, has historically outperformed emotionally driven decision-making across all market environments. ### The Multi-Generational Imperative For families building wealth across generations, the inflation penalty on excess cash compounds across decades and dilutes legacy objectives. Consider: - A $50M estate holding 50% in cash loses approximately $13M in real purchasing power per decade at 3% inflation. - That same capital allocated across diversified return-seeking assets typically preserves and grows intergenerational purchasing power. - Dynasty trusts, generation-skipping structures, and step-up basis planning all assume invested capital, not cash accumulation. - Education funding, philanthropic goals, and family governance structures require return assumptions above inflation. Excess cash allocation optimizes for immediate emotional tranquility at the expense of intergenerational purchasing power. ### Conclusion Cash liquidity plays an essential role in liquidity management, SHORT-term needs, and opportunistic investing. But when cash becomes a long-term holding rather than a functional tool, it can undermine the very stability investors seek. Your tactical reserves belong in cash. Your emergency fund should be liquid and readily available for unexpected situations. However, your future and your [retirement](https://manhattanwest.com/the-new-era-of-alternative-investments-in-retirement-accounts/) should be in assets that grow. The task is not to abandon prudence, but to deploy it strategically. Investors building [generational wealth](https://manhattanwest.com/private-wealth/) aren’t the ones who feel the most comfortable. They are the ones who understand that temporary discomfort from volatility is preferable to permanent loss from inflation. Confidence compounds like capital; the sooner you allocate it, the sooner you see returns. Hoarding cash is a strategy of preserving comfort, not wealth. ## We provide a team of specialists thoughtfully selected to align with your goals. [Contact Us](https://manhattanwest.com/contact/) [^1]: [clevelandfed.org](https://www.clevelandfed.org/publications/economic-commentary/2023/ec-202317-the-long-run-costs-of-higher-inflation) [^2]: [morningstar.com](https://www.morningstar.com/columns/rekenthaler-report/cash-an-inflation-hedge-revisited) --- ### Using the QSBS Tax Strategy in a U.S. Business Sale: A Case Study (2025-11-20) https://manhattanwest.com/insights/using-the-qsbs-tax-strategy-in-a-u-s-business-sale-a-case-study/ Tax Planning Founders and early investors in C-Corp businesses that issue QSBS have access to one of the most powerful tax incentives in the U.S. tax code.[^1] The unique opportunity allows those who meet specific criteria under Section 1202 to legally reduce or exclude their federal capital gains tax obligations. This directly rewards those who took early risks to build innovative, high-growth businesses. ## Background on QSBS (Section 1202) Qualified Small Business Stock (QSBS) offers a substantial tax incentive for business founders, early employees, and investors, contingent upon satisfying the specific criteria set forth under Section 1202 of the U.S. Internal Revenue Code. If the stock qualifies, the holder can potentially allow up to 100% exclusion of capital gains[^2] when the stock is sold, depending on the amount of gain. Requirements for QSBS: - The issuer must be a C Corporation. - The domestic company must have no more than $50 million in gross assets before and immediately after the stock issuance. - The business must be active. - At least 80% of the company’s assets must be active trades or businesses. Investments and real estate holdings do not qualify. - Shares must be held for at least 5 years. - The maximum gain exclusion is $10 million or 10X your adjusted basis in the stock. - Anything above the threshold is taxable and eligible for capital gains rates. Key Exclusions: - LLCs, S-Corps, and partnerships do not qualify. - If over 20% of the business is related to certain service-based or asset-holding activities, it does not qualify. - Examples of nonqualifying business types include: Health, law, engineering, performing arts, farming, financial, mining, hospitality, and real estate companies. - You can not claim the exception if you didn’t receive the stock from the original issuance. - Stocks acquired through secondary sales or from another shareholder on the secondary market do not qualify. - C-Corps can not claim the exclusion for themselves. It must be a non-corporate taxpayer. ### The Business Owner’s Situation Business owners considering an exit should carefully assess their exposure to capital gains taxes and the strategies available to mitigate it. The following real-world example demonstrates how early planning and proper structuring can greatly influence future tax outcomes. In 2012, Camila Ruiz, a former film editor, invested $150,000 from her personal savings to start LumenEdit, a SaaS video editing platform for independent creators and marketing teams. She immediately incorporated the business as a Delaware C-Corporation. Her first employee was her younger sister, Clara, who joined to manage customer success. Within six months of incorporation, LumenEdit formally issued founder stock to both Camila and Clara in late 2012. Over the next decade, LumenEdit grew steadily. By its 10th year, it had: - 43 full-time employees, - $32 million in annual recurring revenue, - Customers in over 40 countries, - Profit margin averaging 18% for the past 3 years, - Valuation interest from both strategic buyers and private-equity funds, Camila maintained roughly 82% ownership, having raised only a small amount from angel investors in her first year, to retain control. In the company’s 11th year, Camila suffered a serious hiking accident that required months of recovery and an extended time away from the day-to-day of the business. During her recovery, she reflected on her future and decided to sell the company to secure financial freedom for her family and fund her philanthropic goals to give back to her local community. She had a million questions: Her business is only 11 years old, can she take advantage of any tax benefits? She doesn’t own 100% of the stock; does that affect her tax liability? What can she do before the sale to maximize her tax savings? Would a multi-million dollar charitable contribution be more effective before or after the sale? She needed to understand her options to decide on her next steps. Before making any final decisions, she consulted with her personal wealth manager and estate planning attorney, whom she had worked with for the past five years. After receiving several offers, Camila accepted one from VistaWave Technologies, a large creative-software conglomerate, for a stock sale valued at $185 million. However, before signing on the dotted line, she needed to ensure that she qualified for the QSBS tax exception. ## Applying the QSBS Strategy Camila and her team confirmed that her SAAS video editing company qualified under Section 1202 and met the following requirements: - The shares were held for 11 years, meeting the 5-year holding minimum. - Stock was issued directly to her and her sister by the C-Corp. - The upcoming sale was structured as a stock sale and not an asset sale. - Stock was issued within the first 6 months of forming the C-Corp, and the company had less than $500k in assets. That was well below the $50M threshold needed for QSBS eligibility. By understanding the qualifications, the company’s founder could confidently structure her exit and clarify her tax obligations. ### Tax Results from the Case Study When Camila Ruiz initially incorporated her business, she did not fully appreciate the magnitude of the potential tax benefits she had unknowingly established. That early decision, however, would later prove pivotal as the company’s value grew exponentially. Camila’s cost basis in her shares was minimal, roughly $150,000. Her capital gain was about $151 million ($151M = 82% × $185M − $150K). Under QSBS, she could exclude up to the greater of $10 million or 10X her original investment from federal capital-gains tax. Because her investment was $150K, the exclusion cap was $10 million for her personally. To optimize the transaction and ensure an efficient exit, Camila coordinated with her finance team and estate planning attorney to implement a pre-sale gifting strategy. Three months prior to the sale, she made the following QSBS-Eligible transfers and gifted: - **To her sister Clara:** $10 million in stock. - **To her parents:** $8 million in stock, split evenly between them. - **To a Donor-Advised Fund (DAF):** $5 million to fulfill her philanthropic goal of supporting local creative-arts and education charities in her hometown. Assuming a combined capital gains[^3] tax rate of 28.8% (federal + NIIT + state), the total tax exposure without QSBS or gifting would have been approximately $43.7M on $151.7M in gains. However, through the successful application of QSBS exclusions and the pre-sale gifting strategy, a significant portion of the gain was rendered federally tax-free. This resulted in millions in tax savings for Camila and her family. ![](/images/insights/qsbs-manhattan-west.jpg) That meant the Ruiz family and their charitable foundation together kept about $13.66M more than they would have without the QSBS and gifting plan, roughly a 30% reduction in the overall tax bill on the stock sale. ### Risks and Limitations QSBS exclusions offer a powerful tax advantage, but they also entail significant risks and limitations. To qualify, the business must be structured as a C-Corporation. Many business owners struggle to meet the first requirement, as many of them operate as LLCs or S-Corps, which are ineligible. Businesses in service-based industries, such as hospitality or law, generally do not qualify. It is critical for business owners to maintain meticulous record-keeping from the time of the stock issuance to the full holding period to verify compliance. While Section 1202 deals with federal-level tax exceptions, state tax rules significantly depend on which state your C-Corp was registered in. Some states conform to federal QSBS rules, like Colorado and Delaware, while others do not offer any QSBS exclusions, like California. It’s imperative for founders and investors to plan with trusted tax advisors to ensure full compliance and to optimize their after-tax outcomes. ### Lessons from the Case Study By choosing C-Corps rather than S-Corps, founders and early investors can access QSBS benefits, one of the most significant tax advantages available. With thoughtful planning from the time of formation, founders, like Camila Ruiz, can position themselves for multi-million dollar tax savings at their exit. ### Conclusion As illustrated in the case study, it’s imperative to understand and plan for QSBS eligibility from the time of formation. Selecting a C-Corp structure, maintaining meticulous records, and holding shares for the required period can translate into millions of dollars in potential tax savings [at the time of an exit.](https://manhattanwest.com/owners-guide-to-exit-planning-securing-your-business-legacy-and-financial-future/) Founders who incorporate QSBS planning into their overall business strategy can unlock benefits that extend well beyond the immediate tax relief. Proper structuring and planning can lay the foundation for a [long-term wealth management strategy](https://manhattanwest.com/press/what-is-private-wealth-management-and-is-it-right-for-you/), enabling founders to create lasting value for themselves, their families, and future endeavors. Business owners should consult experienced tax, legal, and [financial advisors](https://manhattanwest.com/) to structure ownership and entity formation to maximize QSBS eligibility and support long-term financial goals. ## We provide a team of specialists thoughtfully selected to align with your goals. [Contact Us](https://manhattanwest.com/contact/) [^1]: [uscode.house.gov](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section1202&num=0&edition=prelim) [^2]: [home.treasury.gov](https://home.treasury.gov/system/files/131/WP-127.pdf) [^3]: [irs.gov](https://www.irs.gov/taxtopics/tc409) --- ### Q4 2025 State of the Market Update: Echoes of the Past, Signals for the Future (2025-10-23) https://manhattanwest.com/insights/q4-2025-state-of-the-market-update-echoes-of-the-past-signals-for-the-future/ Market Outlook #### _“History never repeats itself, but the kaleidoscopic combinations of the pictured present often seem to be constructed out of the broken fragments of antique legends.”_ **Mark Twain & Charles Dudley Warner, The Gilded Age: A Tale of Today (1873)** This passage, likely the source of Twain’s famous quote, feels especially relevant today. ![](/images/insights/85e59f53-e686-455f-a32f-7af78ee263db_1108x627-1024x579.jpg) As the bull market moves past its three-year mark, the market’s exuberance for all things artificial intelligence continues to build. The enthusiasm is palpable: AI has become the defining investment theme of this cycle, influencing not only technology stocks but the broader market narrative. In many ways, the current environment echoes the late 1990s, when the promise of the internet reshaped expectations for growth, productivity, and valuation. Yet while there are clear parallels to the dot-com era, there are also important differences that warrant careful distinction. Now is an opportune time to ask how much history truly rhymes, and how that informs our investment approach going forward. ## Echoes of the Past During the dot-com bubble, investors extrapolated early signs of internet adoption into boundless growth expectations. Valuations detached from fundamentals as capital flooded into companies with little revenue and even less profitability. When the bubble burst, the NASDAQ ultimately fell nearly 80% from its March 2000 peak. ![](/images/insights/nasdaq-composite-index-1998-2002-1024x468.jpg) ###### Source : Bloomberg Today’s AI narrative shares several similarities. The speed of innovation, the scale of investment, and the language of “paradigm shift” all mirror the optimism of 25 years ago. Capital expenditures by cloud providers and semiconductor firms have surged to record levels. Market concentration has reached extremes: AI-linked mega caps now represent over 35% of the S&P 500’s market capitalization. And once again, the belief that “this time is different” is driving increasingly riskier bets across the AI ecosystem. ## This Time _Is_ Different Unlike the dot-com era, today’s technology leaders are deeply profitable, entrenched, and integral to the global economy. The mega cap technology companies of today generate enormous free cash flow and hold dominant positions in essential technologies. So far, expanding valuation multiples have been supported by strong earnings growth. Moreover, evidence of AI-linked productivity gains has begun to bolster U.S. GDP, offsetting some of the drag from a still-sluggish labor market. ![](/images/insights/us-gdp-2020-2025.jpg) ###### Source: Bloomberg Source:  Underlying Data: Bureau of Economic Analysis ![](/images/insights/atlanta-fed-gdpnow.jpg) ###### Source: Bloomberg. Underlying Data: Federal Reserve Bank of Atlanta Yet exuberance breeds fragility. Just as in the dot-com era, we expect significant amounts of capital to be misallocated and, ultimately, incinerated. Having more capital to deploy does not guarantee an adequate **return on that capital.** ### Dot-Com Revisited In the late 1990s, investment poured into fiber optics, network equipment, and web infrastructure, much of it based on wildly optimistic projections for internet traffic and demand. Many companies of that era failed; those that survived often took years to recover. One well known networking technology company is a telling case study. As the physical backbone of the internet, this company’s routers and switches fueled explosive growth, and its stock reflected that optimism. The company even financed many of its customers’ purchases, creating a circular economy that proved unstable when the bubble burst and many of their customers failed. This company’s shares ultimately fell 80% and, remarkably, have yet to revisit their 2000 highs. ![](/images/insights/share-price-from-1997-to-2025-.jpg) ###### Source: Bloomberg We may be witnessing a similar dynamic today. Semiconductor capacity, AI training clusters, and data center buildouts are expanding at a dizzying pace. History suggests such capital intensity often leads to periods of oversupply and margin compression before equilibrium is restored. Investors should distinguish between **the technology trend**, which may well be transformative, and **the investment opportunity**, which may be less compelling at current valuations. Forecasts of limitless AI-linked productivity rely on assumptions about monetization, regulation, and scalability that remain untested. The market appears to be pricing in a smooth, linear path to mass adoption, leaving little room for the inevitable setbacks, cost overruns, and competitive pressures that accompany every technological revolution. Compounding the risk is an emerging “circular economy” dynamic, in which hardware providers are increasingly financing their customers’ infrastructure buildouts. Recent headlines highlight a growing trend: semiconductor manufacturers and cloud service providers investing in large language model developers, who then use those funds to construct data centers by purchasing semiconductors and cloud capacity from the same investors. The broader adoption of this financing structure adds leverage to the system and heightens the potential for systemic fragility across the ecosystem. ### The Path Forward As stewards of your capital, our goal remains unchanged: to capture long-term value creation while avoiding the excesses that so often precede painful corrections. We continue to participate selectively in structural growth themes, but with a disciplined focus on valuation, cash flow, and balance sheet strength. We hold high-quality technology firms with durable competitive advantages, yet remain cautious about extrapolating recent earnings momentum too far into the future. The AI revolution is real, but so are the risks of collective overconfidence. The internet did change the world, but investors in 1999 paid too high a price for that truth. Two decades later, we benefit from hindsight: technological transformation and disciplined investing are not mutually exclusive. **As always, we appreciate your continued trust and partnership.** Manhattan West Asset Management, LLC (“MWAM”) is an SEC registered investment adviser located in California. MWAM may only transact business in those states in which it is notice filed or qualifies for an exemption or exclusion from notice filing requirements. This summary should not be construed by any consumer and/or prospective client as MWAM’s rendering of personalized investment advice. Any subsequent, direct communication by MWAM with a prospective client shall be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides. For information pertaining to the registration status of MWAM, please contact the United States Securities and Exchange Commission on their web site at www.adviserinfo.sec.gov. A copy of MWAM’s current written disclosure brochure discussing MWAM’s business operations, services, and fees is available upon written request. [**Click to download**](https://docsend.com/view/d6q59jd87s32ue33). ## We provide a team of specialists thoughtfully selected to align with your goals. [Contact Us](https://manhattanwest.com/contact/) --- ### The New Era of Alternative Investments in Retirement Accounts (2025-10-09) https://manhattanwest.com/insights/the-new-era-of-alternative-investments-in-retirement-accounts/ Private Markets ### The Policy Shift Alternative investments have traditionally been out of reach for the average retirement account, reserved instead for high-net-worth individuals and institutional investors. On August 7, 2025, President Trump issued an Executive Order entitled _“Democratizing Access to Alternative Assets for 401(k) Investors”[^1]_, signaling a major policy shift regarding access to alternative asset classes. Only a few days later on August 12, 2025, The U.S. Department of Labor rescinded its December 21, 2021, Supplemental Statement[^2], that discouraged fiduciaries from including alternative assets like private equity in 401(k) plan investment options. “Instead of allowing Washington bureaucrats to call the shots, we believe plan fiduciaries should decide which retirement investment options are best for hardworking Americans.” said the U.S. Secretary of Labor[^2] Lori Chavez-DeRemer in the official news release. The Labor Department has removed a regulatory hurdle that had discouraged plan sponsors from offering such investments. This is expected to bolster more inclusion of private equity and other alternative assets in retirement portfolios, potentially increasing diversification and aligning with broader market trends. “On the asset manager side, it’s a $12-trillion retirement market that they have previously not had access to. For them, there’s certainly a lot of opportunity,” said Morningstar analyst Jason Kephart. ## Why Alternatives Matter for Retirement [Alternative investments](https://manhattanwest.com/a-guide-to-alternative-investments-what-you-should-know-in-2025/) are private assets that are not traded on public markets, such as private equity, venture capital, real estate, or private credit. Alternative investments often show low correlation with traditional asset classes like stocks and bonds, helping reduce overall portfolio volatility and improve risk-adjusted returns. Pensions and endowments have long relied on alternatives to outperform public markets, setting an institutional precedent. The market rationale for inclusion is clear: diversification, inflation protection, and potential for enhanced long-term returns. ### Types of Alternatives The Executive Order provides an official definition of alternative investments, including: - **Private market investments:** direct and indirect interests in equity, debt, or other instruments not traded publicly, - **Real estate:** both equity and debt instruments secured by real estate. - **Digital assets:** holdings in actively managed investment vehicles investing in cryptocurrencies or related assets. - **Commodities:** direct and indirect investments in raw materials and goods. - **Infrastructure projects:** financing for large-scale development initiatives. - **Lifetime income strategies:** including longevity risk-sharing pools. This means private equity, venture capital, private credit, real estate, infrastructure, commodities, hedge funds, and digital collectibles may now find a place in retirement planning and accounts. ### Access to Alternatives Under Section 2 of the “Democratizing Access to Alternative Assets for 401(k) Investors”, it states “It is the policy of the United States that every American preparing for retirement should have access to funds that include investments in alternative assets when the relevant plan fiduciary determines that such access provides an appropriate opportunity…” This reframes the issue of access to alternatives from a question to an affirmative right that all plan participants should have, where appropriate. Up until now, employer-sponsored 401(k) plans have been largely limited to mutual funds, ETFs, and target-date funds, while self-directed IRAs offered some more flexibility. Through self-directed IRAs, investors could already access real estate, private equity funds, private placements, and even certain digital assets. This policy change is closing the gap by bringing institutional-style options into mainstream 401(k) planning. ## Retirement Accounts Retirement accounts are tax-advantaged vehicles designed to help individuals build wealth for the future. In the U.S., these accounts fall into two main categories: ### Traditional (Tax-deferred): - 401(k), 403(b), and 457 plans: employer-sponsored with potential matching contributions. - Traditional IRA: individual account with tax-deductible contributions (subject to income limits). - SEP-IRA and Solo 401(k): for self-employed individuals and small business owners. ### Roth (Tax-free growth): - Roth IRA: contributions made with after-tax dollars, with tax-free withdrawals in retirement. - Roth 401(k): employer-sponsored plan with Roth tax treatment. These accounts provide meaningful tax benefits, offering either upfront deductions in traditional plans or tax-free growth in Roth plans. They also set rules for contributions, withdrawals, and required minimum distributions, which generally begin at age 73, except for Roth IRAs during the owner’s lifetime. Historically, retirement portfolios in these accounts have focused on stocks, bonds, and mutual funds, with very limited access to alternatives. Yet as workers face longer lifespans, greater market volatility, and the limits of traditional asset classes, alternatives present a powerful complement within tax-advantaged accounts. This is the beginning of a new era in portfolio construction and retirement planning. ## Considerations for HNWI or UHNWI Investors The strategic allocation to alternative investments is no longer an edge, but a core component of a prudent financial plan for high-net-worth individuals. While most HNWI already have alternative investments, adding them to their retirement planning can enhance returns, reduce volatility, and build a more resilient portfolio designed to withstand various economic conditions. The recent executive order has opened up an enormous pool of assets in DC plans (billions in 401(k)s) to alternative asset managers. For individuals already investing in or running private equity, this could mean more capital and a corresponding rise in demand. As more capital is sought from DC plans, there could be pressure to differentiate via risk control, performance, etc. New funds may adapt to liquidity restrictions, transparency, or fee sensitivity may emerge. UHNWI may get earlier access than the general public to some of these funds. As new fund structure emerge to serve 401(k)s, there may be an opportunity for private investors or UHNWI to seed them, take early positions, or even negotiate favorable economics before scale causes fee compression. Since many changes depend on guidance/regulation rather than law, future court decisions or presidential administrations could roll back or limit parts of the executive order. UHNW should not assume permanence and should communicate to their fiduciary. ## Legal, Tax, and Compliance Considerations For Investors The expansion of alternatives into retirement accounts brings both opportunity and responsibility. Fiduciary duties remain the cornerstone: plan sponsors and advisors must exercise prudent judgment, conduct rigorous due diligence, and ensure that any alternative offerings are suitable for participants. The Department of Labor, SEC, and Treasury have broadened the official definitions of alternative assets, but they have also reinforced the importance of compliance, disclosure, and oversight. Tax considerations are another critical factor. Certain structures can generate Unrelated Business Taxable Income (UBTI), which may undermine the tax-advantaged benefits of retirement accounts if not properly managed. In addition, liability concerns for fiduciaries persist, especially when offering complex or illiquid assets that require careful valuation and transparent communication. Many retirement savers are unfamiliar with the risks and mechanics of