Emerging managers must provide investment opportunities that are clearly differentiated from well-established funds. Institutional investors and high-net-worth individuals diligently search for alternative investments that can produce genuinely different patterns of returns.
An estimated $5.5 trillion of incremental investments will be required by 2050 to achieve net-zero emissions, with $1.6 trillion needed for the energy transition. Median returns for cleantech venture funds have been strong with energy optimization, electric mobility, and energy storage leading the way.
Investor interest has been focused on real estate with the recent surge in inflation. For real estate to be a good inflation hedge, the increase in cashflows must outweigh the rise in operating costs by at least the rate of inflation. We think opportunistic real estate could provide good risk-adjusted returns.
Returns from litigation finance have been high and uncorrelated with the broader market and other asset classes. The returns for litigation finance depend on the outcomes of particular court cases, which are unaffected by movements in the stock market.
Roughly 10% of global car sales are electric, and we expect 30% growth over the next three to five years. However, we acknowledge the risks for investors in the space and we think that charging infrastructure and batteries are the best risk-adjusted ways to invest in electric vehicles.
Institutional investors and high-net-worth individuals diligently search for alternative investments that can produce genuinely different patterns of returns. Emerging managers must pursue profitable niches, new technologies, and financial arrangements that are not accessible in public markets.
We believe that the Russian economy and stock market, which is highly fossil fuel and resource dependent, should not have passed basic ESG screening criteria. The country has high levels of corporate and political corruption, and the linkages between the government and the oligarchs further increases the risk for investors.
The most common transactions in India's venture debt market are revolving credit facilities, revenue-linked loans, accounts receivables factoring, and equipment financing. The loans are typically short-term, with returns ranging from 10% to 18% depending on the sector and the borrower.
Depending on the strategy, a manager can receive a preliminary term sheet within a month after speaking with an investor. A seed capital transaction can typically be closed in less than 90 days after receiving an offer from one or more of our capital providers.
Strained public budgets mean that local, state, and national governments must turn to alternate sources of financing from investors to complete water infrastructure projects. The need for these investments remains strong, with over half a million premature deaths due to inadequate and unsanitary water each year.
There is a growing market for providing litigation funding because it gives investors a socially responsible way to generate returns that are not correlated with other markets. The merit of the case itself is the key factor for litigation funders.
Environmental, social, and governance (ESG) investing is a relatively new approach that continues to evolve. ESG criteria developed gradually over the last few decades, and private fund managers must keep adapting their interpretations to meet changing investor demands.
Gaining access to managers with true alpha is perhaps the most crucial practical problem associated with private equity, but there are other issues as well. Some of the most successful manager strategies do not scale well, so investment opportunities are limited.
Emerging managers must provide investment opportunities that are clearly differentiated from well-established funds. Emerging managers must also pursue profitable niches, new technologies, and complex strategies that are not accessible in public markets.
As an emerging manager builds a fund into a more mature organization, it becomes increasingly vital to establish policies that promote growth and protect investor interests. We share best practices for reporting, annual meetings, and other ways to boost operational efficiency.
Public debt and equity markets in the United States recovered from the coronavirus crisis so quickly that many institutional investors did not have a chance to react. However, less liquid private credit still offers opportunities to participate in the recovery.
One of the most innovative ideas in private infrastructure funding is to scale and package financing in ways that appeal to investors. Many nations in Latin America had considerable success in building infrastructure through alternative arrangements with private investors.
Distressed debt offers the highest potential return of any type of debt security. Using all the available information can turn the danger of bankruptcy into the opportunity to gain control of the company.