Week in Focus – Alternative Assets

WC 12th July

Lewis Carroll: 1st Edition Alice’s Adventure in Wonderland, 1999 Pokemon Chizard Holo PSA 10, Vintage Sneakers, and #1 9.6 Avengers Comic Book being the latest newsmakers in the alternative asset space. 

Money, money, and more money is what virtually everyone thinks about when they try to consider investments, and rightly so, investments are expected to generate income. To gain the very best from investments and virtually any aspect of business, diversification is key and that is where this topic comes into play. 

An alternative investment is an investment method that explores investing in non-conventional assets like private equity, hedge funds, and more.

In this article, we try to explore alternative investments with the aim to bring readers up to speed on this rapidly developing space. We cover the following alternative assets:

• Lewis Carroll: 1st Edition Alice’s Adventure in Wonderland – a part of a recreated 1,000 book copies from the initial dozens. 
• 1999 Pokemon Chizard Holo PSA 10 – Most valuable of all Pokemon trading card games released in 1999
• Vintage Sneakers – thinly traded and mispriced providing opportunities for identification of hidden gems.
• #1 9.6 Avengers Comic Book – highest-graded 1st edition comic containing intro and origin stories of Avengers characters. 

What are alternative assets?

Alternative investments as stated earlier explore non-conventional investment options and the assets involved in these investment firms are described as assets that deviate from the traditional asset classes and are regarded as unexpected investment sources. Some examples of alternative assets classes include venture capital, hedge funds, bonds, real estate, pension funds, diversified portfolios and so on. 

What are the risks of an Alternative Investment Fund 

Before diving into the alternative asset space, it is quite important to understand some risks that may be involved not just for knowledge sake but to help guide against the financial implications of these risks.

Alternative assets are known to have a unique risk-return profile and a big contributor to its unique risk profile is illiquidity. Since most assets involved in this market space are illiquid assets, they can not be easily converted to cash at any time as they have specific lockup periods and these investment periods do not necessarily protect these assets from market volatility and speculations available in the market. Apart from the lockup period, other contributors to the illiquid nature of these assets are transfer restraints and the lack of a secondary trading market. 

Another important aspect to note in alternative assets is that they are less regulated compared to mutual funds and they often charge higher fees for transaction processing and in cases where the return on investments aren’t the best, it could further dampen financials. 

These risks do not necessarily put alternative assets in a bad light but they are warning on the different paths investors may have to navigate as they add alternative assets to their portfolios.

What do alternative asset classes mean?

Alternative asset classes are the main drivers of the alternative asset market. These asset classes provide a range of investment variants to choose from in the alternative investment space. They fit the bill of what alternative assets are they are neither shares nor listed on fixed income security. There are several available asset class variants and each one has its own advantages and things potential investors may need to look out for. 

What are the seven alternative asset classes?

Along with the flexibility alternative assets bring to the financial market, they are classified into seven main classes and these types of investments include; Private equity which are investments made into private companies or startups not open for everyone to see on a public exchange, private debt which like private equity refers to investments in companies that are not financed by banks, hedge funds which are investment pools that trade liquid assets with an aim to enjoy massive returns, a real estate whose reputation precedes it as investments made into housing estates, commodities which could be real estate as well as natural products, collectibles like rare items, vintage cars and finally, structured products which provide a return based on how the invested asset performs in the market.  

Alternative asset class provides several options to choose from in the investment space but before committing to these investments, conducting relevant research is quite necessary. 

Is Yieldstreet.com as an alternative investment platform trustworthy?

Yieldstreet is an online alternative investment platform created to make investments much easier by providing alternative assets like commercial real estate, arts, and more to be invested in with a base investment input typically at $10,000 but could be as low as $5,000. Yieldstreet has recorded quite an impressive improvement over the last six years by providing about $960 million in return of investments. In June 2021, it announced a $100 million Series C funding. 

