Real Assets Adviser

February 1, 2018: Vol. 5, Number 2

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From the Current Issue

The call of stewardship: Richard Todd, CEO of Innovest Portfolio Solutions, on how attrition-based hiring and his membership in Legatus rocked his organization’s world

Kristy LeGrande, a managing director from Cambridge Associates, came through the door at Innovest Portfolio Solutions one day during 2016 looking for a lifestyle change — one that, among other things, did not require such an aggressive travel schedule. Innovest had no positions available, but LeGrande’s personal and professional credentials were outstanding, so the firm hired her anyway to occupy a position that did not exist. During 2017, history somewhat repeated itself when Innovest client Katherine Sauer, a former economics professor turned human resource executive at the University of Colorado, expressed interest in coming to work for the investment house.

Sign of the times: Micro-hospitals expected to gain popularity

As baby boomers age — 10,000 Americans will turn 65 every day for the next 20 years — the total demand for inpatient care will witness enormous growth. With the number of mental health patients on the rise, micro-hospitals are steadily evolving into consumer-friendly environments, taking their cue from the hospitality industry.

A review of how nontraded investment vehicles performed during 2017

The changing regulatory landscape and continued bull markets in the commercial real estate property and debt markets have driven some significant shifts in the nontraded alternative investments industry over the past few years. Uncertainty around the U.S. Department of Labor’s Fiduciary Duty Rule and Financial Industry Regulatory Authority (FINRA) Regulatory Notice 15-02 caused the nontraded REIT industry to reassess fee structures and introduce greater transparency — changes intended to benefit investors and create a more level playing field.

How to invest in emerging and frontier markets

The power of an economy is largely rooted in its capacity for production, which is based on the presence of land, labor and capital. Emerging markets and frontier markets — developing countries that are still too small to be considered emerging markets — have the majority of the world’s land and labor, but only share a fraction of the capital that could serve as the foundation for expansive growth. These markets continue to evolve from net exporters of raw goods to export and domestic consumption of finished products, a transition that is continually accelerating. While fundamentals, growth and transparency are increasing, developing market investment suffers from two main issues that have little to do with the markets themselves: investor emotion and susceptibility to “headline risk.”

Big things from Big Oil — maybe

The Energy Select Sector SPDR, the largest equity-based energy exchange-traded fund, ended 2017 down about 7.5 percent, making it the worst performer among the sector SPDR ETFs. However, XLE was up almost 4.5 percent in the fourth quarter, and some analysts are expecting 2018 will bring a rebound for major oil stocks.

Roundtable: What private wealth industry leaders are reading — and why

John Coleman recently wrote on the Harvard Business Review website that one of his favorite regular activities is participating in a book club called Six Pillars, hosted by a friend named Stan. Stan initiated the group several years ago to convene friends, diversify his own reading habits and make new connections. Six Pillars is so named because each year Coleman and his cohorts read six books in six key disciplines. The group meets every two months, Stan hosts and cooks dinner, and for two hours the group of 10 to 12 people discusses the book they have read.

Rich, richer, richest: Millionaires are rapidly becoming a dime a dozen

Thirty-five years ago at a residential real estate awards event in Sedona, Ariz., the man declared the city’s Realtor of the Year took the podium, shared all the requisite thanks and expressions of humility, and then spoke to his financial success thusly: “It’s true that money can’t buy happiness, but it sure makes misery more tolerable.”

The outlook for public REITs: What sectors will score during 2018 in a rising interest-rate environment?

Investors cannot be blamed for having misgivings about the value REIT shares might bring to their portfolios heading into 2018 — particularly with so much chatter about an imminent correction in real estate prices — given REIT stocks underperformed the Dow and the S&P 500 by 23 percent and 17 percent, respectively, during 2017. Let’s look at the different REIT sectors to form some overarching opinions.

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