Alternative investments include innovative investment strategies as well as investment concepts. Terms such as hedge funds or private equity are particularly common in the room but that does not yet cover the broad field of alternative investment opportunities.
For even beyond this, the trend towards alternatives extends beyond many other areas of the financial market: works of art or classic cars are just as much a part of the new alternative investments as infrastructure and raw materials.
There is no universally accepted definition so that there is no clear distinction between the individual economic sectors. But it is important that the alternative investment takes place outside the traditional investments: stocks and bonds are excluded.
Let us understand why invest in alternatives?
Alternative Investments: The Essential Areas Explained:
• Hedge funds are a special form of an investment fund, which is characterized by a particularly risky investment strategy. They are often launched for institutional investors such as banks and managed by a manager or alternative investment advisors speculating with large leverage on warrants or risky price movements.
• Private equity comprises the equity capital provided by investors, with which companies acquire company shares for a limited period of time. Important is the risk-return ratio: Investments in established companies are just as possible as the financing of young companies. The latter results in a higher return not without good reason but then venture capital.
• As a generic term, infrastructure investments cover many different areas, all of which offer different risks and opportunities. The investments are for example in public buildings such as hospitals or cultural institutions, as well as in renewable energy or transport infrastructure.
• Commodities are almost among the classics among alternative investments. Examples of possible raw material investments include a precious metal such as silver or gold, industrial metals, crude oil or natural gas.
• Real Estate includes real estate investments that are acquired to generate real estate returns. The investment in real estate can take place in various ways: for example through real estate funds, direct acquisition or crowd investing.
Even beyond the mentioned areas, there are many other investment opportunities. Because there are special niches for modern investments in almost every area - forests, wine, patents or antiques and works of art - you can invest your money according to your wishes.
To get more detailed information about alternative investments, do not hesitate to contact a good alternative investment management firm.