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Alternative Assets: Latest Thinking Sep 2021

Alternative Assets: The Song Remains the Same...

Recent long-term return forecast papers from several leading asset managers (also available on the Savvy Investor site) continue to suggest that over the medium term, alternative asset investing is likely to provide investment returns that exceed those of conventional asset classes while also compensating for illiquidity and other risk and diversification concerns.

This selection of papers covers a range of alternative asset investments, ranging from wine grape farmland investments in the U.S. through private markets debt, real estate and whether, this time, it might be a different decade for hedge fund returns.  

grape vine bunch

Understanding Wine Grape Farmland Investing (Nuveen, 2021)

Nuveen outlines the inner workings of the wine grape property market, explaining why the United States may be attractive for international investors in these unique assets.

Alternative Data: The informational advantage in growth equity (BlackRock, 2021)

For compliance reasons, this paper is only accessible in the United States and Canada

Alternative data – sometimes called big data – is changing the way we live, the way we work and now the way we invest. And one of big data’s biggest impacts is in private markets – and late-stage venture capital or growth equity most of all. For investors able to refine this growing stream of raw data into tradeable intelligence, the hurricane can be a windfall. Investors armed with diverse information sources and streams of alternative data can more accurately assess factors which can contribute to a company’s success.

Down the Crypto Rabbit Hole (Columbia Threadneedle, 2021)

For compliance reasons, this paper is only accessible in the United States and Canada

Columbia Threadneedle provides insight into the murky world of cryptocurrencies and how traditional analysis may now be relevant for these companies. It also includes information about crypto exchanges, smart contracts, and the tokenisation of assets.

Diversified Private Debt Portfolios for Insurers (M&G Investments, Sep 2021)

For compliance reasons, this paper is only accessible in certain geographies

Insurance investors may be better able to harness the potential of private debt investments by focusing on insurance-oriented risk constraints in the search process.

The Investment Case for Net Zero Buildings (LGIM, 2021)

For compliance reasons, this paper is NOT accessible in the United States and Canada

Constructing buildings in a manner that meets the standards of the Paris Agreement requires a major shift in construction techniques and operational expertise, but a first mover advantage may exist in positioning buildings this way, both in terms of occupier demand and the performance of the underlying asset.

To Hedge or Not to Hedge (Diamond Hill CM, 2021)

Should investors in foreign stocks choose to hedge currency risk? The authors discuss the arguments for and against hedging away this type of exposure in this brief article.

Q3 Strategy: Constructive on event-driven and macro (Man Group, 2021)

In Q3, Man Group remains constructive on event-driven and macro hedge fund managers, but they are negative on U.S. quant equity strategies.

Investing in Hedge Funds: A primer (Mercer, 2021)

Mercer's primer on hedge funds seeks to illustrate the beneficial aspects of a strategic allocation to these assets, such as diversification, resiliency, and a unique risk/return profile.

Finding Higher Yielding Opportunities in Private Markets (PGIM, 2021)

As CIOs search for yield, one place they are increasingly turning to is private markets. Forces such as regulatory changes, infrastructure improvements and climate change awareness are leading to new opportunities in these alternative assets.

Real Assets are Favoured, But Fragmentation Requires Scrutiny (Amundi, Sep 2021)

For compliance reasons, this paper is NOT accessible in the United States

The real assets industry could be one of the major beneficiaries of a new inflationary environment. Amundi Asset Management discusses the performance and impact of real assets given a potentially new phase of the economic cycle.

Insurance Trends PE Investors Should Understand (McKinsey & Company, 2021)

The fog is clearing, and there's less uncertainty in the private equity industry than there was in 2020. This McKinsey & Company article focuses on private equity activity in the insurance and insurtech sector.

A New Decade for Hedge Funds? (Investments & Wealth Institute, 2021)

Will inflation reignite investors' interest in hedge funds? And how much do funds of funds diversify risk? This article from Investments & Wealth Institute explores these questions and more about the current state of the hedge fund market.

Webinar: Inflation and investing in real assets (PGIM, Sep 2021)

Experts from PGIM discuss recently released research from QMA on inflation and the ability of real assets to potentially insulate portfolios against inflation.

Podcast: The democratisation of private assets (M&G Investments, Sep 2021)

For compliance reasons, this paper is only accessible in certain geographies

M&G looks at the utility value of private assets within multi-asset portfolios, as well as ways to navigate their liquidity and complexity issues.

Video: Why investors should consider junior capital (Nuveen, Sep 2021)

Head of Junior Capital and Private Equity Solutions Jason Strife speaks about changes in junior capital and the way that the industry has evolved over the past five years, as well as its beneficial characteristics for investors' portfolios.