Browsing: Real Assets

Real Assets

Islam, Western Pensions, and Real Assets

Oct 18th, 2016 | Filed under: Newly Added, Institutional Investing, Intellectual Property, Natural Resources and Land, Operationally Intensive Real Assets, Institutional Asset Management, Real Assets, Allocating to A.I.

A recent academic discussion of the much-vexed question of Islamic finance (including the always at least implicit query, how does it fit into the broader usually non-Islamic global picture?) focuses on the role in Islam of real assets, understood as tangible objects such as land, buildings, machinery, and commodities. TheRead More

Fine Art as Joy and Investment: A Reflection

Oct 12th, 2016 | Filed under: Newly Added, Business News, Real Assets

Why do people own great paintings? As something pleasing to hang on the wall? As a way to impress the neighbors? Presumably many buyers of privately circulating 17th century Dutch masterpieces are speculators, alpha seekers. But aren’t they speculating, in the end, upon what some end user will pay? WhatRead More

Saving the World: One EM City at a Time

Oct 10th, 2016 | Filed under: Newly Added, Infrastructure, Operationally Intensive Real Assets

The Global Commission on the Economy and Climate has issued a new report urging governments and major financial institutions to “scale up and shift investment to sustainable infrastructure as a fundamental strategy….” The report, The Sustainable Infrastructure Imperative, has no force as law or policy anywhere, but it may signalRead More

Kyle Bass, IPR and Shorting Big Pharma

Sep 22nd, 2016 | Filed under: Newly Added, Intellectual Property, Operationally Intensive Real Assets, Personalities in AI, Real Assets, Other Topics in A.I.

Kyle Bass, the investor who shorted the market in residential mortgage-based securities a decade ago, with speculator success, is interested now in shorting the major pharmaceutical companies. He is certainly entitled to try that play. But what is especially provocative and controversial is that he also seems willing to giveRead More

Study Says Pensions May Be Looking for Returns in the Wrong Places

Aug 7th, 2016 | Filed under: Newly Added, Alpha & Beta, Private Investments, Real Estate Equity Investments, Allocating to A.I.

Alex Beath, senior research analyst at CEM Benchmarking, the Toronto-based pension research firm, has produced a white paper on the pension fund performance in the U.S. since 1998, and the news he brings is not good (for pension funds themselves, or for the hedge funds to which they have allocatedRead More

Private Capital Fundraising Slows: Green and Brown Valleys

Jul 14th, 2016 | Filed under: Newly Added, Real Estate, Infrastructure, Farmland, Natural Resources and Land, Operationally Intensive Real Assets, Real Estate Equity Investments, Real Assets, Other Topics in A.I.

Preqin, the multinational data and consulting firm, has looked at the second quarter and found it was, for private capital fundraising  … slow. So was the quarter before it. Together they made up the first half of 2016, in which the funds closed in the world of private capital globallyRead More

Infrastructure: Look at the Contracts–Not the Industry or the Index

Jul 10th, 2016 | Filed under: Newly Added, CAPM / Alpha Theory, Infrastructure, Financial Economics Theory, Operationally Intensive Real Assets, Real Assets, Finance & Economics

A new paper from EDHEC Infrastructure Institute decides that there is no such thing as a listed infrastructure asset class. What is the practical significance of that inference?  It means that for investors (individual or institutional) looking to diversify their portfolio properly, a dedicated index focused on a listed infrastructureRead More

Welcome to Low-Return World: Will Chief Investment Officers and Trustees be ready?

