December 1, 2014: Vol. 1, Number 3

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From the Current Issue

Team Approach: Adviser Melissa Joy is part of a growing trend toward multigenerational ensembles tackling wealth management.

Founded in 1985 and based in Southfield, Mich., the Center for Financial Planning (CFP) manages about $880 million in assets, working with more than 700 families. Three of the original founders — Dan Boyce, Marilyn Gunther and Estelle Wade — thought they could get more value and power from their business if they collaborated. That led to the fateful decision to build a business that is more of an ensemble enterprise than just individual siloed entities.

Six Sides: For 2015, real assets strategies will continue to play a key role in advisers' portfolio construction. Here are six views on what's ahead.

Advisers say real assets will continue to play an important role next year in mitigating risk through diversification, along with enhancing returns in a low-yield environment. Many advisers expect interest rates and inflation to inch up in 2015 and are looking to real assets to hedge portfolios. Here’s how a sampling of advisers are currently investing in real assets and how they plan to do things differently, or not, next year.

Joining the Crowd

Real estate crowdfunding has mushroomed since September 2013, the effective date for Title II rules created under the Jumpstart Our Business Startups (JOBS) Act of 2012. Title II changed crowdfunding rules by allowing private companies to advertise investment opportunities to any accredited investors. Crowdfunding raised about $40 million for real estate deals in the first six months of 2014.

Building Momentum

Despite the huge needs, deal flow for so-called P3 infrastructure projects has only slowly and incrementally increased in the past few years. However, 2014 has become the year that the federal government has dramatically stepped up its efforts to get public and private sides together on P3 infrastructure deals.

Catching Some Rays

The rationale for investing in solar energy generally includes at least three common tenets: 1) Clean solar promotes energy security, public health and a cleaner, safer environment; 2) Solar energy offers a long-term solution to the world’s energy needs, with zero pollution, free fuel and near-zero operational risk; and 3) Solar energy holds the promise of a distributed, as opposed to centrally generated, electricity source.

Look Before Leaping into the Great Tech Conundrum

This December issue of Real Assets Adviser, our third on the trot coming to you every month, attempts to tackle a variety of topics that are relevant to investing trends in the real assets space, but one in particular is proving to be more divisive and yet potentially game changing — crowdfunding.

Accessing Real Returns from Real Assets

Real assets find favor based on their diversification potential; historic correlation with mainstream assets and with each other has been low. Overall, their track record in terms of generating inflation-adjusted returns is also impressive. However, especially in today’s low inflation environment, investors may need to exhibit considerable patience in order to benefit. In addition, the global markets for real assets are opening up and developing in ways that should broaden their appeal further.

Crowdfunding's Status: Shiny New Vehicle?

Without a doubt, individual real asset investors will be hearing from crowdfunding promoters in 2015, if they have not already. As someone who is an optimist by temperament, but who has acquired some skepticism by analytical training and as a witness to history, I believe that there are a number of economic questions that should be asked in examining crowdfunding “opportunities."

Optimizing a PE Real Assets Program

A private equity investment program in real assets can help investors diversify their portfolios, generate yield, provide inflation protection and offer the opportunity to earn above-average returns. But investing in real assets is a significant undertaking. To meet their investment objectives, investors must construct and manage high-quality portfolios, yet the risk of picking bad investments is significant.