In recent years, alternative investments have become increasingly popular topics in financial news reports. As traditional assets like stocks and bonds face greater volatility and uncertainty, investors are looking for ways to diversify their portfolios. Various alternative investment options can provide uncorrelated returns, hedge against risks, and generate stable income streams. In this article, we will summarize the key information and conclusions about major alternative investment news and trends covered by journalists and analysts. Types of alternative investments mentioned frequently include private equity, venture capital, hedge funds, managed futures, real estate, infrastructure, commodities, and more. Understanding the latest alternative investment news can help investors make informed decisions when constructing a well-balanced portfolio.
Private equity funds raised record amounts of capital based on news
Many news articles in 2022 highlighted the flood of capital pouring into private equity funds. Top PE firms like Blackstone, Carlyle, and KKR have raised massive new funds, with Blackstone alone securing $50 billion for its latest flagship vehicle. This underscores private equity’s continued growth and investor demand for its unique value proposition of generating high returns from unlocking operational improvements and financial engineering. However, news also cautioned that huge capital inflows have inflated asset prices for leveraged buyouts, spurring fears of overheating in private markets.
Hedge funds rebounded in 2022 according to journalists
Early 2022 headlines lamented hedge funds’ poor performance in 2021, when many macro and equity long-short strategies struggled. But sentiment shifted as hedge funds generated strong returns in 2022, benefiting from volatility across stocks, bonds, currencies and commodities. Leading multi-strategy hedge funds like Citadel, Millennium Management, and Balyasny Asset Management produced double-digit net returns. News credited hedge funds’ ability to trade both long and short, rotate across asset classes, and leverage differentiated research for their resurgence. With potential recession risks looming in 2023, many predict hedge funds’ uncorrelated returns will remain attractive.
Real estate and infrastructure emerged as inflation hedges
Surging inflation was one of the biggest investing stories in 2022. Many reports pointed to real assets like real estate and infrastructure as effective inflation hedges that can pass rising costs through to tenants and users. News on commercial real estate highlighted robust demand for warehouses, data centers, and medical properties, while warning of headwinds for offices and retail. Residential real estate also grabbed headlines as housing prices hit new highs before moderating later in the year. Infrastructure was touted for its pricing power and monopoly-like characteristics that enable reliable inflation-protected income. But supply chain issues and rising interest rates present challenges to new projects.
Cryptocurrencies faced ‘crypto winter’ but adoption grew
The ‘crypto winter’ of 2022 dominated digital asset news, as both Bitcoin and Ethereum suffered steep declines of 60% or more from their peaks. Contagion from the Terra/Luna collapse, Celcius bankruptcy, and FTX exchange implosion led to a risk-off environment. Firms like MicroStrategy and Block even had to take large impairment charges on their crypto holdings. However, journalists also noted that overall adoption increased in 2022, with crypto becoming legal tender in certain countries like the Central African Republic.
Managed futures held up as portfolio diversifiers
With both stocks and bonds declining, diversification proved critical in 2022. Managed futures funds were highlighted for their ability to produce uncorrelated returns across different market environments. News noted that systematic global macro managers generated strong risk-adjusted returns this year as trends emerged in equity indices, bonds, currencies, and commodities. Their rules-based trading strategies profited from mid-year reversals across asset classes. Analysts touted managed futures’ portfolio utility for improving returns, managing volatility, and hedge tail risks like market crashes.
In summary, major alternative investment news and trends in 2022 covered the popularity of private capital strategies, hedge funds’ resurgence, real assets as inflation hedges, the ‘crypto winter’, and managed futures as portfolio diversifiers. As macro uncertainty persists, understanding the latest developments across alternative investments can help investors position their portfolios.