Highlights This Month
- Stock trading machines have led to fast and extreme moves in the market.
- Most global markets ended the year in the red, with some in a bear market.
- There appeared to be a large disconnect at the end of 2018 between how the U.S. economy was performing and what the market was discounting.
- The U.S. and China trade war is the greatest risk to the U.S. economy.
- How much stimulus China decides to deploy in 2019 could be one of the key variables in determining where to invest this year.
The Nicola Wealth Management Portfolio
Returns for the Nicola Core Portfolio Fund were down 0.7% in the month of December. The Nicola Core Portfolio Fund is managed using similar weights as our model portfolio and is comprised entirely of Nicola Wealth Pooled Funds and Limited Partnerships. Actual client returns will vary depending on specific client situations and asset mixes.
The Nicola Bond Fund was +0.1% in December, and returned +1.4% for the year in 2018. Comparatively, the FTSE TMX Canada Universe Bond Index benefited from the December drop in Canadian bond yields to gain +1.1% in the month, returning +1.0% for the year. East Coast Investment Grade Fund II at 23% weight was the largest detractor in the Nicola Bond Fund for the second month in a row, returning -0.9% in December. With recently wider credit spreads, we look for ECIG to generate significantly higher yield income from the wider spreads than any negative returns incurred during the past two months. The Nicola Bond Fund overall is now yielding 3.7% versus 2.5% a year ago, and continues to have low interest rate sensitivity.
The Nicola High Yield Bond Fund returned -0.2% in December, and +2.7% for the year. High yield credit spreads widened significantly into year-end, and the BofAML US High Yield Index returned -2.2% in December. At year-end, the index yield is 8.0%, compared to 5.8% one year ago. The recent selloff coupled with lack of new high yield bond issuance has resulted in attractive yields for many good credits, and has set up the potential for prices to rebound. As such, the internal portfolio invested its 25% cash balance during the month of December and also switched into longer maturity bonds to capture the higher yields. At year-end, the internal portfolio’s yield is 10%, up from 6.1% at the beginning of the quarter. Overall, the Nicola High Yield Bond Fund is yielding 6.5%, up from 4.5% at the beginning of the quarter.
The Nicola Global Bond Fund was up +2.7% for the month. The strong returns were mainly driven by currency as the U.S. dollar along with emerging market currencies such as the Mexican and Argentine Peso all appreciated. Duration exposure in the Pimco Monthly Income fund was also a strong contributor to returns for the month as yields fell, offsetting losses from credit spread widening across the fixed income spectrum.
The Mortgage Pools continued to deliver consistent returns, with the Nicola Primary Mortgage Fund and the Nicola Balanced Mortgage Fund both returning +0.4% last month. Current yields, which are what the funds would return if all mortgages presently in the fund were held to maturity and all interest and principal were repaid and in no way is a predictor of future performance, are 4.1% for the Nicola Primary Mortgage Fund and 5.6% for the Nicola Balanced Mortgage Fund. The Nicola Primary Mortgage Fund had 16.5% cash at month end, while the Nicola Balanced Mortgage Fund had 12.1%.
The Nicola Preferred Share Fund returned -2.3% for the month while the BMO Laddered Preferred Share Index ETF returned -2.4%. The sell-off in preferred shares continued right until the last couple days of the month, perhaps not coincidently, aligning with the last day of tax loss selling, December 27th. Afterwards, the market rebounded with a strong rally for the last two business days, recovering 4.5%. As mentioned last month, wider credit spreads and a sell-off in equity markets would lead to a weakening in preferred shares.
However, preferred shares are in between common equity and corporate bonds in terms of capital structure and thus, their volatility should be in between as well. To put the preferred sell off in perspective, looking at price only, ENB stock sold off -13.7% for the calendar year 2018 (-8.3% from a total return perspective) while ENB preferred shares sold off -18.8% in price. With some institutional support buying, we hope the market should stabilize and return to some sense of normalcy.
Canadian Equities were weak in December with the S&P/TSX -5.4%. The Nicola Canadian Equity Income Fund was -6.2%. Materials (thanks to gold stocks which we do not own) were the only sector that had a positive return. Top contributing sectors were Energy, Health Care and Technology, where we have underweights. Negative contributing sectors were Materials, Consumer Discretionary, Financials and Industrials. We sold our position in Medical Facilities. Top contributors to performance were Teck Resources, CNR, and Diversified Royalty. Top contributors were Teck Resources, CNR and Diversified Royalty. Top detractors were Air Canada, Cargojet, and Aritzia.
