This article was written by expert contributor, Portfolio Manager Dania Zinurova from WAM Alternative Assets (ASX: WMA).
Introduction
Portfolio Manager Dania Zinurova delves into the fundamentals of alternative assets and the unique opportunities inherent in real estate, infrastructure, private equity, real assets and private debt.
Video: Private Debt
The private debt universe is broad, deep and multi-faceted. Investing in private debt comes with increased challenges of complexity, which is rewarded through solid return potential and better liquidity than private equity. Private debt strategies generally provide income and return capital faster. This mitigates the risk of the J-curve effect, a phenomenon in which a period of negative or unfavourable returns is followed by a gradual recovery that stabilises at a higher level of investment returns. Strategies we can employ when investing in private debt include corporate direct lending, real asset debt, distressed debt and speciality finance.
WAM Alternative Assets aims to expand into this unique asset class. In this video, I explore the strategies and opportunities available in private debt, and explain its investment characteristics, including a longer-term investment horizon, diversification, access to inefficient markets and bank disintermediation.
Also in this series
- Real Estate
- Infrastructure
- Private Equity
- Real Assets
- Add if you would like more from the author, Dania Zinurova, check out her appearance on the Equity Mates Investing Podcast: Private equity, water rights and other alternative assets with Dania Zinurova
Investing in alternative assets has traditionally been limited to these institutional investors, as well as high net worth individuals, due to the large minimum ticket sizes required for a single investment (often $10 million). WAM Alternative Assets (ASX: WMA) however, seeks to democratise investing in alternative assets for retail investors through its listed investment company (LIC) structure, which provides investors with access to a diversified portfolio of alternative assets while also providing them liquidity and a steady stream of dividends.
Prior to making an investment decision, retail investors should seek advice from their financial adviser. This document is intended as general information only.