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Alternative Investments Going Mainstream

Posted by: In: Newsletter 20 Sep 2012 Comments: 0

By Jim Hynes

Managing Director

There have been a number of local and national articles published lately covering the popularity of alternative investments.  Alternatives are commonly defined as assets in private equity, real estate, hedge funds, commodities and infrastructure.  Globally, alternative assets under management more than doubled between year-end 2005 and year-end 2011, to $6.5 trillion, according to a recent report from McKinsey & Company.  This pace represents a compounded annual growth rate of 14 percent over that period, far outpacing the 1.9 percent growth for traditional asset classes.

Low rates and market volatility in traditional stock/bond portfolios are the main drivers for investors seeking alternatives.  Another significant factor is to generate increased alpha.  The result is institutional and retail investors increasing their allocations to alternative investments.  U.S. institutional investors are expected to have 28 percent of their portfolios allocated to alternatives by the end of 2013.

Rockspring Capital has benefited greatly from this trend.  The main reasons investors go with us are:

1)      The attractive opportunity of a Texas real estate investment;

2)      Our use of no debt; and

3)      Our track record of delivering double digit returns.

Rockspring Capital looks forward to providing our investors returns with this alternative investment strategy for many years to come.

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