Jun 22nd, 2016 | Filed under: Newly Added, Infrastructure, Institutional Investing, Operationally Intensive Real Assets, Institutional Asset Management

By Charles Skorina For executive recruiters like us, that’s a question we’ll have to wrestle with as we present candidates to the boards of institutional asset managers. Two of our investment-management village elders–Bill Gross and Burton Malkiel–say we’re staring down the barrel of a low-return decade.  They’ve been around for aRead More

Somebody Has to Crunch These Numbers: Infrastructure Cash Flow

Jun 5th, 2016 | Filed under: Newly Added, Infrastructure, Operationally Intensive Real Assets, Real Assets

EDHEC Infrastructure Institute-Singapore recently released a paper on the cash flow dynamics of private infrastructure project debt. The gist of the paper is that investors’ ability to understand credit risk in private infrastructure debt turns on advanced statistical techniques. Or, in the authors’ words, “the nature of the data requiresRead More

Infrastructure, Dividends and Path Dependence

Apr 21st, 2016 | Filed under: Newly Added, Infrastructure, Operationally Intensive Real Assets, Real Assets

A new paper from EDHEC Infrastructure Institute-Singapore argues that infrastructure firms represent a unique business model, one with lower revenue volatility, higher payouts, and substantially lower correlation with the business cycle than other firms. An “infrastructure firm” for purposes of this discussion is either a special purpose vehicle created inRead More

Real Estate: Footloose Money Chasing Cross-Border Deals

Feb 2nd, 2016 | Filed under: Newly Added, Real Estate, Liquid and Fixed Income Real Estate, Real Estate Equity Investments, Real Assets

Savills, a global real estate services provider listed on the London Stock Exchange, has released its annual report on the role that real property plays in the investment world.  Here are some of its key points: Real estate assets constitute 60% of the value of all assets worldwide; Residential realRead More

A Perennial Gale Hits the Coffee Industry

Jan 11th, 2016 | Filed under: Newly Added, Commodities, Agriculture, Investing in Commodities, Farmland, Natural Resources and Land, Commodities

The popularity of the drip coffee maker is in decline, or at least it has passed its peak.  In 2013. 58% of coffee drinkers had used such a coffee maker on the day before the day they were asked, that is, “yesterday.” That number was down to 54% in 2014,Read More

API: An Emerging Multi-Trillion-Dollar Market

Sep 29th, 2015 | Filed under: Operationally Intensive Real Assets, Business News

IBM has now purchased Strongloop, and this has gotten Faille thinking about APIs, a potential multi-trillion dollar market. Where technology's imperatives press again the law: how to bet? Read More

How Public Pensions Are Getting Smart About Infrastructure

Sep 24th, 2015 | Filed under: Operationally Intensive Real Assets, Institutional Asset Management

Guest columnist Jill Eicher looks at how public pension funds are cutting out the middle man and leveraging the power of their own capital for infrastructure investments.Read More

An Overview of Real Asset Investing

Aug 26th, 2015 | Filed under: Real Estate, Private Equity, Infrastructure, Risk management, Intellectual Property

Guest columnist Andrew Smith, CAIA, provides an overview of real assets and their commensurate risks and rewards.Read More

PwC on Mergers and Acquisitions Activity

Jul 28th, 2015 | Filed under: Currencies, Agriculture, Alpha Strategies

"Not moving is more risky than moving," said one CEO asked about mergers and acquisitions. "We will make more acquisitions, but they’ll probably be larger in nature, more transformative. " Read More

SCOTUS on Copyright Means a Win for Fences: Loss for the Noosphere

Jul 6th, 2015 | Filed under: Institutional Investing, Intellectual Property

An idea for the hierarchical design of a platform's APIs, and a particular expression of that idea, walk into a bar. What's the punch line? Read More

PwC Looks Ahead to 2020: Offers a Roadmap for Alternative Investment Managers

Jul 5th, 2015 | Filed under: Hedge Fund Industry Trends, Hedge Fund Strategies, Infrastructure, Technology, Emerging markets

PwC offers a glimpse of a 'day in the life' of a typical compliance analyst in 2015 and again in 2020. As these authors tell it, the day is filled with data, darkness, and drudgery at present, but it will be airy, alliterative, and analytical in another five years. Read More

Who Will Meet Yahoo at the Altar?

