UniFi by CAIA Crossing the Threshold - 28

Income
For investors seeking income, alternatives such as private credit, real estate, and
infrastructure assets can offer differentiated and diversified sources of income.
Today, alternative strategies focused on income range from those offering stable,
consistent income (e.g. core real estate and renewable energy assets), to ones with
chunky, unpredictable distributions, and still others with payout outcomes closer to
equities. Increased challenges and constraints in traditional bank lending have created
significant opportunities for private credit expansion. Below are just a few of the
private credit strategies investors can access today:
* Direct loans to lower, middle, and upper private market companies
* Venture debt (loans to startup and early-stage companies)
* Revenue-based loans (loans paid back through a percentage of borrower's
revenues)
* Trade finance (loans to businesses involved in trade transactions)
* Infrastructure debt (loans to infrastructure developers)
* Private, tax-exempt debt (private activity debt for affordable housing
development)
* Litigation financing (loans to individuals or firms pursuing claims in court)
* Government receivables (loans to government contractors)
Income-generating alternatives with shorter durations, such as trade finance, are
better suited for investors with less capacity for illiquidity, while investors without
liquidity needs can access private credit with longer horizons and, often, higher yields.
Growth
For clients seeking capital appreciation, alternative investments such as hedge funds,
private equity, early-stage venture, distressed debt, and real estate have the potential
to generate outsized returns across different market environments. The number of
publicly listed companies traded on global exchanges has been shrinking over the last
few decades, as privately held companies stay private for longer.
Considering only publicly traded equities
today means investing in a shrinking
opportunity set and earning returns on a
smaller and smaller portion of the investable
global market. By adding allocations to private
equity markets, investors can participate in
growth opportunities inaccessible in public
equity markets. Today, private equity investors
can invest broadly in this asset class or in
specific niches based on sector, size, or
company life-stage from pre-seed venture to
large privately held enterprises.
Source: CNN.com; https://www.cnn.com/2023/06/09/investing/premarket-stocks-trading/
index.html and Schroders.com; https://www.schroders.com/en-gb/uk/institutional/
insights/how-should-investors-respond-to-the-stock-market-s-dwindling-status-/
28 A BETTER WAY FORWARD

http://www.CNN.com https://www.cnn.com/2023/06/09/investing/premarket-stocks-trading/ http://www.Schroders.com https://www.schroders.com/en-gb/uk/institutional/

UniFi by CAIA Crossing the Threshold

Table of Contents for the Digital Edition of UniFi by CAIA Crossing the Threshold