The Nicola Canadian Tactical High Income Fund returned -3.1% in the month, which was relatively better than the S&P/TSX’s -5.4% return. The Nicola Canadian Tactical High Income Fund’s relative outperformance came from being underweight in Financials, Healthcare & Energy. The materials sector was up close to 6% on the month led by gold names which the Nicola Canadian Tactical High Income Fund did not own. In terms of option writing, the environment has become more attractive during the month as option volatility increased 45%, close to a two year high. We added Royal Bank to the portfolio (via Put options) at attractive premiums. The Nicola Tactical High Income Fund has an equity-equivalent exposure of 76% and remains defensively positioned with companies generating high free-cash-flow and having lower leverage relative to the market.
The Nicola U.S. Equity Income Fund had a negative total return of -9.8%, versus the S&P500 of -9.0%. Besides Energy, Financials were the most challenged sector during the month with a 12% exposure to Banks. While our positions in defensive names Procter & Gamble and utility company Nextera Energy helped with performance, Newell Brands and Westrock detracted. During the month, we added to stocks that were particularly weak while trimming stocks that had done relatively well, such as some Health Care names, Nextera and Crown Castle International. We sold some of our positions for tax loss selling and bought companies in similar industries: Activision for Electronic Arts, Vulcan Materials for Martin Marietta Materials, and BB&T Corp for M&T Bank, to name a few examples.
In December, the Nicola U.S. Tactical High Income Fund’s performance was -7.6% vs -9.0% for the S&P 500. The Nicola U.S. Tactical High Income Fund’s relative outperformance was mostly due to being underweight in Healthcare and Info Tech. Option volatility increased 40% during the month to hit a 10 month high (36%) which provided us an opportunity to add to our high quality names that have sold off with the rest of the market. The portfolio remains defensively positioned with a lower valuation multiple, higher free-cash-flow, and lower leverage relative to the S&P 500.
The Nicola Global Real Estate Fund was +1.3% for the month of December vs. the iShares (XRE) -3.4%. The publicly traded REITs were weak along with the rest of the market but they did outperform the broader TSX market, which was -5.4%. The GoC 10 year rates declined from 2.27% at the end of November to 1.97% at the end of December. This should limit upside pressure in mortgage rates and also help sentiment on the publicly traded REITs. We estimate 44% of the fund has U.S. dollar sensitivity and benefited from the strength of the USD, which was +2.6% in December. The fund is currently weighted 24% publicly traded REITs and 76% LPs, which exhibit lower volatility (quarterly appraisals and NAV updates). We sold our position in Brookfield Property Partners in December to take advantage of tax loss selling. We do view BPY as a value play and will look to buy back in at a later date.
We report our internal hard asset real estate Limited Partnerships in this report with a one month lag. As of December 31st, November performance for Nicola Canadian Real Estate LP was +1.1%, Nicola U.S. Real Estate LP +0.7%, and Nicola Value Add LP +1.2%.
The Nicola Alternative Strategies Fund returned 1.6% in December (these are estimates and can’t be confirmed until later in the month). Currency contributed 1.7% to returns as the Canadian dollar continued to weaken. In local currency terms, Winton returned -3.5%, Millennium 0.6%, Apollo Offshore Credit Strategies Fund Ltd -0.6%, Verition International Multi-Strategy Fund Ltd 0.6%, RPIA Debt Opportunities -0.7%, and Polar Multi-Strategy Fund 1.1% for the month.
We view strategies such as Winton as divergent in nature. Often times when equity markets sell-off significantly, most risk markets sell down in sympathy. Divergent strategies allow for positive returns even when everything else is lower. Unfortunately, our exposure to these strategies did not dampen the weakness in risk markets as much as we had anticipated. CTA’s identify trends in the market place and were generally lower as strong trend reversals occurred in both natural gas and precious metals at the end of the year. It is not uncommon during periods of trend reversals for trend followers to have negative or muted returns. However, as trends stabilize, they should provide protection from sustained bear markets. Overall short exposure to smaller cap orientated equities helped offset the losses from long equity investments.