These figures seem quite impressive and rightly so, it is a platform with an aim to do great things. Its progress is backed by its ability to provide investors with private credit structured deals, has some of the investments backed by assets to provide some sort of security, and provides a decent range of investment types. A particular downside of this platform is that it serves investments on a first-come, first-serve basis. Yieldstreet has a particularly decent track record but as a golden rule of alternative investment and investments as a whole, only put a fraction of your finances into it. 

What are the best alternative investments?

Although alternative assets are meant to be investment diversifiers, they are still generally expected to help investors increase their income streams in addition to real assets. 

The need to make healthy returning investments means that investors need proper information on certain alternative assets, especially how the market reacts to such assets. The best alternative assets to consider in 2021 include; physical real estate, diversifying income into real estate crowdfunding setups, art collectibles, peer-to-peer lending as well as precious minerals.

Despite these assets being listed as beneficial assets to invest in, proper research is still needed to properly integrate into the advantages and downsides each investment may have. 

How much money is in alternative investments

Alternative asset as an investment term isn’t really a new one as it has been in inception around the 1800s but has always been mainly restricted to wealthy families and has been used as a support system for real assets. 

The growth of this investment method was particularly prominent during the 20th century which marked the rebuilding process after wars and the introduction of technology. Technology has played a crucial role as to be expected in the development of these assets and as of 2021, the alternative asset space is worth over $10 trillion. 

This value is still expected to especially as technology advances leading to the introduction of more investment platforms. 

Are alternative investments worth it?

Alternative assets are better known as investment diversifiers to support other investment plans like shares, cooperate bonds, and other conventional assets. 

There are several asset options to choose from and several attractive asset classes to consider but in and among all this is it important to utilize only a portion of investments in this space so they can remain the portfolio diversifiers they are meant to be and not disrupt your entire investments with a single unfavorable market movement. 

Is gold an alternative asset

Seeing how most people are considering jumping on the alternative asset bandwagon, the need to invest in assets that could be easily understood becomes necessary and that is what gold provides.

It is an alternative asset which unlike the biggest asset class has a low entry-level and is a liquid alternative to cash. In conditions where an asset owner makes a substantial investment in an asset, gold could prove to be a good supplementary product that grows along with the asset. Also important to note is that investment in gold is tax-free as gold doesn’t earn income. 

What is an alternative asset management company?

A common theme with finances is typically being able to regulate the activities of participants. The need for regulation in alternative investments is quite key as most of the investments are not legally influenced by certain laws. 

To provide a sort of control over assets of a combination of assets, alternative asset management companies are quite important and they ensure that potentially controversial investments like hedge funds and private equities are managed in a structural manner. It provides regulation for these transactions but may not be as those on tangible assets. 

Lewis Carroll: 1st Edition Alice’s Adventure in Wonderland trades up to $22,000 after an initial public offering of $12,000. 

Alice’s adventure in wonderland book is particularly common with its relevance spanning the length of culture to entertainment. The original version of this book was first produced in 1865 but the version currently making the news is a reproduced one created in 1,000 units but is still one of impeccable quality. 

• The original dozens of this book are valued up to $55K but the reproduced one in impeccable shape fetches as high as $18K. 
• An important contributor to the increased trade level of this asset is its $1/sh offering price which could still rise up to $1.5/sh. 
• This asset showcases a low-risk profile although, this comes with reduced capital growth. In the second half of 2021, a standard deviation of 27% represents a low-risk profile for rare books. 

Thoughts: As with most alternative investments and even traditional investments, it would be far-fetching to expect 10 times multiplication in this asset. you could just gamble if that’s what you’re in search of. It is expected that this asset would slowly grow into prominence as it slowly increases its value through rarity. It is best to be patient with this asset.

Although the offering price of this financial asset is expected to rise up to $1.5.sh, it could dip down towards $1 – $1.35/sh, and purchasing at this rate could be really beneficial. 

1999 Pokemon Chizard Holo PSA 10 targets a share price of $5.71/sh after an opening share price of $10/sh. 

The Pokemon story was an integral part of our childhood at least for those born after 1996 and valuable as well as memorable items like this is what alternative investment is all about especially as a portfolio diversifier. 

