Displaying items by tag: real estate
Innovation Drives Growth
Companies within the Disruptive Innovation space have generated higher levels of idiosyncratic risk relative to broad markets and major asset classes, creating stronger alpha opportunity for skilled active managers…see the full story on our partner’s site
JPMorgan Picks its Big Winner for 2022
Strategists at JPMorgan Chase & Co see a weak market in traditional stocks and bonds coming in 2022. They say the remedy for your portfolio is in alternatives like hedge funds and real estate. It's not a small margin of victory either, JPMorgan is predicting a 6% gain in hedge funds and real estate over the traditional composition of stock and bonds. However, they are recommending investors be weary of crypto as they do expect gains but they will be too rocky to ride. In fact, volatility almost halves the value in the investment firm’s mind. JPMorgan sees macro trends dominating the funds because of a variety of factors like inflation and Fed tapering.
FINSUM: Macro hedge funds have struggled in leading up and going through Covid, but with inflation moving, the tide could be turning.
Westfield's Approach to ESG Analysis
Over our 30-year history, Westfield has relied on our culture of introspection as we seek to optimize our approach to investing client funds in an ever-changing investment landscape...see the full story on our partner's site
Goldman’s Big Call on Real Estate
The housing market has outpaced nearly all expectations as prices are up a staggering 17.7% over the last 12 months. Some bears said this pace has to slow and that simply put there aren’t enough buyers to keep demand boosted this high, but Goldman Sachs sees it differently. They are projecting home prices to grow at 16% over the next year. They believe millennials are just hitting their stride in the buyers market and that a woefully short supply will keep prices elevated. New home construction has been far too sluggish in the post-2008 environment as investors are skittish, but low-interest rates give many the opportunity to buy. All of this puts the U.S. at an estimated 4-million home shortage, which has Goldman extending the horizon for house price growth through 2023, projecting another 6% increase. Others aren’t as bullish; CoreLogic and Freddie Mac are projecting 2.2% and 5.3% respectively.
FINSUM: Extremely low interest rates and glimpses of inflation could prop up home prices for the time being, as excess money has tended to flow disproportionally into assets like real estate.
Don’t Worry, It’s Too Big to Fail
China’s giant real estate group Evergrande Real Estate Group is in hot water. While they may be China’s second-largest real estate holding company, they are the world’s most indebted as their balance sheet carries an excess of $300 billion in liabilities. Despite this, some of the most prominent investment firms such as BlackRock, UBS, and HSBC Holdings have all bought up their debt. Evergrande’s bonds are trading at 25 cents on the dollar. BlackRock, for example, has increased its holdings from 12.2 million units to 43.5 million YTD and is now nearly 1% of its portfolio. Evergrande is taking measures like discounting apartments, parking spaces, or retail property to pay back its debt as notes are beginning to reach their maturity. Many investors are expecting Chinese authorities to step in to accommodate the debt by either rolling it over or taking other measures.
FINSUM: There is certainly safer debt to hold, but many investment firms see Evergrande as a buy and a risk worth taking because it may be too big to fail.