Investing In Alternative Assets

Why Alternative Assets?

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A Real Asset is a tangible investment that has an intrinsic value due to its substance and physical properties.

Key considerations of any investor are whether their investment portfolio as a whole is structured as effectively as possible to offer growth, diversification, protection and opportunity. Here we look at some of the key reasons why Real Assets should be included in any portfolio to offer this.

Real Assets provide portfolio diversification as they are not correlated to traditional financial markets. Indeed, there are a wide array of diversification opportunities within the sector itself. 

 

Their values also generally increase in line with inflation ensuring that they offer both growth and protection throughout each stage of the economic cycle. Their private nature tends to reduce volatility ensuring a greater element of “peace of mind” which has sorely been lacking in other markets.

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Modern Wooden House

Similarly, many real assets have offered unparalleled growth opportunities as witnessed over past decades, outperforming many traditional investment classes and providing attractive returns for investors.

Recently we have seen a sharp rise in investment by both private and institutional money towards real assets. This shift in favour of tangible assets has seen the overall sector grow from $23 Trillion to $43Trillion in the last 10 years (186% increase – an average 18.6% per annum). This trend is set to continue and is expected to be valued at $80Trillion by 2025.

Asset allocations into Real Assets by Institutional Investors has risen from 5% in 2000 to 25% in 2017 and is expected to rise above 40% by 2030, highlighting the mounting sentiment of savvy or professional investors for these assets which further reinforces the real growth opportunity the sector offers.

Another very powerful reason to embrace the opportunity these assets offer is the favourable tax treatment. The tax treatment of many real assets differs from that of other financial assets, allowances for potential depreciation may provide effective tax planning benefits to the investor and, dependant on tax residency, gains are free from tax altogether making them highly effective for both short- and longer-term tax and estate planning requirements.

Real Assets tick all of the boxes, providing investors with a robust investment opportunity, intrinsic value, significant growth potential, security and effective but simple tax efficiency.

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Frequently Asked Questions

What are Alternative Investments?


The term Alternative Investment covers multiple assets, essentially any asset which lie outside of traditional mainstream financial markets such as stocks, bonds, commodities and traditional funds/ETF’s. Under the alternative umbrella, you will find varying assets from antiques and rare coins to private equity, venture capital deals to Scotch whisky and classic cars. The list of assets under the alternative banner is ever increasing as investment worthy assets come to the fore, with cryptocurrencies being the latest to break onto the scene.




Why Alternative Investments?


Alternative Investments offer investors diversification and growth non correlated to traditional financial markets. Their popularity and importance has risen substantially over the past 20 years, particularly in the wake of the financial crisis in 2008-2009. Whilst traditionally only accessible for high net worth investors and institutions, companies such as Altvest Capital Partners have made quality alternative investments accessible to investors of all kinds, allowing everyone to participate and benefit from some exceptional assets and the growth, tax efficiency, protection and diversification which they offer.




How can I use alternative assets to diversify my investment portfolio?


Here at Altvest, we offer each client exclusive opportunities to build alternative asset portfolios. Each of the assets we manage offer diversification and returns which are not correlated to financial markets, thus acting as the ultimate diversification tool. Whether you are looking at a certain asset to diversify your portfolio with, or would like to build a robust portfolio consisting of several alternative assets, here at Altvest we are best placed to assist, advise and execute.




Using Alternative assets to counteract inflation and negative interest rates


As of year end 2021, we are seeing the recovery from the global pandemic accelerate. With this, we have the worry of high inflation and negative interest rates. This is a significant worry for investors as cash has become more of a guaranteed depreciating asset than it was just a year or two ago. Investors are seeking quality alternatives to act as both a store of value as well as a growth component for their portfolios. A key component of our portfolio construction is to provide stable growth for client portfolios, whilst offering both diversification and protection to investors, ensuring that our clients are well placed in the current global situation.




How have alternative investments performed compared to traditional financial markets?


Certain alternative investments have consistently outperformed traditional financial markets over the past decade, resulting in increased focus and investment being allocated to alternative and real asset portfolios by institutional and retail investors. Over the past decade, end 2010 to 2020, the MSCI All Country World Index returned just 165%, which bearing in mind includes the rally which came on the back of the 2008 financial crisis (which didn’t affect alternative markets in the same way), should open the eyes of investors into the real value which alternative assets offer. By contrast, certain key alternative investments outperformed whilst offering far less volatility, such as Fine Whisky which returned 478% over the same period and Classic & Supercars returning 193%.




Are Alternative Assets as volatile as financial markets?


Alternative assets do not react to global events in the same way as financial markets, as they generally have a purpose for use and as such are far less sensitive to negative developments, be it economic, political or unforeseen major events such as we’ve seen recently via the coronavirus pandemic. During the latter, financial markets experienced a period of extreme volatility, however the same cannot be said for the majority of alternative assets. Whilst there were short term fluctuations in pricing in some alternative spaces, on the whole this was far less extreme than the volatility experienced within financial markets. Furthermore, the fast paced recovery of alternative assets further underlines their resilience, with record breaking highs and new, exciting alternative assets becoming a relative norm.




How have other alternatives performed in comparison to gold?


Gold is seen as the ultimate store of value, yet in the same 10 year period (end of 2010-2020) gold offered an absolute return of just 73%, whereas other alternatives offered far greater returns over the same period, with similarly low volatility. Some examples of this are Scotch Whisky at 478%, Classic & Supercars +193% and Fine Wine +127%.




Why is now a good time to invest in alternative assets?


The Fintech revolution continues to encroach and envelope the asset spectrum. As this phenomenon evolves even the rarest and historically inaccessible assets will become widely available to the masses via tokenisation and other forms of fractional ownership. As with all finite assets, this revolution will push the price of real assets ever higher. Few people are aware of the opportunities within the real asset spectrum even fewer have the knowledge or expertise to enter this highly secure and lucrative market. The recent record economic stimulus compounded by mounting fears of inflation means there has never been a better time to enter the realm of real or tangible assets.





Our Portfolio

We have unapparelled access to 1000’s of tangible assets across the real asset universe, If you are looking for something specific just reach out and let us know.

WHAT OUR CLIENTS SAY

“Like the majority of people in the world, luxury asset investment has never been top of my agenda due to knowledge and affordability. I met Chris and Byron of Altvest during virtual business training sessions in lockdown. At a follow up meeting we very quickly recognised our joint interest in the whisky industry. I made enquiries about their cask investment portfolio and decided to buy from them if I could afford to do it. I am pleased to say I have made my first ever investment in a cask of whisky and I can add that the knowledge, integrity and enthusiasm of the guys made this purchase an absolute pleasure. I have no hesitation in recommending their services to anyone."

—  RAY BLACK | UNITED KINGDOM