Real Assets Adviser

August 1, 2017: Vol. 4, Number 8

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From the Current Issue

The Tiedemann Effect: When a family and its organizations stand the test of time

It is one of the most beautiful compensations of life that no man can sincerely try to help another without helping himself. It is doubtful those exact words, the construct of Ralph Waldo Emerson, were drifting through Mary Tiedemann’s mind during a fateful October 2005 lunch with her son, though the sentiments behind Emerson’s words were certainly present. So were notions that son Michael Tiedemann, CEO of Tiedemann Wealth Management, had been blessed with some enviable advantages in life. After all, Mary Tiedemann’s husband, Michael’s father, Carl Tiedemann was a partner at Donaldson, Lufkin & Jenrette, where he was president during the 1970s and helped take the firm public. He also founded Tiedemann Wealth Management, as well as a hedge fund in 1980 that is still operating today, 37 years later.

Core Real Estate Investing for the Long Run

In 2002, Daniel Kahneman won the Nobel Prize in economics for his work in a subfield called “behavioral finance.” This field, which Kahneman pioneered (along with Amos Tversky and Richard Thaler) in the late 1970s, attempts to explain why economic decision making often differs from what the neo-classical theory suggests “rational actors” should do.

Mostly Uninsured and Driverless: Autonomous vehicle technology could shrink auto insurance sector by 71% by 2050

Autonomous vehicle technology could shrink the auto insurance sector by 71 percent or $137 billion by 2050, according to new research by KPMG. The big accounting and consulting firm extended its actuarial model by 10 years to 2050, finding that the pace of change has accelerated, pushing projections that illustrate greater declines to the insurance sector than KPMG’s previous 2015 study. It also shows an increasing need for new types of insurance products.

How to Invest in Timber

Recent news on trade wars over Canadian timber has put back into the limelight this relatively sleepy asset. As this magazine has noted in the past, timber is a “classic” real asset worthy of consideration in portfolio construction. Again, its “classic” status is due to both the asset’s characteristics and its general longevity as a real asset, which has sped its academic acceptance as a part of modern portfolio theory. The characteristics of the asset are well known: a hedge on inflation, a safe haven, long dated, and generally relatively uncorrelated with equity markets. In turn, timber has been around for a long time and as such there is strong academic research on its place in a portfolio.

Crowdfunding: It is not just for real estate anymore

Earlier this year, Jack Jacobs unveiled GridShare, a crowdfunding platform solely targeting renewable energy projects. Jacobs, the company’s cofounder, asserts that GridShare is the only organization doing renewable energy, equity-based crowdfunding.

Big Impact: Why impact investing is gaining traction among global investors

Impact investing — the choice to make investments with a positive social impact — is gaining momentum among institutional investors. According to a 2016 Global Impact Investment Survey, assets under management in this sector increased from $25.4 billion in 2013 to $35.5 billion in 2015, indicating substantial growth and strong investor appetite for social impact investments.

There’s a Bad Moon Rising Over Retail: Deal flow is falling at a faster rate than any other major real estate asset class

Growing concern about the long-term prospects for in-store retail is creating a slowdown in the sale of shopping centers. Retail property sales in the second quarter of 2017 fell 45.9 percent year-over-year, and first-half sales are 26 percent below 2016, according to preliminary data from Real Capital Analytics. Sales declined in several segments of retail, led by lifestyle/power centers, single-tenant and drug stores.

The Royal Underground: A question and answer session with Angus Baker of Montego Capital Partners about using the 1031 exchange to access oil, gas and mineral rights

Among real estate owners and investors, section 1031 of the IRS tax code is a well known and often used way of exchanging one asset for another, while forestalling any tax consequences. Less well known and far less common is the use of the 1031 exchange to get involved in subsurface property rights that give the investor access to monthly royalties from the production and sales of oil, natural gas and mineral rights. Angus Baker of Montego Capital Partners offers his experience in 1031 oil and gas exchanges in this Q&A excerpted from a podcast interview he recently did with Real Assets Adviser editor Mike Consol. Listen to the podcast at this link: http://bit.ly/2ufaWRi

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