• The PSA is about the most valuable of the 102 cards in this card collection and on January 17th, its original purchase value was around $300,000. 
• Around March 26th, this card’s initial public offering further increased to $350,000 at a rate of $10/sh offering for 35,000 shares. This is the highest this asset has gone now and it seems like its growth may be stopped here for a while. 
• The initial public offering of this item happened few weeks after a $399,750 sale and days before a $311,800 sale which marked its decline. 
• This card since its highest offering has recorded quite a decline and its most recent sale in May being $240,000 and this doesn’t really seem to be the end of its decline. 
• Associate cards to this one like the PSA 9 sold last week at ~30% down and a PSA 8 as well was down around 20% and a PSA 6 was down around 10%. Inferring an average from the values of the surrounding cards to this one could mean PSA 10 card could still take a tour down at 20% and its value could go as low as $200,000.
• An overall value of $200,000 for this card would mean half of its first sale at an offering price of $5.71/sh. The Pokemon cards posted a -25% ROI in the second half of 2021. 

Thoughts: Although it is not expected that this asset remains on the decline forever, the point at which it flattens out is what is unknown. 

A good number of these cards are still available so it might still even steep a little bit more as it may not become scarce for a while and as collectible investments thrive on scarcity. 

The best investment strategy at this point would be to understand how truly risky an investment into this asset could prove. Fortune does not always favor the brave and that may be the case here. If offers at $7/sh arise, that may be the best deal for this asset for a while so it may be best to sell. 

Vintage Sneakers providing hidden gems that could be worth your bucks. 

• Sneaker resale is certainly carving its own niche for itself especially as it primary sale as well as resale move digital. 
• As with most marketing sectors, the restrictions enforced by the Covid-19 crisis have certainly made this transition much faster as recent data shows a +20% year-on-year increase in the sneaker sale and resale space. This data suggests that sneakers could prove quite valuable when it comes to creating iconic shoes especially seeing how their price appreciates. 
• It recorded over $2B resale value in North America and more is still to be expected in this emerging space. 
• The sneakers niche could prove to be a goldmine for one particular reason being that they could be mispriced meaning that special sneakers could be sold at giveaway prices. 

Thoughts: The need for businesses to recover from the effects of the global pandemic has meant diversion of investments as well as a development of a sort of connection with the digital world hence the development of this investment opportunity. 

Despite the promise this investment opportunity provides, it is best to approach it with caution if not for anything, for the particularly volatile nature of the alternative asset space. The mispriced nature of this asset provides an opportunity to locate highly valuable items. Also important to note is the fact that a large amounts of shares in this space are not readily traded at once so enjoying returns on investments may prove to be a gradual process.

#1 9.6 Avengers Comic Book providing ways of turning favorite childhood memory creators into investment options

Comic books have been around for a long long while and they form essential parts of our childhood. They don’t have to remain as only childhood memories because new movements in the market show that they could be potential investment options and the very first Avengers comic book is proof of that. 

• One of the reasons for this asset’s high valuation is its quality. It has a 9.6 grading which is the highest of all six copies of this epic book. It is a complete representation of what tier one should be. 
• This comic contains the origin story of the most famous Marvel characters. 
• This asset went for $194,000 the last time it was publicly traded (2014) and was sold last for $250,000.
• An evidence-backed calculation has seen the value of this item rise by 50% leading to an expected overall value increase of about $350,000.
• The latest offer made for this asset was to the tune of $61.97/sh making a total of $309,850. Although this value is less than the expected $350,000, it is still a good bargain. 

Thoughts: The share prices are about the obtainable best for this item and based on its already scarce nature, it could prove quite an asset to consider. 

A roundup of Important News Relating To Tech and Investments. 

Alternative financing providing ways for exponential company growth through revenue-based financing. 