alternative assets, making it essential for fiduciaries to prioritize clear explanations, balanced risk assessments, and ongoing support. By pairing expanded access with stronger compliance practices and participant education, investors and fiduciaries can navigate this evolving landscape with confidence. ## Pros and Cons of Adding Alternatives in Your Retirement ### Benefits: - Diversification, - Potential for enhanced returns, - Inflation hedging. ### Risks - Illiquidity, - Higher fees, - Complexity of valuation and oversight. ## Conclusion The inclusion of alternatives in retirement accounts represents more than a regulatory change: it’s a paradigm shift. For investors, it offers diversification, inflation protection, and access to historically higher-return asset classes. For fiduciaries, it introduces both opportunities and responsibilities in education, compliance, and oversight. As retirement savers confront longevity risk, market volatility, and the limitations of traditional portfolios, alternatives now provide a powerful complement within tax-advantaged accounts. This shift marks the beginning of a new era in retirement investing. Sophisticated investors who recognize these implications early and position accordingly will benefit from the transition. Those who view it merely as a regulatory footnote risk missing one of the most significant structural changes in private markets in decades. ## We provide a team of specialists thoughtfully selected to align with your goals. [Contact Us](https://manhattanwest.com/contact/) [^1]: [whitehouse.gov](https://www.whitehouse.gov/presidential-actions/2025/08/democratizing-access-to-alternative-assets-for-401k-investors/) [^2]: [dol.gov](https://www.dol.gov/newsroom/releases/ebsa/ebsa20250812) --- ### Owner’s Guide to Exit Planning: Securing Your Business Legacy and Financial Future (2025-09-25) https://manhattanwest.com/insights/owners-guide-to-exit-planning-securing-your-business-legacy-and-financial-future/ Wealth Strategy Exit planning is one of the most important yet most overlooked aspects of business ownership. In 2025, with shifting markets, evolving tax laws, and increasing demands on leadership, preparing for a transition has never been more critical. Too often, owners focus on building their companies and chasing growth milestones but postpone planning for what happens when they eventually step aside. Every entrepreneur begins with a vision: launching a disruptive idea, scaling it into a market leader, and perhaps even building a global powerhouse. But what happens when life throws an unexpected curveball? If illness, burnout, or personal circumstances suddenly pull you out of the day-to-day, will your business continue to thrive? Or will you leave it to your management team to “figure it out” without a clear plan? The reality is that every owner will exit their business, whether by choice, circumstance, or necessity. Preparing for this transition allows owners to maximize financial returns, secure their legacy, and provide stability for employees and stakeholders. ## Exit, Succession, and Estate Planning: How They Fit Together Exit planning, succession planning, and estate planning are closely related but serve different purposes. Exit planning focuses on creating a strategy to maximize business value and ensure a smooth transaction, whether through a sale, succession, or another exit path. Succession planning is identifying and preparing the next generation of leaders or owners to ensure operational continuity. Estate planning, on the other hand, addresses [personal wealth](https://manhattanwest.com/private-wealth/), family inheritance, and long-term legacy considerations. While distinct, these three often overlap. The most effective exit strategies weave all three together, ensuring no gaps are left during transition. Business owners who only focus on one area risk overlooking critical opportunities. By aligning leadership continuity, estate strategies, and exit objectives, owners can safeguard business value while protecting family wealth and personal goals. ### The Price of Procrastination: Common Planning Mistakes Far too many business owners operate without an emergency plan or clear instructions for how the company should function in their absence. This lack of preparation can become critical if an unexpected health issue or personal crisis sidelines the owner, leaving the team to struggle without guidance. Proper tax planning is another area often overlooked. It is essential that business owners understand their potential tax liability well before an exit is structured. Equally important is preparing management and identifying a capable successor; without this, both leadership and operations risk faltering. In family-owned businesses, the absence of open communication creates additional challenges. Setting clear expectations and discussing transition plans with family members early can prevent misunderstandings and conflict when the time comes to announce broader changes to the organization. ## The Six Most Common Types of Exits Not all exits are unexpected. Some exits are meticulously planned for years and have many phases of execution. There are many factors that need to be taken into account before deciding what type of exit strategy is right for you. You must consider your timeline, reason for exiting, and what is required from you before your last day. The most common type of exits : 3rd Party Sales to a Strategic Buyer ● Best Fit: market expansion ● Pros: higher multiples, resources ● Cons: cultural fit risk, integration control 3rd Party Sale to a Financial Sponsor (Private Equity) ● Best Fit: growth runway, professionalization ● Pros: rollover equity, second bite at the apple ● Cons: governance requirements, leverage sensitivities Management Buyout (MBO) ● Best fit: strong team, desire for continuity ● Pros: cultural continuity, smoother transition ● Cons: financing complexity, price may be lower Family succession or generational transfer ● Best fit: engaged and capable heirs ● Pros: legacy preservation, flexible timelines ● Cons: increased family dynamics, liquidity and fairness issues ESOP (employee stock ownership plan) ● Best Fit: stable cash flows, culture of ownership ● Pros: tax advantages, employee engagement ● Cons: trustee oversight, valuation and repurchase obligations Liquidation or wind-down ● Best Fit: asset-heavy or limited going-concern value ● Pros: speed and simplicity ● Cons: lowest value realization, possible negative impact on legacy/reputation Choosing the right exit path is rarely a one-size-fits-all decision. Each option carries its own mix of opportunities and trade-offs, shaped by your goals, timeline, financial needs, and the legacy you want to leave behind. What matters most is aligning the method of exit with both the realities of your business and your personal objectives. Once you’ve clarified the path that fits best, the next step is to understand how the new owners will value your company. ## Valuation, Value Drivers, Red Flags, and Due Diligence Prep When it comes to preparing for an exit, understanding how your business will be valued is critical. Buyers typically rely on three main valuation approaches: income-based models such as discounted cash flow (DCF)[^1], market comparisons using multiples, and asset-based methods. The strongest valuations are supported by key value drivers like recurring revenue, healthy margins, consistent growth, strong brand recognition, intellectual property protection, a capable management team, diversified customers, and clean, reliable financial controls. Conversely, red flags that can reduce value include heavy reliance on a single customer, an owner-dependent business model, declining or inconsistent financial performance, unresolved legal or compliance issues, environmental liabilities, and weak management systems or documentation. To position for success, sellers must be due-diligence ready with a well-organized data room containing financial, tax, legal, HR, IP, commercial, operational, and ESG records. Additional steps include preparing a quality of earnings report, setting a working capital target, and auditing contracts, IP assignments, licenses, and compliance documentation. These measures help instill buyer confidence and reduce the risk of surprises during negotiations. ### Financial and Tax Considerations Financial and tax planning is one of the most critical components of a successful exit. Timing plays a significant role in capital gains planning, as the way and when a deal is structured can dramatically impact the owner’s after-tax proceeds. Understanding the differences between an asset sale and a stock sale is also essential, since buyers often prefer asset deals for liability protection while sellers favor stock deals for tax efficiency. Beyond the basics, specialized elections and deal structures such as Section 338(h)(10) elections, rollover equity, earnouts, seller notes, or installment sales can create opportunities to optimize outcomes. For example, eligible C corporations, founders, early employees, and investors with QSBS[^2] (Qualified Small Business Stock) may be able to avoid paying federal capital gains tax on up to $10 to $15 million (or up to 10 times their initial investment) of profit when they sell shares. To qualify, the company must meet specific requirements, and the shares must be held for a required period. With proper planning, such as filing an 83(b) election to start the clock or utilizing rollovers and trusts, taxpayers can benefit from massive tax savings. Trusts and estate strategies, including GRATs, IDGTs, or family limited partnerships, can help preserve wealth and transfer it efficiently to future generations. Charitable vehicles, such as donor-advised funds (DAFs) or charitable remainder trusts (CRTs), may also provide both tax advantages and philanthropic benefits. Because of the complexity, owners should coordinate closely with their CPA, transaction tax counsel, and [wealth manager](https://manhattanwest.com/press/what-is-private-wealth-management-and-is-it-right-for-you/) to build an integrated plan. It’s crucial that everyofne is on the same page. By having clear communication and deadlines with your whole team, it greatly improves your probability for a successful exit. To add: While not legally required, key person insurance can be critical for protecting a business against unexpected loss. Key person insurance is a life insurance policy that protects the business from financial loss if an essential employee, partner, or owner dies or becomes disabled. The company is the policyholder and beneficiary. The payout can be used to stabilize operations, recruit and train a replacement, or settle debts if the business is forced to wind down. Finally, developing a post-exit liquidity plan, investment strategy, and cash flow model ensures financial security and a smooth transition into the next chapter of life. ### Legal and Compliance Every planned exit involves a complex web of legal and compliance requirements that must be carefully navigated. If you decide to sell your business, letters of intent (LOIs) set the tone for negotiations, addressing key items such as price mechanics, exclusivity, working capital adjustments, and timelines. From there, definitive agreements detail the finer points, including representations and warranties, indemnities, escrow provisions, and often the use of representations and warranties insurance (RWI) to mitigate risk. Employment agreements, non-competes, and incentive plans must also be reviewed to ensure key talent remains motivated and retained. On the operational side, companies need to confirm that intellectual property is properly assigned, software licenses are in order, and that they are compliant with data privacy and cybersecurity regulations. Depending on the industry, regulatory approvals, environmental compliance, or government notifications may also be required. Addressing these issues proactively reduces the likelihood of delays, disputes, or surprises that could threaten deal certainty or valuation. ## Leadership and Succession A strong exit strategy requires building a management team that can operate effectively without the owner’s involvement before the owner exits. This includes identifying and leading internal successors, whether family members or key executives, and ensuring they are prepared to take on leadership roles. Well-designed incentives, phantom equity, long-term incentive plans (LTIPs), or retention bonuses, can motivate and retain top talent through the transition. Depending on the size of your business, you may want to consider upgrading governance, whether through the addition of a board of directors or an advisory board and by establishing clear reporting rhythms, can help instill discipline and transparency. Do not forget a communication plan or announcement timeline. You must ensure that employees, shareholders, customers, suppliers, and lenders remain confident throughout the process and afterwards. Depending on your relationship and size of your businesses, you may decide to do an in-person announcement or a digital correspondence. ### Personal and Emotional Planning Beyond the financial and operational aspects, business owners must prepare for the personal transition that comes with an exit. For many founders, stepping back creates a profound identity shift, which can also affect their other close relationships. Family dynamics add another layer of complexity, especially when questions of fairness among children or business partners arise. Owners should also plan for what comes after the exit is completed. For some that means a sabbatical, philanthropy, traveling, spending more time with family, starting new ventures, or serving on boards. Planning for health, lifestyle, and how time will be spent post-exit helps ensure the transition is both fulfilling and sustainable. ## The Exit Planning Process Exiting a business is a step-by-step journey. While every exit plan is unique, there are some similarities between most of them. If you are selling your business it typically starts with a readiness assessment, where you evaluate your company’s value, risks, and your personal goals. Next comes a value enhancement plan, usually spread over 12 to 24 months, aimed at strengthening the business before going to market to sell it. After that, owners usually bring in a team of experts, an M&A advisor, CPA, attorney, wealth manager, and banker. With their help, you prepare materials for potential buyers, including financial forecasts, a confidential information memorandum (CIM), and an organized data room. This preparation leads to buyer meetings and, eventually, a letter of intent (LOI). From there, buyers conduct due diligence and arrange financing. The process concludes with signing final agreements, closing the transaction, and putting a transition plan in place. After the sale, the focus shifts to integration and managing the wealth generated from the exit in line with your long-term vision. ### Best Practices and Common Pitfalls The most successful exits share a few best practices. Owners who start planning early, focus on what buyers value, keep their financials in order, protect intellectual property, reward key employees, and stay open to different exit options tend to achieve better results. It is also critical to look at after-tax proceeds, not just the headline price, since taxes and fees can make a big difference in the final outcome. Common mistakes include waiting too long to plan, focusing only on price, overlooking working capital, entering the market without proper preparation, picking the wrong buyer, or failing to communicate clearly with stakeholders. Avoiding these pitfalls can mean the difference between a smooth, rewarding transition and a stressful, disappointing one. ## Conclusion Successful exits don’t happen by chance, they are the result of careful planning well in advance. Starting early allows business owners to protect the value they’ve built, preserve their legacy, and ensure a smoother transition for both the company and their families. Now is the time to take the first steps: complete a readiness assessment, assemble a trusted advisory team, and outline a clear plan forward. Even small actions taken today can set the foundation for a transition that maximizes financial rewards, reduces risk, and creates clarity for life after the business. ## We provide a team of specialists thoughtfully selected to align with your goals. [Contact Us](https://manhattanwest.com/contact/) [^1]: [online.hbs.edu](https://online.hbs.edu/blog/post/discounted-cash-flow) [^2]: [sba.gov](https://www.sba.gov/blog/qualified-small-business-stock-what-it-how-use-it) --- ### Q3 2025 State of the Market Update: Tour de France Edition (2025-07-31) https://manhattanwest.com/insights/state-of-the-market-update-q3-2025-tour-de-france-edition/ Market Outlook As the Tour de France concludes, we find apt parallels between the world’s most grueling cycling race and today’s capital markets. Just as riders and teams in the Tour adopt different strategies based on their strengths and goals, investors are navigating a similarly complex environment with divergent approaches. In cycling, sprinters focus on stage wins: flat, fast bursts where power triumphs. The post-tariff-announcement rally since “Liberation Day” in April certainly resembled one of those sprint stages. The S&P 500 has surged more than 25% from its lows, driven by a resurgence in speculative behavior: SPACs are reappearing, meme stocks have returned, and some unprofitable companies are pivoting to cryptocurrency, issuing equity to fund purchases of Bitcoin and Ethereum, with investors enthusiastically paying $2 for $1 worth of crypto. Wild, indeed. ![](/images/insights/bloomberg-spx-index-e1755226127406.png) ###### Source: Bloomberg But sprinters rarely win the yellow jersey. That’s reserved for general classification riders: those who stay disciplined, conserving energy during the early stages and attacking strategically in the mountains. Investing, when done properly, is a long race. It demands patience and discipline. Chasing fast money often leads to burnout, while success comes from seizing opportunities, especially during challenging stretches of the course. ## Though markets are currently riding a strong tailwind, several significant headwinds remain: ### Tariffs Are a Tax Despite the pause in tariffs announced on “Liberation Day” (April 2nd) as negotiations unfold, the baseline level of tariffs today remains higher than at any point in the last 80 years. ![](/images/insights/us-tarrifs-theatened-by-us-customs-and-bloomberg-1024x287.png) ###### Source: Bloomberg. Underlying Data: US International Trade Commission, US Customs, US Census Bureau, Bloomberg Economics ![](/images/insights/chart-of-us-tarrifs-on-china-e1755226225626.png) ###### Source: Bloomberg. Underlying Data: US International Trade Commission These effects are beginning to show up in consumer prices, particularly for imported goods like toys, furniture, appliances, and apparel. Core goods prices (excluding autos) rose 0.55% in June, the largest monthly jump since November 2021. While services inflation, especially shelter costs, has cooled recently, higher goods prices are likely diverting consumer spending away from services. In our view, tariffs are not broadly inflationary but are a drag on economic growth. They represent a shift in how and where consumers spend, ultimately weighing on the broader economy. ### Valuations Are Stretched As we’ve said before, valuation is a poor short-term market timing tool; stocks can remain expensive for quite a while. But for long-term investors, valuations are a crucial determinant of future returns. Today, the S&P 500’s cyclically adjusted price-to-earnings ratio is at levels not seen since the tech bubble of the early 2000s. ![](/images/insights/inflation-adjusted-prices-with-real-pe-ratios-on-sp-500-e1755226307648.png) ###### Source: Bloomberg Much of the current enthusiasm is centered on artificial intelligence, a potentially transformative technology. To be fair, today’s market leaders are real businesses generating real cash flow, not just concepts ending in “.com.” Still, a growing number of companies are trading at valuations we view as unsustainable. We continue to adhere to our “growth at a reasonable price” philosophy, avoiding the froth and identifying quality businesses trading at discounts to intrinsic value. ### The Growing U.S. Debt Load The administration has called on Fed Chair Jay Powell to lower interest rates, hoping to offset potential tariff fallout and reduce the government’s interest expense. (See the now-infamous handwritten note from Trump to Powell.) ![](/images/insights/president-trumps-note-to-fed-chair-jay-powell-e1755226373634.png) ###### Source: Truth Social However, cutting rates without labor market weakness risks reigniting inflation. The Fed is likely to resist, especially given two major inflationary pressures: tariffs and the recently passed “Big Beautiful Bill,” which the Congressional Budget Office estimates will add $3.4 trillion to the national debt. Rather than bringing rates down, this additional fiscal stimulus has pushed long-term yields higher, as investor demand for U.S. debt and the dollar begins to soften. ![](/images/insights/30-year-us-generic-govt-30-index-e1755226405634.png) ###### Source: Bloomberg We believe the administration may eventually get its rate cuts, but likely only in response to a slowing economy. ### Municipal Bonds: The Unsung Heroes Municipal bonds are the domestiques of a well-built portfolio: the support riders who shield the leaders from wind, absorb attacks, and do the heavy lifting that enables overall victory. With multiple headwinds facing the market, municipals provide valuable ballast and currently offer compelling value. In the first half of the year, municipal bonds underperformed the broader fixed income market despite strong fundamentals: state and local tax revenues remained healthy, and credit quality continued to improve. The primary culprit was an oversupply of new issuance, as issuers rushed to market in anticipation of a perceived, though unlikely, threat that tax-exempt status could be eliminated in the latest spending bill. We expect this supply-demand imbalance to ease in the second half of the year, creating a favorable environment for municipal bond valuations to recover. For long-term investors, this sets the stage for attractive total return potential with meaningful tax-advantaged income. ![](/images/insights/munsmt30-index-source-bloomberg-e1755226435826.png) ###### Source: Bloomberg Today, tax-exempt municipal bonds are offering yields near those of equivalent taxable Treasuries, an unusual and attractive situation. For example, a 30-year AAA-rated muni yielding 4.90% equates to roughly an 8.25% taxable equivalent yield for clients in the highest federal bracket. In our view, this presents a far better risk-adjusted investment than paying $2 for $1 of Bitcoin. ## Final Thoughts As we enter the final stages of this economic “race,” the temptation to sprint ahead is strong. But lasting success, whether in cycling or investing, comes from discipline, strategic patience, and strong fundamentals. While the headlines may celebrate the sprinters of today, we remain focused on positioning our clients to win the yellow jersey in the long run. **As always, we appreciate your trust.** Manhattan West Asset Management, LLC (“MWAM”) is an SEC registered investment adviser located in California. MWAM may only transact business in those states in which it is notice filed or qualifies for an exemption or exclusion from notice filing requirements. This summary should not be construed by any consumer and/or prospective client as MWAM’s rendering of personalized investment advice. Any subsequent, direct communication by MWAM with a prospective client shall be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides. For information pertaining to the registration status of MWAM, please contact the United States Securities and Exchange Commission on their web site at www.adviserinfo.sec.gov. A copy of MWAM’s current written disclosure brochure discussing MWAM’s business operations, services, and fees is available upon written request. [**Click to download**](https://docsend.com/view/th2rwne78f62h7gh). ## We provide a team of specialists thoughtfully selected to align with your goals. [Contact Us](https://manhattanwest.com/contact/) --- ### A Guide To Alternative Investments : What You Should Know in 2025 (2025-07-25) https://manhattanwest.com/insights/a-guide-to-alternative-investments-what-you-should-know-in-2025/ Private Markets In today’s increasingly complex and interconnected global markets, traditional investments alone may no longer provide the growth, protection, or diversification that investors seek. As volatility reshapes public markets, discerning investors are turning to [alternative investments](https://manhattanwest.com/private-investments/): not as a trend, but as a strategic move. From private equity to venture capital, alternatives offer a compelling path to enhanced portfolio performance, inflation resilience, and high return potential. Yet, the opportunities within this asset class are as nuanced as they are promising. For those with capital to invest, selecting the right investment partner is paramount. You need an investment firm with access to exclusive opportunities, rigorous due diligence, and strategies tailored to your long-term financial goals. Understanding your alternative investment strategy is critical. Our goal is to provide you with the clarity, insight, and expertise required to make confident, data-driven decisions as you expand into this dynamic and complex asset class. ## Alternative Investments VS Public Investments Public markets (composed of stocks, bonds, and ETFs) are liquid, transparent, and broadly accessible. While they remain foundational, they also tend to reflect broader market swings and offer limited customization or control. In contrast, alternative investments, such as private equity and venture capital, are private, often illiquid, and typically accessible only to accredited or institutional investors. Their exclusivity offers access to differentiated strategies with the potential for stronger, uncorrelated returns. Alternative investments refer to private investments that are not traded publicly such as private equity and venture capital. One of the most significant distinctions between alternative and public investments is who can access these opportunities. Alternative investments are inherently private and often reserved for individuals who meet specific criteria, such as accredited investor status or high minimum capital commitments. This exclusivity not only limits general access but also creates a unique advantage: the opportunity to participate in less correlated strategies that may offer higher return potential compared to traditional public assets. ### Examples of Alternative Investments #### Private Equity [Private equity](https://manhattanwest.com/private-investments/private-equity/) is a direct investment in a privately owned company that is not traded on public markets. By directly investing in high-growth private companies, you have the opportunity for higher returns that don’t correlate with public markets. The primary objective of private equity investing is to generate value by driving operational enhancements, fostering strategic growth, and ultimately achieving a profitable exit. Sourcing, evaluating, and structuring direct private equity investments is