Real Assets Adviser

April 1, 2019: Vol. 6, Number 4

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From the Current Issue

Buying in a down market: While Wall Street shed personnel during the financial crisis, Fielding Miller brought aboard the best of the castaways — and he’s poised to do it again

Fielding Miller, by his own admission, is not a skilled manager of people, which is why he chooses to have as few people as possible report directly to him. It was four “direct reports” at last count. He was told 15 years ago by a friend (who now sits on his board of directors), “You are never going to build a great company until you are the dumbest guy in the room.”

Beyond the opportunity zone hype

The congressional intent and hype surrounding the income tax benefits of qualified opportunity-zone funds (QOFs) is well known within the nontraded investment-program universe, and for good reason. The underlying law was intended to motivate taxpayers holding $3.8 trillion in unrealized capital gains to redeploy their resources in several neglected areas of the United States in an effort to create jobs and businesses, redevelop properties, and stimulate economic growth. To accomplish the aforementioned purpose, Congress adopted Internal Revenue Code Section 1400Z, a close cousin of the code’s like-kind exchange provisions.

Emerging trends in infrastructure: The advance of data and technology is presenting massive opportunities for infrastructure owners, operators, developers and investors

This will be a year of data-driven enlightenment for the infrastructure sector. It is the year where data and analytics matures in the sector; it is the year where evidence-based decision-making starts to become commonplace; it is the year where all organizations begin to uncover new insights that lead to new opportunities and — ultimately — important choices.

Data surge: Asia Pacific to power the largest expansion of data centers globally

Data center investments will continue to grow in Asia Pacific, with investor interest rising in the emerging markets of China, India and Indonesia, according to JLL. With a growing demand for data storage, many companies are looking to rent a share of facilities, rather than own a center. This demand means that Asia Pacific revenue for shared or colocation data centers is expected to overtake the United States, rising to 40 percent of global share by 2020.

The long-haul question for Boeing: Also, missing crypto, threats to RIAs, and global meat eating

BOEING AND ITS FUTURE: One must assume that an aerospace giant such as Boeing will, in time, overcome the damage wrought by its new and problem-plagued 737 MAX airliner. The longer-term question is whether Boeing can keep up with competitors, whether that be Airbus or aviation players in Brazil, Canada and China. The surprising answer that came from Yale alum Bertrand-Marc Allen, who is also president of Boeing International, was this: “A few years ago, it was very easy for everybody in the company to look to our European airplane competitor and our largest U.S defense competitor and see that as our competition. Today, the Google, Apple, Facebook and Amazons of the world are our competitors because they’re entering into disruptive mobility. They are entering into performance-based logistics and machine learning. Those will disrupt supply chains and the management of inventories which are things that we do.”

Space-based solar: China aims to be first to launch orbiting solar farm capable of beaming electricity to earth-based power grids

China has announced plans to become the first nation to create a space-based solar energy farm that beams power to receiving stations on earth. Not only does the plan allow the space-based solar station to avoid cloud cover and other forms of inclement weather, allowing it to collect the sun’s ray 24 hours per day, 365 days a year, it also gathers sunlight that is six-times as intense on earth-based solar farms.

An unobstructed view: U.S. economy to continue supporting real estate market

The U.S. economy will continue to support demand for real estate in 2019, reports UBS in its U.S. Real Estate Outlook 2019 report. Even if the pace of growth in real GDP is a little slower than in 2018, the momentum is positive and the labor market is strong. Additional findings from the report include:

Come together, right now: PPP infrastructure investment holds promise for a better world

Wherever you look around the world, the clamor for increased spending on critical infrastructure has reached an inflection point. In developed markets, aging infrastructures are in need of repair, while many emerging nations and governments are beginning to recognize repairing and constructing infrastructure will help support their pace of economic growth. Changing demographics are also spurring governments to act. The increase in both younger and older people throughout the globe means different types of infrastructure, such as schools and hospitals, are needed for local populations to thrive.

Adding alternatives to the retirement mix: The formula for making target-date funds even better

As employers have moved away from the simplicity and security of defined benefit pension plans, employees have taken on more responsibility for retirement through defined contribution programs, like 401(k) plans. With more workers taking a bigger role in their own financial futures, investment managers have sought to make the complicated decisions about asset allocation and risk management a bit simpler.

Gold keeps staking its claim: 10 fundamentals supporting a portfolio allocation to the yellow metal in 2019

During 2018, we started to sound a bit like a broken record. We felt the Fed’s dual policy agenda of simultaneous rate hikes and balance-sheet reduction was too aggressive in the context of a global economy bloated with debt and addled far too long by salves of quantitative easing and zero-interest-rate policies. We even questioned whether the Keynesian academics at the Fed fully appreciated the direct and measurable impacts of quantitative tightening on global money supply. All the way through December’s unanimous decision by the Federal Open Market Committee (FOMC) to hike fed funds for the fourth time in 2018, our concerns gained very little traction in consensus circles.

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