Our crystal ball on where markets are going is just as hazy as most Wall Street firms. What we do have confidence in is our long-term investment approach which seeks to utilize market consensus to find areas that are priced inefficiently and to diversify risk to stay fully invested through market cycles. We see a high probability of the U.S. tipping into a recession and have added exposure to areas we believe will hold up better. Active management, quality balance sheets, and international equity exposure are areas that we have added to in our equity allocation. In fixed income, we have moved our duration target up slightly (5-6 year duration) and remain in high quality assets, not chasing high yield. In Alternatives, we continue to invest in quality small/mid buyout managers, while being selective in investing in growth and venture managers. Within hedge funds we benefited significantly from our global macro managers in 2022 and see opportunity in distressed and small cap long/short strategies in the next 2-3 years.

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