complex; for many, it's inaccessible. At Manhattan West[^1], we curate opportunities in sectors such as sports, media, and entertainment, targeting companies at strategic inflection points led by proven management teams. Manhattan West offers our investors exclusive opportunities to invest in private, high-growth companies in the sports, media, and entertainment sectors. With over two decades of investment experience, Manhattan West leverages our deep industry knowledge and ecosystem of operators and investors to partner with businesses led by exceptional management teams undergoing a strategic inflection point. #### Venture Capital While often lumped together with private equity, [venture capital](https://manhattanwest.com/private-investments/venture-capital/) stands apart by focusing on high-growth startups at the forefront of innovation. These companies may carry higher risk, but they also hold the potential for transformative impact in their industries. Partnering with a firm that specializes in venture capital is crucial. The level of due diligence and vetting required to identify the most promising ventures is exhaustive and complex. Manhattan West offers its investors exclusive access to venture capital opportunities in cutting-edge sectors like AI, space exploration, software, and climate technology, industries that are shaping the future of our world. “We leverage proprietary deal flow to identify and invest in the most innovative founders and market-defining companies,” says a Manhattan West executive. With a track record of backing companies that are changing the game, Manhattan West isn’t just investing in companies; they’re investing in the future. ### Why Alternative Investments Are Attractive To Investors #### Portfolio Diversification Alternative investments often have a low correlation with traditional asset classes like stocks and bonds. This means they can help reduce overall portfolio volatility and enhance risk-adjusted returns. #### Enhanced Return Potential Private markets may offer superior return potential, particularly when accessed through institutional-quality opportunities and seasoned managers. #### Access to Unique Opportunities Alternatives offer exposure to sectors and opportunities not typically available in public markets. ### 5 Key Considerations For Investors When Considering Alternative Investing **Your overall investing goals** You must understand your investment goals and overall timeline before investing in alternative assets. **Liquidity** Consider whether your portfolio can support illiquid holdings without compromising cash flow or emergency funding needs. **Investment Timelines** Many alternatives require a long-term view, with capital commitments of 5–10+ years. Income requirements Determine whether you need predictable distributions or can accommodate irregular payout schedules. **Portfolio Diversity** As an investor with investment capital, you likely already have a diversified portfolio. However, it is key to periodically review your overall investment strategy to ensure it aligns with your revolving financial goals and that they are meeting your expectations. By adding alternative investments, you can help mitigate risks associated with traditional assets. ### CONCLUSION As the role of alternative investments continues to expand in modern portfolio construction, discerning investors are rethinking traditional models in favor of more agile, resilient strategies. Whether your objective is capital growth, income generation, or long-term wealth preservation, Manhattan West offers access to private market strategies curated for your unique financial vision. Our team combines deep sector expertise with institutional-grade diligence to help you confidently navigate this complex and rewarding asset class. ## We provide a team of specialists thoughtfully selected to align with your goals. [Contact Us](https://manhattanwest.com/contact/) [^1]: [linkedin.com](https://www.linkedin.com/company/manhattan-west-enterprise-llc/) --- ### Navigating Tariffs: Protecting Your Investment Portfolio in Uncertain Markets (2025-05-07) https://manhattanwest.com/insights/navigating-tariffs-protecting-your-investment-portfolio-in-uncertain-markets/ Market Outlook ## Tariff Portfolio Navigation Strategy: **Navigating Tariffs with Discipline and Purpose** In periods of heightened market volatility, especially those triggered by policy developments such as recent tariff announcements, a measured, long-term investment approach is critical. At Manhattan West, we remain grounded in the principles that have consistently guided us through market cycles. This note provides a strategic framework tailored to different portfolio positions amid ongoing uncertainty, offering guidance for navigating tariffs with clarity and conviction. ## Our Core Investment Principles: We remain steadfast in our philosophy, especially when markets become turbulent: - **Valuation Always Matters:** Market dislocations offer rare opportunities to acquire high-quality businesses at attractive prices. Discipline in valuation is the cornerstone of long-term return potential. - **Patience is a Virtue, and a Strategy:** We invest with a disciplined two- to three-year outlook, but our preferred holding period is long-term. Timing short-term market moves is rarely productive. - **Discipline Over Emotion:** We exit positions when the investment case no longer holds, not based on headlines or sentiment. - **Research-Driven Decisions:** Every allocation is underpinned by rigorous fundamental analysis, evaluating operations, industry dynamics, and competitive positioning. - **Capital Preservation First:** We favor companies with strong balance sheets to help limit downside risk and protect against permanent capital impairment. ## The Pitfalls of Market Timing: Attempting to exit and re-enter the market in volatile times is rarely successful. Recoveries often begin before the broader economic picture improves, making perfect timing nearly impossible. Historical data shows that being out of the market on even a few of the best days can significantly impact long-term performance. **Annualized Return S&P 500 Index (Total Return)** ![](/images/insights/mw_tariff_returns.jpg) ## Let’s Talk Strategy: In times of market change, a thoughtful review of your investment portfolio is more important than ever. Whether you’re considering new allocations or reevaluating risk exposure, navigating tariffs effectively starts with a disciplined, customized plan. - Sitting on cash and wondering if it’s the right moment to enter the market? - Holding bonds and considering a shift toward equities? - Heavily weighted in U.S. stocks and thinking about enhancing diversification? We’re here to help you navigate the possibilities. Our personalized approach is designed to align with your financial goals, risk tolerance, and long-term vision. ## We provide a team of specialists thoughtfully selected to align with your goals. [Contact Us](https://manhattanwest.com/contact/) --- ### Q2 2025 State of The Market Update: Fear, Fundamentals, and Mr. Market (2025-04-30) https://manhattanwest.com/insights/state-of-the-market-update-q2-2025-fear-fundamentals-and-mr-market/ Market Outlook The post-election optimism that had surged through U.S. business circles, driven by promises of deregulation and tax cuts, has swiftly faded over the past month. A combination of DOGE-fueled federal spending cutbacks and a volatile trade policy, punctuated by the April 2nd announcement of reciprocal tariffs on all global trade partners, has unnerved markets and left corporate leaders seeking direction. Until there’s greater clarity on trade, corporate America remains in a holding pattern, waiting for the rules of engagement to be defined. ## Hard vs. Soft Data: A Tale of Two Economies As of March, the “hard” economic data continues to show strength: unemployment remains near historic lows, and inflationary pressures, while still present, are gradually easing. From the Federal Reserve’s[^1] perspective, this economic backdrop supports the current interest rate posture. Federal Reserve Bank of New York President John Williams recently echoed this sentiment: > “The current modestly restrictive stance of monetary policy is entirely appropriate given the solid labor market and inflation still above our 2% goal.” However, hard data is by nature backward-looking. It doesn’t yet reflect the potential downstream effects of recent policy shifts. Meanwhile, “soft” data, surveys that capture consumer sentiment, tells a much different story. ![](/images/insights/us-consumer-sentiment-sinks-to-second-lowest-on-record-1024x835.png) ###### Source: Bloomberg. Underlying Data: University of Michigan According to the latest University of Michigan survey, consumer sentiment has plummeted to the second-weakest level on record. Notably, this pessimism is bipartisan: Democrats, Independents, and Republicans alike are showing diminished outlooks, accompanied by inflation expectations hitting multi-decade highs amid rising tariff fears. The consumer has been a resilient force, helping prop up the economy through various headwinds. But consumer psychology can play a powerful role in economic cycles. When sentiment deteriorates to this extent, fear alone can trigger reduced spending, potentially tipping the economy into recession, regardless of what the hard data currently shows. ## Markets Are Reflecting Uncertainty Stocks have started to price in these growing uncertainties, and we expect volatility to continue as long as policy unpredictability persists. Markets, businesses, and [investors](https://manhattanwest.com/) alike need visibility into the road ahead before valuations can reflect any level of long-term confidence. ![](/images/insights/spx-index-april-2024-april-2025-1024x514.png) ## The Pitfalls of Market Timing Trying to time the market in turbulent periods rarely works. Recoveries often begin before the broader economic indicators improve, making it nearly impossible to re-enter the market at the right moment. Historical data clearly shows that missing even a handful of the market’s best days can significantly impair long-term performance. ![](/images/insights/source-by-charles-schwab-quarterly-chartbook-q4-2024-as-of-12-24.-underlying-data-bloomberg-1024x580.png) ###### Source: Charles Schwab Quarterly Chartbook 04 2024 as of 12/31/24. Underlying data: Bloomberg Recent price swings, driven by algorithmic trading reacting instantly to headlines or even social media posts, have caused entire indexes to gap up or down 5–10% within a single session. These moves are a stark reminder of how quickly wealth can be eroded when trying to outmaneuver volatility. The intraday chart of the S&P 500 over three days last week demonstrates this best: ![Source: Bloomberg](/images/insights/spx-index--1024x555.png) ###### Source: Bloomberg ## Mr. Market and the Power of Discipline In times like these, it’s helpful to revisit Benjamin Graham’s timeless parable of Mr. Market from The Intelligent Investor. In it, Graham describes a moody business partner who shows up daily with a price he’s willing to buy or sell your shares at, sometimes rational, sometimes erratic. The key takeaway is this: You don’t have to act on Mr. Market’s whims. Instead, you assess the true value of your investments based on fundamentals and act only when it suits your long-term strategy. Mr. Market, in his manic-depressive state, was wildly optimistic heading into 2025 as many stock valuations became unmoored from reality. Now, he has turned pessimistic, punishing the high-valuation stocks he once exalted. This is precisely why one of our core investment principles is **Valuation Matters.** Maintaining discipline around valuation is essential, not just for achieving strong long-term returns but also for protecting capital during downturns. Market volatility can be unsettling; however, these moments often present rare opportunities to buy high-quality businesses at deeply discounted prices, thanks to our emotional and erratic friend, Mr. Market. **As always, we thank you for your continued trust and partnership. We remain focused on fundamentals, guided by a long-term perspective, and vigilant in seeking value amidst volatility.** Manhattan West Asset Management, LLC (“MWAM”) is an SEC registered investment adviser located in California. MWAM may only transact business in those states in which it is notice filed or qualifies for an exemption or exclusion from notice filing requirements. This summary should not be construed by any consumer and/or prospective client as MWAM’s rendering of personalized investment advice. Any subsequent, direct communication by MWAM with a prospective client shall be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides. For information pertaining to the registration status of MWAM, please contact the United States Securities and Exchange Commission on their web site at www.adviserinfo.sec.gov. A copy of MWAM’s current written disclosure brochure discussing MWAM’s business operations, services, and fees is available upon written request. [**Click to download**](https://docsend.com/view/i8kkrrug4e6rrwbr). ## We provide a team of specialists thoughtfully selected to align with your goals. [Contact Us](https://manhattanwest.com/contact/) [^1]: [federalreserve.gov](https://www.federalreserve.gov/aboutthefed.htm) --- ### 2024 Year End Update (2025-01-07) https://manhattanwest.com/insights/2024-year-end-update/ Market Outlook Dear Friends, With the year coming to a close, I am writing to share our reflections on 2024, along with our goals for the future. 2024 was marked by the rebound of the U.S. economy and labor market, the ongoing rise of artificial intelligence and cryptocurrency, and the impact of conflicts in the Middle East and Ukraine. Enclosed are the observations we’ve made over the course of 2024 and how we plan to approach 2025. ## The United States Economy ![](/images/insights/3fe60454-9ca6-fb11-76a5-e621bcae3c8f-1-1024x512.jpg) America voted for an “America First” agenda in 2024, making it only natural to begin this annual letter with a reflection on the United States economy. The enduring strength of the nation’s resilience was evident both in the election and in the year’s economic performance.  Since 2020, the U.S. economy has consistently grown faster than any other G7 nation, and 2024 proved no exception. The S&P 500 index has risen by over 20% as of this writing, fueled by investor confidence in the country’s economic trajectory. Despite lingering global uncertainty, the United States avoided a recession, aided by the Federal Reserve’s long-anticipated pivot to a rate-reducing cycle. Inflation, which had been a persistent concern over the last few years, steadily retreated in 2024. By year-end, it settled within the Federal Reserve’s target range of 2-3%, thanks to easing energy prices, stabilized supply chains, and strategic monetary policy. Lower inflation translated into a boost for real wages, empowering consumers and sustaining robust household spending. The labor market remained a pillar of strength, with unemployment hovering near record lows and workforce participation showing promising gains across key sectors like manufacturing, technology, and services. The results of the 2024 election underscored the nation’s commitment to a renewed focus on domestic priorities. Policies aimed at advancing infrastructure development, achieving energy independence, and fostering innovation across emerging industries played a pivotal role in shaping the year’s economic agenda. Federal spending on renewable energy projects and AI technologies surged, creating new opportunities while fortifying America’s position as a global leader in these sectors. Despite a healthy economic year in 2024, challenges persist. The cost of government borrowing remained elevated due to accumulated deficits, posing long-term risks to fiscal sustainability. Additionally, geopolitical tensions created uncertainties in international trade, forcing businesses to reassess supply chains and mitigate risks. Yet, the economy’s strong fundamentals and the renewed sense of purpose from the electorate kept the country on a growth trajectory. 2024 also marked a turning point for American business. Corporate investments reached record highs as companies responded to incentives for reshoring operations and adopting greener practices. Small businesses, buoyed by improved credit conditions and a strong consumer base, continued to drive innovation and job creation. Meanwhile, the real estate market showed signs of stabilization, with housing affordability improving as mortgage rates declined alongside the Fed’s rate cuts. The United States entered 2024 with challenges yet emerged with remarkable momentum. The economy’s resilience, rooted in its adaptability and the enduring optimism of its people, remains its defining strength. As America moves forward under an “America First” agenda, the balance of innovation, investment, and fiscal prudence will be critical in sustaining its position as the engine of global growth. ## Artificial Intelligence ![](/images/insights/40d02df5-8b3c-9f69-0fbf-ee90734ec11a-1-1024x512.jpg) 2024 marked a pivotal chapter in the growth of artificial intelligence (AI). As highlighted in last year’s annual letter, AI continues its transformative impact on nearly every facet of the global economy. The AI industry found itself at a crossroads, oscillating between euphoria and caution. Tech giants continue to invest in AI infrastructure, fueling a race to dominate the sector. Chipmakers have emerged as the biggest beneficiaries, with chip sales growing substantially in 2024. Meanwhile, demand for AI servers skyrocketed to respond to the global demand. With the robust growth, challenges have begun to emerge. The soaring energy costs of training and operating generative AI models raised concerns about their long-term economic sustainability. Server manufacturers and energy providers scrambled to keep up with the demand for new data centers. At the same time, competition intensified as nimble upstarts introduced specialized chips and smaller, more efficient AI models, challenging the dominance of industry leaders. Shareholders began voicing concerns over potential over investment, with some warning of an AI bubble. As the race to innovate accelerates, tech giants face growing scrutiny to demonstrate that their massive expenditures can deliver sustainable returns. We expect to see significant additional capital deployed into AI in 2025 as recognition that we are still in the early wave of a new secular trend. ## Crypto Currency ![](/images/insights/e7cca119-950b-e64b-e811-31f16a3182a2-1024x512.jpg) Digital asset prices are highly volatile, often driven by shifts in sentiment and policy. At the start of 2023, Bitcoin was valued at just over $16,000 but surged to exceed $100,000 by December 2024. This meteoric rise gained momentum following Donald Trump’s re-election, which ushered in significant changes for the crypto industry. Notably, Mr. Trump nominated Paul Atkins, a known crypto advocate, to lead the Securities and Exchange Commission (SEC). With prominent venture capital leaders seemingly influencing the new administration, regulatory and enforcement barriers are expected to ease, paving the way for the crypto sector’s growth. Unlike previous market booms, this surge has a distinct characteristic: mainstream investors, hedge funds, and some of the world’s largest money managers are now actively participating alongside early crypto adopters. This signals a shift toward broader institutional adoption. If regulatory challenges to the industry are reduced, the institutional embrace of crypto may accelerate further. This presents a paradox for crypto’s early advocates. While the increased institutionalization will likely drive Bitcoin and other digital assets to new heights, it will also align them more closely with traditional asset classes, making them subject to the fluctuations of the broader financial system. ## War in the Middle East The Middle East remained a focal point of global tension in 2024, with several interconnected conflicts shaping the region’s dynamics. The Israeli-Palestinian conflict saw one of its most volatile years in recent history, as clashes between Israeli forces and Palestinian factions intensified following a series of provocations and escalations. Gaza experienced prolonged airstrikes, while the West Bank faced a surge in violence, prompting widespread international concern. Diplomatic efforts to mediate were largely ineffective. Meanwhile, the civil war in Syria persisted in a fragmented but deadly state. The Assad regime, backed by Russian and Iranian support, fell from power as its leader, Bashar Al Assad fled to Russia. The humanitarian crisis deepened, with millions of displaced Syrians facing dire conditions. The conflict also underscored the growing influence of regional powers like Turkey, which expanded its military presence in northern Syria to counter Kurdish forces.  The power vacuum created by Assad’s departure is uncertain. Undoubtedly, the new Trump Administration will be forced to confront a volatile Syria beginning to re-build itself. In Yemen, efforts toward peace showed some progress, with a fragile ceasefire holding in several areas. However, tensions between the Saudi-backed government and Houthi rebels remained unresolved, leaving the country’s future uncertain. The devastating humanitarian toll continued, with millions in need of food, medical aid, and basic infrastructure. International organizations struggled to address these needs amid funding shortages and restricted access to conflict zones. The region’s prospects for stability remain fragile in 2025.  In Israel and Palestine, the potential for de-escalation depends on renewed diplomatic engagement, though deep-seated grievances and leadership challenges on both sides make meaningful progress difficult. Syria’s instability will require external involvement to deal with the complex internal dynamics. Yemen offers a glimmer of hope, with the potential for a more robust peace process if international stakeholders remain committed to supporting reconciliation and rebuilding efforts. The Middle East in 2025 will continue to grapple with the challenges of protracted conflicts, shifting alliances, and external interventions. However, opportunities for localized agreements and incremental progress exist, particularly in areas where humanitarian needs demand urgent attention. The actions of regional powers and the level of international engagement will play a critical role in shaping whether the region moves closer to peace or deeper into turmoil.  The region will test the Trump Administration’s desire to pursue an isolationist approach to global affairs. ## The Russian War on Ukraine This year, the war between Russia and Ukraine entered a critical phase, with Ukraine achieving meaningful gains in its counteroffensive. Ukrainian forces regained strategic territory in the east and south, leveraging advanced Western weapons and innovative battlefield tactics. Despite these successes, progress was slow and costly, with both sides suffering heavy casualties. Russia, in response, intensified its missile strikes on Ukrainian cities and infrastructure, aiming to disrupt civilian life and undermine Ukraine’s resolve. Western support remained a cornerstone of Ukraine’s resistance, as NATO allies continued to provide advanced weaponry, intelligence, and financial aid. However, political shifts in some Western nations led to questions about the long-term sustainability of this support. In the United States, the “America First” agenda influenced debates over foreign aid priorities, while European nations grappled with energy security concerns and economic pressures tied to the ongoing war. These challenges highlighted the delicate balance between supporting Ukraine and addressing domestic political realities. On the Russian side, the strain of a prolonged war became increasingly apparent. Economic sanctions continued to erode Russia’s economy, with supply chain disruptions and declining public morale posing significant challenges. Reports of internal dissent, though tightly controlled, suggested cracks in the Kremlin’s narrative of strength and inevitability. Yet, President Vladimir Putin maintained a hardline stance, doubling down on his rhetoric of protecting Russian sovereignty and countering Western encroachment. As 2025 approaches, the path forward remains uncertain. Ukraine, emboldened by its territorial gains and growing international partnerships, may continue to press for further advances, though its resources are stretched thin. Meanwhile, Russia’s ability to sustain its military campaign amid economic and social pressures is increasingly in question. While some analysts see a glimmer of hope for peace talks, the deep-seated animosities and mutual mistrust make a negotiated resolution unlikely in the near term. Instead, the conflict seems poised to persist, reshaping the geopolitical landscape and testing the resolve of both nations and their allies. This prolonged war has broader implications for global stability, with the potential to redefine alliances, trade relationships, and security strategies in the years to come. The resilience of Ukraine and the adaptability of its allies will likely determine whether 2025 brings a shift toward resolution or an escalation of hostilities. ## Investment Themes in the World Ahead ![](/images/insights/674f68bc-e94a-077a-5965-def9bb0b43ba-1024x512.jpg) In 2025, artificial intelligence (AI) and automation remain a central investment theme, continuing a rapid growth trajectory. The AI industry has expanded beyond traditional tech companies, permeating sectors such as healthcare, manufacturing, and financial services. Companies that develop AI chips, algorithms, and cloud infrastructure are set to benefit as organizations across industries seek to leverage AI for efficiency and innovation. Specialized AI applications, such as generative AI for content creation and advanced robotics for manufacturing, are seeing increasing adoption, driving demand for both software and hardware solutions. Investors are also eyeing the growth of AI-enabled automation, particularly in logistics and supply chain management, where firms are deploying autonomous vehicles and drones to streamline operations. However, the rising energy costs associated with AI and the push for greener technology are prompting companies to innovate around efficiency, presenting opportunities in the energy-tech crossover space. As the global commitment to combat climate change intensifies, renewable energy and green technologies remain a cornerstone for long-term investment. Solar, wind, and battery storage technologies are seeing significant advancements, driven by both government incentives and private-sector innovation. In 2025, the electrification of transportation continues to accelerate, with a growing focus on EV charging infrastructure and next-generation battery technologies such as solid-state batteries. Additionally, carbon capture and hydrogen energy technologies are gaining traction, particularly in regions with stringent emission targets. Companies developing energy-efficient solutions, such as smart grids and energy storage systems, are well-positioned for growth. ESG (environmental, social, and governance) investing continues to influence capital allocation, as investors prioritize firms with strong sustainability credentials and a commitment to reducing their carbon footprint. The digital transformation of businesses, accelerated by hybrid work models and increased reliance on cloud services, underscores the growing importance of cybersecurity and digital infrastructure. In 2025, the rise of cyber threats, ranging from ransomware to state-sponsored attacks, has made cybersecurity a critical investment theme. Companies providing advanced threat detection, data encryption, and secure cloud platforms are likely to experience sustained growth. At the same time, investments in digital infrastructure are surging to meet the demands of AI, 5G networks, and the Internet of Things (IoT). Data center operators, edge computing providers, and fiber-optic network developers are benefiting from this trend as businesses and governments seek to modernize their IT infrastructure to keep pace with evolving technology needs. The healthcare sector continues to present robust opportunities in 2025, driven by innovation in biotech, telemedicine, and personalized medicine. Breakthroughs in gene editing and mRNA technology are revolutionizing treatments for genetic disorders and infectious diseases, while telehealth platforms are expanding access to care. As populations age in developed countries, demand for diagnostics, remote monitoring devices, and senior care services is expected to grow. Another key trend is the integration of AI in healthcare, which is improving diagnostics, streamlining drug discovery, and enhancing patient care. Companies applying AI to disease detection and management are attracting investor attention, as these technologies demonstrate potential for cost savings and better health outcomes. The investment themes for 2025 reflect a dynamic mix of technological innovation that highlight the need for adaptability in a rapidly changing economic landscape. ## Manhattan West in 2025 ![](/images/insights/7b18f034-ee15-10ea-7b80-2ae9b11decd4-1024x512.jpg) In 2024, we undertook a comprehensive re-imagination of our firm’s platform to better position Manhattan West for the future. A key step in this transformation was the strategic decision to outsource our Tax and Business Management services, enabling us to collaborate with a diverse array of specialized providers. This shift allowed us to streamline our operations and enhance client account support functions, ensuring a more efficient and seamless experience for our clients. As part of these efforts, we restructured our team, reducing headcount in select areas to align resources more closely with our core priorities. In December, we proudly unveiled a redesigned website that communicates our refined value proposition, emphasizing our two pillars of expertise: private wealth and private investments. As we enter our ninth year of business, we are filled with optimism for the year ahead. 