Real Assets Adviser

July 1, 2020: Vol. 7, Number 7

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From the Current Issue

5 Questions: Finding the light of day through smart-glass technology

We have long known the benefits of natural light in the workplace. Consider the survey by an HR advisory firm Future Workplace and published in the Harvard Business Review showing access to natural light is the number one attribute workers want in their office environment. Yet, millions of employees are deprived of natural light because the use of traditional window blinds and shades act as a blunt instrument for reducing glare and heat transfer.

The budget deficit, the national debt and commercial real estate

Concerns about the federal deficit, waning in recent years, have all but disappeared in the wake of the COVID-19 pandemic. The unprecedented shutdown of large segments of the U.S. economy prompted hasty passage of several trillion dollars of emergency aid, with more to come.

Do low oil prices represent a buying opportunity for investors?

What goes down must go up, would be the inverse lyrics of the famous Blood, Sweat & Tears song. Oil interests can only hope for such a reversal of fortune as petroleum prices recently scraped the bottom of the barrel. Investors must be wondering the same, and whether now is the time to invest in oil to enjoy the ride back to paydirt.

The dark side of 5G technology

There has never been a highly touted technology that didn’t come with unexpected ill-effects. Still, that hasn’t stopped tech-hounds from glorifying the possibilities of 5G even while they ignore the potential downsides and multiple risks.

Cash crops: How investors can play a role in regenerative agriculture

Across the planet, our food system has become focused on producing quantity over quality, which is the way humans have been farming since the Green Revolution. The problem: This system of farming has depleted more than 30 percent of our planet’s topsoil. But agriculture does not need to be exclusively an extraction process because there are regenerative agriculture practices that replenish the health of our soils.

Coal day in hell: Renewables on track to surpass coal as U.S. energy source during 2020

If you think the conversion from the old to new U.S. energy systems is taking an insufferably long time, consider the fate of coal. Ten years ago, coal dominated energy production, accounting for half of the nation’s electrical output. Today — despite a relaxed regulatory regimen aiming to revive coal plants — the United States is projected to generate more electricity this year using renewables than coal, something that has never happened before.

The infrastructure payoff: How one city made itself more attractive to private investors

The City of Champaign, Ill., (population 88,000), where I have worked as the planning and development director for the past 31 years, maintains a 10-year capital improvement plan and updates it annually to ensure we are addressing the highest priority infrastructure projects. This is a process that requires a considerable commitment of staff time, as well as energy and focus from our city council. This is an effort that the city is committed to because of the firm belief that investment in maintaining and expanding the city’s infrastructure is critical to the city’s success as a growing and developing community.

Roundtable: What is the most effective way for managers to successfully introduce their investment products to your RIA?

First and foremost, our firm seeks to develop long-term relationships with managers. It takes time to get to know us when introducing capabilities. While our manager search effort harnesses quant models, our selection process is mostly informed by personal field work, with our team averaging 400-plus manager meetings per year. The team doesn’t chase results and expects managers to clearly describe how a well-conceived, efficiently-executed investment process adds incremental value over time.

Profile: Colleen Affeldt, performance coach and managing director of RGT Wealth Advisors

It is American novelist William Faulkner who has long been quoted as saying: “The past is never dead. It’s not even past.” Indeed, the battle between the “past” and what is regarded as the “present” is a battle fought daily by Colleen Affeldt, managing director of Dallas-based RGT Wealth Advisors. Affeldt is not your typical RIA executive. She doesn’t pick investment products or construct portfolios. Her role is to move the professionals at her firm from the thought patterns of the past to a more self-aware mode of thinking that addresses issues of the present — all in the service of achieving optimal performance.

Rethinking alternative allocations: How performance fees may bolster active allocations in client portfolios

There are obvious hurdles when it comes to motivating investors to move from products they know well, into something different — especially when performance has been satisfactory. Managers, advisers and asset owners have not been terribly challenged during the past decade, and the alternative product space has done little to entice investment dollars in what’s been a highly competitive period. Recent volatility may certainly trigger questions about the status quo, but new fee structures and innovations may offer increased impetus for portfolio modifications.

Looking ahead: Pandemic-driven opportunities for real estate investors

As COVID-19 continues to ravage the U.S. economy, real estate investors are looking to potential opportunities as businesses continue to reopen. In this search, we can look to the global financial crisis for instructions on where to look for opportunities and what type of opportunities will be available. However, the COVID-19 impacts are different from the global financial crisis and these opportunities will evolve in an unprecedented manner.

Infrastructure fundraising starts 2020 where it left off in 2019

Infrastructure fundraising in first quarter 2020 nearly matched fourth quarter 2019, with 14 funds raising more than $39 billion, according to the FundTracker database compiled by Institutional Real Estate, Inc., Real Assets Adviser’s parent company. In fourth quarter 2019, eight funds raised more than $41 billion.

Three reasons to invest in renewable energy now

As the human tragedy of the COVID-19 pandemic worsens, global restrictions to stop the spread of the virus — including stay-at-home orders, business closures and travel prohibitions — may contribute to the worst economic downturn since the Great Depression. The virus has already made an indelible impact on the energy sector: Global energy use is predicted to fall 6 percent over the course of 2020; the renewable energy industry has not been spared.

History lessons for braving economic crises

While the full impact of the COVID-19 pandemic is unclear (and likely will be for some time), public crises inevitably have a dramatic impact on financial markets. A look at past crises makes that clear, with widespread economic disruption and uncertainty leading to nervous investors and plunging markets. So, while the current market disruption may be historic, the underlying dynamics of market volatility are extremely familiar.

AI and senior care: Applying technology to help solve the crisis among the aging

We are facing an aged care crisis. Every day another 11,000 Americans turn 65 and there are only enough aged-care beds for 17 percent of today’s aged population. For us to keep providing just this 17 percent of our aged population with beds we would need 1,870 additional new beds to be created daily. The result is many of our seniors are waiting five years to enter a senior care facility, many of whom will not survive that long. The solution is to keep our seniors independent and in their own homes for as long as possible to take pressure off the system, while also providing the kind of oversight and health benefits they need to remain safe in their environments. Senior care then becomes “high care” when seniors are no longer able to live independently.

Fund of funds come to private wealth — again

About a decade ago, pension plans and other institutional investors that wanted access to the rarified world of hedge or private equity funds often took an indirect route. Rather than picking funds themselves, they turned to funds of funds, which offer one-stop shopping when it comes to professional due diligence and portfolio management, as well as broad diversification across asset classes, investment styles, managers and more.

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