The Nicola Precious Metals Fund returned 11.0% for the month while underlying gold stocks in the S&P/TSX Composite index returned 13.8% and gold bullion rose 7.8% in Canadian dollar terms. The strong rally in gold names impacted both senior and junior companies as concerns on global growth and equity market turmoil put a bid on the safe haven asset.
December in Review
December has historically been kind to investors. Accordingly to LPL Financial, the S&P 500 has posted positive returns 75% of the time in December, more than any other month of the year. Typically, returns in the last month of the year are given an added boost by the so called Santa Claus rally, which is usually considered to comprise the last five trading days of the present year and first two trading days of the following year.
This year, traders, or at least those that were still around over the holidays, were not in their normal festive spirit, as the S&P 500 fell 9.0%, its worst December since the great depression. The month was looking even worse before Santa finally showed up, with the S&P 500 rallying just over 3.7% before year end, but losing some ground in early January.
Overall, the 2018 Santa Claus rally managed to match the 1.3% average seven day return (according the Dow Jones Market Data) since 1969. This is a small victory for what turned out to be a disappointing month. According to the Stock Trader’s Almanac, the last six times Santa left investors a lump of coal instead of a rally, returns for the S&P 500 the following year were flat three times (1994, 2004, and 2015), and experienced a bear market twice (2000 and 2008). In 2016, the S&P 500 did manage a respectable 12% return, but only after falling nearly 7% at the start of the year.
Stock trading machines lead to fast and extreme moves in the market.
Not only does December typically treat investors with good returns, it also normally does so in an orderly fashion. As Christmas approaches, trading tends to slowdown as Wall Street winds down for the holidays. For those left to “man the fort”, so to speak, it’s a good time to catch up on tasks neglected during the year. Not so much this past December, however; markets sank relentlessly lower and volatility for the S&P 500 spiked to its highest level since 2012. 40% of the trading days in December saw declines of more than 1%, triple the historical average, culminating in an epic sell off on December 24th with the S&P 500 falling 2.7%, its largest loss on the day before Christmas ever. Christmas Eve folks! Who’s trading stocks on Christmas Eve?
The answer, most likely machines, with a recent Wall Street Journal article pointing out roughly 85% of trading is controlled by models or passive investing formulas and is essentially on autopilot. The herd like behavior of these “machines” on autopilot can lead to very fast and extreme moves in markets. Fortunately, it works both ways, as the market rose 5% on Boxing Day, the largest one day gain for the S&P 500 since March 23, 2009. The Dow actually rallied 1,086 points; it’s largest on day point gain on record.
The next day, December 27th, the Dow found itself more than 600 points in the red at one point, but rallied to finished the trading session up over 260 points, or 1.1%. The 860 point intraday swing was the largest single-day point rebound in the Dow’s 120 year history. We fear we haven’t seen the last of the machines. We’re confident in saying, “they’ll be back”.
Most global markets ended the year in the red, with some in a bear market.
American investors weren’t alone in experiencing negative returns, and not just in December. Most global markets ended the year in the red, with some even in a bear market. While Canadian stocks outperformed their U.S. counterparts in December with the S&P/TSX down “only” 5.8%, for the year Canadian stocks lost 8.9% versus a decline of only 4.4% in the S&P 500 (all in local currency terms).
Translated into Canadian dollar terms, U.S. stocks were actually positive for the year, increasing nearly 4%. Large U.S. stocks also avoided falling into a bear market in 2018, though just barely. From it’s all time high on September 20th, the S&P 500 fell 19.8% by December 24th (price only, in U.S. dollars), well into correction territory (a decline of over 10%), and within a rounding error of entering a bear market (price decline of over 20%). Smaller U.S. stocks didn’t fare as well, however, with the Russell 2000 falling over 22% from its August 2018 high.
Canadian stocks also avoided falling into bear market territory, with the S&P/TSX declined nearly 17% from its July 12th high. Despite the nice rally after Christmas and into the New Year, however, it’s premature to say U.S. and Canadian stocks have avoided a bear market. Only once prices have retraced their entire decline will the coast be clear. Based on current trends, this might be a tall order for U.S. stocks. Up until they peaked on September 20th, U.S. stocks were outperforming global markets.
After September 20th, both started declining in tandem until December, when the decline in U.S. stocks accelerated. The Shanghai Composite for example, declined only 3.6% in local currency terms in December, though still ended the year down 30% from its January 24, 2018 high.