2024 was marked by meaningful growth, as we welcomed a significant number of new clients across both private wealth and private investment segments. This expansion is a testament to the trust our clients place in us and the strength of our tailored approach to managing and growing their assets. Looking forward to 2025, we remain committed to innovation and growth. A central focus will be on enhancing our technology stack, making it even easier for clients to access and monitor their investments. We understand that transparency and convenience are paramount, and these technological advancements will ensure that our clients have the tools they need at their fingertips.  We plan to expand our team of Financial Advisors, strengthening our ability to provide personalized service and expert guidance. On the investment front, we will continue to identify and invest in the world’s most innovative private companies, delivering unique opportunities for our clients. To all who have partnered with Manhattan West, we extend our deepest gratitude. Your trust and collaboration are the foundation of our success, and we are excited to build on that momentum in 2025. We look forward to a year of shared prosperity and growth. From all of us at Manhattan West, we wish you a happy, healthy, and successful New Year. With kindest regards, Lorenzo Esparza CEO – Manhattan West ## We provide a team of specialists thoughtfully selected to align with your goals. [Contact Us](https://manhattanwest.com/contact/) --- ### State of the Market Update: When In Doubt –Zoom Out (2024-10-01) https://manhattanwest.com/insights/state-of-the-market-update-when-in-doubt-zoom-out/ Market Outlook Manhattan West is pleased to present its Q3 State of the Market Update. Navigating financial markets is hard enough without getting caught up in the hyperbole and emotion of the current news cycle.  Be it the equity or bond markets, there may very well be some moments of outsized volatility in the coming months.  We implore you to take a deep breath and zoom out to your larger investment goals with a clear head – because our team here at Manhattan West will be doing the same for you. [**Click to download**](https://mcusercontent.com/09f30d798b519637ea1b4584a/files/9bd85188-7a96-22e8-baeb-e05b35bf9756/State_of_the_Markets_October_2024_vF.pdf). ## We provide a team of specialists thoughtfully selected to align with your goals. [Contact Us](https://manhattanwest.com/contact/) --- ### State of the Market Update: Insights For Today’s Economic Challenges (2024-08-01) https://manhattanwest.com/insights/state-of-the-market-update-insights-for-todays-economic-challenges/ Market Outlook Manhattan West is pleased to present its Q2 State of the Market Update. Over the last few weeks in the U.S. Presidential election cycle, the world witnessed Joe Biden’s shaky debate performance, the failed assassination attempt of Donald Trump, and the sitting President stepping aside for Vice President Kamala Harris to take over the democratic nomination.  This has been a moment in time we shall not soon forget. This also presents us an opportune moment to reflect on the current state of the economy and financial markets through the wisdom and guidance in the words of past U.S. Presidents, whose insights remain relevant today. [**Click to download**](/images/insights/state-of-the-markets-july-2024-vf.pdf). ## We provide a team of specialists thoughtfully selected to align with your goals. [Contact Us](https://manhattanwest.com/contact/) --- ### State of the Market Update: Strong Jobs, Steady Inflation: Can the Goldilocks Market Last? (2024-04-30) https://manhattanwest.com/insights/state-of-the-market-update-strong-jobs-steady-inflation/ Market Outlook The first quarter of 2024 presented a positive start for our liquid strategies. While the market may seem stable, potential challenges loom on the horizon. Inflation and geopolitical tensions are factors we closely monitor, as they could disrupt the current economic climate. Our portfolio management team shares their insights on the market’s performance, our economic outlook, and how we’re strategically positioning portfolios for the future in this Q1’24 State of the Market Update. [**Click to download.**](https://docsend.com/view/5xzc3ihgcjyrk7sf) ## We provide a team of specialists thoughtfully selected to align with your goals. [Contact Us](https://manhattanwest.com/contact/) --- ### 2023 Year End Update: Investment Themes in the World Ahead (2023-12-31) https://manhattanwest.com/insights/2023-year-end-update-investment-themes-in-the-world-ahead/ Market Outlook ## The United States Economy America avoided recession in 2023 but the overall economy slowed down significantly.Inflation that was rampant, declined to nearly 3% by year end.Price pressures across the economy retreated in food, energy, and housing.The labor force remained relatively strong with unemployment stabilizing just below 4%. It took the majority of 2023 to see light at the end of the tunnel after consecutive rate hikes throughout the year.Inflation should continue to decline or hover around the Federal Reserve Bank’s target of 2%.Sharply higher interest rates drove inflation down as the Federal Reserve Bank raised rates at the fastest pace in history.The Federal Reserve paused rate increases in its last two meetings.A sign that they are most likely done raising rates.Fed Fund futures are now projecting a rate reduction in 2024.In fact, Fed Chairman Jerome Powell finally hinted at future rate cuts in his last post meeting interview. Financial markets were down in 2022 as they priced in the probability of higher rates in 2023.And while we saw equity markets decline early in the year, the changing interest rate narrative caused the equity markets in 2023 to rebound. Surely, the narrative around future rate cuts sparked confidence in the equity markets as the S&P 500 reached new highs.The tech heavy Nasdaq was up more than 30% in 2023, recovering much of the loss it sustained in 2022. ## The Russian War on Ukraine The Ukrainians have shown great resolve and received tremendous western support early in the conflict.They are winning back territory lost to Russia.However, Putin’s strategy of stringing out the conflict as a method of eroding support from the United States and Europe is working.Voters and policymakers are growing tired of the burden to support Ukraine. Vladimir Putin’s strategy rests on the hope that support from the West is waning because it appears to be an increasingly open-ended commitment. A long war plays to Putin’s strengths. In Russia, the populace is either too afraid to voice opposition or they have accepted the war despite heavy casualties. For Ukraine, allowing Russia to hold onto territory it has taken is unacceptable. The economic impact of losing most of its southern coast is dramatic. For Russia, the invasion still looks like a failure, because it does not fully control any of the four provinces it annexed in September 2022.Neither country is in a good spot today. Although the United States started out as the main arms supplier to Ukraine, Europe increased its support in 2023, and has overtaken the US as Ukraine’s largest cumulative supplier of military aid. This is a problem for Europe because depleting its own reserves of tanks, ammunition and missiles will require a ramp up of production in defense. Something they may not be keen to do. We do not think Europe can or will maintain this pace. This portends another challenge for Ukraine’s long-term ability to sustain a defense and mount a takeover of their lost territory. For Ukraine, the United States may no longer be depended upon to help lead their fight with Russia. New House Speaker Mike Johnson has consistently voted against aiding Ukraine before taking his current position. After assuming the speakership, he has spoken about the need to stop Mr Putin’s imperialist expansion, but his hard right supporters feel otherwise.The parties in Congress continue to debate the need to support Ukraine and it remains an issue fraught with complexity. Without an open check book from the United States and Europe, what will the Ukrainians do?We think their greatest hope is to speed up integration with the European Union itself. Ukraine was formally accepted as a candidate in June 2022.EU’s leaders should give the green light to the start of detailed negotiations with the hope of a quick resolution. Integrated within the vast European economy, Ukraine will have a chance of holding the line against Russia and outlasting Mr Putin.Having said that, we expect the war to continue throughout 2024. ## Israel & Palestine It’s hard to write about this topic, but to ignore it would miss a significant story line in 2023. The Middle East is a violent part of the world.It is a place where peace plans go to die.It has an extended history, one far longer than ours here in the United States.The fractures that exist are deep and they persist through generations of religious and territorial machinations. As terrible as it is to write after so much death, we are hopeful that the region has a real chance of peace.In this information age, the story cannot be ignored because the world is watching. The war will produce new leaders on both sides. Israel’s prime minister, Benjamin Netanyahu will be forced from office. The catastrophe that took place while he was in charge will end his political career. Meanwhile, Hamas’s leaders are likely to be killed by Israeli forces.New leaders on both sides can and must bring change.Israel’s new leaders must win over traumatized Israelis to the idea of making peace. In the Palestinian territories, new leaders must assuage their people with an acceptance of Israel’s right to exist. A state of permanent and perpetual semi-war is not sustainable.Every war in history has come to an end.So too will this one. An Arab peacekeeping force is one hope for peace. Arab countries that have closer relations with Israel than in the past (through the Abraham accords) may be able to help.It will be a daunting task as both Israelis and Palestinians are seething with anger toward one another.However, once the fighting ends, international efforts can cautiously begin to build trust again.It will not be easy. It will not be quick.But we are hopeful that it will happen. We think this war will persist throughout 2024 but an end to the fighting and settlement discussions should emerge by year end. ## Crypto Currency Things can change significantly in one year.Crypto prices were decimated in 2022.This year however, Bitcoin climbed to a two-year high above $40,000, up from just over $16,000 to start 2023.Meanwhile, the industry has seen considerable change. The founders of FTX and Binance await sentencing for financial crimes.As expected, regulators are cracking down on the industry. Bitcoin has established itself as a serious asset partially because of its technology. It is not a company that can go out of business or shut down. The blockchain technology on which it’s built maintains a database of transactions where they are verified by a decentralized network of computers.Only if the tokens fall to zero does the whole architecture collapse. There continue to be plenty of reasons to believe in cryptocurrencies and blockchain technology.First, there are plenty of smart developers, many of whom are working on new uses. Second, with each boom-and-bust cycle, it becomes clearer crypto is not a bubble.Finally, the biggest fund managers have applied to launch Exchange Traded Funds (“ETFs”) following a court ruling this year that allowed coins to be held in an ETF. Although Bitcoin is a volatile asset, its price history looks like many stocks and appears closely correlated with technology stocks. An asset that swings up and down, and not in parallel with other assets in a portfolio, can be a useful diversifier.We are confident Bitcoin is here to stay for the long term. ## Artificial Intelligence There have been four major technological innovations in the last 40 years.The personal computer, the Internet, the smart phone and now; Artificial Intelligence (“AI”).We think the implications and magnitude will cause a seismic shift in the world.It felt like everywhere I turned this year, the topic of Artificial Intelligence was part of the zeitgeist. “Generative” AI, which can create text and images with basic prompts, and the emergence of “large language models” will materially impact the future.The idea of producing human-like responses to questions has caused a myriad of issues and discussions across topics far and wide. Launched in 2022, “ChatGPT”, the product developed by the company Open AI, quickly became a sensation. Right away, the company amassed over 100m users. In turn, the investment potential for all manner of AI projects was unleashed. Investors are betting that its use could rapidly drive innovations. Engineers of artificial intelligence see the tool in different ways.Some want to create superhuman intelligence to improve daily life.They see AI’s transformative promise while others see extreme AI risk and a backlash against its own creators. Numerous viewpoints exist on AI.One analogy that comes to mind is that AI is like a survivalist knife.In the hands of some, it’s a tool. In the hands of bad actors, it’s a weapon.As such, we expect guidance and regulations to take shape as AI technology continues its inevitable diaspora through life as we know it. ## Investment Themes in The World Ahead We continue to believe that a diversified portfolio of equities, fixed income and alternatives are the right way to allocate assets in an ever-changing world. As equity markets rebounded this year from big declines in 2022, we are cautiously optimistic about US equities in 2024.We will focus on high dividend paying companies with strong balance sheets and strong defensible businesses.Additionally, we continue to believe in growth stocks and technology names as many of these companies adopt plans to benefit from the emergence of artificial intelligence.We are in the early innings of this trend. In fixed income, investors were finally getting paid with a yield on cash and short term government instruments.But rates are likely to have peaked.After crossing above 4%, the 10 year US Treasury is back below 4% and will likely stay there in 2024.We expect high interest rates on the front end of the yield curve to begin their assent downward as the inverted yield curve retreats over the next 12 months. In alternatives, for qualified investors whose time horizon and liquidity permit an allocation, we continue to like venture capital and private equity as alternatives to public equity.As interest rates move, we also favor private credit and dividend yield real estate opportunities as another means of getting income. ## Manhattan West in 2024 As we enter our 8th year in business, we are excited for another year of growth.We added new Financial Advisors, Business Managers and Tax Professionals in 2023 and we added many new clients in each segment.Each unit showed impressive results as we worked to be our client’s most trusted advisor. Our focus in 2024 will be to increase our technology stack to make it easier for clients to view their investments with us.We will continue to add Financial Advisors, Tax Professionals and Business Managers in order to build and improve our “private client ecosystem” for the benefit of our clients. To those who have done business with Manhattan West, we are grateful for you!We look forward to a prosperous 2024 and we wish you all a happy and safe new year. With kindest regards, **Lorenzo Esparza** CEO/Founding Principal [**Click to download**](/images/insights/2023-ye-letter-to-clients-12.28.23-vf.pdf). ## We provide a team of specialists thoughtfully selected to align with your goals. [Contact Us](https://manhattanwest.com/contact/) --- ### State of the Market Update: Finding Opportunities in Uncertain Times (2023-06-08) https://manhattanwest.com/insights/state-of-the-market-update-finding-opportunities-in-uncertain-times/ Market Outlook Manhattan West is pleased to present its Q1 State of the Market Update discussing current market conditions and our views on how investors should proceed during these uncertain times. The one thing that 2022 and the start to 2023 has taught us is this simple, often forgotten lesson: uncertainty does not mean a lack of opportunities. Yes, the past sixteen months have created high levels of uncertainty due to inflationary pressures, spiraling price and wage increases, slower growth, aggressive central bank policy, widening credit spreads, four bank failures (and counting), the ongoing war in Ukraine, and the self-inflicted debt ceiling fiasco. At the same time, many of these adverse risks have moderated as inflation has started to decline. The economy may not be at an imminent risk of sliding into a deep recession, but many indicators point to the US entering a brief, mild recession towards the end of 2023 or early 2024. **_Our outlook for this year remains cautiously optimistic, and our general belief is that investors should be cautious, yet strategic, opportunists._** [**Click to download**](https://docsend.com/view/3ctb5n5tc4e82vx8). ## We provide a team of specialists thoughtfully selected to align with your goals. [Contact Us](https://manhattanwest.com/contact/) --- ### 2022 Year End Update: Investment Themes in the World Ahead (2022-12-27) https://manhattanwest.com/insights/2022-year-end-update/ Market Outlook We are pleased to share the observations we’ve made over the course of 2022 and how we plan to approach 2023. 2022 was marked by a significant change in monetary policy in response to inflation, a Russian led war in Europe, China’s continued battle with Covid, a slowing US economy, and the collapse of crypto markets.  We saw the world economy slowing and many countries facing the risk of recession. At Manhattan West, we continued to expand our firm as the investment strategies we espoused were validated this year in the face of falling markets and our adherence to a more institutional asset allocation provided stability in volatile times. [**Click to download**](https://docsend.com/view/j8wefw46y9b7ncns). ## We provide a team of specialists thoughtfully selected to align with your goals. [Contact Us](https://manhattanwest.com/contact/) --- ### State of The Market Update: When Disciplined Opportunism Meets Uncertainty (2022-10-01) https://manhattanwest.com/insights/state-of-the-market-update-when-disciplined-opportunism-meets-uncertainty/ Market Outlook Manhattan West is pleased to present a State of the Market Update discussing current market conditions and our views on how investors should proceed during these uncertain times. _**O** **ur outlook for the remainder of 2022 is cautiously optimistic, and our general belief is that investors should proceed with caution.**_ [**Click to download**](https://docsend.com/view/3f6hx4a7tha6ucwq). ## We provide a team of specialists thoughtfully selected to align with your goals. [Contact Us](https://manhattanwest.com/contact/) --- ### 2022 Mid Year Update: The Global Economy (2022-07-01) https://manhattanwest.com/insights/2022-mid-year-update-the-global-economy/ Market Outlook We are pleased to provide our latest insights on the global economy and to update you on Manhattan West. While the stock market has rallied and real estate prices have soared in the United States, economic fractures exist across the country. The pandemic affected people differently with poor Americans suffering the most. Covid continues to present significant problems in the US and abroad. [**Click to download**](https://docsend.com/view/58zvuyp9gtbztskz). ## We provide a team of specialists thoughtfully selected to align with your goals. [Contact Us](https://manhattanwest.com/contact/) --- ### 2021 Year End Update: The Global Pandemic (2021-12-28) https://manhattanwest.com/insights/2021-year-end-update-the-global-pandemic/ Market Outlook We are pleased to share the observations we’ve made over the course of 2021 and how we plan to approach 2022. The world has changed as the Covid-19 Pandemic reshaped nearly every aspect of our lives.  Confronting new realities, deeper trends are underway as the investment landscape becomes more complex. [**Click to download**](https://docsend.com/view/4ufrdeby8mce648q). ## We provide a team of specialists thoughtfully selected to align with your goals. [Contact Us](https://manhattanwest.com/contact/) --- ## Perspectives (12) ### The Inverted Risk Model: Why Deep Tech Bets Are Won or Lost in the Lab, Not the Market (2026-08-01) https://manhattanwest.com/perspectives/perspective-deep-tech-inverted-risk-model/ Deep Tech The standard venture playbook starts with demand. Build the market slide first. Show the TAM. Prove someone will pay. That logic governs software, where shipping a working product is relatively straightforward and the real uncertainty is whether anyone cares. Deep tech inverts the model entirely. The demand is often obvious: governments want autonomous systems, grids need new energy sources, compute infrastructure requires faster chips. What is uncertain is whether the thing can actually be built. That single inversion changes everything about how to evaluate an investment: what risk looks like, when it retires, and what it means to survive it. In our view, understanding this distinction is not academic. It changes which diligence questions matter and which ones are largely irrelevant. ## Market Risk vs. Technical Risk: The Fundamental Divide The risks facing deep tech companies are structurally different from those facing software investments. Market and customer risks dominate in software (is the market large enough? Does the product have product-market fit?), whereas technical and financing risks dominate in deep tech. If a deep tech company actually manages to build a commercial quantum computer, it is a no-brainer that the market is more than large enough and that customers will clamor to use it. The same logic applies to reusable orbital launch vehicles, next-generation chips, and autonomous defense systems. Nobody needs a market slide for any of those. The U.S. Department of Defense, commercial satellite operators, and hyperscalers are already in line. The question is purely whether the engineering delivers. Hardware often has clearer demand at the category level (of course people want cheaper energy or more capable defense systems) but much higher technical risk. The market may be obvious in the abstract, while the hard questions are whether the product can be made to work, manufactured economically, deployed safely, and sold through the right channels. This is what the conventional "hardware is hard" framing misses. The difficulty is not the same kind of difficulty. It is harder in a different dimension, and that matters for how you price it. ## Risk Retires at Milestones, Not at Revenue The most important practical implication of the inverted risk model is that technical progress is measurable in a way that market progress rarely is. You can test whether an engine hits its thrust-to-weight specification. You can verify whether a chip achieves a target inference throughput. You can confirm whether a material holds its yield strength under operational stress conditions. Each positive result retires a discrete tranche of risk. Deep tech companies face genuine technical risk: the science may not work, or may not work at commercially viable cost points. The mitigation is stage-gated investment based on technical milestones. This is how sophisticated capital should be deployed here: not in a single commitment against a vision document, but in tranches calibrated to demonstrated technical progress. The pitch is not a vision; it is a de-risking roadmap. And from an investor's perspective, reading that roadmap accurately (knowing which milestones genuinely retire which risks) is the core competency the category demands. ## Failure Looks Different One underappreciated feature of the inverted model is that failure in deep tech tends to be early and loud, while failure in software tends to be late and quiet. A software company can raise multiple rounds, grow a team to several hundred people, accumulate customer contracts, and still quietly fail to achieve the unit economics that justify its existence. The failure accumulates slowly, often invisible until a down round or a controlled wind-down years in. The market risk resolves gradually, and badly. Software companies usually win by moving quickly through product and distribution uncertainty. Deep tech companies usually win by making a smaller number of harder, less reversible decisions correctly: assembling the right specialized team, choosing the right architecture, retiring the right technical risks, navigating regulation, financing the company with the right mix of capital, and turning their technical progress into a durable moat. In deep tech, the physics either works or it