ASC Advisors June 2025 Newsletter
ASC Advisors June 2025 Newsletter
Welcome to ASC Advisors’ monthly newsletter, where we provide thoughts around recent developments affecting the alternative investment management industry, as well as provide updates on our firm and team.
Equity Market Rebound
Since Liberation Day, equity markets have experienced a strong rebound, sparking a cautious sense of optimism among investors. Both the S&P 500 and the Nasdaq recorded solid gains throughout May, largely fueled by a surge in large-cap technology stocks and cautious optimism about more favorable international trade dynamics. A pivotal moment came on May 27, when each index jumped over 2% in a single trading session. This rally followed President Trump's announcement to delay the imposition of tariffs on European Union imports—a move that was welcomed by investors and signaled a temporary de-escalation in trade tensions. In response, risk-on sentiment strengthened across public markets, driving increased capital flows and renewed interest in growth-oriented sectors.
For alternative asset managers, this shifting landscape presents a nuanced opportunity, especially in light with the ongoing volatility and uncertainty in terms of tariff policies and bond market yields. Despite the upbeat tone, most alternative managers remain cautious, positioning portfolios for that continued volatility while selectively deploying capital in strategies aligned with long-term structural shifts.
Changes at the SEC
Paul Atkins was sworn into office as the 34th Chairman of the SEC in late April, and while not many changes have taken effect yet, a broad deregulatory agenda is on the horizon. This is expected to include scaling back climate-related disclosures, shifting focus away from anti-corruption enforcement, adding access to private markets given the strong rebound for equities, extending compliance deadlines and centering digital assets and cybersecurity disclosures.
Crypto will be a large focus for the SEC under Atkins, which has long lacked clear regulatory guidelines. Following the formation of a crypto task force, Atkins has shared his desire to overhaul the agency's current policies, with a desire to establish 'common-sense' guidelines for distributions of crypto tokens that are securities. To start, several lawsuits against crypto firms that were previously set in motion have been paused or withdrawn. Atkins has also indicated that the SEC may consider tweaking its rules so that registered broker-dealers with an ATS can also facilitate trading in bitcoin or ether, as they previously have not been able to do.
In addition, the SEC is looking to replenish its employee-base following a 15% drop across all divisions since the start of this year. According to Reuters, the commission's legal and investment management division have been the hardest hit since the new administration took office in January and the Department of Government Efficiency implemented.
As the Agency diverges significantly from the regulation-by-enforcement approach, they will seek more stakeholder engagement as part of a new rule making agenda designed to curate a more business-friendly environment, focused on capital formation, rather than enforcement.
Bond Market Volatility
Bond markets experienced significant volatility in May, with U.S. Treasury yields rising sharply due to declining demand and the S&P acting as the third ratings agency to downgrade treasuries in May. The 10-year Treasury yield surpassed 4.61%, and the 30-year exceeded 5.14%, largely influenced by concerns over U.S. debt as President Trump's tax legislation moves through Congress.
Government bonds are no longer working as an effective hedge against risky assets, creating a challenge for global investors and spurring a search for asset diversification, says KKR. This is prompting alternative investment managers to reassess their strategies. With rising treasury yields, managers could shift allocations to hedge against interest rate risk.
Given the breakdown in the historical negative correlation between equities and bonds, alternative investment managers should explore new diversification methods to mitigate portfolio risks. Diversification will be challenging for stock investors because the US equity market is twice the size of Europe, Japan and India combined. In the bond market, however, there's more room to move away from the US because Treasuries are becoming less correlated with the fixed-income assets in the rest of the world, according to KKR.
The rare simultaneous selloff of US bonds, stocks and the dollar in early April when the Trump administration slapped tariffs on major US trading partners that has led to bond market volatility is now making investors question whether Treasuries have lost their status as a haven to institutional investors.
Firm News
Palm Beach Hedge Fund Association - ASC Advisors is pleased to announce that it has joined the Palm Beach Hedge Fund Association as its exclusive communications partner. The partnership with the PBHFA follows the March hiring of Max Rayden as Senior Director in West Palm Beach and another key milestone in strengthening our presence in the South Florida market. A copy of the press release can be found here.
New Hires - We are thrilled to welcome three new hires to the firm. Dan Stein joins us as a Senior Associate based in Boston from LaunchPad Creative, Cassandra Dasco joins as an Associate following her graduation from Syracuse University with a BS in Public Relations and an internship at Joele Frank, and Morgan Minoff joins us as an intern based in Connecticut as she completes her BA in Strategic communications from Elon University. Join us in welcoming them to the ASC family!
Nasdaq Trade Talks - Taylor Ingraham joined Jill Malandrino's Nasdaq Trade Talks to discuss the rise in prominence of the secondaries market, deal sourcing opportunities, and also how PE firms and other managers are leveraging deal announcements, firm and portfolio company developments, and thought leadership across traditional and social media platforms. You can watch his segment here.
From Wall Street to Wall Street South: What is Fueling West Palm Beach's Private Markets Renaissance - Our West Palm Beach based Senior Director, Max Rayden, penned the following article for the Palm Beach Hedge Fund Association exploring the key factors that has made West Palm Beach fertile ground for alternative investment managers and why the region is living up to its 'Wall Street South' moniker. A copy of the full article can be found here.
Regulatory Successes: Over the last year, our firm wrote three letters to the UK's FCA, as well as Parliament, opposing their controversial “Name and Shame” proposal, which would disclose ongoing investigations for managers at its inception. We are thrilled that FCA has decided to walk back that proposal in their final guidance here.
