Real Assets Adviser

December 1, 2018: Vol. 5, Number 11

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From the Current Issue

The 2019 outlook for real assets

Ask Rick Buoncore of MAI Capital Management to predict how the stock market will perform next year, and he will trot out a quote by one of his favorite thought leaders, renowned investor Howard Marks: “You can’t predict. You can prepare.”

Roundtable: If a person wins a $1.5 billion mega-millions lottery and becomes your client, how would you invest the money on that person’s behalf?

Tyler Glover, director of consulting services, private wealth management, William Blair Anytime an individual experiences a major liquidity event, whether it’s the sale of a business, a large inheritance or winning the lottery, there are financial and emotional elements involved. The big question becomes: What is the purpose of this capital and what is the potential impact it can have on lives, families and communities? We have active conversations with clients about their financial objectives, philanthropic strategy, generational wealth approach and capital deployment. Our recommended strategy is the culmination of efforts to ensure proper planning, education and risk management — not just from an investment standpoint, but also personal and cyber security.

Attitude matters: Global economic sentiment is declining

Wondering how business executives around the world are feeling about current economic conditions? In a nutshell, sentiment on the economy is declining, particularly in emerging markets, and more businesses are looking to the United States for opportunities, according to a McKinsey & Co.’s Economic Conditions Snapshot, September 2018, a McKinsey global survey.

Bringing the jackpot mentality to RIAs: What if private wealth lost its mind and bet on the gambling business?

If you want to get an investment professional’s heart to skip a beat, refer to the investment choices they make as “bets.” Advisers and money managers are fastidious about making clear they are absolutely, positively not gambling with people’s precious, hard-earned money. But why? Let’s think about this rationally. Nobody entrusts their investable assets with a wealth adviser without knowing there is some risk of some monetary loss, and virtually zero risk of losing the full sum of their investment. By contrast, there are millions of Americas who wager billions of dollars per year at casinos, online gambling sites, and legal and illegal sports-betting syndicates, all of whom know financial losses are virtually a given. H2 Gambling Capital, a market data firm, estimates that U.S. citizens lost $117 billion on gambling in 2016, and that results in an additional annual cost of $17 billion in gambling-associated problems such as crime, addiction and bankruptcy. Yes, addiction. Compulsive gambling is a form of addiction that becomes worse over time, according to the National Council on Problem Gambling.

Game night for investors: Why stand-alone stadiums are a thing of the past

The thriving neighborhood next to Atlanta’s SunTrust Park, dubbed The Battery, is reaping rewards for investors and the community alike. Since opening in March 2017, the ballpark and mixed-use development have brought in $19 million of tax revenue, according to a study by the Georgia Tech Center for Economic Development Research.

Digital disruption: Farm and food policy innovations for the technological age

The Brookings Institution originally published this article. Not a week goes by without news of digital disruption in traditional industries and sectors. We’ve already seen long-standing business models from taxis to hotels upended, and we’ve got to wonder where this will take the world’s oldest industry — agriculture. We urgently need to rethink public policy interventions to help countries navigate opportunities and challenges linked to digital advances in the food economy.

Power shift: Regulation and technology are shifting how industry, homes and transportation are powered

The world is undergoing a deep structural shift in how it powers industry, homes and transportation. Although this shift is vast — crossing both different types of energy and different parts of the supply chain — the main thrust is the shift from coal and nuclear energy to cleaner sources, notably natural gas and renewables. At the same time, the proliferation of electronics, including electric cars, is resulting in steady power demand growth even as economic and population growth decelerate.

Trade tensions: Tariff war places sharper spotlight on challenges facing farming sector

The U.S. Department of Agriculture announced in August it planned to distribute $4.7 billion to farmers as part of the initial wave of a $12 billion aid package. Farmers themselves seem less than thrilled with the bailout, with the prevailing sentiment that those dollars are flowing to larger agricultural conglomerates. Sen. Ben Sasse (R-Nebraska) may have summed up the general sentiment now swirling throughout many farming communities when he told CBS News that farmers and ranchers in his state don’t want more bailouts, but the ability to sell overseas.

Higher returns, please: Investors move toward core-plus, value-added strategies among closed-end infrastructure funds

Over the past decade, investors have sought higher returns, resulting in a move toward core-plus and value-added strategies among closed-end funds, and away from core strategies, according to the Infrastructure Investor Trends: 2018 Survey Results, an annual survey by Probitas Partners. On an annual basis, Probitas Partners surveys institutional investors globally to determine how their interests in and perspectives on infrastructure have developed.

The trifecta of investments: Amit Dogra, CEO of Third Seven Advisors, insists on providing interesting alternative investments that excite his advisers and clients with curb appeal

Amit Dogra wants to put investments back into everyday conversations. He is convinced people do not talk about stocks anymore because most are invested in funds containing thousands of stocks or other assets, and do not even know what the fund contains, killing any excitement or conversation on the topic. Too many portfolios are devoid of the direct private-equity investments in companies and alternative assets that excite investors and make the financial commitments they have worthy of cocktail party or golf course chatter. What’s more, investments in alternative and hard assets are a portfolio’s opportunity to generate alpha.

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