does not. A launch vehicle that fails on the pad has failed obviously and early. A reactor design that cannot achieve net energy gain fails the moment the measurement is taken. That clarity is brutal in individual cases, but at the portfolio level, it means capital stops flowing to dead ends faster. The companies that clear their engineering milestones are genuinely worth backing. ## The Team Slide Is the Market Slide If technical milestones govern risk retirement in deep tech, then the credibility and completeness of the team executing against those milestones is the primary diligence variable. Not the serviceable addressable market breakdown. Not the customer acquisition model. The team. Deep tech companies need different early employees. A software startup can hire generalist full-stack engineers early on and add specialists later. Deep tech companies usually need an extremely specific early team. You do not hire a generalist biologist or electrical engineer; you hire someone with direct, hard-earned experience in the specific therapeutic pathway, actuator design, RF system, or manufacturing process you are focused on. Deep tech companies usually win by making a smaller number of harder, less reversible decisions correctly. For founders, this means deep tech rewards judgment more than motion. The corollary for investors is that evaluating a deep tech company requires being able to assess whether a given technical architecture is sound and whether the team has actually solved comparable problems before, not just whether they have PhDs from the right institutions. The distinction matters enormously. ## The Moat That Forms on the Other Side The most structurally important consequence of the inverted risk model is what a successful outcome produces. Companies that clear genuine engineering milestones (that cross the valley of technical uncertainty) emerge into a competitive landscape that almost no competitor can reproduce quickly. Reproducing a deep tech breakthrough requires equivalent scientific talent, specialized equipment, and often years of iterative research. This creates durable competitive moats that software startups rarely enjoy. Software has low barriers to entry but weaker moats; hardware has high barriers to entry but more durable moats. The corollary of that asymmetry is significant: the companies that survive deep tech's front-loaded technical risk emerge into a position that is structurally harder to attack than any software category. Patents, process knowledge, manufacturing yield curves, and operational data accumulated over years of iteration compound into a position that a well-funded newcomer cannot simply buy their way into. In software, defensibility usually comes from network effects, switching costs, or data moats. In deep tech, it often comes from patents, trade secrets, and freedom to operate. A company that does not own its core IP cleanly faces existential risk. And the offensive side matters just as much: that IP may be the only thing preventing a well-capitalized incumbent from replicating the work once the market is proven. The capital markets are increasingly pricing this in. Global deep tech venture investment reached $48 billion in 2025, up from $18 billion in 2020. AI captured over a third of all global deep tech investment. Defense tech rode geopolitical tailwinds to its strongest year on record, posting 81% growth. The sectors attracting the most capital (autonomous systems, advanced compute, space infrastructure, next-generation energy) share the same underlying logic: clear demand, hard engineering, and deep moats for whoever gets there first. Global military spending surged to $2.7 trillion in 2025, growing at more than twice the pace of the prior two decades. The trend is set to continue as governments seek technological sovereignty. Defense tech has become one of the most significant capital magnets in private markets. Roughly $19 billion flowed into aerospace and defense startups in 2025, nearly double the $10 billion raised in 2024. ## Where This Lands In our view, the inverted risk model is not a niche framework for defense and space specialists. It is the correct mental model for evaluating any company whose primary uncertainty is engineering rather than go-to-market. That set of companies is growing, and the capital flowing to them is increasingly coming from investors who have correctly identified that the diligence skill required is different, not just harder. The implication is straightforward: if you are evaluating a deep tech opportunity using the market-first lens you would apply to a SaaS business, you are measuring the wrong thing. The market slide is not the key document. The technical roadmap is. And the team's ability to execute against it (milestone by milestone, in disciplines where errors are expensive and irreversible) is the question that determines the outcome. What would change this view: evidence that demand in a given category is genuinely uncertain, not merely unproven at scale. That would restore conventional market-risk dynamics and require a different framework. For now, in the sectors where technical risk is the dominant variable, the correct investment question is simply this: can they build it? --- [^1]: [Bessemer Venture Partners, "State of Deep Tech," April 15, 2025](https://www.bvp.com/atlas/state-of-deep-tech) [^2]: [Leo Polovets, "Deep Tech Companies Are Built Different," CodingVC, May 22, 2026](https://www.codingvc.com/p/deep-tech-companies-are-built-different) [^3]: [NexaTech Ventures, "Deep Tech Investment: Why Hardware-Software Convergence Matters," March 8, 2026](https://nexatechventures.com/insights/deeptech-investment-thesis-2026) [^4]: WePitched, "Cracking the Code: Deeptech VC Investment Criteria 2026," March 15, 2026 [^5]: [Technoist, "Why Deep Tech Founders Need a Different Playbook: The Risk Stack," April 3, 2026](https://www.technoist.com/the-risk-stack-why-deep-tech-founders-need-a-different-playbook/) [^6]: [deeptech.build, "What Is Deep Tech? Definition, Examples, and Why It Matters in 2026," March 23, 2026](https://www.deeptech.build/content/what-is-deep-tech) [^7]: [Joltoo, "Deep Tech Funding Playbook 2026," March 3, 2026](https://joltoo.com/insights/deeptech-funding-playbook) [^8]: [Forbes Finance Council, "Rising Defense Spending: Fueling a Deep Tech Boom in 2026," March 3, 2026](https://www.forbes.com/councils/forbesfinancecouncil/2026/03/03/rising-defense-spending-fueling-a-deep-tech-boom-in-2026/) [^9]: [PwC, "Aerospace and Defense: US Deals 2026 Midyear Outlook," June 17, 2026](https://www.pwc.com/us/en/industries/industrial-products/library/aerospace-defense-deals-outlook.html) --- ### The Space Economy's Next Phase: Infrastructure, Intelligence, and Power (2026-06-04) https://manhattanwest.com/perspectives/the-space-economys-next-phase-infrastructure-intelligence-and-power/ Intergalactic For the past decade, investors were expecting smaller satellites to lower launch costs, accelerate deployment, and increase access to orbit. Investment accordingly focused on the miniaturization of satellites. As space systems become increasingly tied to AI, defense, communications, and real-time computing, investors are raising the same question: will the next phase of the space economy favor low-cost, distributed networks, or shift toward fewer, high-capability platforms designed around power, processing, and persistent performance? ## From Miniaturization to Mission Capability At first, miniaturization dramatically reduced the cost of reaching orbit, but it also introduced numerous new tradeoffs. Reduced size limits overall payload functionality, resulting in a lack of processing power, endurance, and capability for more demanding applications. The miniaturization era was defined by two major developments. CubeSat, a standardized nanosatellite roughly the size of a large coffee mug (around 10x10x10 cm), was originally designed for academic research and has since democratized access to orbit by lowering the cost and complexity previously required to build and launch a satellite, according to NASA[^1] (August 6, 2024). Instead of relying on a single, large satellite, operators began deploying hundreds to thousands of small, interconnected LEO satellite constellations. By connecting many nanosatellites closer to Earth, these systems reduce signal latency while delivering more resilient and widespread global broadband coverage at a fraction of traditional costs. Nanosatellites and LEO constellations have made space more accessible than ever. However, as mission requirements grow more demanding, the constraints of miniaturization become harder to ignore. ## The Constraint No One Talks About: Power Unlike on Earth, power is a hard constraint in orbit. There are only two real power sources: solar panels or nuclear systems. While solar is the dominant choice, it comes with fundamental limitations. The farther a satellite is from the sun, the less energy it generates: on Mars, a satellite gets roughly 40% of the Earth's solar intensity; on Jupiter, it's about 4%, per Marspedia (November 5, 2024). To get more power, satellites need larger arrays, which means more mass, more drag, more deployment complexity, and a higher failure rate. Power limitations can determine what a satellite can actually do. As satellites become more capable and mission profiles more ambitious, energy generation and management are emerging as critical enabling technologies: - **Advanced sensors and instruments:** Require ongoing, sustained amounts of energy to operate continuously and at full resolution. - **Real-time processing and computing:** Places growing demands on onboard power budgets, especially with AI inference in orbit. - **Communications bandwidth:** Higher output requires more energy and scales directly with power. The gap between what small and larger satellites, and what a high-capability system can deliver, is significant. ## The Rise of High-Capability Orbital Infrastructure The shift toward larger, high-capacity satellites wasn't the result of a single breakthrough. Rather, it was several technologies maturing around the same time. Together, they have made building large, powerful satellites function more like infrastructure than hardware. Instead of relying only on miniaturized satellite constellations or singular large satellites, the future of orbital infrastructure will likely be a combination of both working together. Smaller satellites remain well-suited for area coverage, redundancy, and cost-effective data collection. High-capability, larger satellites are better suited for onboard processing, efficiency per unit of output, and overall throughput. **Power Output** The most visible gap between legacy and next-generation satellites is power. While older large satellites typically generated between roughly 5-15 kW, that was enough for their original missions. Next-generation platforms, per NASA's Technical Reports Server[^2] (2004), are being designed with roughly 20 kW to 100-plus kW. This is not just an incremental improvement: it changes the capabilities available, enabling an entirely new class of payloads, sensors, and onboard workloads. **The Cost Stack Has Changed on Multiple Fronts** Historically, the cost of large satellites was prohibitive. That is no longer the case, and the new reasons are structural rather than cyclical. - **Reusable heavy-lift rockets** have significantly reduced launch costs. It has become economically viable to launch heavier, more capable platforms into orbit more frequently. - **Automotive-style manufacturing** has been adopted by satellite builders, applying high-volume assembly processes and standardized components to drive down per-unit production costs. - **Improved battery systems** help maintain capability during eclipse periods, enabling more persistent operations rather than intermittent ones. - **Higher-efficiency solar cells** and large, deployable arrays have enabled greater power generation without proportional increases in mass or complexity. ## From Hardware to Infrastructure Space is increasingly evolving from a frontier technology theme into a distinct infrastructure asset class. Satellites are no longer isolated pieces of hardware performing a single task: they deliver consistent communications, Earth observation, navigation, defense, and data services, and increasingly operate more like systems than instruments. As demand grows, orbital architecture is beginning to resemble the critical infrastructure layers that power our modern economies: energy grids, data centers, and telecommunication networks. The question is no longer whether space is infrastructure, but what kind. ## Strategic Implications: Defense and AI Defense applications represent one of the more durable demand drivers for capability advancement in the space economy. Unlike commercial applications, where adoption curves are influenced by market timing and price sensitivity, defense requirements are dictated by threat environments, national security imperatives, and foreign relations. Lower launch costs, higher power output, and increasingly affordable manufacturing have made new mission profiles viable. The next-generation mission defense architecture requires large, power-intensive satellites capable of ongoing surveillance, real-time tracking, and autonomous tracking. Due to the nature of these missions (continuously high-bandwidth communications and sustained onboard processing workloads), small satellites can't support the level of performance required. Intelligence, surveillance, and reconnaissance (ISR) demands continuous high-resolution data collection, which is power- and processing-intensive. Persistent, ongoing surveillance requires platforms that maintain uninterrupted coverage, not a system that passes over a target periodically and downlinks data later. For secure communications, these systems require resilient, high-bandwidth links that are resistant to jamming and interception, capabilities that require ongoing power and payload sophistication legacy small-satellite architectures were never designed to support. AI in orbit isn't just a feature; it's increasingly the architecture. As AI inference workloads increase, the option for processing data in orbit rather than sending it to Earth is becoming increasingly compelling. High-capability satellites with sufficient onboard compute can run models directly in space, reducing latency, cutting bandwidth costs, and enabling faster autonomous decision-making across defense, intelligence, and commercial applications. The mission requirements were never in question. What changed is that the economics now make them viable. Growth in the space economy is broadly accessible, but exposure and durable value are not the same thing. In this environment, allocation may be less about gaining exposure to the space economy generally, and more about identifying where concentrated value is most likely to emerge. The more precise question for capital allocation is not which companies are participating in the space economy, but which ones are positioning themselves where capability concentration is likely to occur. Mission criticality, switching costs, and technical barriers will, in our view, make those positions difficult to displace. ## The Investor Dilemma: Finding Where Value Concentrates in the Stack As launch capacity expands and small satellite markets become increasingly crowded, investor attention may shift from miniaturization to mission-critical infrastructure. Attention is beginning to move up the value chain, toward the capabilities that determine whether a satellite can actually perform under real mission conditions. Now, the infrastructure layer matters more than the delivery mechanism. The components that define durable value include onboard compute, power systems, AI-enabled payloads, mission-critical networks, and defense-grade infrastructure. These are not commodity inputs; they are capabilities that determine whether a satellite can support complex, persistent workloads, communications at scale, surveillance data processing, and autonomous operations in orbit. The distinction will likely shift from which companies are building satellites to which can handle load-bearing capabilities within a broader system. In a maturing market, pricing power, switching costs, and long-term contract value tend to concentrate. ## Strategic Considerations for Investors The space economy's trajectory is compelling to investors, but the gap between technical potential and broad adoption has historically been wide, and the space sector is no exception. Before deploying meaningful capital, several structural risks demand investors' attention. Adoption rates, cost-to-performance trade-offs, regulatory uncertainty, technological gaps, and increasingly congested orbits may all influence how quickly high-capability systems scale. Systemic, regulatory, and geopolitical considerations must also be taken into account before deploying any meaningful capital. - **Cybersecurity vulnerabilities:** The American space industry lacks a single, unified cybersecurity regulator, leaving operators subject to multiple regulatory requirements, agency-specific standards, and contractual obligations. The space sector has seen a rise in cyber-related threats, per The Record (August 18, 2023); a satellite network attack can interrupt communications across multiple regions. - **Orbital congestion:** There are tens of thousands of tracked debris objects and over half a million untracked fragments larger than 1 cm, creating a growing risk as constellations continue to scale. A self-sustaining collision cascade is a long-range risk that is already causing operators to increase their investments in collision avoidance. Debris removal will be expensive if it becomes necessary. - **Orbital slot competition:** This represents a medium-term regulatory risk. Increased competition could create bottlenecks and chokepoints for new businesses and lead to legal disputes between companies. These risks are not singular in origin; they span systemic, regulatory, and geopolitical considerations. That level of complexity matters to investors because structural resilience, not just technical promise, will determine which systems and operators endure and become profitable. In a market moving this quickly, in our view the companies best positioned to scale will be those that can navigate the full stack of challenges, rather than a single layer. ## Conclusion The space economy isn't standing still. What first started as a race to miniaturize technology has become a race to maximize performance. AI, defense, and real-time computing are reshaping the importance of powerful satellites. The next era will, in our view, reward those who understand where capability concentrates, where infrastructure becomes indispensable, and those who look beyond the initial launch. Artificial intelligence, defense systems, and real-time computing are not peripheral trends: they are driving demand for the very architecture that high-capacity satellites were designed to support. The most consequential missions of the coming decades will require persistent performance, reliable power generation, and increasingly sophisticated onboard intelligence. These requirements are unlikely to ebb and flow with market cycles; instead, in our view, they are poised to compound as geopolitical competition, national security priorities, and global connectivity demands continue to intensify. Space is no longer simply a frontier technology investment theme. It is becoming a distinct infrastructure asset class with durability, mission criticality, and barrier-to-entry characteristics that sophisticated investors recognize from other long-duration infrastructure categories. In our view, the biggest developments in this market will not announce themselves loudly: they will appear in contract structures, payload specifications, power budgets, and a consolidation of mission-critical capabilities into the hands of a small number of operators. Investors who recognize the signals early may benefit from the next phase of the space economy that actually delivers. [^1]: [nasa.gov](https://www.nasa.gov/) [^2]: [ntrs.nasa.gov](https://ntrs.nasa.gov/) --- ### How the Largest IPO in History Will Refine The Space Economy (2026-05-01) https://manhattanwest.com/perspectives/how-the-largest-ipo-in-history-will-refine-the-space-economy/ Intergalactic GPS, weather apps, satellite internet, and even credit card transactions rely on space-based infrastructure. As more data, commerce, and critical military activity become dependent on orbital systems, space has evolved from a niche investment theme a decade ago into one of the fastest-growing sectors in global markets and an institutionally investable category. At the center of this shift is the pending IPO of the world's most valuable private company, and speculation about its future listing continues to attract enormous attention. For investors, this is not just another stock event: it's a catalyst that, in our view, will reshape how capital flows across an entire industry. But the real story is not the offering itself. It is what comes after. ## The Ongoing Privatization of Space The space economy isn't just about rockets and satellite companies. It has evolved into a foundational layer of critical infrastructure powering global communications, national security, climate intelligence, and, increasingly, AI computing, according to Via Satellite[^1] (April 7, 2026). What is being built today is the modern equivalent of the railways, highways, and data cables that defined earlier eras of economic transformation. What distinguishes this cycle from prior waves of space investment is that the shift is now structural rather than speculative. Launch costs have fallen dramatically, declining from roughly $54,000 per kilogram during the Space Shuttle era to under $3,000 today, a reduction of over 94%, driven largely by reusable launch systems. More than 30 countries now operate active national space programs, but recurring commercial revenue, rather than government contracts alone, has become the primary engine of industry growth. The infrastructure buildout is no longer theoretical; it is already underway at scale, and capital markets are only beginning to recognize the magnitude of the transition. As a result, space is no longer only a government-funded frontier. It is increasingly a privately built, owned, and operated network of orbital infrastructure that underpins a growing share of the global economy, per the U.S. Patent and Trademark Office[^2]. Today, approximately 78% of total space activity is tied to the commercial sector, with the remaining 22% connected to government budgets. This transition reflects a broader privatization of strategic infrastructure, where commercial operators are becoming central to communications, navigation, Earth observation, defense support systems, and the next generation of computing capacity. ## New Market Precedents Are Being Set The upcoming IPO listing transforms space infrastructure from a venture and pre-IPO asset class into a full institutional allocation category. The offering will not merely establish a valuation for the issuer; it will create a valuation benchmark for the entire space economy. For the first time, every company at every layer of the commercial space stack will have a verified public reference point. **The Next Wave of Offerings: Now Benchmarked** **Commercial Space Stations:** Valuations are increasingly being measured against the recurring revenue dynamics established by satellite broadband networks. Investors are beginning to evaluate long-duration orbital platforms through the lens of infrastructure economics rather than speculative space exposure alone. **Next-Gen Reusable Rockets:** Launch providers are no longer being valued solely on technical capability or launch frequency. Margins and scalability are becoming benchmarked against disclosed launch economics, with cost efficiency and reusability becoming central indicators of long-term competitiveness. **Satellite Launchers & LEO Constellations:** Regional satellite internet providers are beginning to face the same financial scrutiny as terrestrial broadband and telecommunications businesses. Addressable markets, subscriber growth, and ARPU assumptions are now compared against disclosed broadband performance metrics rather than aspirational adoption forecasts. **In-Space Mobility & Orbital Transfer Vehicles:** Orbital logistics is emerging as a distinct infrastructure layer within the space economy. As launch costs continue to decline, in-space transportation systems are gradually evaluated based on their ability to extend mission life, reposition assets, and reduce the economic friction of operating in orbit. **In-Orbit Manufacturing:** In-space manufacturing is transitioning from an experimental concept to a potentially investable asset class. Economic viability is progressively anchored in verified heavy-lift launch economics, which are reshaping assumptions about the cost of transporting materials and conducting industrial activity beyond Earth. **Space Surveillance:** As orbital congestion increases, space domain awareness is becoming increasingly important for both governments and commercial operators. Companies operating in this segment are increasingly benchmarked against disclosed defense contract revenues, reflecting the growing overlap between national security and commercial space infrastructure. **Dual-Use Defense & Orbital Data Centers:** The convergence of AI, defense, and space infrastructure is creating a new category of strategic assets. Investors are gradually evaluating these businesses not as isolated ventures, but as infrastructure platforms tied to communications, computing, surveillance, and national security priorities. Investors can expect a wave of new ETFs, indexes, and periodic index reweightings, followed by subsector vehicles designed to isolate exposure across the value chain of the space economy. A public listing will compel disclosure of margins and operating performance and provide the market with benchmarks for launch and space-economy economics that competitors and investors can use as reference points. ## Investor Dilemma: Where Will Value Ultimately Accrue? Space investing is defined by long development cycles, geopolitical complexity, and capital intensity on a scale that few sectors can match. Unlike software or traditional real estate, scaling orbital infrastructure requires substantial patience, technical execution, manufacturing capacity, and sustained financing over extended periods of time. Yet despite these barriers, the space economy IPO wave is already underway, spanning the full spectrum of commercial space activity. Investors will have the opportunity to gain exposure across several distinct layers, each with their own risk profile, time horizon, and proximity to near-term cash flow. As with many large-scale infrastructure buildouts, the winners are not always the earliest participants at each layer, but rather the companies that become indispensable to the broader system itself. Within the space economy, that dynamic is beginning to emerge across multiple categories and sectors: 1. **Launch and Infrastructure**: Launch providers are competing on reusability, launch cadence, and cost efficiency rather than launch capability alone. Vertical integration across propulsion systems, advanced materials, avionics, and aerospace manufacturing is becoming increasingly strategically important as companies seek to control costs, secure supply chains, and enhance operational resilience. 