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April 5th - This Week in Alternative Investments
Adam Katz
April 05, 2024
This issue is brought to you by RYSE, the shade automation device redefining smart living
Headlines
Bite-sized market updates
A new comic book record
Is private credit worth it?
VC investment at a 5-year low
BREIT’s troubles
How much Americans want for retirement
Plus: One of the world’s oldest books, a quantum computing breakthrough, hot luxury markets, and more.
Performance
Bitcoin | Liv-Ex Fine Wine 1000 |
Thomson-Reuters VC Index | FHFA House Price Index - Jan. |
Partner
Last Chance to Invest Before this Company Redefines Smart Living
What if you had the opportunity to invest in the biggest electronics products as they launched into big box retail, would you?
Ring changed doorbells and Nest changed thermostats. Early investors in these smart-home companies earned massive returns, but the opportunity to invest was limited to a select, wealthy few.
Not anymore. RYSE has just launched in 100+ Best Buy stores, and you're in luck — you can still invest at only $1.50/share before their name becomes known nationwide.
They have patented the only mass market shade automation device, and their exclusive deal with Best Buy resembles that which led Ring and Nest to their billion-dollar buyouts.
Market Updates
(Heritage Auctions)
A copy of Action Comics #1 set an all-time record for a comic book sale. The highly-graded CGC 8.5 copy of the 1938 debut of Superman sold for $6 million at Heritage Auctions, beating the previous record of $5.3 million for a 2022 sale of a copy of Superman #1. There are believed to be only around 100 existing copies of Action Comics #1, and this is the highest-graded pedigreed copy in the world. While the comic book market has been struggling the past few years, this sale shows the demand for high-end, rare books remains high.
A new study found that private credit offers no extra return for investors. While the $1.7 trillion market has grown significantly the past few years, and has been boosted by higher interest rates, the study from the National Bureau of Economic Research found that the asset class does not beat benchmark returns. While private credit tends to offer higher returns than public debt, the fees taken by managers, and the increased risk, offsets those entirely. However, one of the study’s authors pointed out that investing in private credit is still a good source of portfolio diversification, as long as investors are aware of its shortcomings.
Global venture capital investments fell to their lowest quarterly total since 2019. The total of $75.9 billion invested in Q1 of 2024 represented a near-five year low, and the total number of deals fell to a four-year low. The fundraising environment for startups has been difficult due to higher interest rates and the lack of successful exits, with the latter falling to a six-year low in 2023. Additionally, U.S. venture investment declined by 8.7% in Q1, with a year-over-year decline of 29%. This despite the rise of AI, which has generated a lot of VC activity. However, the Reddit and Astera Labs IPOs caused the Q1 exit activity to nearly double, though it remains to be seen whether there will be more high-profile IPOs the rest of the year.
Alternative asset manager Blackstone’s property fund BREIT failed to cover its dividend in 2023. The $60 billion fund for wealthy retail investors generated $2.7 billion in cash flows, but paid out a distribution of $2.8 billion, with the overage coming from their reserves. The average publicly listed REIT covers 125% of its dividend payment with cash flow, and BREIT’s failure to cover raises concerns, though it does claim to have $8 billion in liquidity. As the largest non-traded REIT in the world, BREIT’s performance is closely watched as an indicator of the real estate and REIT markets as a whole.
Smart Humans Podcast
In this episode, Slava Rubin talks with Congressman Patrick McHenry about driving innovations in fintech, navigating regulations, and expanding access for investors.
Explore
More stories worth checking out
(Christie’s)
A new survey found that Americans believe they need $1.46 million in savings to retire comfortably - a 53% jump since 2020 - and given that the average American has just $88,400 saved, investing wisely will be paramount to closing that gap.
One of the world’s oldest books, the 3rd or 4th century Crosby-Schøyen Codex, is being auctioned in June at Christie’s, with an estimated value of $2.6 million to $3.8 million.
Another, slightly less old book, is expected to fetch seven figures at Sotheby’s in June - a handwritten draft of Arthur Conan Doyle’s 1899 Sherlock Holmes novel, “The Sign of Four.”
Quantum computing startup Quantinuum announced, in partnership with Microsoft, that they have made a major breakthrough in the field, which could be the next big tech investing sector.
Newport, RI, Volusia, FL and York, ME, led the rankings of the hottest markets for second homes, as the luxury market remains mostly untethered from the slow real estate market overall.
The crypto firm Ripple is launching a new U.S. dollar stablecoin to compete with Tether and Circle’s USDC, which they hope will grow the XRP ecosystem.
Renting is now significantly cheaper than buying nationwide, due to higher mortgage rates and a decline in rents, which may decrease the pool of potential buyers.
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