Real Assets Adviser

December 1, 2024: Vol. 11, Number 11

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From the Current Issue

As good as it gets? How investors can get what they want from managers

Intuitively, we tend to assume an investment manager who consistently has outperformed the benchmark is likely to continue to outperform the benchmark. And, conversely, we tend to assume that an investment manager who consistently has underperformed the benchmark is likely to continue to underperform. We also tend to assume that a manager with its own capital at risk is more likely to have its interests aligned with the interests of its investor clients.

Infrastructure boondoggles: Failed projects undermine civic trust

With global infrastructure needs mounting but budgets strained, the need to avoid undertaking boondoggle projects is greater than ever. Throughout the developed world, aging infrastructure needs replacement or upgrades, even as whole new industries are slated to be built out, such as power-hungry data centers, EV charging facilities, solar and ...

From niches come riches: Investors turn to new property types

After some brutal passages in the 2000s, many institutional investors are seeking diversification and returns in “niche” property sectors. And for good reason. In recent decades, entire core sectors of the real estate universe have shown an unnerving propensity to deliver gut punches to investors, including most prominently and recently U.S. office market properties. Indeed, none of the major property sectors have ...

A new curriculum for student housing

Why has student housing become the darling of real estate? With the global student population projected to exceed 594 million by 2040 — more than doubling due to an expanding middle class and increased higher education enrollment — the demand for quality accommodations has never been higher. Today’s students are reshaping the housing market, prioritizing environments that promote mental and physical well-being, a shift that has ...

Tax Update: Maximizing bonus depreciation

Since 2017, bonus depreciation has been a powerful tool for commercial real estate (CRE) investors looking to offset significant capital gains or passive income. However, this benefit is set to gradually phase out, creating a limited window of opportunity. For investors focused on tax deferral strategies, bonus depreciation offers ...

Forecast 2025: Real assets offer solid prospects for the new year

For 2025, the short story is that the world’s major global central banks, including the Federal Reserve, will extend monetary easing and migrate to lower interest rates. That is always balm for investors of all stripes, including those committed to real assets. In the United States, the long-predicted economic recession in 2024 ...

The reincarnation of retail: Brick-and-mortar retailers find new strategies to compete

Looking back at headlines from 2019-2021, there are plenty of articles proclaiming the downfall of in-store retail. Doomed to disappear, supposedly, were a mass of brick-and-mortar locations. Ecommerce’s rocketing toward making up 17 percent of all retail sales during the pandemic was a signal to some that the retail apocalypse was here. Three years later ...

Regulation Update: Navigating AI regulations in financial services

The increasing availability of artificial intelligence presents both opportunities and challenges for financial services firms. As the technology continues to advance, so does the need for a thoughtful approach to regulatory compliance. While AI has the potential to revolutionize client interactions and enhance operational efficiency, its implementation is not without risk — especially in the absence of ...

Profile: Steve Brennan, head of private wealth solutions at Hamilton Lane

Steve Brennan sensed there were changes afoot in the investing business way back in the mid-1990s during his days working in custody services at the Bank of New York. He observed that institutional investors were making significant commitments to private equity while also expanding their interest in private assets in general, including private credit, private infrastructure and private real estate. That observation was confirmed when ...

Taming the heat: To make nuclear fusion scientists need to design heat-resilient materials

Fusion energy has the potential to be an effective clean energy source, as its reactions generate incredibly large amounts of energy. Fusion reactors aim to reproduce on Earth what happens in the core of the Sun, where very light elements merge and release energy in the process. Engineers can harness this energy to heat water and generate electricity through a steam turbine, but the path to fusion isn’t completely straightforward.

Volatile markets: The future is unknowable, which is why financial advisers are essential

In my conversations with advisers, I often hear how much they dread market volatility. The idea of political turmoil, a looming recession or (even worse) an extended bear market quickly becomes the anxiety-driven theme of the discussion. These events are painful, and it is a good thing they don’t happen very often. But few advisers consider that without the fundamental uncertainty of the markets, they ...

Trump’s victory could signal the start of flourishing era for digital assets

Donald Trump became the first openly pro-crypto candidate to be elected president of the United States, joining 266 pro-crypto candidates in the House of Representatives and 18 pro-crypto candidates in the Senate. Come January, the number of pro-crypto members on both sides of the aisle in Congress will surpass the number of anti-crypto members.

Powering up: Nuclear power could be a game changer for data centers in the AI era

If you’ve been paying attention to the markets, especially in recent months, you have likely noticed something interesting happening with nuclear energy stocks. Shares of companies involved in uranium and nuclear, such as NuScale Power, Oklo, Cameco and Centrus Energy, have been surging, driven in large part by groundbreaking nuclear energy deals with major tech firms.

The next wave of ecommerce innovation

Deeply interconnected search and checkout functions on ecommerce platforms have enabled the discovery of products and services. Fintech-as-a-service has enhanced tight integration by improving the security of transactions and simplifying payments. Together they have set the stage for the next wave of innovation in online shopping.

Talking Points: Quotations from people in the news

David Hoffmann, a Florida billionaire investor, on why he purchased more than 5 percent of Lee Enterprises, one of the largest U.S. newspaper companies: “These local newspapers are really important to these communities. With the digital age and technology, it’s changing rapidly. But I think there’s room for both, and we’d like to be a part of that.”

Research Roundup: December 2024

The effects of the Federal Reserve’s inaugural interest-rate cut and anticipated future cuts have begun to materialize, but the benefit to the credit markets will vary meaningfully by sector and issuer. So says a new paper published on the subject by Guggenheim.

Out with the old: Developers convert industrial and retail into self-storage

Self-storage construction has surged in recent decades, but not all self-storage space comes from new construction. In many cities across the country, land is in high demand and expensive, and stringent zoning laws can make it challenging for developers to construct facilities from the ground up. As a result, a growing number of self-storage developers are ...

Record investments are flowing into U.S. multifamily — and for good reason

In recent months, the investment market for residential real estate in the United States, particularly in the area of multifamily investments, has experienced positive traction, while commercial real estate has endured the opposite. Private equity giants are once again strategically investing in multifamily assets in the United States after a lengthy investment pause. Blackstone is a prime example, acquiring ...

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