2. **Satellite Broadband & Connectivity**: Moving beyond experimental deployments and into commercially scalable communications infrastructure, satellite connectivity is rapidly maturing into a viable extension of global telecommunications, according to the OECD[^3] ("The Space Economy in Figures," 2019). Direct-to-cell providers are bridging satellite and mobile telecommunications networks, while constellation operators with recurring subscription revenue models are gradually being evaluated alongside traditional broadband businesses. 3. **Earth Observation & Geospatial Intelligence**: Satellite imaging is evolving from a hardware business to a data- and analytics-based business. Commercial operators are gradually monetizing real-life operating insights, with climate monitoring, environmental intelligence, and resource tracking emerging as standalone commercial categories. 4. **Defense & Sovereign Infrastructure**: National security is becoming progressively intertwined with commercial space infrastructure. Space domain awareness platforms, orbital tracking systems, and dual-use satellite constellations are becoming increasingly strategically important as governments seek communication, surveillance, and missile-detection capabilities. 5. **Commercial Space Stations & In-Space Manufacturing**: In-space manufacturing platforms are exploring the economic advantages of microgravity for materials, semiconductors, and pharmaceutical production. Orbital servicing of future habitats, satellite refueling, and debris management may also evolve into recurring service-based businesses as orbital congestion and asset-maintenance requirements increase over time. 6. **Funds & Indirect Vehicles**: Institutional access to the space economy is expanding beyond direct company exposure. Secondary market transactions in private space companies are gradually benchmarked against comparable public market assets, while thematic ETFs and dedicated space-focused funds offer broader exposure across the value chain. ## Key Considerations Before Deploying Capital The space economy is a long-duration infrastructure buildout measured in decades. Investors should weigh several considerations before committing capital across any layer of the space industry. The sector spans a broad range of businesses, technologies, and timelines. Not all space companies are operating at the same stage of development. Some are generating commercial revenue today, while others depend on future infrastructure, technology breakthroughs, and regulatory approvals that have yet to occur. The space industry remains closely tied to government agencies, defense budgets, and licensing frameworks. Government and regulatory dependence remains a defining characteristic of the industry, with changes in policy, procurement priorities, and geopolitical conditions that can materially influence certain businesses within the sector. With many segments in the space economy requiring substantial upfront investment, capital demand is a key consideration for investors. Launch systems, satellite constellations, manufacturing infrastructure, and hardware development can involve long R&D cycles and ongoing capital requirements before profitability is reported. Some new businesses emerging within the space economy rely on adjacent infrastructure to succeed and are infrastructure-dependent. Launch availability, onboard power generation, satellite connectivity, ground station networks, AI compute capacity, and overall orbital logistics can influence operational visibility and scalability. As launch and technology development costs decline with expanding orbit access, certain areas of the market may become more crowded. Investors should assess whether the companies they are considering investing in possess differentiated technology, proprietary data, strategic partnerships, and other barriers to entry. With any global investment, geopolitical dynamics are impossible to ignore. Global powers are competing aggressively for orbital dominance and driving durable, policy-backed demand across every layer of the space economy. NASA's Artemis program and the U.S. Space Force are driving private capital into orbital infrastructure as defense increasingly relies on commercial satellite networks. In 2025, President Trump signed two executive orders aimed at reducing regulations and speeding up approvals for the commercial space industry, according to the White House[^4] (August 13, 2025; December 18, 2025[^5]). Europe is focusing on sustainability, Earth observation, and orbital servicing: the European Space Agency[^6] previously approved a record budget for 2023-2026 of €16.9 billion (+17%) and has since released its commitments for 2026 to 2040, focusing on climate protection, space exploration, boosting growth, competitiveness, and inspiring its citizens. In 2024, the Japanese government established a Space Strategic Fund, with plans to allocate JPY 1 trillion over the next ten years, per Chambers and Partners' Global Practice Guides[^7] (July 10, 2025), with the first set of development themes covering transportation, satellites, and space exploration. China is placing greater emphasis on lunar exploration and accelerating its timeline for a lunar landing before 2030; with two state-backed LEO constellation programs planning to deploy over 27,000 broadband satellites into low Earth orbit, China's collective efforts are reshaping the competitive landscape in the category. As with all investments, investors need to evaluate how their current exposures would align with potential future exposures and take into account broader portfolio objectives, liquidity needs, and individual risk tolerance. There is a wide range of operational, financial, regulatory, and technological factors that can influence outcomes across the evolving space industry. ## Conclusion The pending offering of the largest private company in history will, in our view, serve as a gravitational pull, drawing institutional attention and capital toward a market that has been quietly building for years. It's not the final destination, but a catalyst. From launch infrastructure to satellite broadband, Earth observation, defense systems, and in-space manufacturing, the space economy offers investors entry points across a range of risk profiles and liquidity horizons. In our view, the question for investors is not whether to pay attention: it's knowing which layer of the space economy aligns with their objectives, and recognizing that the window before this industry becomes mainstream may be closing faster than most realize. [^1]: [interactive.satellitetoday.com](https://interactive.satellitetoday.com/via/april-may-2026/its-unanimous-space-already-functions-as-critical-infrastructure) [^2]: [uspto.gov](https://www.uspto.gov/sites/default/files/documents/oce-ip-and-space.pdf) [^3]: [oecd.org](https://www.oecd.org/en/publications/the-space-economy-in-figures.fa5494aa-en.html) [^4]: [whitehouse.gov](https://www.whitehouse.gov/fact-sheets/2025/08/fact-sheet-president-donald-j-trump-enables-competition-in-the-commercial-space-industry/) [^5]: [whitehouse.gov](https://www.whitehouse.gov/fact-sheets/2025/12/fact-sheet-president-donald-j-trump-launches-a-new-age-of-american-space-achievement/) [^6]: [esa.int](https://www.esa.int/About_Us/Corporate_news/Ministers_Back_ESA_s_Bold_Ambitions_for_Space_with_Record_17_Rise) [^7]: [practiceguides.chambers.com](https://practiceguides.chambers.com/practice-guides/space-law-2025/japan/trends-and-developments) --- ### Data Center Investments: From Terrestrial Constraints to Orbital Opportunity (2026-04-01) https://manhattanwest.com/perspectives/data-center-investments-from-terrestrial-constraints-to-orbital-opportunity/ Intergalactic Data centers are involved in almost every digital interaction, from streaming and e-commerce to banking and AI applications. With billions of dollars now backing the infrastructure behind them, the question for investors is shifting from "if" capacity constraints will bite to "when." As the AI build-out continues, current data centers are facing mounting structural constraints. For investors, the binding constraint is no longer demand for compute: it's the infrastructure required to support it. With limited real estate, rising energy demands, and increasing environmental scrutiny, Big Tech is accelerating its exploration of alternatives beyond Earth. ## From Niche Infrastructure to Digital Backbone For decades, from the mainframe era of the 1960s through the early 2000s, data centers were primarily internal assets, owned and operated by large enterprises to support their own computing needs, before the rise of cloud infrastructure. As cloud computing gained widespread adoption after 2006, data infrastructure shifted from in-house data centers to hyperscale facilities that power cloud platforms and AI. ## Scaling Challenges of Terrestrial Data Centers The constraints facing terrestrial data centers are no longer purely operational; they are structural pressures that will increasingly influence where capital is deployed across AI infrastructure. As countries and companies race to expand their AI footprint, three bottlenecks are emerging. **Current Energy Constraints** Data centers are already consuming approximately 1.5% of global electricity. That figure is expected to double by 2030, equivalent to Japan's total current power consumption, according to S&P Global[^1] (April 10, 2025). This level of demand is beginning to strain local grids, delay project approvals, and increase the marginal cost of incremental compute. Access to reliable, scalable energy is becoming a gating factor for growth. **Water Intensity** AI workloads require significantly more cooling than traditional computing, making water a critical resource. Data centers rely heavily on water for thermal management, much of which is lost through evaporation, and the remaining water is often too contaminated for reuse in natural systems like rivers and lakes. According to Bloomberg[^2] (May 8, 2025), two-thirds of data centers built since 2022 are located in water-stressed regions, raising long-term sustainability concerns. Water is no longer a secondary consideration: it is an emerging constraint on capacity expansion. **Local Pushback** Finding sites for new data centers is becoming increasingly difficult. As of March 2026, $64 billion in projects have been delayed or blocked[^3], with 11 U.S. states introducing legislation to restrict new developments, per National Conference of State Legislatures[^4] (March 16, 2026). Local opposition is intensifying as communities push back on land use, energy consumption, and environmental impact. Compounding this, data centers are still largely regulated as real estate projects rather than strategic infrastructure, resulting in prolonged permitting timelines and inconsistent policy treatment. These constraints are structural, not cyclical. They are unlikely to ease with time and instead will likely multiply as AI demand accelerates. As energy availability tightens, water constraints deepen, and local friction increases, the ability to scale terrestrial infrastructure becomes increasingly limited. For investors, this marks a potential inflection point. Each phase of the AI value chain has shifted where returns accrue: from hardware to hyperscale platforms. The next phase may again redefine where capital flows, favoring approaches that can bypass terrestrial constraints altogether. ## What Are Data Centers in Space? Data centers in space, or satellite-based computing systems, are servers deployed in low Earth orbit that process and store data outside of terrestrial infrastructure. These systems would be powered by solar energy through onboard panels and connected via satellite networks and emerging laser-based communications. What was once a theoretical concept is becoming technically feasible as several enabling technologies mature simultaneously. Launch has become more commercialized and flexible, reducing the cost and friction of putting hardware into orbit. Small spacecraft can now support far more capable onboard computing, such as integrated processors and radiation-tolerant architectures. Communications have also progressed meaningfully. NASA has demonstrated high-bandwidth laser-based data transmission over extreme distances, signaling a step change in the ability to move data between space and Earth. Early commercial experiments further reinforce this shift: initial deployments of edge computing devices and prototype orbital data processing systems have demonstrated that compute workloads can already be executed in space, albeit at a limited scale. Meanwhile, the regulatory environment is beginning to evolve. Policymakers are taking steps to modernize satellite licensing frameworks to accommodate a faster-moving and increasingly commercial space economy. Together, these developments are moving orbital compute from a theoretical concept toward an emerging infrastructure category. ## How Space Addresses Terrestrial Constraints In theory, orbital infrastructure addresses three of the most binding constraints facing terrestrial data centers. **Energy Advantage** Certain orbital architectures offer near-constant solar exposure, creating the potential for a more continuous and predictable energy supply. This reduces reliance on constrained terrestrial power grids and may improve overall energy efficiency at scale. **Cooling Efficiency** Cooling alone accounts for up to 40% of total data center energy consumption, according to Harvard's John A. Paulson School of Engineering and Applied Sciences[^5] (May 23, 2024). Space provides a natural vacuum environment that enables passive radiative cooling, potentially reducing one of the largest operating costs in data center infrastructure. However, this advantage is not without complexity: extreme temperature fluctuations in orbit, driven by alternating exposure to sunlight and shadow, will require the development of advanced thermal management systems. **No Real Estate Constraints** Orbital infrastructure removes the need for land acquisition, zoning approvals, and local permitting. Capacity can, in theory, be scaled through satellite constellations rather than physical expansion, bypassing one of the most significant bottlenecks facing terrestrial deployment. ## The Current Development Stage and Market Opportunity **Pre-Infrastructure Buildout Stage** We are still in the pioneer stage of data centers in space, similar to the earliest days of commercial cloud computing in 2006, or terrestrial data centers in the early 2000s. **Deployment** A California-based global technology holding company is reportedly targeting AI compute satellite launches by 2027, marking one of the earliest meaningful steps toward orbital infrastructure. Initial commercial deployments are targeted for the late-2026-to-2028 window, with broader scaling expected in the early-to-mid 2030s as the technology matures and deployment cadence increases. **Current Data Center Market Size on Earth** Revenue in the data center market is projected to reach $573.0 billion in 2026 and $739.05 billion by 2030, according to Statista[^6]. **Space-Based Market Size** One physics-driven, constraint-based model estimates that the space-based data center market could reach approximately $39 billion by 2035. We'd note this figure comes from a single self-published technical paper rather than an established research provider, so it should be treated as a directional estimate, not a benchmark. While still modest relative to the scale of terrestrial data centers, this segment has the potential to capture disproportionate growth if Earth-based infrastructure continues to face mounting limitations around energy, water, and permitting. ## Investor Dilemma: Balancing Vision and Reality For investors, the opportunity in space-based data centers presents a classic timing dilemma. Enter too early, and capital may remain tied up for years without generating meaningful returns. Enter too late, and the most attractive opportunities may already be fully priced. As with prior phases of the AI value chain, the challenge lies not in recognizing the potential, but in identifying when that potential begins to translate into durable, investable infrastructure. This tension is compounded by the gap between long-term potential and near-term visibility. While the total addressable market is significant, there is currently limited clarity around revenue models, pricing power, and margin structure. Without established benchmarks or comparable precedents, underwriting these investments requires a higher tolerance for uncertainty and a longer investment horizon. In many ways, this remains an exercise in investing ahead of proof. The opportunity is defined by real long-term potential, but also by meaningful execution risk across technology, deployment, and regulation. Investors must weigh whether the current stage represents early infrastructure formation or ongoing speculation. Access also remains constrained. Many of the most promising companies are private and early-stage, limiting exposure through public markets and concentrating opportunities within venture and growth equity channels. Despite these uncertainties, the scale of the opportunity and structural pressures on terrestrial infrastructure continue to attract capital, positioning this segment as an area of interest for long-duration investors. ## Strategic Considerations for Investors Before Allocating Capital Investing in space-based data centers requires careful evaluation of execution risk. Unlike terrestrial infrastructure, where delays can often be absorbed or mitigated, orbital deployments leave little room for error. Launch failures, delays, or hardware underperformance can materially set back timelines and capital deployment schedules. Success in these investments depends on precise execution, from launch cadence to system reliability, with limited tolerance for operational missteps. Economic risks are equally significant. At present, there is no proven revenue model for orbital compute, nor are there established benchmarks such as service-level-agreement-backed contracts to anchor pricing, utilization, or margins. As a result, investors must underwrite these opportunities without clear visibility into how value will ultimately be captured or distributed. Regulatory considerations add another layer of complexity. Increasing congestion in orbit raises the risk of collisions, which may prompt tighter regulatory oversight and new constraints on development. In addition, access to orbital slots and radio frequency spectrum is governed by international treaty through the International Telecommunication Union (ITU), a United Nations agency responsible for allocating satellite positions and coordinating spectrum usage. These regulatory frameworks introduce scarcity, but also uncertainty, particularly as commercial activity in space accelerates. At current valuations, many of these risks are not fully discounted, in our view. In an asset class defined by regulatory scarcity and execution risk, early winners are likely to be those that secure orbital positioning, demonstrate visible revenue pathways, and execute on-time deployments. These factors will play a defining role in shaping the competitive landscape for decades to come. **Where Capital Is Flowing** As AI infrastructure evolves, capital is being deployed across multiple layers of the emerging space-based data center value chain, each offering distinct risk and return profiles. At the foundational level, investment is concentrated in launch and space infrastructure, including rockets, satellites, and deployment systems. These assets represent the "picks and shovels" of orbital compute, enabling access to space and forming the backbone upon which all higher-layer services depend. Further up the stack, capital is flowing into semiconductors and AI compute designed specifically for the space environment. This includes the development of radiation-resistant GPUs and TPUs capable of operating reliably in orbit, addressing one of the core technical challenges of deploying compute infrastructure beyond Earth. Energy and power transmission are also emerging areas of investment. Space-based solar power systems offer the potential for continuous energy generation, with some companies exploring technologies to beam that energy back to Earth. While still early, this layer could play a meaningful role in supporting both orbital and terrestrial energy needs. At the highest and most speculative layer sits SaaS and orbital cloud: the concept of compute-as-a-service delivered directly from space. While furthest from commercialization, it is widely viewed as a potentially high-margin segment, assuming the underlying layers are successfully established. ## Conclusion As terrestrial constraints tighten (limited land, growing local opposition, and increasing environmental scrutiny), Big Tech is looking beyond Earth for its next generation of data centers. While still in its early stages, the shift from Earth-bound to orbital compute represents one of the newer frontiers in digital infrastructure. In our view, the opportunity for investors here isn't immediate ROI: it's early positioning in what could become a foundational layer of AI infrastructure, for those with the patience and risk tolerance the category demands. [^1]: [spglobal.com](https://www.spglobal.com/energy/en/news-research/latest-news/electric-power/041025-global-data-center-power-demand-to-double-by-2030-on-ai-surge-iea) [^2]: [bloomberg.com](https://www.bloomberg.com/graphics/2025-ai-impacts-data-centers-water/) [^3]: [datacenterwatch.org](https://www.datacenterwatch.org/report) [^4]: [ncsl.org](https://www.ncsl.org/state-legislatures-news/details/why-states-are-considering-temporary-bans-on-new-data-centers) [^5]: [seas.harvard.edu](https://seas.harvard.edu/news/sustainable-future-data-centers) [^6]: [statista.com](https://www.statista.com/outlook/tmo/data-center/worldwide) --- ### Fusing Private Markets With Global Energy Needs: The Case For Nuclear Fusion (2026-03-13) https://manhattanwest.com/perspectives/fusing-private-markets-with-global-energy-needs-the-case-for-nuclear-fusion/ The Future of Finance Nuclear fusion energy is moving from science fiction toward a potential commercial energy source. Private companies are accelerating energy development with a combination of government funding and venture capital. MIT Energy Initiative analysis (September 12, 2024) suggests fusion could emerge as a leading power source over time, potentially displacing coal, which today supplies roughly a third of global electricity. "With more than 40 fusion startup companies and more than 100 government-supported fusion projects, there has never been more momentum and enthusiasm for the potential role for fusion in the energy transition," said Robert C. Armstrong, former director of the MIT Energy Initiative. "People are tremendously interested in understanding how fusion power plants could transform electricity generation in the decades ahead." With billions backing this next clean energy source, the question is shifting from "if" to "when." ## What Is Fusion Energy? Fusion is the process by which the sun and stars produce energy. Fusion power has powered the universe for billions of years, but because the temperature and pressure requirements for achieving fusion are hard to replicate, no one has yet been able to achieve bulk fusion in a practical way to generate electricity. Scientists have theorized about different nuclear fusion approaches since the late 1950s, but without the help of transistors or modern computers, they were unable to prove their concepts. **Current Nuclear Power vs. Fusion Energy** Today's nuclear power plants use fission, which releases energy by splitting large atoms. Fusion energy is released by pushing small atoms together. Both release energy, but they behave very differently. ## Why Fusion Energy Matters The nuclear power plants we have today are fission-based. Fission creates a chain reaction that must be constantly controlled and produces radioactive waste that lasts thousands of years. It is extremely regulated, as fuel is rare and the output is hazardous. As of 2025, 31 countries operate nuclear fission power plants; just five countries (the U.S., France, China, Russia, and South Korea) control 71% of global nuclear capacity, making it geographically concentrated. The biggest difference between fission and fusion energy is that fusion energy has no chain reaction: if conditions are stopped, the reaction stops. Fusion energy is powered by abundant isotopes found in water, and it produces very little short-lived radioactive material, which makes it an attractive energy source by comparison. ## The Investor Dilemma: Where to Deploy Capital With over 75% of private fusion companies targeting grid delivery by the 2030s, capital is shifting from funding laboratory research to industrial construction with a credible near-term timeline. As governments back private businesses, investors will have to do their own due diligence to decide the best way to deploy their capital. ## Global Investment Opportunities **USA:** The U.S. hosts at least 29 fusion startups that have captured over half of global private funding. Supported by federal tax credits and an active innovation environment, it's currently the world's most active private fusion market. **China:** China has reportedly mobilized an estimated $6.5 billion toward fusion commercialization since 2023 alone, nearly triple the U.S. Department of Energy's Fusion Energy Sciences Program budget over the same period. **EU:** Europe's private sector accounts for only about 5% of global private fusion funding despite its deep public research base. **India:** India updated its nuclear energy laws to allow private companies and foreign investors to participate for the first time, as part of its plan to reach 100 GW of nuclear power capacity by 2047, according to NucNet (December 18, 2025). Once fusion energy becomes viable and commercialized, it could, in our view, help countries reduce their reliance on imported oil and gas. Global electricity production today remains heavily concentrated in coal, gas, and hydro, with China and the United States together accounting for the largest share of output across all sources, including nuclear, wind, and solar, according to Global Electricity's country-level production rankings. ## Strategic Considerations for Investors: Follow the Money For investors interested in this landscape, the challenge isn't finding a fusion company to back, but knowing which ones to trust. While not all fusion ventures are created equal, there are useful government signals to help identify credible private-sector companies. The American DOE Milestone-Based Fusion Development Program was first authorized in the Energy Act of 2020 and received its first funding appropriation in fiscal year 2022. The program was announced in September 2022, and, following a rigorous merit-review process, eight selectees were announced in May 2023. Initially, $46 million was obligated for the first 18 months of the program. The program is authorized for a total of $415 million through fiscal year 2027 under the CHIPS and Science Act of 2022. This program serves as a useful signal filter, since companies that receive competitive grants and funding have already established credibility that purely private backing doesn't provide on its own. "As the world races to make fusion a viable source of energy for industry and consumers, these programs signal that the U.S. intends to be the first to commercialize fusion energy