Real Assets Adviser

February 1, 2025: Vol. 12, Number 2

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From the Current Issue

The case for real estate: Championing allocations to property in 2025

Up until around the middle of 2024, a certain thesis within real estate investment circles held sway. It went something like this: Once the era defined by inflated valuations and investment strategies reliant on cheap capital and liquidity blew up in 2022, investment committees took a large step back from real estate allocations. Having already been spooked by the seismic shock that lockdowns had delivered to office markets, they were now dealing with financing costs that were making deals prohibitive, while fixed-income investments of every stripe were ...

Tax Update: How tax cuts mislead equity investors

The prospect of corporate tax cuts put a brief charge into the U.S. financial markets following the November election of Donald Trump as U.S. president. This short-lived “Trump trade” saw the Dow Jones Industrial Average notch its biggest one-day gain in two years, while the S&P 500 and tech-heavy Nasdaq indexes also climbed to record highs. The bump at least in part reflected investors’ expectations for ...

Talking Points: Quotations from people in the news

Steve Klinsky, CEO of New Mountain Capital: “The key to private equity is there’s still plenty of money — it’s a $5 trillion asset class. The real message about private equity is, are you a value-added institution or not. And the key is to be a firm that can prove to the LP’s, who are very sophisticated, you can actually build businesses, not just lever an index.”

Research Roundup: February 2025

Principal Asset Management is out with a new report titled, Front runners: The property types more likely to benefit from rising AI adoption. It is the first in a series about AI and real estate.

Regulation Update: Clues to the congressional agenda

Rep. French Hill (R-AR) was recently elected to be the chair of the House Financial Services Committee, and that’s likely to be positive for the payments industry. Rep. Hill spoke at the Institute for Portfolio Alternatives (IPA’s) annual conference in 2019, and while we need to be careful about making predictions based on anything from the pre-pandemic era, his talk does offer some clues as what we might see going forward.

Profile: Shane Clifford, partner and head of global wealth at Carlyle

Shane Clifford has a story to tell you. It begins during his years at Permal Group, the global investment management firm focused on hedge and private equity funds, where he learned this time-honored lesson: People are far more likely to remember stories than a recitation of hard, sterile facts. It was then Clifford started telling stories rather than using a dizzying blizzard of numbers and other data to promote his organization’s products and capabilities. Fortunately for Clifford, he was ...

Debunking three common misconceptions about passive investing

Over the past decade, passive investment strategies have seen enormous growth in assets under management — and with good reason. Many passive exchange-traded funds (ETFs) and index-tracking mutual funds offer low-cost, tax-efficient opportunities to access broad market returns by mirroring major market indices, such as the S&P 500 or Nasdaq 100.

Electric avenue: Ten EV stories that defined 2024

2024 was a big year for electric vehicles. Sales are rising, battery prices are dropping, and the sales forecasts are rising, thanks to huge sales in China, South Korea and North America. On the flip side, legacy automakers are backing away from their EV targets, and the U.S. election is sending a president with a litany of complaints about clean cars back to the White House. With 2024 behind us ...

The energy-investing future: Q&A with David Grumhaus, CIO at Duff & Phelps

Evaluating energy investments versus other real assets is difficult because performance has varied significantly by subsector. The most well-known energy investments — oil itself, traditional big oil stocks, and oilfield services stocks — finished down on the year and underperformed both the broader market and other real asset categories such as listed real estate and listed infrastructure. However, energy investments focused on natural gas, most notably midstream and natural gas producers, have ...

A whole new world: Don’t you dare close your eyes

For at least a few decades, we’ve been talking about how the cow that most of the investment managers out there have been milking (the defined benefit pension fund cow) has been getting skinnier and skinnier. When I entered the real estate investment business in 1979, the majority of pension fund capital was coming from ...

Data centers and sustainability

Sustainability is a key priority for most companies as they seek to mitigate climate change, manage risk, meet customer expectations and attract investors. Increasingly, companies are looking beyond their own operations to their providers’ sustainability practices. In the data center industry, the largest customers have made aggressive ...

Stellar ambitions: Investors line up for the riches of asteroid mining

The math is astounding: A 140-mile-wide metal-rich asteroid is estimated to have a commercial value of quadrillions of dollars, a total that exceeds the entire global economy. Investors like all those zeroes, as evidenced by space startups around the world having raised tens of millions of dollars to back the developing and testing of asteroid-mining technologies. Their ambition is to cull from those stellar bodies some rare and precious metals, including ...

Cities take on extreme heat

Rising temperatures have put heat firmly on the radar for U.S. cities, with heat waves that have become more frequent, more intense and more widespread over the past decade. 2024 was another record breaker for extreme temperatures. Phoenix experienced an unprecedented 113 consecutive days with temperatures reaching at least 100 degrees. Las Vegas set a new high with a scorching

Building a smarter future: Investors look to capitalize on digital Infrastructure 2.0

Artificial intelligence (AI) is being touted as a game-changer for just about everything it touches. For infrastructure, it has broad potential to increase productivity and efficiency, create value and better manage risks. At the same time, AI has unleashed Infrastructure 2.0 and a new era of investment opportunities related to the voracious demand for digital infrastructure. The breakout moment for AI came in late 2022 when ...

What is an AI agent? A computer scientist explains

Interacting with AI chatbots such as ChatGPT can be fun and sometimes useful, but the next level of everyday AI goes beyond answering questions: AI agents carry out tasks for you. Major technology companies, including OpenAI, Microsoft, Google and Salesforce, have recently released or announced plans to ...

Rising demand, a shortage of capacity and outdated facilities offer opportunities for investors

The future of cold storage appears bright, as increasing global demand for fresh and frozen food products places this asset class in an irreplaceable position on the global supply chain. Considering the industry’s need for modernizing and evolving alongside the increase for ecommerce as well as fresh food, there is a transformation under way for cold storage assets. This transformation is evolving through modernization and ...

Is impact investing hitting its target?

Investors can aim not only to make money but to benefit society while doing so. But few of those impact investors follow up on whether their strategy is having a positive impact, we found in a study published in the Journal of Business Ethics. After conducting 124 interviews with impact investors and an experiment with 435 participants, we found that, rather than evaluate impact risk directly, many impact investors presume ...

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