Why investors should consider investing in alternative assets
Any investor needs to understand what alternative assets are before considering them.
Alternative assets are usually less liquid than traditional investments such as shares, bonds, or cash. Because of the nature of this asset class and potential cash lock-up periods, they normally require a longer investment horizon, but quite often exhibit superior returns to traditional investments.
The most common types of alternative assets are shares in private companies, private debt, hedge funds, commodities, cryptocurrencies, collectibles (vintage cars, art, coins, stamps, rare wine, and so on), and structured products (such as derivatives and securities).
If successful, alternative assets provide a higher return compared to traditional types of investments. This is the reason investors are attracted to these opportunities. They also give the investors the opportunity to build a balanced portfolio, because they are generally not correlated with the stock and property markets. Alternative assets are an investment class with higher risk than the traditional options, but with potentially higher growth. Some of these investments require technical knowledge and are usually offered to sophisticated[1], professional and overseas investors.
When considering investing in alternative assets, it is important for investors to keep in mind, among other things, risk appetite, disposable cash, investment time horizon, knowledge about the business model, and the background of people managing the investment. It is also recommended to seek appropriate financial advice.
At Funding Strategies, we specialise in providing introduction services to investors, helping to match investment criteria with appropriate opportunities. We offer a range of industry sectors to choose from. We tend to specialise in software, technology, financial services, biotech, manufacturing, and energy opportunities. Visit Investment Opportunities - Australia | Funding Strategies to review a sample of our current options.
If you are looking to expand your investment portfolio and/or start investing in alternative assets, we would welcome a chat to see how we can assist.
For more information, please visit our website here. Alternatively, please email us or phone +61 7 3160 2840.
[1] According to Moneysmart, a person with a gross income of $250,000 or more per year in each of the previous two years, or net assets of at least $2.5 million.
About Funding Strategies
Funding Strategies is an Australian based capital markets firm providing venture equity capital and finance services to small business and companies seeking capital for growth and expansion in the unlisted and pre-IPO capital markets. We specialise in creating and implementing successful funding and capital raising strategies, both equity raising and debt funding, including quick business loans. We work with predominately private and public companies, and sophisticated investors, with a broad range of services. If you would like more information, please email brisbane@fundingstrategies.com.au or phone +61 7 3160 2840.
Image below: Eugenia Arrarte, the author of this article.
