Browsing: Real Assets

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

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

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, 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

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

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

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

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

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

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

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

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

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

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

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

"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

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 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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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