Real Assets Adviser

September 1, 2018: Vol. 5, Number 8

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From the Current Issue

A primer on opportunity zones: Understanding the basics of the nation’s new economic development program

Capital gains tax has been generating a lot of buzz recently, and not only because the current administration has asked the Treasury Department to look into new ways to reduce it. One of the hidden gems of the recent tax-reform legislation is opportunity zones (generally referred to as o-zones) and the ability to defer, reduce and eliminate realized and future capital gain taxes as a result of certain investments.

Willie Sutton would be eating his heart out: If around today, the notorious bank robber would find a dizzying array of money-rich targets, thanks to a proliferation of debt funds

Back in 2012, Mesa West Capital was one of the country’s top five nonbank lenders. Five years later, it was acquired by Morgan Stanley Investment Management. Berkshire Capital Securities ushered the deal through to completion. “This is an example where an independent commercial real estate debt manager partnered with a larger institution to secure global clients,” observes Ted Gooden, a Berkshire Capital managing director. It also brought Morgan Stanley into the nonbank lending business.

Blockchain meets trading platform: Moving real assets from the illiquid to liquid column

There was plenty of reason for excitement when the JOBS Act was passed in 2012, opening the door for investors previously considered “non-accredited” to participate in private placements. The legislation was aimed at providing more startup capital to new businesses and creating millions of jobs. Naturally, the fertile imaginations of product sponsors and financial advisers were buzzing with notions of a whole new class of Americans plowing money into investments of the alternative, hard asset and illiquid varieties.

Roundtable: What will it take to attract the next generation of advisers to the private wealth business?

The private wealth business is facing a persistent and decades-old personnel crisis. The number of financial advisers continues to dwindle as RIAs struggle to attract young talent to the business. U.S. financial advisers number roughly 285,000, down from about 500,000 in the mid-1990s. The average age of a financial adviser is 51, and 38 percent of advisers are expecting to retire in the next 10 years, according to a report from Cerulli Associates. Only 10 percent of financial advisers are less than 35 years of age.

The market remains strong for investing in real assets: Real estate is among the hard assets that performed well globally

Despite headwinds such as geopolitical uncertainty — driven, in large part, by escalating tensions over trade policies — equity real asset classes posted positive results and outperformed broader global equity markets, according to Brookfield’s second quarter 2018 real assets performance report. Real asset debt declined with the overall fixed-income market and outperformed more broad-based fixed-income indexes.

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