Displaying items by tag: alts

Several Western and Midwestern cities, including Boise, Idaho, and Stockton, California, are projected to join the "million-dollar club" in median home prices over the next decade. 

Realtor.com's forecast estimates Boise’s median price will rise from about $464,000 to $1.2 million by 2033, following a strong growth trend seen in previous years. Other cities expected to cross the million-dollar mark include Salt Lake City, Portland, and Colorado Springs. Stockton’s proximity to costly Bay Area markets is driving its prices, with an anticipated median of $1.4 million by 2033. 

Denver and Sacramento are also projected for substantial gains, reaching approximately $1.3 million and $1.1 million, respectively. These forecasts hinge on continued demand and limited supply, but a surge in new construction could temper these projected gains.

Finsum: One key aspect of this to watch is how fast wages are growing in these cities as this is a strong indicator of future home price growth

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.