Alternative Assets
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Inhalt
Preface xi
Acknowledgements xv
1. What are Alternative Assets? 1
Illiquid 2
Unquoted 2
Non bonds or equities 3
Are alternative assets really "alternative"? 3
Thoughts on classification 6
Private assets 6
Commodity type assets 9
Volatility and valuation issues 10
Time horizons 12
Global Tactical Asset Allocation (GTAA) 13
An alternative way of accessing conventional assets? 15
What we will be considering 16
Summary 17
2. Investing in Alternative Assets 19
Why should we invest in alternative assets? 19
The traditional worldview 20
Risk (volatility) 20
Liquidity 22
Problems posed by the traditional world view so far as alternative assets are concerned 23
The tail wags the dog 23
The parallel universe of pension funds 24
Volatility as risk 25
Liquidity 27
How much liquidity do you really need? 28
The illiquidity premium 29
Problems with liquidity 30
The stock market goes supernova 31
Liquidity and volatility 31
Liquidity and correlation 32
Extending the efficient frontier 33
Correlation 35
Active and passive investing - beta and alpha 37
The rationale for alternative assets 40
Summary 41
3. Real estate 43
Real estate beta 45
Real estate exposure 46
Direct 47
Quoted 48
Quoted (1): property companies 48
Quoted (2): REITS 49
Quoted (3): ETFs 50
Unquoted (1): unlisted property funds 50
Unquoted (2): private real estate 53
Synthetic 57
Summary 61
4. Energy 63
Spot trading 64
Influences on pricing 65
Untapped reserves 65
The (US) strategic petroleum reserve 65
Production and growth in oil hungry economies 65
Weather 66
Political factors 66
Terrorism 67
The US dollar 67
Accessing oil as an investment 69
Investing in the shares of oil companies 69
Synthetic exposure 71
Oil ETFs 73
Bio-fuels 75
Natural gas 77
Oil and gas royalties 79
Energy as an investment 82
Summary 83
5. Private Equity 85
Private equity - definition and types 85
Buyout 86
Drivers 87
History and development 88
Development capital 89
Characteristics 89
Minority shareholder protection 90
Deal types 91
Growth capital 91
Venture capital 92
Venture returns and home runs 94
Mezzanine 95
Quoted private equity 95
Private equity funds 97
Private equity returns 99
The J-Curve, IRRS and multiples 100
Vintage year returns 102
Funds, funds of funds and secondaries 102
Concluding thoughts on private equity 103
Summary 105
6. Hedge Funds 107
Introduction 107
Use of derivative instruments 108
Leverage 110
Some common elements 112
Legal structure 112
Type of trades 113
Lack of transparency 113
How hedge funds invest - an overview 114
Long and long/short 114
Credit based 116
Global macro 117
Specific strategies 117
Long only 118
Long/short 118
(Equity) market neutral 118
Convertible arbitrage 118
Statistical arbitrage ("stat arb") 119
Merger arbitrage 120
Fixed income arbitrage 120
Global macro 121
Event driven 121
Distressed 121
Fund of funds 122
The hedge fund model - pros, cons and the future 123
Redemption/co-investor risk 125
Some final thoughts on hedge funds 126
Summary 127
7. Infrastructure 129
What is infrastructure? 131
Secondary and primary infrastructure 132
Regulated and demand-driven 133
Drivers 133
Government 134
Investors 134
Industry 134
Threats 135
Regulatory/governmental 135
Funding 137
War and terrorism 137
Quoted and unquoted infrastructure 138
Quoted infrastructure (1): industrial companies 138
Quoted infrastructure (2): listed investment vehicles 140
Unquoted infrastructure (1): projects (typically PFI or PPP type) 143
Unquoted infrastructure (2): funds 144
Returns 145
Summary 146
8. Commodities 147
What are "commodities"? 148
How can we classify commodities? 149
Soft commodities 149
Hard commodities 150
What are the return drivers? 151
Commodities beta 152
Prices and indices 152
Is it investable? 153
US dollar currency risk 155
Are they representative? 156
Counterparty risk 158
Renewal effect 160
Commodity returns 161
What can be stated? 162
What other factors are relevant? 163
The case for commodities 164
Summary 165
9. Gold 167
Introduction 167
Inflation 168
Gold as a safe haven 169
Gold as a hedge against US dollar weakness 172
Gold as a diversifier 172
Returns 173
Gold doesn't have babies 174
Fixing the gold price 175
How to invest in gold 176
Gold shares 177
Physical ownership 178
Synthetic ownership 180
Indirect ownership 182
Summary 183
10. Active Currency 185
How can an investor make money by investing in currency? 187
Are the currency markets a zero sum game? 188
Institutional approaches 190
Risk management 190
Active currency 192
Liquidity 193
Volatility 193
Correlation 194
Active currency strategies 194
The carry trade 195
Momentum/trend investing 196
Value investing 197
Active currency beta 199
What is the beta measure we are discussing? 199
What is the methodology? 200
Is the DBCR investable? 202
Final Considerations for Active Currency 203
Summary 203
11. Other Alternative Assets 205
Forestry 208
Returns and correlation 208
Direct and indirect forestry 209
Gem stones 210
Works of art 212
Musical instruments 213
Antiques 214
Wine 215
Classic cars 218
Other collectables - coins, medals, stamps, militaria, snuff boxes, perfume bottles, etc. 220
Yet more ...? 221
Conclusion 222
Summary 223
Index 225