through strong partnerships among our National Laboratories, universities, and the private sector to realize industry-led designs for fusion pilot plants," said David Turk, former U.S. Deputy Secretary of Energy. Large oil and gas companies are increasingly backing nuclear innovation. Over the past several years, one of the largest American oil and gas producers and its venture investment arm has committed hundreds of millions of dollars to nuclear fusion companies as the technology moves closer to commercial viability. A major Italian oil and gas player went further, taking equity stakes in fusion developers and signing long-term power purchase agreements valued at more than $1 billion for future clean fusion electricity expected to be produced in Chesterfield County, Virginia. International energy companies taking an interest in nuclear energy is not new: there are reports of a Canadian energy company backing fusion since 2011, when it committed $5 million. Tech giants are also getting involved, driven by climate commitments, data center energy needs, and an interest in buying in while the price is low. In 2023, a trillion-dollar technology company signed what was reported to be the world's first power purchase agreement with a fusion startup, committing to receive fusion-generated electricity as early as 2028 to help support the rapidly growing energy demands of artificial intelligence and hyperscale data centers, per the International Energy Agency (April 10, 2025). A different trillion-dollar technology company has approached fusion on two fronts: as a long-term equity investor in one fusion company since 2015, and more recently as a power buyer, signing a 200-megawatt power purchase agreement in June 2025 for electricity expected to come online in the early 2030s from a Virginia-based reactor. ## Conclusion The fusion energy investment landscape has matured quickly. It is entering an era where capital, policy, and construction are converging around credible commercialization timelines. Accelerated by government funding, private investment, and the need for clean energy, fusion energy has the potential to displace fossil fuels over time. The question for investors has shifted from *whether* fusion energy will go to market, to *who* will bring it to market first. In our view, fusion energy represents a rare opportunity: early-stage exposure to a technology that, if it succeeds commercially, could help redefine global energy markets and economic power for decades to come. That said, fusion has a long history of commercialization timelines slipping, and there is no guarantee any given company or technology path will reach grid-scale delivery on the timelines currently being discussed. For forward-looking investors, the strategic case is, in our view, fairly clear: follow the government signals, prioritize companies with near-term, verifiable milestones, and weigh position sizing against the real possibility that commercialization takes longer than the current cycle of enthusiasm suggests. --- ### Confidence is a Strategy: The Psychology of Staying Invested (2026-02-13) https://manhattanwest.com/perspectives/confidence-is-a-strategy-the-psychology-of-staying-invested/ The Future of Finance Why do some investors buy high and sell low? It's the same reason some liquidate their investments and go all in on a single position: emotions. Emotions and investing are closely linked: emotions are arguably the worst driver of investment decisions, yet they influence nearly every investor. Why is it that some investors describe investing as a roller coaster, while others treat it as a simple transaction? Unfortunately, some investors react more strongly to emotion than to the information in front of them. ## The Rational Planner vs. the Emotional Reactor Most investors can be loosely categorized as either a rational planner or an emotional reactor. The rational planner views investing as a long-term strategy. The emotional reactor is an investor who overrides data and strategy with emotion. ## The Emotional Cycle of Investing The classic investor emotional curve runs: optimism → excitement → euphoria → anxiety → denial → fear → panic → depression → capitulation → hope → relief → optimism. **Optimism**: At the beginning, most investors are optimistic about their investments. It's human to want things to go your way. **Excitement**: As markets move, investors get excited about the possibility of greater gains. **Euphoria**: Investors may experience euphoria as markets reach the top of the cycle. During this phase, investors may begin to believe they can tolerate higher risk levels, and therefore invest in riskier asset classes or increase trading frequency. Unfortunately, this can come with a belief that positive times will continue indefinitely. **Anxiety**: For emotional investors, euphoria turns to anxiety as soon as the market dips. Will the investment lose profits, break even, or become a complete loss? **Denial**: When the market pulls back from a small dip, some investors will believe that things will improve and hang on to underperforming positions. **Fear**: As losses accelerate, fear sets in. **Panic**: Investors who missed the profits and are desperate to get back in the black may consider selling their performing investments or moving into new assets that don't fit their original risk profile. Panic sets in as paper profits shrink. **Depression**: During this phase, investors feel the realities of a bear market and become desperate and discouraged. **Capitulation & Dependency**: In this part of the cycle, investors may abandon their investing strategy altogether. Many feel at the mercy of the market, and some quit investing entirely. **Skepticism**: When the market starts to rise, many investors experience skepticism. Will the market continue to rise, or was the move just a blip? Many will be cautious about their next move, reluctant to invest new money even when prices are relatively low and opportunities look attractive. **Hope > Recovery > Optimism**: As the market recovers, investors who let their emotions dictate decisions can restart the cycle from the beginning. ## Why Investors Miss the Best Days In a recent Manhattan West State of the Market update, we highlighted a real-time example of how headline-driven decisions can erode capital: an investor exited a position in the U.S. defense sector after reacting to a presidential social media post that negatively framed the industry. Just over two hours later, a follow-up post released shortly after the market closed reversed the narrative entirely. The result: a portfolio locked into losses with no exposure to the subsequent recovery. This scenario illustrates a critical but often overlooked dimension of market timing risk: investors who exit positions based on short-term volatility don't just miss abstract "best days." They systematically miss the snapback rallies that immediately follow the very events that triggered their exit. The psychological pattern is predictable: negative news prompts selling, but by the time clarity emerges or sentiment reverses, the investor is on the sidelines watching their former position recover without them. This creates a compounding effect where emotional exits lock in drawdowns precisely when positions are most oversold, while the subsequent mean reversion accrues to those who maintained their positions through the uncertainty. The "best days" aren't randomly scattered across the calendar. They tend to cluster around periods of heightened volatility and negative sentiment: the exact moments when reactive investors have already fled. The data illustrate the cost of missing them: | | Annualized Return, S&P 500 Total Return Index (2005–2024) | |---|---| | Fully invested | 10.40% | | Excluding top 10 days | 6.10% | | Excluding top 20 days | 3.50% | | Excluding top 30 days | 1.30% | | Excluding top 40 days | -0.60% | *Source: Charles Schwab Quarterly Chartbook, Q4 2024, as of 12/31/24; underlying data from Bloomberg. Past performance is not indicative of future results.* ## The Role of Confidence in Investing Confidence is key when investing. When you are confident in your strategy, you are less likely to be overcome by emotion and stray from your original plan. Overconfidence can lead an investor to overestimate their abilities, resulting in riskier investments or overtrading. A lack of confidence, on the other hand, can result in decision paralysis and missed opportunities. With the right level of confidence, an investor can anchor decisions in data and fact rather than emotion. Balanced investors do their own research before making changes to their investing plan when they read unsettling headlines. ## Strategy & Key Investor Takeaways **Revisit your plan:** Discipline is built through clarity and consistent review of your strategy. **Diversify with intent:** Balance liquidity, income, and growth across assets and emotional triggers. **Stay grounded:** Professional guidance creates distance between fear and decision. In our view, this is one of the more underrated roles an advisor plays: acting as an emotional shock absorber and a source of perspective during volatile times. ## Conclusion Market cycles do just that: they come and go, and will continue to do so. Investor behavior remains one of the more persistent factors shaping long-term investment outcomes. While buying high and selling low isn't most investors' intended strategy, it can be a consequence of emotional decision-making. If investors are aware of the role emotions play in investing, they can change that pattern. In uncertain markets, in our view, confidence is one of an investor's most valuable assets, and unlike most assets, it compounds the longer it's sustained. Having a clear understanding of your goals and a well-constructed plan can help you navigate volatile markets. --- ### The Trillion-Dollar Convergence: How Retail Finance and Betting are Merging into Prediction Markets (2026-01-15) https://manhattanwest.com/perspectives/the-trillion-dollar-convergence-how-retail-finance-and-betting-are-merging-into-prediction-markets/ The Future of Finance Prediction markets are not just the latest digital fad; they represent the merging of two massive, fast-evolving industries: retail finance and regulated betting. As financial markets adopt gamification, increase accessibility, and betting platforms evolve toward exchange-based, probability-driven models, prediction markets are emerging as a natural interface layer between information, participation, and capital. In our view, the opportunity for investors is in the platforms, exchanges, and infrastructure that monetize probabilistic decision-making at scale, not merely in engaging with the apps themselves. ## Two Irreversible Trends Are Colliding **The Evolution of Retail Finance** Retail finance has steadily grown from an expert-driven space defined by access, participation, and engagement. What once required institutional capital and professional gatekeepers moved to ETFs. It then evolved into online brokerages that opened public markets to novice investors, followed by zero-commission trading and fractional stock ownership that continued to remove high capital barriers. The rise of options, crypto, and narrative-driven retail trading has reshaped how individuals interact with risk and opportunity. Today's popular trading platforms prioritize speed, accessibility, and engagement to meet the next generation of investors accustomed to immediacy and participation. Modern retail investors are increasingly trading on events, narratives, and catalysts rather than long-term fundamentals, creating demand for short-duration, outcome-based financial instruments. **The Evolution of Betting and Wagering** Over the past couple of years, the gambling industry has undergone a complete transformation. It has evolved from informal, bookmaker-driven wagering into highly structured, data-driven digital markets. Traditional bookmakers first gave way to online sportsbooks; now, increasingly, regulated exchanges resemble financial marketplaces more than Las Vegas casinos. Real-time odds, in-play betting, and dynamic pricing have accelerated participation and increased liquidity. In effect, modern betting exchanges have trained a generation of users to interact with continuous pricing, implied probabilities, and rapid information updates: behaviors indistinguishable from retail trading. What once relied on intuition and static lines has become faster, more liquid, and increasingly financialized. ## Prediction Markets as the Convergence Layer Prediction markets currently sit at the intersection of financial market infrastructure, real-time information aggregation, betting mechanics, and behavioral economics shaped by gamification. At their core, prediction markets are exchanges where participants buy and sell contracts tied to real-world outcomes. These outcomes range from elections and economic indicators to pop culture and weather events. What makes these markets distinctive is their dynamic pricing: prices adjust as new information emerges, and sentiment is expressed instantly through capital allocation. Platforms monetize collective intelligence in real time, according to Forbes (December 20, 2025). As a result, prediction markets often surface shifts in expectations and beliefs well before traditional institutions, surveys, or expert analysts can react. With these markets, prices are set by capital, not opinion, rewarding accuracy over persuasion in an environment increasingly defined by informational noise. ## Why Prediction Markets Are Gaining Traction Now Prediction markets offer unusually low barriers to participation compared to traditional institutional financial markets. They're built on systems that feel familiar to anyone who's spent time trading online, placing a sports bet, or even playing online poker. Their short-duration contracts, clear outcome resolution, and rapid feedback loops create an engaging rather than intimidating experience. This makes them a natural fit for mobile-first, gamified financial platforms. These markets can span a wide range of real-world questions. Topics include political elections, policy outcomes, macroeconomic events like government shutdowns and interest rate decisions, cultural moments, and even international weather conditions. In this way, prediction markets do something few financial instruments can: price collective attention directly into liquidity. In a time when people are losing faith in traditional forecasts, markets that let you price uncertainty itself are starting to look a lot more valuable. ## Market Scale and Growth Potential The global sports betting market exceeds several hundred billion dollars annually, according to Research and Markets, via Yahoo Finance (December 3, 2025), while retail equity and options trading volumes measure in the tens of trillions. Prediction markets do not need to replace these markets; they only need to capture a fraction of the event-driven risk expression already occurring across finance, betting, and media. Industry estimates suggest that prediction markets could scale to as much as $1 trillion in annual trading volume by 2030, according to CDC Gaming Reports (December 18, 2025), propelled by the expansion of contract categories, broader retail participation per Reuters (July 29, 2025), continued improvements in market infrastructure, and increased liquidity. Distribution through existing financial and betting platforms further accelerates adoption by meeting users where they currently are. The total addressable market is amplified by the sheer size of global retail investing, the rapid expansion of legalized sports betting, and a growing willingness to monetize information as financial assets rather than passive signals. ## Regulation, Classification, and the Path Forward Regulation is shaping new digital and derivatives markets, with the Commodity Futures Trading Commission (CFTC) playing a key role. New laws and regulations now clarify jurisdiction, contract types, and compliance. The Digital Asset Market Clarity Act of 2025 (H.R. 3633, 119th Congress, as accessed January 13, 2026) grants the CFTC authority over digital commodities and establishes clearer registration standards, reducing regulatory uncertainty. In late 2025, streamlined guidance, targeted relief, and the CFTC's year-long "Crypto Sprint," per Morgan Lewis (December 18, 2025), advanced the acceptance of digital assets as collateral and eased compliance. With new Senate-confirmed leadership signaling a focus on market structure and enforcement clarity, per WilmerHale (December 18, 2025), forthcoming rulemakings are expected to facilitate efficient registration and participation. Together, these developments are likely to formalize regulated digital market categories, strengthen integrity through defined anti-manipulation standards, attract institutional participation by reducing legal risk, and create durable compliance moats for qualified platforms. This mirrors how regulatory certainty has historically accelerated growth in online trading, crypto exchanges, online poker, and sports betting, where definitive rulebooks and recognized standards enabled broader participation and capital inflows. ## Additional Tax Developments Impacting Participation Recent legislative changes, including updates in the One Big Beautiful Bill, are altering the tax treatment of event-based winnings, potentially influencing participation dynamics. Beginning January 1, 2026, loss deductions for gambling-related activity are capped at 90%, down from the previous 100%, a shift that disproportionately affects high-frequency and professional participants who rely on full loss offsetting, according to the Tax Foundation (August 22, 2025). While these changes may temper certain forms of short-term activity, it is unlikely to undermine the market's long-term trajectory. Instead, liquidity is expected to consolidate around institutional market makers, platform-driven liquidity provisioning, and increasingly sophisticated participants operating within clearer regulatory and tax frameworks. ## Investor Dilemma For investors, prediction markets present a familiar dilemma: trade the market or own the rails? Direct participation involves trading short-duration, binary outcome contracts, a strategy marked by high volatility and regulatory exposure. Alternatively, backing the platforms, exchanges, data infrastructure, and distribution channels that support these markets enables value generation from volume, spreads, and user engagement, independent of individual outcomes. In our view, over the long term, the most durable returns are likely to accrue to those who control the market infrastructure, user distribution, compliance frameworks, and the orchestration of the market itself. ## Strategic Considerations for Investors From a strategic standpoint, prediction markets sit at a compelling inflection point for investors. The convergence of finance and betting meaningfully expands the total addressable market, while gamified mechanics drive higher engagement and retention than traditional financial products. As regulatory clarity improves, it not only legitimizes the category but also creates durable barriers to entry for latecomers that lack the capital, compliance infrastructure, or distribution reach to compete. While ultimate market scale remains scenario-dependent, shaped by the span of permitted contracts and access to major distribution channels, the underlying demand appears structurally resilient. Prediction markets benefit from a form of behavioral durability: as long as people seek to express beliefs, manage uncertainty, and act on information, in our view these markets will persist and grow, even as regulatory pathways continue to evolve. ## Conclusion Prediction markets represent, in our view, one of the more significant evolutions in how individuals interact with risk, information, and capital. As retail finance and betting converge, these markets are turning probabilistic thinking into a scalable financial category. For investors, the opportunity lies not in predicting outcomes, but in backing the platforms and infrastructure that facilitate probabilistic trading. As regulation grows alongside demand, prediction markets may evolve from a speculative niche into a durable, high-volume component of modern financial markets. --- ### Hollywood, AI is Here to Stay (2025-11-06) https://manhattanwest.com/perspectives/hollywood-ai-is-here-to-stay/ Artificial Intelligence "70% of this episode was made with AI" was the opening line during an exclusive Los Angeles Tech Week event in 2025. What followed was an in-depth conversation on how the technology had advanced over the prior 18 months, from concept to use case and finally to "the future of production." AI has moved from novelty to foundational across the entertainment stack. Text-to-video and video-to-video tools have passed key usability thresholds: anatomic mimicry, voice sync, and, most importantly, consistency. The top three generative-entertainment platforms carry an aggregate value of roughly $510 billion, and the primary talent agencies have adopted what amounts to a "Dutch-door" posture: slamming the top half shut with public opt-outs and hardline statements, while keeping the bottom half ajar for controlled pilots and platform partnerships such as a proprietary rights-management vault built by one of the top talent agencies. "Our position is that artists should have a choice in how they show up in the world and how their likeness is used, and we have notified the platform that all our clients be opted out of the latest AI video update, regardless of whether IP rights holders have opted out IP our clients are associated with," a senior digital-strategy executive at one of the top Hollywood talent agencies wrote in a statement to press (October 16, 2025). ## The Three Pillars of AI in Entertainment **1. State of Technology & Adoption** One leading platform's latest text-to-video model advanced video realism and control and is moving into consumer distribution; a competing model emphasizes pro-workflow and supports C2PA (the Coalition for Content Provenance and Authenticity), which is increasingly becoming a procurement requirement. In parallel, a major video-sharing platform has begun rolling out likeness detection to identify and remediate unauthorized AI videos at scale, signaling that provenance and consent rails are becoming distribution chokepoints. **2. Copyright, Labor & Policy** Guild rules, litigation, and regulation are now gating adoption. The Writers Guild of America's 2023 Minimum Basic Agreement states that AI output is not "source material," preserving writer credit and preventing compelled AI use. SAG-AFTRA's framework with an AI voice-replica platform enables consent-first professional voice replicas. Meanwhile, the Recording Industry Association of America's (RIAA) suits against two AI music-generation startups over training on copyrighted recordings crystallize the risk of unlicensed corpora. The EU AI Act and national measures (e.g., Spain's proposed fines) are pushing labeling and transparency requirements for synthetic media. **3. Agencies as Gateways** Agencies are shifting from pure representation to rights operations. One top talent agency has partnered with an AI data-management vendor to launch a secure repository for clients' scans, voices, and metadata, and has collaborated with a major video-sharing platform on early likeness-detection testing. Another leading agency's internal research arm documents creator attitudes toward AI and has joined its peer agencies in a negative stance on the leading text-to-video platform's latest release, deeming its posture "exploitation, not innovation." ## How It Works: The Modern AI Pipeline for Entertainment **The Content Layer: Good In, Good Out** Studios start with cleared assets (with documented consent); these assets are then used to generate or transform media, which is finished inside the same non-linear editor/VFX suites used for traditional post-production. The completed media is then exported with AI metadata so platforms can label, route, or remove content as needed. In this model, AI doesn't replace Hollywood: it formalizes Hollywood's operating model, driving fewer handoffs, faster iteration, and stronger audit trails. One leading stock-media and data-licensing company's business illustrates how quickly this has scaled: data, distribution, and services revenue tied to AI licensing deals grew from roughly $7 million in 2019 to $16 million in 2021, $39 million in 2022, and $137 million in 2023, with an outlook of $138 million for 2024, according to that company's Q4 2023 earnings report and investor relations materials (2024). With studios prioritizing licensed and indemnified corpora up front (stock libraries, archives, and performer-approved scans and voices), downstream legal review and platform distribution proceed with less friction. Data suppliers and enterprise vendors have turned "clean inputs" into a commercial moat, and procurement desks increasingly ask how the work was made before they ask what it looks like. **The Hybrid Production Model: "It's the Same Damn Horse Every Time"** During the same Tech Week, one event held at a Culver City soundstage showcased not only the quality of a proprietary model, but also its consistency. A 40-second segment of a one-hour film showed a Clydesdale horse with distinguishable features. That same horse was then shown in five different scenes, each representing a different setting, angle, and mix of real and AI characters. The only consistency on each scene was the Clydesdale and its distinguishing features. The speaker on stage, to everyone's surprise, said the horse "was generated in the cloud [through a proprietary text-to-video model], it does not exist, and it's the same damn horse every time." To illustrate how significant this consistency was: the simple prompt of "generate a video of Will Smith eating pasta" has generated short clips that increase in accuracy and quality, approaching near-perfection, without the use of a digital twin (an accurate 3D virtual representation of a physical object). It took roughly two years to get a usable base render; it now takes minutes to replicate every aspect of the same base render across any situation. For on-set production, LED-volume stages combine widely used real-time 3D rendering engines with precise camera tracking. This makes virtual environments move naturally with the camera's position, adjusting lighting and parallax live. Near-final shots can be captured directly in-camera, reducing post-production fixes and keeping shooting days more efficient and predictable. This hybrid segment is then fed into the model layer and used as a basis for other scenes in real time. On the audio side, AI-driven tools handle everything from speech-to-speech dubbing to voice replication to sound-environment simulation. Neural voice models can preserve an actor's tone and pacing across multiple languages, while automated sound design tools generate ambient layers or Foley effects that match the visuals in real time. In postproduction, the tools producers already trust have absorbed AI natively. One widely used color-grading and editing suite's built-in AI engine automates person and depth isolation and accelerates rotoscoping, relighting, and subtitle timing. Another major finishing platform layers machine-learning segmentation and next-generation camera tracking onto a pipeline built for broadcast and features. These embedded upgrades cut hours to minutes and reduce handoffs between departments. The