alternative_investments   17

How Financial Products Drive Today’s Art World
July 20, 2018 | The New York Times | By Scott Reyburn.

How does one invest in art without going through the complications of buying and owning an actual artwork?

That is the question behind financial products for investors attracted by soaring art prices but intimidated by the complexity and opacity of the market..... entrepreneurs are trying to iron out the archaic inefficiencies of the art world with new types of financial products, particularly the secure ledgers of blockchain...... “More transparency equals more trust, more trust equals more transactions, more transactions equals stronger markets,” Anne Bracegirdle, a specialist in the photographs department at Christie’s, said on Tuesday at the auction house’s first Art & Tech Summit, dedicated to exploring blockchain......blockchain’s decentralized record-keeping could create a “more welcoming art ecosystem” in which collectors and professionals routinely verify the authenticity, provenance and ownership of artworks on an industrywide registry securely situated in the cloud...... blockchain has already proved to be a game-changer in one important area of growth, according to those at the Christie’s event: art in digital forms.

“Digital art is a computer file that can be reproduced and redistributed infinitely. Where’s the resale value?”.....For other art and technology experts, “tokenization” — using the value of an artwork to underpin tradable digital tokens — is the way forward. “Blockchain represents a huge opportunity for the size of the market,” said Niccolò Filippo Veneri Savoia, founder of Look Lateral, a start-up looking to generate cryptocurrency trading in fractions of artworks.

“I see more transactions,” added Mr. Savoia, who pointed out that tokens representing a percentage of an artwork could be sold several times a year. “The crypto world will bring huge liquidity.”......the challenge for tokenization ventures such as Look Lateral is finding works of art of sufficient quality to hold their value after being exposed to fractional trading. The art market puts a premium on “blue chip” works that have not been overtraded, and these tend to be bought by wealthy individuals, not by fintech start-ups.....UTA Brant Fine Art Fund, devised by the seasoned New York collector Peter Brant and the United Talent Agency in Los Angeles.

The fund aims to invest $250 million in “best-in-class” postwar and contemporary works,...Noah Horowitz, in his 2011 primer, “Art of the Deal: Contemporary Art in a Global Financial Market,”.... funds, tokenization and even digital art are all investments that don’t give investors anything to hang on their walls.

“We should never forget that in the center of it all is artists,”
art  artists  art_advisory  art_authentication  art_finance  auctions  authenticity  best_of  blockchain  blue-chips  books  Christie's  collectors  conferences  contemporary_art  digital_artifacts  end_of_ownership  fin-tech  fractional_ownership  game-changing  investing  investors  opacity  post-WWII  provenance  scarcity  tokenization  collectibles  replication  alternative_investments  crypto-currencies  digital_currencies  currencies  virtual_currencies  metacurrencies  art_market 
july 2018 by jerryking
Pimco’s Strategy for Life After Gross: Go Beyond ‘Bonds and Burgers’ - WSJ
By JUSTIN BAER
Updated Nov. 7, 2016

The 53-year-old Frenchman, who joined Pimco in the past week, intends to push it deeper into hedge funds, real-estate assets and other alternative investments, people familiar with the matter said. With interest rates in much of the developed world near zero, those kinds of investments are in demand from pensions, endowments and other clients. They are also among the types of funds that command higher fees.

Investing in bonds, loans and other forms of debt securities will remain Pimco’s focus, but Mr. Roman will aim to build out capabilities in areas ranging from private credit to quantitative investments based on computer models, the people said.....Pimco, a subsidiary of German insurer Allianz SE, believes the gradual shift into alternatives is its best bet to ride out what many industry executives expect will be a brutal shakeout for asset managers. Tepid returns and the surging popularity of cheaper investment options, including exchange-traded funds, have pressured managers to lower fees.
Pimco  CEOs  alternative_investments  asset_management  capabilities  money_management  ETFs  shakeouts  interest_rates  developed_countries  low-interest 
november 2016 by jerryking
White House to Begin $10 Billion Rural Investment Fund - NYTimes.com
By ALEXANDRA STEVENSON JULY 24, 2014

The White House Rural Council will announce plans on Thursday to start a $10 billion investment fund that will give pension funds and large investors the opportunity to invest in agricultural projects. Those include wastewater systems, energy projects and infrastructure development in rural America.