Jun 16th, 2015 | Filed under: Real Estate, Alpha Strategies, Technology, Intellectual Property

There was some excitement as recently as January 2015 over renewed talk of a Yahoo/AOL deal, but after the bloom finally came off that rose, YHOO settled into a trading range has been roughly from $42 to $46. Faille guesses that there is an opportunity here on the upside of that range, because another suitor is bound to appear.Read More

Java IP War: The Obama Administration Picks the Wrong Side

Jun 8th, 2015 | Filed under: Technology, Intellectual Property

The Solicitor General, speaking for the United States, has filed the expected amicus brief in the Google/Oracle showdown. The SG's position is that the Supreme Court should refuse to hear the case so that the lower courts can get back to using what the brief calls the "flexible fair use doctrine" to do justice. Read More

Farm Land: The Risks & Rewards of Buying Direct

Jun 7th, 2015 | Filed under: Real Estate, Infrastructure, Institutional Investing, Farmland

Guest columnist Andrew Smith, CAIA, examines the risks and rewards of investing directly in farmland.Read More

Top Hedge Fund Managers: They Aren’t Wizards, but They Are Masters

May 28th, 2015 | Filed under: Hedge Fund Industry Trends, Real Estate, Hedge Fund Strategies, Institutional Investing, Alpha Hunters, Alpha Strategies, Alpha Seekers

For Faille, the stand-out essay in this collection of case studies, from CNBC's Maneet Ahuja, concerns Marc Lasry and Sonia Gardner, of the Avenue Capital Group. As Myron Scholes says in his afterword to this volume, Lasry and Gardner take returns from those whose demand for liquidity makes them willing to give them up. Read More

What’s in a Copyright? Java API Case Before U.S. Supreme Court

May 25th, 2015 | Filed under: Institutional Investing, Technology, Intellectual Property

High-stakes litigation between Google and Oracle approaches its resolution at the Supreme Court. For seekers of alpha, this isn't just about what investments to make, but about the way one goes about making them, the very mechanics of trading. Read More

Some Assets are Hard to Ignore

Apr 23rd, 2015 | Filed under: Currencies, Infrastructure, Hard metals, Alpha Hunters, Alpha Strategies, Gold

Guest columnist Diane Harrison looks at the world of alternatives to alternatives, including stamps, cars, farmland and more...Read More

Aleynikov’s Trial and My Cousin Vinnie

Apr 21st, 2015 | Filed under: Algorithmic and high-frequency trading, Intellectual Property, Legislation/Court rulings

A party seeking to employ an expert witness is supposed to let the other side know who the expert is in advance of trial. Fans of a classic Joe Pesci movie will remember that it isn't necessary to join the prosecutor in a hunting lodge. Read More

Tax & Election Seasons Create Alternative Altercations in the US

Apr 20th, 2015 | Filed under: Real Estate, Venture capital, Legislation/Court rulings, Partner accounting

As a general rule, politicians [mostly] on the Democratic side benefit by raising the issue of the taxation of carried interest during campaigns and then quietly letting it die, as their donors expect, when the legislature is actually working on tax bills. It's a way of signaling who is a "populist" and who isn't. Read More

Does Private Real Estate Actually Have a Low Correlation with Public Real Estate?

Mar 15th, 2015 | Filed under: Real Estate, Private Equity, Institutional Investing, Alpha Hunters, Alpha Strategies

Brad Case, Ph.D., CFA, CAIA, looks at the relationships between public and private real estate.Read More

Gazelles, Exports, and Infrastructure: A View from the UK

Mar 11th, 2015 | Filed under: Infrastructure

The Confederation of British Industry has taken a look at some of the issues that do and should concern investors in the industries of those islands. Among much else, the CBI wants the government to kick-start the private placement market. And to worry more about infrastructure. Read More

