In the third quarter of 2023, Alternative Investments ("Alternatives") were a haven of performance against a backdrop of negative returns for traditional assets, U.S. Treasuries, and global equities, in particular. Over the prior three quarters, there seemed to be hope of an economic “soft landing” or “no landing” as opposed to a significant recession. This sentiment was reflected in a consistent and strong bid for equities and other risk assets. Concurrently, there were also a growing number of voices expressing that despite a deeply inverted yield curve, declining Federal Reserve (the “Fed”) balance sheet and other indicators of tightening credit, this was not the 1970s when the economy cycled between inflation blooms and recession busts; this inflation cycle would be different. While the end game has yet to be played, during the third quarter, the capital markets started to reflect a deeper concern that perhaps things are not that different than the inflationary decade of the 1970s, and a bit of risk aversion might be prudent.  

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