“We’re the eHarmony.com of infrastructure and business investment,”...The move comes as pension funds and institutional investors, faced with few investment opportunities that yield high returns in the face of low interest rates, have begun to shift large amounts of money into less traditional investments that promise bigger returns like hedge funds and private equity firms.
farmland  agriculture  agribusiness  rural  alternative_investments  private_equity  infrastructure  investing  energy  wastewater-treatment  institutional_investors  pension_funds 
july 2014 by jerryking
How David Goodman aims to get back to wealth management - The Globe and Mail
TIM KILADZE |The Globe and Mail | Jul. 16 2014

After keeping a low profile – restricted by legal covenants that prevented him from dabbling in wealth management right after the deal – Mr. Goodman is determined to create something new within Dundee Corp., the holding company his father founded decades ago.
wealth_management  entrepreneur  alternative_investments  Tim_Kiladze  noncompete_agreements  Dundee 
july 2014 by jerryking
Titans of finance have moved on from the banks
14 Feb. 2014| Financial Times | Gillian Tett.

If the mighty J Pierpont Morgan were reincarnated in New York today, who might he be? Jamie Dimon, the man who is now chief executive of JPMorgan, the ...
Jamie_Dimon  private_equity  Blackstone  regulation  KKR  alternative_investments  moguls  Gillian_Tett  from notes
may 2014 by jerryking
Carlyle Group buys Toronto alternative asset manager - The Globe and Mail
Nov. 26 2013 | The Globe and Mail | Boyd Erman.
U.S. private equity behemoth Carlyle Group LP is buying a Toronto-based asset manager that specializes in picking hedge funds for huge institutional investors, yet another sign of Canada’s growing influence in the business of running alternative assets.

Carlyle said Tuesday that it has agreed to buy Diversified Global Asset Management Corp., an employee owned firm that oversees assets of $6.7-billion (U.S.), for about $103-million

DGAM’s specialty is advising large investors such as pension funds and sovereign wealth funds on how to use hedge fund strategies to manage risk and increase returns.

Canada, particularly Toronto, has a reputation as a top centre for money management in pension circles, with institutions such as Ontario Teachers’ Pension Plan and Canada Pension Plan Investment Board running complex strategies using alternative investments – essentially, in-house hedge funds. DGAM helps clients do the same thing by building custom portfolios of hedge funds and investments.
Carlyle_Group  private_equity  Toronto  investors  pension_funds  sovereign_wealth_funds  alternative_investments  Boyd_Erman  asset_management  OTPP  CPPIB  money_management  risk-management  institutional_investors 
november 2013 by jerryking
The Francis Bacon indicator? Art world soaks up excess cash
Nov. 19 2013 | The Globe and Mail The Globe and Mail | BRIAN MILNER.

Investors, collectors and dealers forked out nearly $1.2-billion (U.S.) last week – far above industry expectations – for a handful of illustrious names at the fall contemporary art auctions in New York. ...Art market experts, just like their counterparts in commodities, real estate, stocks and bonds, insist this is no bubble: The market is healthy, demand is growing and supply is limited....But the rich are eagerly parting with their money for art for a variety of personal and financial reasons. As a rising asset in a low-interest rate world, it’s viewed as a potential hedge against future financial storms. After all, demand remained relatively stable in the aftermath of the Great Meltdown. Also, owning a famous piece of art offers a heck of a lot more prestige than buying another commercial property. And it’s a lot cheaper than trying to compete with the Russian oligarchs (who are also big art buyers) for sports franchises.
alternative_investments  art  art_finance  bubbles  collectors  auctions  high_net_worth  contemporary_art  prestige  hedges  hedging  low-interest  art_market 
november 2013 by jerryking
Endowments: Ivory-towering infernos
Dec 11th 2008 | The Economist |From the print edition.

As Mr Swensen explains in his influential book, “Pioneering Portfolio Management: An Unconventional Approach to Institutional Investment”, which was published in 2000, the “permanent” endowments of universities (and of some charitable foundations) meant that they could be the ultimate long-term investors, able to ride out market downturns and liquidity droughts.

