Real Assets Adviser

January 1, 2020: Vol. 7, Number 1

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From the Current Issue

Startups seeking to move nuclear fusion from the galaxy to the grid

“We are on the cusp of delivering a transformational energy source capable of sustaining the planet into the future,” says Michl Binderbauer. He is the chief executive officer of TAE Technologies and among a group of visionary innovators seeking to harness the power of the sun and stars right here on earth. It sounds like something straight out of a sci-fi novel or comic book, but TAE is one of about a dozen private companies around the world — including General Fusion and Commonwealth Fusion Systems — working to make fusion power a reality.

How fintech is picking apart traditional finance

Let’s consider some cold, hard numbers for starters. Some 45 percent of personal loans are now originating through fintechs, a figure that stood at about 5 percent just four years ago. Goldman Sachs estimates the worldwide fintech space to be worth $4.7 trillion, and there are more than 12,000 fintech startups worldwide. China-based Ant Financial, heralded to be the world’s largest fintech company, is worth more than $60 billion and employs over 10,000 people.

Barriers to investing in PE and VC are too high

The rich are getting richer and the poor are getting poorer, and for that we can largely blame policies of envy that increasingly restrict investors’ access to wealth-building instruments.

Distressed debt funds are sorely in need of some bad economic news

Financial distress can be a profitable alternative investment, provided you have the cash to rescue otherwise viable companies from a financial pinch or even circumstantial bankruptcy. Sponsors of distress debt funds have been stockpiling cash in anticipation of the next economic downturn and are now armed to the teeth with the financial resources to profit by aiding of troubled companies struggling to pay their obligations. What they could not have anticipated is that the United States was in the midst of its longest economic recovery and expansion in the country’s history, and now it is the holders of distressed debt funds in need of relief.

No accounting for success: Life as an accountant was not his calling, but Eric Kittner managed to find a path to the top of $20 billion Moneta

Eric Kittner had a front-row seat for one of the biggest corporate calamities in U.S. business history. At the time he was a staff accountant for Arthur Andersen, the $8 billion accounting and consulting giant, when one of its most high-profile clients, Enron Corp., went into full collapse, filing for the largest bankruptcy in U.S. history at the time. Enron shareholders filed a $40 billion lawsuit against the company after Enron’s stock prices plunged from a high of $90.75 per share in mid-2000 to less than $1 by the end of November 2001.

More fanfare for the common investor, please: Investing in tax-advantaged private equity

Understanding the complexities of private equity and how value is created in such investments are the first steps in investing in an asset class that is gradually becoming more accessible to individual investors. Private equity is often ruled out of a portfolio, but it shouldn’t be. As long as investors understand the risks and have no short-term liquidity needs, there are several ways to participate in a private equity investment.

Recession-proofing the portfolio: Which real asset classes are poised to best withstand a downturn?

The recovery from the 2008 global financial crisis is the longest in the economic annals, leading pundits to ponder whether 2020 can stay friend to the trend. Certainly there are threats to prosperity, from geopolitical tensions to trade tussles to the possibility that central banks have run out of ammo. With interest rates already negative in Europe and Japan, and low in the United States, the usual central bank fix for recessions, that of even lower interest rates, might lack effectiveness.

Seven red flags for oil investors

If you want to better understand the potential hazards facing oil investing, let’s spend a little time reviewing the years-delayed IPO planned by Aramco, the Saudi state-owned oil giant. Though the Aramco IPO is finally appearing imminent and is expected to be the largest-ever initial public offering, it has been riddled with problems tied to the oil business’s vulnerability.

5 Questions: Private aviation for flyers and investors

Private jet travel is booming, and not just because it makes a heady status symbol. It also offers a host of advantages and investment opportunities. Skift, a hospitality news service, asserts that private aviation is shaking up traditional luxury markets — adding private aviation services to expenditure like those on second homes and yachts. The research firm Mordor Intelligence reports the market for business jets is anticipated to reach $19.95 billion in 2024. Michael Fisher, COO of the Greensboro, N.C. office for Diversified Trust, has been closely following the private aviation business.

Philanthropic giving among UHNW individuals exceeds $150b

Ultra-high-net-worth (UHNW) individuals — those with a net worth of at least $30 million — gave a total of $153 billion toward philanthropic endeavors in 2018 — roughly equivalent to all U.S. federal government spending on healthcare, education and energy expected for 2019, according to The New Normal: Trends in UHNW Giving 2019, the fourth edition of Wealth-X’s report focused on philanthropic giving by the world’s wealthiest individuals.

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