Alternatives

David Di Pilla’s group made its bones flipping unloved real assets into a sprawling network of essential retail centres. Now HMC Capital is leaning into its public/private hybrid style of management and eyeing off investment in a host of sectors.

David Di Pilla’s listed property group is shaking things up with a fund that combines the best features of private and public investing to create a pro-active management style equity fund.

With almost $600 million worth of SMSF assets held in art – up 54 per cent since 2016 – the original alternative investment is seeing a significant resurgence in popularity.

Up until recently, alternative investments were only really open to institutional investors, but with these now available at a wholesale and retail level the retirement strategy game has changed.

Digital transformation, combined with companies staying private for longer, means successful startups are scaling up faster. The next wave of development, SeedSpace’s Cathryn Lyall said, would come from larger VC fund allocation and sovereign wealth fund investment.

Cryptocurrencies may take up most of the headlines, Invesco says, but the real investment potential lies in the technology and the trading platforms behind them – despite the shocking FTX blowup.

Diversification is invaluable, and this is especially apparent during times of disruption and uncertainty. Exposure to infrastructure assets can help investors take advantage of the current volatility, but keeping asset correlation in mind is key.

Despite increased volatility emanating from the banking sector, tech stocks have been supported by falling bond yields on fears the global economy could slip into recession this year, with big-name companies leading the gains.

At The Inside Network’s Alternatives Symposium, Kyle McCarthy and David Lewis encouraged investors to define private credit very broadly to reap the benefits of diversification and strong risk-adjusted returns.

Many supply chain issues have been alleviated in the last year as restrictions eased in the wake of the pandemic, said Alceon’s Phil Green, but labour remains a sticking point.

With private equity becoming more accessible, retail investors can now take advantage of the asymmetry-of-information and diversification benefits PE offers, while its safe-haven characteristics stand out in the uncertain macro environment, according to David Chan and Cameron Brownjohn.

The amount of capital being made available to private companies has surged in recent decades, making it possible, and often preferable, to keep companies private for much longer. Liberty Street Advisors’ Christian Munafo and Schroders’ Claire Smith discussed the opportunities and risks for investors as the private-for-longer trend picks up pace.