By investing heavily in illiquid assets, rather than the publicly traded shares and bonds preferred by shorter-term investors, an institution with an unlimited time horizon would earn a substantial illiquidity premium.
Yale  Harvard  endowments  Colleges_&_Universities  books  illiquidity  alternative_investments  private_equity  institutional_investors  long-term 
february 2013 by jerryking
Current Thinking on Hedge Funds: Are They Worth It?
Amid a growing list of disasters, many are increasingly questioning the claims of hedge funds to offer absolute returns. On the other hand, new studies seem to support the performance claims of hedge funds. Read more →
Alternative_Investments  Portfolio_Management  Risk_Management  hedge_funds  roundups  from google
december 2012 by ntnien
Ego, envy and the Ivy portfolios
In the textbooks investing is a very rational process. Strategies are analyzed, portfolios are optimized and returns are positively related to risk. However in the real world there is the sticky issue that all along the way individual human beings are involved. Unfortunately those human beings are driven by any number of impulses. Two articles today highlight the way in which our desire to impress and invest like the best get in the way of good decision making. The first quote is from Eric Falkenstein at Falkenblog. He writes:

It’s interesting to note that in games there’s a profound dichotomy between the optimal tactics for beginners and experts. For example, Simon Ramo notes that among the very best tennis players, to win you need good winning shots; to be a good average player, you need to merely lower your failure rate. In expert tennis, 80% of the points are won, while in amateur tennis, 80% are lost. The same is true for wrestling, chess, and investing: beginners should focus on avoiding mistakes, experts on making great moves.

Yet if the distinguishing characteristic of an expert investor is whether they are being aggressive, then any aspiring expert is forced to be aggressive because this signals to others that he truly is an expert, and finance is all about getting other people to give you money to manage. Thus it should come as no surprise that if you give people advise to invest is simple index funds or to focus on low volatility stocks because you can do little damage, and save a couple percent a year, far too many will dismiss this advice.

Now contrast with the actions of a slew of university endowment officials who followed the lead of the Harvards and Yales of the world into alternative asset classes but did not end up generating the returns the Ivys were able to. James Stewart at NYTimes has the following quote:

“I feel that there was endowment envy, or maybe emulation is a better word,” Francis M. Kinniry Jr., a principal in Vanguard’s Investment Strategy Group, told me this week. “Everybody wanted to look like the Yales and Harvards of the world. But they were early. They were doing these techniques in the mid-1990s and late 1990s when equities looked overvalued, and alternative strategies could capture market imperfections. That’s no longer true. Those universities were forward-looking and deserve a lot of credit. But emulating that process three, five or seven years later is very problematic.”

Now many of these funds are stuck with mediocre (or worse) managers who are charging high fees and generating returns far outpaced by the equity and bond markets.  The bottom line is that investors, both amateur and professional, are acting, often unconsciously, in a manner that first and foremost feeds their ego rather than their bottom line. Simple strategies, consistently applied have both the weight of history on their side and above all help remove the ego of managers from the process.
Alternative_Investments  Behavioral_Finance  from google
october 2012 by takshimada
Forget Stocks—Chinese Turn Bullish On Booze and Caterpillar Fungus - WSJ.com
JANUARY 30, 2012 |WSJ | By DINNY MCMAHON.

Forget Stocks—Chinese Turn Bullish on Booze and Caterpillar Fungus
Investors Chase Returns in Strange Places; A Wild Ride in 'Roaring Yellow River'...With Chinese stocks falling, real-estate markets flat and bank deposits offering measly returns, Chinese investors have been looking for help in strange places. Besides traditional medicinal products, they are plowing money into art-based stock markets, homegrown liquors, mahogany furniture and jade, among other decidedly non-Western asset classes....The problem for Chinese investors is that returns have evaporated from more traditional markets. Real estate was once China's favorite investment, but government efforts to contain price increases and keep housing affordable have led to price stagnation and even declines in some cities. China's major stock exchange in Shanghai is down almost 20% since the beginning of 2011. Bank deposit rates are lower than the pace of inflation, meaning savers effectively pay banks for the privilege of handling their money.

"There really are very few investment channels," says Ren Jun, a 30-year-old media entrepreneur with investments in contemporary art, antiques, gold and silver. "That's why I'm kind of forcing myself to be brave in trying new options."
China  investing  investors  personal_finance  financial_planning  asset_classes  diversification  art  collectibles  commodities  alternative_investments  antiques  furniture  collectors 
january 2012 by jerryking

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