production is complete, and two questions come to mind: who owns the AI-generated content, and how do you track it? Content Credentials (C2PA), a cryptographically verifiable manifest of "who did what, with which tools," can be embedded at export and carried through edits. As platform policies tighten, assets bearing credentials pass compliance faster and avoid relabel and rollback cycles. Platforms are also becoming more active policy enforcers: likeness-detection and synthetic-media labeling allow creators and agencies to flag or remove impersonations while still permitting legitimate, disclosed use. ## The Conflict AI is not the first technological leap in Hollywood to spark an identity crisis. From "talkies" in the 1920s to CGI in the 1990s, the same question returns: who will be replaced? On one side, writers fear dilution of voice, and actors fear the permanence of their digital doubles; history shows a pattern of tools advancing faster than the debate over them, collapsing the space between intent and execution. In our view, AI in Hollywood will primarily redefine what it means to be "in the industry" by compressing repetitive tasks and upskilling incumbents, rather than reducing headcount outright. Editors, VFX artists, and sound engineers are already evolving into AI supervisors and creative technologists, a shift that should push unions like the WGA, SAG-AFTRA, and IATSE to codify consent, authorship, and compensation as part of this transition. The next phase of AI in entertainment should be reinvention, not reduction. Jobs should evolve, not disappear; AI should compress inefficiency, not creativity. For studios, this is less about cost-cutting and more about capacity expansion: building faster, safer, rights-aware production pipelines. If Los Angeles aligns capital, policy, and education around modernization instead of resistance, it can remain a global hub for this transition. ## The Manhattan West Late-Stage Venture Capital Position We are cautiously optimistic on AI in entertainment over the next three to five years. In our view, the companies most likely to win will blend creative capability with legal clarity (using licensed data, clear consent systems, and provenance by default) while fitting into existing studio workflows. As AI becomes standard across editing, VFX, and localization, it has the potential to re-anchor production in Los Angeles, cutting costs and timelines while giving the workforce opportunities to upskill with AI-assisted tools. --- ### The Expanding Frontier: Investing In The Space Economy (2025-11-06) https://manhattanwest.com/perspectives/the-expanding-frontier-investing-in-the-space-economy/ Intergalactic As the global space economy transitions from a government domain into a commercial and private investment frontier, investors are looking far beyond our atmosphere. From satellite launches, communications, and a new wave of technology, it is redefining how humans are using and profiting from outer space. As capital is deployed toward infrastructure, orbital manufacturing, and even extraterrestrial resource extraction, this new economy is evolving into an intricate network of markets that will support global communication, climate monitoring, and national security. The cost of access to orbit is declining, technologies are getting closer to going to market, and investors are ready to reshape the aerospace supply chain. Private equity and late-stage venture capital are turning a once-expensive industry into a scalable one. Fueled by exclusivity and vision, ultra-high-net-worth (UHNW) investors are eager to participate in intergalactic investments, not just for financial speculation, but as early believers in a universal economy. ## Why This Is a Structural Shift ### Beyond Satellites Traditionally, satellite communications have been at the core of the space economy. New sectors (space debris management, in-orbit manufacturing, and resource extraction) are expanding the scope. Emerging companies are developing technologies for repairing spacecraft in orbit, refueling satellites, and returning hardware to Earth. ### Infrastructure as an Asset Class The last century was defined by railways, highways, and data cables; this century will be shaped by lunar logistics, interplanetary supply chains, and orbital transport. Orbital relay and communication networks, space stations, and off-world human habitats represent the next wave of infrastructure investment. Early investors who position themselves may benefit from the compounding effects of this emerging infrastructure layer. ### Strategic and Defense Dimensions Space has traditionally been viewed as a domain of militaries and governments. Countries have already established "space commands" and deployed satellite constellations for communications, missile detection, and surveillance. While this militarization parallels naval dominance centuries ago, international position in orbit is increasingly viewed as essential to global power projection. Technologies with dual civil and defense uses are creating strong demand for secure data relays and propulsion systems. ### Earth Observation and Climate Intelligence Commercial satellite constellations can now deliver near-real-time information on weather, energy, environmental change, and agriculture. The ability to monitor every square foot of the earth carries both economic and ethical implications. ### Asteroid Mining and Extraterrestrial Resources Access to platinum-group metals and rare earth elements could redefine supply chains and geopolitics through off-world resource extraction. In our view, the earliest investors in this category may not see near-term returns, and outcomes here are far from assured: this is a long-horizon allocation, not a near-term one. ## The Investor Dilemma: Vision vs. Viability Space investments face long development timelines, international geopolitical sensitivity, and complex regulatory landscapes. Unlike software or real estate, scaling in space demands enormous capital, a high tolerance for technological risk, and patience. ## Private Equity and Late-Stage VC Trends - **Aerospace supply chains:** By acquiring mid-tier component manufacturers, propulsion specialists, and material firms, private equity funds can consolidate the fragmented aerospace economy. - **Launch and satellite technology:** Focusing on dual-use potential and recurring revenue, late-stage investors are funding miniaturized satellites, AI-driven orbital operations platforms, and reusable rockets. - **Downstream applications:** Data analytics firms that use satellite imagery for insurance, defense intelligence, and agriculture represent, in our view, one of the more immediate paths to profitability in the sector. These opportunities can offer a high risk-adjusted upside and exclusivity, but they require the same underwriting discipline as any private allocation. ## Global Dynamics The United States, Asia, and Europe are competing to establish footholds in orbit and on the moon. - **United States:** NASA's Artemis program, Space Force initiatives, and partnerships with commercial launch and orbital infrastructure providers are driving the integration of lunar and orbital infrastructure into the private sector. - **China:** Commercial space ventures are largely state-funded and will likely continue to accelerate as the technology matures. - **Europe and Japan:** Currently focused on sustainability, earth observation, and cross-border industrial cooperation for orbital servicing. The global race is both competitive and collaborative, with partnerships accelerating innovation and reinforcing strategic dependencies. ## Strategic Considerations for Investors - **Ethical and environmental responsibilities:** Orbital congestion, space debris, and militarization risk warrant careful ESG consideration. - **Governance and transparency:** Investors should prioritize ventures with clear protocols and international cooperation frameworks. - **Due diligence beyond technology:** Geopolitical exposure, regulatory compliance (e.g., ITAR and export controls), and dual-use considerations must be assessed before investing. - **Long-term horizon:** These investments can carry a 7-to-15-plus-year return window that requires substantial capital and a high tolerance for risk. - **Portfolio construction:** Blending exposure to nearer-term revenue streams (data analytics and communications) with more speculative frontier plays (resource mining and in-space manufacturing) can help investors build a more diversified posture within the category. ## Conclusion The combination of orbital infrastructure, defense, and exploration will help define the next century. For investors, the space economy represents both exclusivity and scale. In our view, the investors who do best in this category won't simply be chasing the next breakout company: they will be the ones who understand the policies, ethical questions, and emerging technology shaping humanity's expansion beyond Earth, and who bring disciplined governance and patient capital to match the timelines involved. --- ### Investing in Immortality: The Next Breakthrough Market (2025-10-16) https://manhattanwest.com/perspectives/investing-in-immortality-the-next-breakthrough-market/ Health & Medical Humans have always had a fascination with living forever, and new breakthroughs in medicine bring that fascination closer to reality. With recent innovations in gene editing, regenerative medicine, and longevity treatments rapidly moving from lab to late-stage clinical trials, investors face a choice about whether (and how) to participate in the health frontier. For some investors, particularly ultra-high-net-worth investors, the biotech sector offers a rare opportunity to be part of a historic shift and invest in something more than life itself. ## Breakthroughs in Longevity Science CRISPR gene editing therapy technology was first demonstrated over a decade ago and is now in human clinical trials. With gene editing, researchers are aiming to cure previously untreatable genetic conditions by making precise edits to DNA and reversing diseases at a cellular level, potentially eliminating inherited disorders and engineering against age-related decline. While this is still early, preliminary results are promising. Regenerative medicine has moved from alternative science to mainstream headlines, with stem cell therapies, tissue engineering, and organ regeneration promising to repair or replace damaged biological systems. These processes aim to reduce the effects of heart disease, neurodegeneration, and musculoskeletal deterioration, which have historically shortened the average lifespan. Longevity therapeutics is entering a new phase, often referred to as "anti-aging therapy." These therapies range from senolytics that selectively remove aging-linked "zombie" cells, to microscopic medicines that aim to mimic the cellular benefits of caloric restriction, to approaches targeting the systemic drivers of aging more broadly. These developments point toward a future where extending human lifespan becomes a more central focus of modern medicine. ## From Discovery to Commercialization Excitement from both scientists and investors continues to grow as a result of early-stage advancements across a series of start-ups. While some companies focusing on advancing CRISPR are now in Phase II and even Phase III trials, regulatory approval and, moreover, market adoption are still years away. Regenerative medicine companies (such as those developing stem-cell-derived therapies for retinal or cardiac repair) are progressing more slowly toward market entry. Longevity-focused biotech start-ups targeting the natural deterioration that comes with age are also advancing to late-stage trials, with potential applications in fibrosis, cancer, and age-related cognitive decline. These late-stage positions represent a notable opportunity for venture capitalists and family offices: growing acquisition interest from large pharmaceutical companies, clearer regulatory pathways, and companies with more verified science. Combined with stronger clinical data, rising consumer demand, and maturing platforms, in our view this combination of factors raises the odds of multiple approvals in the 2025-to-2030 window, though the timing and number of approvals remain uncertain. ## The Investor Angle: Investing More in Life By combining the scalability of global healthcare markets with the scarcity value of breakthrough IP, longevity biotech is, in our view, one of the more compelling healthcare subsectors of the coming decade. Several prominent ultra-high-net-worth individuals have collectively directed billions of dollars into longevity start-ups in recent years, though verified figures for individual company funding and associated development timeframes are not consistently available. For many ultra-high-net-worth investors, the biotech and longevity sector carries two major relevances: financial and deeply personal. On the financial side, as demographics shift and demand grows for therapies that extend the lifespan of healthy living, early investors stand to participate in the generational reallocation of capital within healthcare. On the personal side, the notion of "investing more in life" resonates powerfully. For UHNW families, allocating capital into biotech and longevity isn't simply about returns: it's about being able to access these new therapies for themselves. Private investors can gain early awareness, and in some cases preferential access to clinical opportunities not yet available to the public. Longevity and biotech represent both a financial portfolio allocation and an investment in one's own health and that of future generations. In a world where wealth isn't simply measured in money but in years of vitality, longevity is becoming, in our view, one of the more aspirational categories in private investing. Unlike more traditional investments such as real estate or bonds, investing in biotech offers exposure to a category whose upside, if realized, extends well beyond financial return. ## Conclusion Biotech and longevity sciences sit at a rare crossroads of innovation, capital, and human aspiration. With CRISPR editing, regenerative medicine, and longevity therapies entering late-stage development, the biotech sector is shifting from theory toward commercial reality. In our view, this sector has the potential to offer more than financial returns: it can extend the possibilities of healthy living. Longevity science represents, in our view, one of the more distinctive opportunities in wealth management today: a chance to invest in life itself, both figuratively and literally. --- ### AI Copyright & the Death of Intellectual Property (2025-08-25) https://manhattanwest.com/perspectives/ai-copyright-and-the-death-of-intellectual-property/ Artificial Intelligence A global legal debate over copyright, fair use, and the definition of intellectual property has emerged as large language models and generative AI systems have surged in adoption. With major lawsuits testing the boundaries of data ownership, including suits brought by a leading U.S. newspaper and a major stock-photo licensor against generative AI developers, the stakes are high. A single ruling could redefine how creative industries operate, how AI models are trained, and who profits from artificially generated content. ## Why It's Controversial Copyright law was originally created to protect the replication and commercialization of original works. Generative AI doesn't replicate exactly; it is influenced by training data and user input. Large language models and image-generation systems require massive training datasets. Critics argue that unauthorized copyrighted material (books, articles, photos, audio, code) was scraped from the internet to train these models. Supporters counter that outputs are original unless they exactly replicate protected material. Courts are being asked to decide: - Are outputs trained on unauthorized copyrighted material fair use? - Are copyright holders' rights infringed if an AI "derives" outputs from their work? - Can copyright holders demand licensing fees even if outputs are unrelated to the training? ## The Investor Angle The unresolved legal battles and competitive dynamics surrounding generative AI create a distinct set of dilemmas for investors. Legal outcomes will determine which business models survive. For AI startups and LLM businesses, three outcomes may emerge: - **Unrestricted Fair Use**: Minimal legal barriers, explosive growth potential, low compliance costs - **Mandatory Licensing**: AI companies pay for training data; favors large players with deep pockets, pressures smaller startups - **Output Restrictions**: If unauthorized training is deemed legal but outputs require attribution or revenue splits with content owners | Scenario | Legal Outcome | Competitive Moat | Investment Outlook | |---|---|---|---| | Best Case | Unrestricted Fair Use | Proprietary data & UX lead to defensible margins | High growth, strong valuations | | Middle Case | Licensing required | Defensible only for incumbents with deep pockets | Consolidation, moderate upside | | Worst Case | Licensing + output restrictions | Weak moats, commoditized outputs | Low ROI, high failure risk | ## Trust & Adoption Risk Even with a favorable regulatory outcome, widespread AI adoption depends on public and business trust. In healthcare, law, and finance, accuracy is non-negotiable. Trust barriers could slow adoption in these sectors regardless of legal rulings. Investors must consider: - **Legal Pushback**: Governments may enforce output standards, require disclosures, or apply liability frameworks - **Mass Integration Hurdles**: Large enterprises take months or years to test and approve new technology - **Brand Liability Concerns**: Businesses may avoid AI content if plagiarism or copyright infringement risk exists ## The Core Question: Who Owns AI-Generated Content? In most jurisdictions, AI-generated works without meaningful human authorship are not eligible for copyright protection. This creates an ownership paradox: if no one owns the output, can it be freely copied and commercialized by anyone? Can original rights holders claim a stake in outputs trained on their work? If AI-generated outputs are ruled unprotectable, competitive advantage shifts from ownership toward speed, distribution, and brand trust, creating a crowded field where anyone can replicate content at minimal cost. Implications for investors: - **Data Differentiation Arms Race**: High-quality proprietary datasets may become the most defensible moat, but acquiring them is costly - **New User Challenges**: Consumer loyalty will depend on platform stickiness and switching costs - **Race-to-the-Bottom Pricing**: As outputs commoditize, margins compress across all players ## Conclusion The convergence of generative AI and copyright law will likely produce one of the most significant IP shifts since the printing press. Whether that results in the death of traditional intellectual property or its reinvention depends on legal rulings now in motion. The decisions made in the next 24 months will shape the economics of creativity and innovation for decades to come. --- ### AI Weaponization & Autonomous Warfare (2025-07-25) https://manhattanwest.com/perspectives/ai-weaponization-and-autonomous-warfare/ Artificial Intelligence Modern warfare is undergoing a fundamental upgrade as AI and Lethal Autonomous Weapons Systems (LAWS) are integrated into military operations. The weaponization of AI has sparked an intense global debate as these systems are deployed with life-or-death consequences, sometimes with little to no direct human oversight. Defense contractors are pushing the boundaries of innovation while governments seek strategic advantage. Investors are now facing the same dilemma: avoid polarizing technology or support a booming sector reshaping the defense industry. ## Why It's Controversial Autonomous warfare challenges the fundamental principles of accountability, international law, and morality: - **Ethical Dilemmas**: By removing human judgment from lethal decisions, is human dignity eroding? - **Legal Ambiguity**: Human accountability is the root of international humanitarian law. If there is no clear operator, who is responsible for war crimes committed by AI? - **Accessibility**: Who is responsible if autonomous weapons fall into unauthorized hands? - **Geopolitical Destabilization**: Will a global autonomous arms race lower the threshold for conflict or accelerate escalation? - **Unpredictable Behavior**: Is deploying AI in combat zones without rigorous validation inherently dangerous? Major powers including the U.S., China, and Russia are opposing binding treaties in favor of voluntary regulation while continuing R&D. ## The Investor Dilemma: Profit vs. Principle Despite the moral complexity, investors recognize the economic opportunity of national security. Venture capital and institutional money are flowing heavily into defense-oriented AI startups with dual civilian and military applications: drone navigation, cybersecurity, satellite imaging. Traditionally, the defense sector has been slow to adopt new technologies. The recent wave of private capital, however, has shifted how markets view the financial future of national security. We'd note that this comes with real moral tension: investors see the potential for large returns in defense-focused AI startups, but should recognize this is not a typical market, and one with long-term social impact attached to it. ## Global Perspective The global AI arms race is accelerating: - **United States**: Recent defense budget requests and earmarks have directed billions of dollars toward AI-related projects, automation, and AI systems, reinforcing a structural U.S. commitment to autonomous systems, data-driven warfare, and cyber capabilities. (Note: we have not been able to independently verify the specific dollar figures originally cited for this program and have omitted them pending confirmation from a named source.) - **Europe**: The EU Defense Fund and NATO's Defense Innovation Accelerator for the North Atlantic (DIANA) are building cross-border pipelines to strengthen Europe's technological sovereignty in AI - **China**: Advancing "Intelligentized Warfare" with AI integrated into command systems, drone swarms, and autonomous surveillance - **Israel**: The IDF is already deploying AI for real-time battlefield intelligence, semi-autonomous drone strike coordination, and threat prioritization As rapid adoption outpaces regulation, global security is growing increasingly complex. ## Can Investors Support Defense AI Without Crossing Ethical Lines? Not all military AI is lethal, offensive, or autonomous. Some systems focus exclusively on logistical optimization, cybersecurity defense, or threat detection, and can fall within the acceptable ethical boundaries of even traditionally conservative funds. Investors are evaluating intent, transparency, and governance before committing capital. Key due diligence questions: - Does this AI enable autonomous lethal consequences or enhance defensive capabilities? - Does it have ethical governance, human-in-the-loop policies, or restrictions on deployment? - What safeguards prevent unauthorized use? AI weaponization presents a landscape where profound ethical challenges collide with significant investment opportunity. Investors must carefully navigate between supporting legitimate security needs and avoiding contribution to ethically problematic weapons development. As capital continues to flow, the strategic importance of defense AI is difficult to ignore. Instead of retreating entirely from the defense sector, investors can support AI that strengthens stability and security while refusing to fund unchecked autonomous violence. In our view, due diligence on these allocations should include long-term ethical impact assessment alongside traditional financial analysis: understanding the potential end-uses, deployment context, and escalation risks behind an investment, not just its financial structure. ## Conclusion Investors are faced with new ethical frameworks, an evolving due diligence process, and a reinforced commitment to responsible investing in this category. Maintaining moral clarity, despite an increasingly complex environment, is crucial for investors. While some will choose to avoid defense investments entirely, in our view, early investors are best positioned to define clear ethical boundaries for the capital that follows them. 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No Offense. — ThinkAdvisor, 2023-03-08 — https://www.thinkadvisor.com/2021/09/09/dont-call-us-an-ria-no-offense/? - The Top Five Things Brand Leaders, Entertainers And Athletes Need To Know When Creating An NFT Strategy — Forbes, 2023-03-08 — https://www.forbes.com/sites/forbesbusinesscouncil/2022/03/15/the-top-five-things-brand-leaders-entertainers-and-athletes-need-to-know-when-creating-an-nft-strategy/?sh=507662d441b8 - What Financial Advisors Need to Know About Crypto Taxes This Filing Season — Financial Planning, 2023-03-08 — https://www.financial-planning.com/news/what-financial-advisors-need-to-know-about-crypto-taxes - Why Advisors Are Embracing Alternative Investments — Barron's, 2023-03-08 — https://www.barrons.com/advisor/articles/alternative-investments-advisor-portfolios-51635365656?mod=features_subpage - Why Diversity is Necessary To Make Venture Capital Future-Ready — Crunchbase, 2023-03-08 — https://news.crunchbase.com/news/startup-diversity-vc-reggie-tucker-manhattan-west/ - Why Traveling the World Has Made Me a Better Adviser — InvestmentNews, 2023-03-08 — https://www.investmentnews.com/why-traveling-the-world-has-made-me-a-better-adviser-216897 - 'You’re Likely to Get Caught': What Crypto Investors Should Know While Filing Taxes This Year — Money, 2023-03-08 — https://money.com/crypto-taxes-how-much-owe-irs/ - A Foolproof Guide to Insuring Your Valentine’s Day Jewelry Purchases — MarketWatch, 2023-03-07 — https://www.marketwatch.com/story/should-you-consider-jewelry-insurance-for-your-valentines-day-purchases-11644863446 - How to Retain Your Business, and Your Sanity, When Leaving Your Firm — Financial Planning, 2023-03-07 — https://www.financial-planning.com/news/the-highs-and-lows-of-parting-ways-with-your-firm - Justin McCurdy Coaches Athletes on Financial Literacy — ETF Trends, 2023-03-07 — https://www.etftrends.com/justin-mccurdy-coaches-athletes-on-financial-literacy-and-attaining-financial-freedom/ - L.A.’s Ultra-Competitive Real Estate Market Sparks Nontraditional Negotiation Tactics — The Hollywood Reporter, 2023-03-07 — https://www.hollywoodreporter.com/lifestyle/real-estate/la-real-estate-market-negotiation-tactics-1235080422/ - Manhattan West Promotes Angie Spielman to Founding Partner — Manhattan West, 2023-03-07 — - New Benchmark Is 33/33/33 With Assets Divided Equally Between Stocks, Bonds and Alternatives — Nasdaq, 2023-03-07 — https://www.nasdaq.com/videos/new-benchmark-is-33-33-33-with-assets-divided-equally-between-stocks-bonds-and-alternatives - The 60/40 Portfolio Is Dead. Long Live 33/33/33. — Kiplinger, 2023-03-07 — https://www.kiplinger.com/investing/604101/the-6040-portfolio-is-dead-long-live-333333 - Manhattan West Real Estate Completes Renovation of The Gates on Beverly Community in Larchmont — Manhattan West, 2023-03-06 — - Manhattan West Real Estate Group Completes $4M Sale of 14,400 Square Foot Industrial Property — Manhattan West, 2023-03-06 — - RanchHarbor and Manhattan West Acquire 91,000-Square-Foot Industrial Infill Property in San Dimas Calif. — Manhattan West, 2023-03-03 —