The pain felt by investors in December wasn’t confined to global equities either, most asset classes were down in December and 2018. Sure, some eclectic asset classes like art and fine wine did well, but within the constraints of mainstream market based financial assets, only cash and U.S. government bonds managed to end the year in the black. Goldman Sachs recently pointed out how much of an outlier 2018 was from an asset class diversification perspective, with over 90% of assets failing to outperform U.S. dollar cash.
Given these results, fine wine, or any alcoholic beverage for that matter, might be a useful portfolio diversifier and help smooth out returns. In fairness, these results paint a direr picture than reality, given the negative results are due more to market price volatility than cash flow or earnings volatility. Private assets which are not traded on an exchange did better.
So why were markets so volatile at the end of 2018, and what does this mean for 2019?
A recent article in Barron’s highlighted growing investor concerns by showing the spike in searches for “recession” and “bear market”. We believe these two major issues dominated headlines and were the cause of most investor angst. Foremost, investors fear the Federal Reserve is making a policy mistake by continuing to increase interest rates which will result in the U.S. economy falling into recession.
Cited as one of the causes of the weakening economy is the brewing trade war between the U.S. and China, which is the other issue we believe, has investors on edge. A Bank of America Merrill Lynch proprietary news based model would appear to back up our views. Using Bloomberg daily market wrap reports, Bank of America has built a system that pinpoints which news stories are responsible for the most market volatility.
While they found no single major cause of the volatility, the confluence of five factors was cited as being mainly responsible: trade, the Fed, weaker U.S. data, lower oil prices, and negative news from abroad. There was a sixth shown on their chart, but it was only labelled as “other. We are going to tighten this list a little and limit the discussion in the remainder of this commentary to the Fed, trade, and how they relate to economic growth and investment returns in 2019. Ok, maybe we’ll throw in one “other” news item at the end, just for fun.
There appeared to be a large disconnect at the end of 2018 between how the U.S. economy was performing and what the market was discounting.
While the economy continues to be quite strong, market volatility was implying otherwise and starting to discount a recession. Based on economic factors like the continued flattening of the yield curve and falling bond yields, the estimated odds of a recession in the following 12 months climbed towards 20%, while action in the equity, credit, and commodity markets started discounting odds closer to 50 or 60%.
Bulls argue that with employment and wages in the U.S. continuing to firm, consumer spending, which makes up the bulk of the U.S. economy, will continue to firm as well. The counter to this argument is markets are forward looking while employment is a lagging indicator and the decline in stocks is beginning to discount a decline in growth not yet showing up in economic numbers.
The Conference Board’s leading indicators index is designed for this very purpose, and it continues to point to strong growth. The ratio of leading versus coincident indicators has turned lower before each of the last eight, and so far it is still on an upwards trajectory.
Recession or just a pause in growth?
According to Macro Research shop Strategas, a slowdown in economic and an economic recovery isn’t uncommon and has historically resulted in stronger equity returns in the ensuing months. If this is the case and the secular bull market is intact, strong performance following a down year is not uncommon. In fact, BMO’s Investment Strategy Group recently pointed out gains for the S&P 500 since 1945 following a down year have provided a higher average return than up years. It’s recessions that cause the most pain for investors. While not all recessions create bear markets, there is a large overlap. Positioning portfolios correctly before an upcoming recession is always job one for investors.
While we can debate the strength of the economy and whether a recession is likely this year or next (or the year after), there is no question that we are moving closer towards a recession. In truth, the economy is always getting closer to a recession. The only time this statement isn’t true is when the economy is already in a recession. It is only a matter of when and how quickly, and this is where the U.S. Federal Reserve comes in. In December, the Fed raised overnight interest rates, their fourth increase in 2018, and signaled their intention to increase rates another two times in 2019.
Higher overnight interest rates tighten financial conditions, but so do weaker stock prices and higher credit spreads. Given all three were working in the same direction last month, it’s no wonder the U.S. Financial Conditions Index has been gapping lower. When the FCI Index falls, GDP typically follows. In the face of falling inflationary expectations, as evidenced by falling breakeven rates on Treasury Inflation Protected Securities (TIPS), it would appear inflation is not presently a problem, so what’s the Fed’s hurry? Why take away the punch bowl (tighten monetary policy by raising interest rates), especially during the holiday season?
