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July 5 - This Week in Alternative Investments
Adam Katz
July 05, 2024
This issue is brought to you by 3i Members, a global deal network for accomplished private investors
Headlines
BlackRock bought Preqin
Crypto prices plummeted
Multifamily in trouble?
U.S. VC funding hits a 2-year high
Plus: A Titian auction record, the Celtics are for sale, record housing prices, and more.
Performance
Bitcoin | Rare Whiskey Apex 1000 Index |
FTSE VC Index | FHFA House Price Index - Apr. |
*as of end of day July 4
Partner
3i Members: Access Alternative Deal Flow
3i Members is a network for accomplished private investors made up of 400+ members—all of whom have exited a company or lead a family office. Recently, 3i surveyed their network to assess members' investment trends. The notable change? Private equity reached its highest point in 12 months, hitting 34%. 3i actively curates opportunity sets by considering member preferences and market cycles over time, and in their recent Monthly Deal Meeting, they showcased two deals within the private equity space.
Market Updates
Asset manager BlackRock bought data company Preqin for $3.2 billion. Preqin is a leading private market data provider, and the purchase will allow the world’s largest asset manager to expand further into alternative investments. BlackRock could potentially offer private market indices and exchange-traded funds (ETFs) for different alternative asset classes. CEO Larry Fink said the acquisition was another step in democratizing access to private market investments.
Bitcoin’s price has fallen more than 10% in the past week, and just hit a 4-month low. The entire crypto market lost around 9% of its value over the July 4th holiday as concerns grow about the sell pressure associated with the upcoming Mt. Gox liquidation. The failed exchange is set to distribute 142,000 BTC between now and October, and traders are worried about the ramifications. While major coins like Bitcoin, Ethereum and Solana are down between 10-15% in the last week, many prominent altcoins and memecoins have seen losses in excess of 20%.
One in five multifamily real estate loans is at risk of becoming delinquent. While only 1.7% of multifamily loans are currently 30 or more days delinquent - compared to 7% of office loans and 6% of hotel and retail loans - there are growing worries that the asset class is the next domino to fall because of the high interest rate environment. Particularly at risk are loans with floating interest rates that could see spikes when new rates are calculated and could be difficult to refinance. The concerns are primarily for apartment buildings in the Sun Belt - in the South and Southwest - where supply has risen but demand has slowed since 2019.
Venture capital funding rose by 47% in Q2 and hit the highest quarterly total in two years. Pitchbook reported $55.6 billion in VC funding in the quarter, up from $37.8 billion in Q1. The increase was largely due to the continued growth of AI, with big raises by xAI and CoreWeave leading the way. Still, deal volume pales in comparison to the record-high $97.5 billion from 2021 Q4, and the slow IPO and acquisition markets continue to hold back a full recovery in the venture ecosystem.
Smart Humans Podcast
In this episode, Slava Rubin talks with 3i Members' Mark Gerson about the innovative investing network, the importance of community, and accessing unique alternative investments.
Explore
More stories worth checking out
🎨 Art
(Christie’s)
A Titian sale: The twice-stolen 1508 painting “The Rest on the Flight into Egypt” sold for $22.2 million, a new record for the artist, and priced in line with the $20 million - $30 million pre-auction estimate.
Six-figure (almost) donation: A painting that was almost sent to Goodwill instead sold for $112,500 after it was discovered to be an original artwork by Texan painter Julian Onderdonk.
⚾ Collectibles
Paul Allen’s collection: The Microsoft co-founder’s extensive collection of science and technology memorabilia will be auctioned in September at Christie’s - many of the items had been displayed at the now-shuttered Living Computers Museum in Seattle.
Celtics (jerseys) for sale: If you can’t afford the entire team (see below), Sotheby’s is selling jerseys worn in Game 2 of this year’s NBA finals, along with a number of other playoff-worn jerseys.
🪙 Crypto
(Bitcoin.com)
Mining revenue at historic low: With Bitcoin’s value dropping and mining rewards halving earlier this year, the price per petahash that miners earn has fallen, causing some to shut down operations.
🏡 Real Estate
Record-high housing prices: Both the Case-Shiller and FHFA House Price indices reported a 6.3% year-over-year gain in their April numbers, as both indices reached their highest ever marks.
Commercial prices also rose: A report from CoStar based on over 1,200 repeat sales in May showed a 1.3% gain in their value-weighted index and a 0.2% gain in their equal-weighted index.
🚀 Venture Capital
Celtics for sale: The NBA champions are on the market, with an estimated value north of $5 billion - the current ownership group bought the team for $360 million in 2002. Sports franchises are becoming an increasing popular investment for private equity and venture capital groups, and such a storied and successful franchise is sure to drive interest.
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