Displaying items by tag: alternatives
Bitcoin is the most polarizing alternative investment by a wide margin and some say the slowing is natural, and the bull run is far from over. However, world leaders are singing a different tune. Swiss Bank Chair Alex Webber was the latest figure to speak out against the digital currency. While he showed appreciation for the underlying tech he said there was no chance that they would survive to upend the global payments structure. This was unwelcome commentary from bitcoin investors who saw prices fall severely in the last week. Additionally, China has targeted bitcoin again with shadow regulation and is the key driver in the price movements.
FINSUM: The biggest threat to bitcoin will always be regulation, particularly because its largest value as an asset class is currency conversion, particularly from developing nations.
The new age gold rush had investors and hedge funds sprinting to the euro area investing in the carbon market where prices doubled last year, but hedge funds are betting California is the big break. If the U.S. is serious about its climate aspirations then the price of carbon will have to increase and California is already a leading collector in the tax of carbon. There has already been an 85% increase in the price of carbon per ton this year stateside and those tax dollars are funding municipality-related climate initiatives such as wildfire prevention. However, the carbon taxes come at a cost. The higher built-in tax drives up consumer goods prices when inflation is already on the minds of every American. Overall investors like Blackstone see gains coming.
FINSUM: In the long-term, this could be another major global financial market that is centered in the US.
Residential real estate is one of the most popular alternative investments for Americans…see the full story on our partner Magnifi’s site
Financial advisors often wonder about the best way to get client money into private equity. The industry has long had very high hurdles for investing directly in funds, and publicly traded funds that try to replicate private equity returns are still nascent. However, there is another good way to get PE like returns by proxy—buy publicly traded private equity company stocks. KKR is a very well known firm that is currently trading very cheaply and seems like a good buy. The stock rose 50% last year but badly trailed its rivals in a year that saw many PE companies double in value as they shifted from partnerships to corporations.
FINSUM: The market seems to be underpricing KKR’s ability to create management fees based on its dry powder, which is causing the weaker valuation.