Investor displeasure with the Fed’s decision to keep raising rates can best be seen through the eyes of the yields curve. Normally the yield curve is upwards sloping, with longer term treasury bonds paying higher yields than shorter term bonds. Investors typically want, and deserve, to be compensated for locking their money up for longer terms and bearing the risk of higher future inflation potentially eroding their returns. When the yield curve inverts and short term notes start yielding more than longer term issues, it’s the markets way of telling investors something’s not right. The only reason an investor would accept a lower rate over a longer term bond is if they believe yields are going to be lower in the future, most likely due to a recession.
The yield curve has been flattening for years but hasn’t inverted, until last month. In December, five year yields declined below two year yields, thus inverting the short end of the yield curve and caused what was described by some as a “kink” in the yield curve. Five year bonds, in fact, began yielding less than overnight rates for the first time in a decade. The markets predictably reacted poorly. Now to be fair, only the short end of the yield curve inverted, not the entire curve. Most commentators and strategists focus on the relationship between two and ten year yields, and this part of the curve is still upward sloping and positive. The inversion in the short end, however, is a clear signal from the market to the Fed, STOP!
By signaling two more rate hikes in 2019, the Fed wasn’t totally ignoring the message the market was sending them. Two hikes was less than the three hikes they announced they were targeting after their previous rate hike in late September. But the market’s not buying it. They don’t think the Fed will raise at all, with Fed Funds futures contracts currently pricing in at nearly a zero percent chance Powell and his Federal Reserve colleagues will raise rates in 2019 or 2020. The market is even starting to price in a rate cut.
Chairman Powell has come under a tremendous amount of pressure, not just from financial forecasters and commentators, but the President of the United States himself, Donald Trump, who uses the stock market as a barometer of his success. In fairness to Chairman Powell, however, many of the same commentators warning him to stop raising rates are the same “experts” who had been chastising the Fed from keeping rates too long for too long. Regardless, in what has become known on the street as Powell pivot, Chairman Powell has backtracked somewhat, leaving open the possibility the Fed might pause in order to collect more data on the state of the economy. The market approved, which is one of the reasons for the strong Santa Claus rally after Christmas and into early January.
If the market stabilizes the Fed will continue moving rates higher.
It’s a tough spot, parts of the economy are showing weakness, like housing, home building, and industrial investment, while others, like national defense spending, consumer spending, and technology related business spending are quite strong. Job growth continues to be very strong and wage growth finally looks to be gaining strength, while global manufacturing and service sentiment surveys have turned sharply lower. We believe Powell really would like to see rates move up a bit more.
The job market is strong and the unemployment rate is below NAIRU (non-accelerating inflation rate of unemployment). Not only does this increase the risk of inflation, but Powell needs a little breathing room in order to be able to cut rates when the next recession finally hits. He may pause for a while, but if the market stabilizes, look for the Fed to continue moving rates higher.
U.S. and China trade war the greatest risk to the U.S. economy.
Of course it’s not just the Federal Reserve that has investors on edge. A Wall Street Journal survey in early December found nearly 50% of economists viewed the U.S. trade dispute with China as the greatest risk to the U.S. economy. A poll conducted by the American Chamber of Commerce in Shanghai recently reported a majority of U.S. firms believe the trade war has hurt their profits and increased non-trade barriers.
According to Bloomberg, Chinese imports from the U.S. dropped 25% in November while imports have continued to rise. China is an important link in the global supply chain, not just for the U.S., but for many countries. A truce was arranged between the two countries in early December in order to allow time to agree on a deal, but it came with a 90 day expiration date. Markets appear comforted that progress is being made, but there is no guarantee negotiations will be successful.
The Chinese market has weakened faster than expected.
The volatile markets have put pressure on President Trump to do a deal, but Chinese leaders are under a lot of pressure as well. The Chinese economy appears to have weakened faster than expected, with China’s official purchasing manager’s index falling to 49.4 in December, its lowest level since February 2016 and below the 50 level indicating the Chinese manufacturing sector is now contracting.
Beijing has been trying to rebalance China’s economy away from manufacturing and towards consumption for years and it is also trying to wean the country off debt driven investment growth so some weakness should be expected. Unfortunately consumer spending has also come under pressure, with retail sales growth decelerating to only 8.1% in November, its lowest level in 15 years.
