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Trends with Benefits #14: The Future of Alternatives with John Bowman

June 09, 2020

Listen Time 31:22 MIN

Alternatives such as private equity, private debt, hedge funds and real assets have become a bigger portion of the global investment market over the last 15 years. According to the CAIA Association, alternative investments could double from 12% in 2018 to nearly 24% by 20251. Further, access to alternatives may be aided by the Securities and Exchange Commission’s proposed changes to accredited investor rules allowing more investors to participate in private offerings.In this episode, I discuss the growth and outlook of alternatives with John Bowman, Senior Managing Director for the CAIA Association.


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Democratizing Access to Alternative Investments

CAIA recently released a new report, “The Next Decade of Alternative Investments: From Adolescence to Responsible Citizenship” that looks at the growth and outlook of alternative investments. Two decades of  lower interest rates have been a major driver of the growth of alternatives, particularly as pension funds sought to offset funding shortfalls. What stood out to me in the report was the notable trend of capital formation happening more and more in the private markets.

More companies are delaying IPOs and coming to market at much high valuations than the generation of companies before them. This is allowing private equity investors to capture a greater proportion of the returns. For regular, non-institutional investors, this may make you wonder why bother buying an IPO if it’s essentially just table scraps. More investors should have access to opportunities that tend to be the domain of institutions. This, of course, may come with more risk than individual investors have become accustomed to. That’s part of the challenge for the industry. Democratize access, do so ethically, and with a focus on education, transparency and diversification.

Trend or Fad

Listen for John’s take on artificial intelligence, baking at home, mass online learning and cryptocurrency.

Follow Ed Lopez @ThatEdLopez on Twitter and John Bowman @BowmanJohnL on Twitter.

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IMPORTANT DISCLOSURES

Source: CAIA Association, “The Next Decade of Alternative Investments: From Adolescence to Responsible Citizenship”, 2020.

https://www.sec.gov/news/press-release/2019-265

Please note that Van Eck Securities Corporation (an affiliated broker-dealer of Van Eck Associates Corporation) may offer investments products that invest in the asset class(es) discussed in this podcast.

The views and opinions expressed are those of the speaker(s) but not necessarily those of VanEck. Commentaries are general in nature and should not be construed as investment advice. Certain statements contained herein may constitute projections, forecasts and other forward looking statements, which do not reflect actual results, are valid as of the date of this communication and subject to change without notice. Information provided by third party sources are believed to be reliable and have not been independently verified for accuracy or completeness and cannot be guaranteed. Any discussion of specific securities/financial instruments mentioned in the commentary is neither an offer to sell nor a solicitation to buy these securities. Fund holdings will vary. All indices mentioned are measures of common market sectors and performance. It is not possible to invest directly in an index. Information on holdings, performance and indices can be found at vaneck.com.

All investing is subject to risk, including the possible loss of the money you invest.  As with any investment strategy, there is no guarantee that investment objectives will be met and investors may lose money.  Diversification does not ensure a profit or protect against a loss in a declining market.  Past performance is no guarantee of future performance.

Van Eck Associates Corporation

IMPORTANT DISCLOSURES

Source: CAIA Association, “The Next Decade of Alternative Investments: From Adolescence to Responsible Citizenship”, 2020.

https://www.sec.gov/news/press-release/2019-265

Please note that Van Eck Securities Corporation (an affiliated broker-dealer of Van Eck Associates Corporation) may offer investments products that invest in the asset class(es) discussed in this podcast.

The views and opinions expressed are those of the speaker(s) but not necessarily those of VanEck. Commentaries are general in nature and should not be construed as investment advice. Certain statements contained herein may constitute projections, forecasts and other forward looking statements, which do not reflect actual results, are valid as of the date of this communication and subject to change without notice. Information provided by third party sources are believed to be reliable and have not been independently verified for accuracy or completeness and cannot be guaranteed. Any discussion of specific securities/financial instruments mentioned in the commentary is neither an offer to sell nor a solicitation to buy these securities. Fund holdings will vary. All indices mentioned are measures of common market sectors and performance. It is not possible to invest directly in an index. Information on holdings, performance and indices can be found at vaneck.com.

All investing is subject to risk, including the possible loss of the money you invest.  As with any investment strategy, there is no guarantee that investment objectives will be met and investors may lose money.  Diversification does not ensure a profit or protect against a loss in a declining market.  Past performance is no guarantee of future performance.

Van Eck Associates Corporation