Displaying items by tag: alts

Private credit firms are increasingly shifting from traditional cash-flow lending toward asset-backed finance using collateral that now includes intellectual property, data centers, and energy infrastructure. 

Despite the US ABF market totaling $5.5 trillion, private credit holds only a small share and is partnering more frequently with banks to expand. The recent bankruptcy of First Brands has raised concerns about how well lenders understand the risks in ABF, especially as more unfamiliar assets require precise valuation in a downturn. 

Demand for digital and energy infrastructure is driving ABF growth, with data center financing alone expected to jump sharply by 2028. Yet the sector has not been tested under high interest rates or recessionary conditions, prompting warnings from regulators about potential systemic risks. 

Finsum: Look for asset return correlation in stress scenario to test your demand for private markets.

Capital Group and KKR have launched two new interval funds that double quarterly share repurchase limits from the industry-standard 5% to 10%, offering a more liquid twist on traditionally illiquid products. 

The funds—Core Plus+ and Multi-Sector+—blend public and private credit, allowing them to support higher liquidity while still targeting alternative-style returns. Advisors are watching closely, as adding liquidity by holding more cash or Treasuries could dilute performance even as it broadens investor access. 

The move comes amid surging demand for alternatives, with interval fund sales tripling in recent years and overall alternative investment fundraising expected to hit $200 billion this year. While advocates say these products help democratize private credit, skeptics warn that rising rates or economic stress could expose the risks in leveraged private-market borrowers. 

Finsum: Many advisors may take a cautious, wait-and-see approach before embracing the new 10% liquidity model, but some may be more willing. 

The industry is entering a new macro environment that challenges long-standing assumptions about returns, inflation, diversification, and governance. After decades in which strong returns and easy diversification masked deeper structural risks, asset owners now face a paradigm where high valuations and slower economic growth may limit future returns. 

Inflation appears contained in the short term, yet structural forces such as deglobalization and rising public debt suggest it remains a long-run risk that investors must manage more deliberately. These shifts elevate the importance of real returns and purchasing-power protection as core objectives for DC plans, endowments, sovereign wealth funds, and retirement savers. 

They also imply that traditional diversification is less reliable than it once was, requiring new approaches to allocating across asset classes and seeking differentiated return streams.

Finsum: In this environment, multi-asset investing becomes inherently active, demanding broader use of private markets.

The Silver industry is benefiting from a strong rally in silver prices, driven by rising industrial demand, especially from solar, electronics, and EV applications, and a fifth consecutive year of global supply deficits. Silver’s recent designation as a U.S. critical mineral is increasing its strategic importance and attracting more investment to the sector. 

Despite cost pressures from energy, labor, and materials, mining companies are improving efficiency through technology and disciplined cost management. 

Silver mining stocks have surged 79% over the past year, far outperforming both the broader materials sector and the S&P 500. Given this backdrop, companies like Fresnillo, Pan American Silver, Hecla Mining, and First Majestic Silver are well-positioned due to expanding production, strong assets, and meaningful earnings growth expectations.

Finsum: The industry’s strong momentum is reflected in its near-term prospects, and these stocks could benefit. 

Portfolio income remains a priority for investors, especially with rate cuts and shifting macroeconomic conditions creating uncertainty. 

Closed-end funds (CEFs) offer an alternative income approach, since they issue a fixed number of shares at launch and then trade on exchanges, often providing higher yields than traditional bond strategies. 

Because CEFs behave differently from standard fixed income, they can also enhance diversification at a time when bond markets remain unpredictable. The Calamos CEF Income & Arbitrage ETF (CCEF) simplifies access to this space by actively investing in discounted closed-end funds to capture both income and potential capital appreciation. 

Finsum: CEFs could be a nice opportunity to gain exposure to alternative income streams