• Revenue-based financing involves investors actively providing investment capital into businesses in exchange for a percentage of the brand’s proceeds in the future. 
• Uncapped which is aimed at providing flexible funding for businesses is currently using revenue-based financing to great effect. It provides a means for businesses to grow by handing out capital anywhere from €10k – €5M without collateral attached.  
• Instead of including interests or attaching collateral, Uncapped charges a 6% revenue-based fee for the capital provided until the investment is balanced. 
• Long term goal of Uncapped is developing a working system for developing companies to grow without having to worry about financial restraints. 

The power of voice notes brought easy email replies. 

• Many times especially during our most tired periods, we have wished we could simply say all we want to write out and have our words converted but that is easier said than done. It may be possible for some cases tho. 
• Reverb is a voice recording tool that lets your voice work for you. It allows users to record voice notes and share them as email replies to reduce the stress of typing. 

Digital transactions in Brazil takes a step further as JPMorgan Chase acquires 40% of C6

• C6 bank is a digital bank in Brazil and has received wide applause since its inception in 2019. 
• Exponential growth is the best word for the sort of growth C6 has experienced with this full-service digital bank having more than 1,600 workers and over seven million customers. 
• Reasons for the fast growth of this bank could be due to the relevance of the digital space for processing of transactions in Brazil. To put the relevance of digitization in Brazil’s finances, about 60% of financial transactions are performed digitally.  
• JPMorgan Chase’s investment in digital banks means the growth of these banks and digital transactions as a whole would only steadily increase over the years. 

The Philippines may prove a new gold mine for digital banking as Voyager Innovations is planning expansion via $167 million capital. 

• Digital banking as a term combines digital innovation and normal banking practices as one. 
• Digital banking could prove quite an impressive investment scheme as only a mere 33% of Filipinos have access to normal banks. 
• Seeing how digital banking is easy to set up and particularly convenient to use, it is not hard to guess why Voyager Innovation which is already providing innovation in this space is deciding to expand, and to aid its rapid development, it has been able to gain $167 million from investors. 

Brazil proving to be a real hot spot for cryptocurrency and digital marketing. 

• Research in trying to estimate the top internet users in the world shows China, India, United States, and Indonesia as the top four countries while Brazil ranks fifth with a reasonable opportunity to grow further. 
•  Pointers to the effect technology are having on Brazilians is evident in a 23% growth of e-commerce in the country. 
• The cryptocurrency space is also a beneficiary of this digital explosion and its growth has attracted investors into crypto exchange companies. 
• Mercado Bitcoin is the largest Bitcoin exchange company in Brazil with over 2.8 million users and this value would only get larger with SoftBank investing $200 million into this company increasing its valuation up to $2.1 Billion. The continual growth of digital finances would also act to push the cryptocurrency space several steps further.  

Summary of news-making events. 

During the week, we have seen some certainly exciting investment options like a replica 1st edition Alice’s adventure in wonderland trading $22,000 while others like PSA 10 special Pokemon card not offering so much promise as a $7/sh offering price considered a really good deal at this point after the price drop from an opening share price of $10/sh to $5.71/sh. 

Although the PSA 10 asset is suffering quite a dip at the moment which is not particularly helped by its number, an asset that has certainly benefited from scarcity is a 9.6-grade Avengers comic book whose value has risen by 50% since it was last offered. 

If you’re a lover of hidden gem investment choices, vintage sneakers and the entire sneakers market could provide what you crave as a +20% year-on-year increase in sneaker sale and resale price provides real opportunities investors may want to consider. The need for the market to recover from the global pandemic has ensured that investments are spread over a range of asset types. 

It is common news at this point that technology is the new driver of our new world and for technology to advance, it needs to be embraced by a healthy percentage of the world population and an example of this acceptance is seen in Brazil as about 60% of financial transactions in Brazil are handled digitally. This percentage of digital reliance provides an opportunity for companies to invest in digital financing and for digital financial organizations to further increase their investments.

A company already taking advantage of this is JPMorgan Chase who made quite a statement with a 40% acquisition of C6 while Uncapped has also increased its investments. Acceptance of technology in Brazil has also increased the investment of cryptocurrency companies into space as well.