Long-Term Infrastructure Debt: The Valuation Issue

Feb 26th, 2015 | Filed under: Infrastructure, Alpha Strategies, Insolvency

Three authors at EDHEC propose a two-step modeling process for the valuation of certain infrastructure debt. One of the key ideas they incorporate is the value of the step-in rights that come when the issuers violate a covenant or otherwise find themselves in technical default. Read More

Focus on U.S. Real Estate Benchmarks: NCREIF Transaction Based Index

Feb 20th, 2015 | Filed under: Real Estate, Alpha Hunters, Alpha Strategies, Indexes

By Brad Case, PhD, CFA, CAIA This is the third in a series of articles focusing on the strengths of different indices that are published regularly and may be appropriate for benchmarking, risk assessment, and other real estate investment purposes. The first article focused on two similar index families, the Moody’s/RCARead More

Down Memory Lane: That WTI-Brent Divergence

Feb 18th, 2015 | Filed under: Commodities, Infrastructure, oil

For one professor, the surprising divergence in the prices of WTI/Brent crude in the period 2010-2012 was a case study in how commodity prices can teach us about supply chain conditions. Faille looks back at his article, and forward past today's calmer but still-fluctuating spread. Read More

Crowdfunding: In the Gun Sights of Patent Plaintiffs

Feb 3rd, 2015 | Filed under: Regulatory, Crowdfunding, Intellectual Property, Legislation/Court rulings

The first of the three patents cited by the plaintiffs was filed at a time when the crowdfunding exemption movement was making a fair amount of noise on Capitol Hill, though it had not yet had tangible success. One might already entertain certain suspicions. Read More

How Bad is the Cash Drag on Open-End Private Equity Real Estate Funds?

Jan 22nd, 2015 | Filed under: Real Estate, Private Equity

Guest columnist Brad Case, Ph.D., CFA, CAIA, examines the effects of cash drag on open-end private equity funds.Read More

Focus on U.S. Real Estate Benchmarks: NCREIF Property Index

Jan 4th, 2015 | Filed under: Real Estate, Alpha Hunters, Alpha Strategies, Indexes

Brad Case, Ph.D., CFA, CAIA, guest columnist, continues his series on U.S. real estate benchmarks as he looks at the NCREIF Property Index.Read More

Does Leverage Have a Positive or Negative Effect on Private Equity Real Estate Investments?

Dec 14th, 2014 | Filed under: Real Estate, Private Equity

Guest columnist Brad Case, Ph.D., CFA, CAIA, explores the effects of leverage on private equity real estate investments.Read More

Focus on U.S. Real Estate Benchmarks: Moody’s/RCA CPPI and CoStar CCRSI

Nov 30th, 2014 | Filed under: Real Estate, Alpha Strategies

Brad Case, Ph.D., CFA, CAIA, guest columnist, examines the value of U.S. real estate benchmarks.Read More

Is Private Real Estate Actually Less Volatile than Public Real Estate?

Nov 18th, 2014 | Filed under: Real Estate, Alpha Hunters

Guest columnist Brad Case, Ph.D., CFA, CAIA, examines the differences between private and public real estate investments.Read More

The Building of an Infrastructure for Renewables: A Report

Nov 5th, 2014 | Filed under: Private Equity, Commodities, Infrastructure, Socially responsible investing, Alternative energy

In 2012, [as the crude oil price was settling in to $110 and low vol,] the renewables’ infrastructure space for private funds reached an aggregate estimated deal value of $132 billion. In 2013, that fell to $95 billion. It now seems unlikely that 2014 will match last year. Read More

Custodians Helping Customers with Securities as Collateral

Sep 11th, 2014 | Filed under: Infrastructure, Risk management, Insolvency

How address issues of supply/demand imbalance in the world of collateral requirements? Custodians can do a good deal on behalf of their customers here, and are exploring just how much. Read More

Advancing the Infrastructure Investment Narrative

Aug 11th, 2014 | Filed under: Infrastructure, Alpha Strategies, Insolvency

Intuitively, the problem with valuing the debt issued by an private SPE in an illiquid infrastructure project is this: the free cash flows of the SPE aren't easily observed. So how does one go about deriving their present value? Read More

Isn’t all Software Abstract?: A Meditation on Alice Corp.