Fourth quarter GDP is expected to show the Chinese economy grew 6.5%, but many economists believe China fudges the numbers and real growth could be even lower. This is a big deal, not just for China, but for the global economy. China is a major contributor to global economic growth, and has been for years.
How much stimulus China decides to deploy in 2019 could be one of the key variables in determining where to invest this year.
Chinese leaders have some levers that they can pull in order to keep the economy from suffering a hard landing. China has already announced plans to adopt a more proactive fiscal policy, and has room to do so given government debt levels are relatively low. China has also been easing monetary conditions and lowering bank reserve ratios, making it easier to borrow money.
This isn’t a long term solution, however, given most of this liquidity typically ends up in the wrong places and risks creating asset bubbles, but it could help China outlast President Trump in trade negotiations. How much stimulus China decides to deploy in 2019 could be one of the key variables in determining where to invest this year. If China reflates, it could be good for emerging market growth, and currencies. It would also be good for commodities, but not so good for the U.S. dollar.
So what are the “other” new items we alluded to earlier that could impact markets in 2019? Well how can one talk about what might happen in 2019 without specifically mentioning President Trump and the drama that continues to emanate from 1600 Pennsylvania Avenue. Since December 22nd, the U.S. Government has been partially shut down because President Trump has vowed to veto any new funding bill put before him unless it includes over $5 billion in funding for a border wall. Initially we dismissed this as non-consequential to the markets.
It’s a big deal for workers who aren’t getting paid, but it’s a purely political event that will eventually get resolved. We still believe this, but it could stretch out longer that we initially thought given how entrenched both the House Democrats and President Trump have gotten in their positions. Trump is effectively stuck and risks severely hurting his standing with his base if he backs now.
It’s a sign of what we are likely to see the rest of the year. A recent issue of Businessweek the headline “The smoothest period of Trump’s presidency is over. Really. It only gets crazier from here”. Can that possibly be true? Already the Trump presidency has seen more people change jobs at the White House than any previous administration and it’s becoming harder and harder for Trump to convince good people to join the team.
According to Strategas, betting odds Trump will be impeached has soared back up to around 50%. It’s hard to believe The Donald won’t impact markets in 2019, we just don’t know how.
Overall, we believe the disconnect between markets and the economy provided investors an opportunity to rebalance investment portfolios. The economy is slowing, but it is not in recession, yet. Same for corporate earnings, growth will slow in 2019, but profits should still be moving higher. Valuations are more reasonable and interest rates are still quite low. Throw in the potential for a trade agreement between the U.S. and China, and 2019 could be a good year. The good old days of low volatility, however, are over. The Fed will still be looking for opportunities to raise interest rates and end of cycle fears will keep traders on edge. Strap yourself in, 2019 should be quite a ride.
This material contains the current opinions of the author and such opinions are subject to change without notice. This material is distributed for informational purposes only. Forecasts, estimates, and certain information contained herein are based upon proprietary research and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Information presented here has been obtained from sources believed to be reliable, but not guaranteed. Returns are quoted net of fund/LP expenses but before Nicola Wealth Management portfolio management fees. Past performance is not a guarantee or a reliable indicator of future results. All investments contain risk and may lose value. Please speak to your Nicola Wealth advisor for advice based on your unique circumstances. Nicola Wealth Management is registered as a Portfolio Manager, Exempt Market Dealer and Investment Fund Manager with the required provincial securities’ commissions. This is not a sales solicitation. This investment is generally intended for tax residents of Canada who are accredited investors. Please read the relevant documentation for additional details and important disclosure information, including terms of redemption and limited liquidity. Nicola Crosby Real Estate, a subsidiary of Nicola Wealth Management Ltd., sources properties for the Nicola Real Estate portfolios. For a complete listing of Nicola Real Estate portfolios, please visit www.nicolacrosby.com. All values sourced through Bloomberg. Effective January 1, 2019 all funds branded NWM were changed to the fund family name Nicola. Effective January 1, 2019 Nicola Global Real Estate Fund, Nicola Canadian Real Estate LP, Nicola U.S. Real Estate LP, and Nicola Value Add LP adopted new mandates and changed names from NWM Real Estate Fund, SPIRE Real Estate LP, SPIRE US LP, SPIRE Value Add LP.