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Monthly Archives: January 2021

CFA Society Minnesota Members Spotlight #3

25th January, 2021 · CFAMNEB · Leave a comment
Deb Weiss, CFA
Deb Weiss, CFA

Deb Weiss, CFA
Okabena Advisors, Managing Director

It’s no surprise that Deb Weiss, CFA, so skillfully helps her clients navigate the world of monitoring and tailoring investment plans. After all, she sits in the navigator’s seat of a single-engine plane built from scratch by her husband with some assistance from her.

Deb, the managing director of Okabena Advisors in Minneapolis, learned to rivet as the couple spent five years building a Van’s RV-7 two-seater and another three years constructing an RV-9.

“It came as a ‘kit,’ which means the entire outside skin of the plane only, absent wiring, instrumentation, propeller and engine,” Deb says. “All of that was custom designed or purchased separately. There is a whole community of lovely people around the world who’ve built planes and share this interest.”

Deb & her husband

Deb loves her husband’s hobby and where it (and he) can take her, but she gets just as excited by the opportunities to support the missions of her tax-exempt clients and the generosity of her taxable clients who strive to make the world a better place. Her role has her serving as her clients’ primary investment contact, communicating Okabena Investment Services’ strategy while helping them create investment policies and allocations that will meet their risk appetites and return expectations. She loves the total portfolio management aspects, risk management and asset allocation functions of her work and enjoys the variety of people and strategies across different asset classes. She’s also always on the lookout for other, like-minded potential clients whose interests are aligned.

Deb began her career in the controllers organization of the automotive industry before transitioning to corporate treasury, issuing bonds and commercial paper. She expanded into corporate venture investing before taking on responsibilities for manager research across all the broad asset classes, evaluating and selecting investments and managers for corporate pension plans and other employee benefit plans.

Deb took and passed the first two levels of the Chartered Financial Analyst (CFA®) exam in the mid 1990s before assuming corporate treasurer roles that left her little time for further study. When she decided to pursue completion of her certification, she called and learned that the seven-year limit between exam levels had been lifted. She passed Level III on her second try and is thankful she was persistent and focused to achieve the designation.

“You have to be an optimist to stay in this industry,” she says, “believing that over the long run, markets grow and diversified portfolios can produce positive returns.” The onset of the COVID-19 pandemic has provided both some challenges and benefits. Working from home has eliminated her commuting time, and Deb loves interacting with her clients. “I miss seeing my colleagues and clients in person, but generally people are more available and flexible about meeting,” Deb says. “And technology has made the transition considerably easier.”

In her words:

What do you want people who work with you professionally to know about you?

I hold myself to very high standards and hope always to meet and exceed clients’ and colleagues’ expectations.

How do you engage with your community?

I volunteer my time on several not-for-profit community-based boards and investment committees.

How do you spend your free time?

These days, I love hanging out with my “pod”, enjoying my family, my home, my neighborhood and the beauty of the Mississippi River and nature generally in Minnesota. When it’s too cold or dark to go out, I knit. I can’t wait to be able to take to the skies again with a destination and far-flung family and friends in mind.

Any predictions for the year ahead?

Who would have thought 2020 would look as it did? I’m not about to attempt to predict 2021. I’ll predict rates and dates, but not both!

—

Deb holds a B.A. in multidisciplinary social sciences from Michigan State University (Summa cum Laude, Phi Beta Kappa) and an MBA from the Owen School at Vanderbilt University. She and her husband have two adult sons (both happily married and gainfully employed) and two amazing grandchildren (so far).