Jun 24th, 2014 | Filed under: Regulatory, Technology, Intellectual Property

Justice Thomas writes, "Deciding whether or not a particular claim is abstract can feel subjective and unsystematic, and the debate often trends toward the metaphysical, littered with unhelpful analogies and generalizations.” He has not given the debate a different turn, it will continue to trend toward the metaphysical etc. Read More

EDHEC: Investors Who Don’t Want to be Mushrooms Need Benchmarks

Jun 16th, 2014 | Filed under: Private Equity, Infrastructure

Investors need benchmarks, especially benchmarks of likely infrastructure return, because the long-term illiquid nature of that investment increases information asymmetry between investors and managers, whereas benchmarks keep this asymmetry bearable. So explains Frédéric Blanc-Brude of EDHEC. Read More

Contexts for Population Growth, U.S. and China Co-Dependence, Fracking

May 26th, 2014 | Filed under: Agriculture, Emerging markets

What is the big picture for these authors? Are China and the U.S. trading places, so that China will have a middle class and the U.S. won’t? No. What is happening is a bit more subtle than that. Read More

Squeezed Margins and a Move to the Clouds

Jun 12th, 2013 | Filed under: Performance, Analytics & Metrics, Infrastructure

The world of cash equities trading is changing and will continue to change, says Celent. Brokerages will have to outsource in order to reduce costs and restore their margins: and some of the outsourcing will involve "the cloud."Read More

Parking Lot Arbitrage: The Latest Trend in Indian Real Estate

May 21st, 2013 | Filed under: Real Estate

Alternative investments have always been the home of innovation. Guest columnist Sourabh Jeswani looks at parking lots as the latest innovation in the Indian real estate market.Read More

Investing in Britain’s Infrastructure: With and Without Guarantees

Jan 28th, 2013 | Filed under: Infrastructure, Institutional Investing

The bottom line of EDHEC's study is that there is no need to create new public sector liabilities to get private sector institutions to invest in infrastructure. Read More

On Not Using the Phrase ‘New Normal’ Here

Sep 26th, 2012 | Filed under: Real Estate, Private Equity, Institutional Investing, Venture capital, Asset allocation

Acceptance of the higher levels of volatility as a fact of life means that careful ongoing attention to risk has become the means of operations. In the United States specifically, 31 percent of institutions say that they monitor their risk budget daily to keep the overall amount of risk in the portfolio under check: more than half (53 percent) say that they do such monitoring on a weekly or monthly basis.Read More

Preqin: Investor Interest in Real Estate Revives

Sep 18th, 2012 | Filed under: Real Estate

The good news from the Preqin survey is that 37 percent of the interviewees said they expect to deploy more capital to real estate over the next 12 months than they did over the last 12 months. The better news is that in a January 2012 survey only 26 percent had said that. Read More

McKinsey: Allocations Will Rise Despite Sticky Fees

Jul 31st, 2012 | Filed under: Real Estate, Private Equity, Alpha Strategies, Asset allocation

The reason for the increased interest in alternatives, McKinsey says, isn’t that the alternatives’ managers are slashing the price of their services. It is, rather, a discontent with the return to be gained from traditional investment. “Even with downward pressure likely over the next few years, revenue yields for institutional alternative products should remain well above the 35 bps average earned on today’s traditional institutional products.” Read More

GFIA: Ag Commingled Products Suffer From Market Noise

Jul 26th, 2012 | Filed under: Agriculture, Alpha Strategies

Given reasonable assumptions, one might expect that those investing in commingled products offering exposure to agriculture would take part in both good investment returns and diversification benefits. Alas, though, GFIA found no such thing, and considers the possibility that agriculture as an asset class has decoupled from fundamentals. Read More