Elkstone Discusses Alternative Investments: Commodities, Cryptocurrencies, and More
Karl Rogers, Chief Investment Officer for Elkstone joined Joe Lynam on Newstalk Breakfast to discuss why people are looking for alternative investments for their savings. Listen to the full interview below.
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Explore alternative investment options beyond traditional savings accounts in this insightful episode with Karl Rogers, Chief Investment Officer at Elkstone Partners. As market fluctuations continue, discover the potential of commodities, cryptocurrencies, and the role of family offices in managing your investments for a more secure financial future.
What are Alternative Investments?
A simple way to understand alternative investments is any that are not traditional markets i.e equities and bonds. Equities are stocks/companies while bonds are debt/loans to companies and/or governments. Alternative investments are any market that is not stocks or loans. A non-exhaustive list includes commodities, gold, real assets like real estate and infrastructure, hedge funds, private equity and venture.
Alternative investments are used to either diversify a portfolio or enhance returns beyond traditional markets. There is a strong misconception that alternative investments add higher risk to a portfolio adding, however, alternative investments actually helps to reduce the risk of an overall portfolio.
How far behind is Ireland from the US when it comes to Alternative Investments?
Uptake of alternative investments is not geographical in nature but rather investor type. Institutional Investors due to their large size and ability to write big cheques that were traditionally required for alternatives were the first movers. This led to endowment investments models best known by Yale and Harvard.
There is now increased uptake from different investor types like Family Offices as highlighted in KKR’s recent report where they have an average allocation of 52% in alternatives.
There is a further move to democratise access where Elkstone has been an Irish first mover through the likes of the Elkstone Venture Club which was established 7 years ago and Elkstone’s Real Estate investment opportunities.
Why have we seen a boom in interest in Alternative Investments recently?
There are two primary reasons for the boom in interest recently. These are structural (the lower bite size access mentioned above) and current market conditions.
Equities and Bonds have been moving together for the past couple of years and so diversification is sought elsewhere. We are in a new market regime of higher interest rates and inflation and alternatives investments can be used to tactical position better for this in the likes of private credit (higher rates) and infrastructure (higher inflation).