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Posted in Hot Topic Commentary, Member Spotlight | Tags: #memberspotlight |

Video Gaming & eSports: Taking Media and Entertainment to the Next Level

11th January, 2021 · CFAMNEB · Leave a comment

By David Camacho, CPA

John Patrick Lee, CFA
ETF Product Manager
VanEck

On December 10, 2020, John Patrick Lee, an ETF Product Manager with VanEck, provided the CFA Society of Minnesota with an overview of where the video game industry stands as we closed out 2020. COVID-19 provided significant tailwinds for the gaming industry, which now projects to reach $159B in 2020, making it a bigger industry than both cyber-security and robotics. Strong growth trends were already in place but stay-at-home orders (both domestically and abroad) and further cord-cutting accelerated the trends.

Mobile gaming now represents the largest and fastest-growing platform by revenues, overtaking console and pc-gaming. Since 2015, mobile revenue has grown at an annualized rate of 22%, outpacing total gaming’s growth of 15%. We are also witnessing a story develop in the emerging markets space, with many consumers gaining access to mobile technology for the first time. These trends may have further room to run, with mobile tech priced at a cheaper entry point relative to gaming counsels or some PCs. Additionally, many consumers may already have or otherwise need mobile tech, providing the base for new gaming consumers.

Publishers have taken note of the mobile boom and adjusted their business models to take advantage of this trend. Throughout 2020, we have seen “games as a service” take off and accelerate revenues. Previously, games were viewed as a product. With viewing games as a service, revenues have steadily increased with the employment of subscription revenue models and microtransactions. In Take-Two’s Q1 2021 fiscal earnings report, recurrent consumer spending grew by 52% and now accounts for 58% of net revenue.

ESports has seen significant growth from the same trends as gaming but is still much smaller compared to the gaming industry. As social streaming websites are experiencing wide-spread adoption and rapid growth (i.e. Twitch), publishers are capturing additional revenue streams. Publishers own the rights to the games played competitively, as well as the broadcasting rights, which are sold to media and communication services companies. The largest share of this revenue is coming from media rights (23%) and sponsorships (42%).

A few of the highlights of the presentation below:

Gaming surge: an acceleration of existing trends – eSports audience has grown tremendously, supported by long-term demographics and industry trends (such as cord-cutting)

  • Social streaming websites are experiencing widespread adoption and rapid growth (i.e. Twitch)
  • Netflix views Fortnite as a bigger competitor than HBO Max
  • The average gamer is in his/her 30s with disposable income

Mobile Gaming: Growth Powerhouse

  • Since 2015, mobile revenue has grown at an annualized rate of 22%, outpacing gaming’s total growth of 15%
  • Huge story in the emerging market space (gaining access to mobile technology for the first time)
  • Mobile tech/entry cheaper than gaming console or some PCs, many consumers might already have or need mobile

In-Game spending: Revolutionizing the Revenue Model

  • New: Gaming as a service (subscription revenue model, in-game purchases/microtransactions pushing total revenues higher)
  • Old: Gaming as a product
  • In Take-Two’s Q1 2021 fiscal earnings report, recurrent consumer spending grew by 52% and accounts for 58% of net revenue

As league owners, publishers control the eSports ecosystem

  • Much smaller than the videogame industry
  • Publishers own the rights to the games played competitively, as well as the broadcasting rights, which are sold to media and communication services companies
  • Biggest revenue in this sector coming from media rights (23%) and sponsorships (42%)

Gaming Industry Risks

  • Single-game risk, company too dependent upon a single game or franchise
  • Return to normalcy risk (highlighted as highest risk) – as COVID-19 fades, consumer behavior shifts

MVIS Global Video Gaming and eSports Index

  • Companies must derive at least 50% of total revenues from video gaming and/or eSports to be initially eligible for index (targeted, pure-play exposure)
  • Included: Activision Blizzard, Nintendo, Tencent, NVIDIA, AMD
  • Excluded: Alphabet, Amazon, Microsoft, Sony, and Intel
  • Relatively low correlation among other indexes/sectors

Resources

  • Presentation Slides from December 10, 2020
  • Get in the Game – Whitepaper by JP Lee, CFA & Nicolas Fonseca, CFA

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Posted in Hot Topic Commentary | Tags: Videogames |

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