Displaying items by tag: alts

For years, alternative investments were mainly the domain of institutional investors, with private individuals largely excluded from opportunities like hedge funds and private equity. The rise of fintech has changed this, offering wider access through platforms that enable everyday investors to participate in alternative investments. 

These platforms utilize technologies like AI, blockchain, and crowdfunding to lower barriers and provide more transparent, secure options. This democratization allows regular investors to diversify portfolios and tap into high-potential markets, like venture capital or cryptocurrency. 

However, the illiquidity and volatility of many alternative assets still pose risks for inexperienced investors. As fintech continues to evolve, it will further shape the future of alternative investments, but due diligence remains essential for success.

Finsum: There have been monumental innovations in fintech in the last decade, but perhaps the strongest is in the alternative investment space. 

The investment landscape is buzzing with new possibilities as fund companies aim to make private equity more accessible to everyday investors through vehicles like interval funds. These funds are generating interest by allowing portfolios to include significant allocations to private assets, sidestepping the limitations imposed on traditional mutual funds. 

While the ability to invest in private equity within an interval fund offers diversification, the illiquid nature of these holdings presents serious challenges. Liquidity issues, compounded by venture capital structures, can severely limit the ability to trade private assets. 

Despite these hurdles, the demand for private market exposure in interval funds continues to rise, presenting both opportunities and significant risks for investors seeking to enter this space.

Finsum: If liquidity concerns are not very high then this alternative makes a lot of sense for many investors. 

According to new research from BNP Paribas and Coalition Greenwich, investors are increasingly focused on strategies that drive both growth and positive societal impact. Thematic investing, which identifies long-term trends related to technology, demographics, and sustainability, has gained popularity, with 63% of respondents prioritizing impact and sustainable outcomes. 

Thematic strategies are especially appealing in areas like artificial intelligence, clean energy, and water management. European investors are leading in the adoption of these strategies, with participation growing from 46% to 61% since 2020. 

Themes like gender diversity, demographic inequalities, and mobility are also gaining attention. As the economic landscape evolves, thematic investments are becoming a preferred way for investors to align their portfolios with future trends.

Finsum: Thematic investing can be a wonderful way to connect with clients, and to dive deep into their interests in the portfolio construction

While nontraded real estate investment trusts (REITs) have faced another challenging year, financial advisors are seeing a rise in sales of alternative investments overall. By August, financial advisors sold $76.6 billion of illiquid alternatives, including nontraded REITs, business development companies (BDCs), interval funds, and private placements. 

This amount matches 2023's total, with projections indicating the industry will surpass $115 billion by the end of 2024. Sales of nontraded REITs have notably decreased to $4.2 billion in the first eight months, compared to their peak of over $33 billion in 2022. 

However, BDCs have overtaken REITs as the most popular alternative investment sold, with $23.7 billion in sales through August. Blackstone Inc. leads in nontraded REIT and BDC sales this year.

Finsum: There is still an elevated risk premium built into most non-treasury rates right currently but REITs could see a bounce back with that falling soon. 

Invesco announced the monthly dividend payments for two of its closed-end funds: Invesco High Income Trust II and Invesco Senior Income Trust. Both funds are maintaining their current monthly dividend rates, with no change from previous distributions. 

The dividend for Invesco High Income Trust II is set at $0.09641 per share, while Invesco Senior Income Trust will pay $0.04301 per share. Under their Managed Distribution Plans, these funds may distribute more than their income, including returning capital to shareholders, which could affect their long-term performance. 

Investors should keep in mind that these returns may not be directly linked to the funds' investment success and may be impacted by market fluctuations and tax regulations. 

Finsum: This might be a great option for investors looking to add income to their portfolio and may compensate for the lack of liquidity.