January 2024 Quarterly Newsletter | Volume 1

Go Niche or Go Home: Top Private Market Segments for 2024

Featured in Wealth Management Magazine

Advisors hunting fresh alternative asset opportunities for investors in 2024 won't have to look too far. Here are three focused market segments that deserve attention in 2024, plus one time-honored classic that's currently, and we think shortsightedly, attracting skepticism of late. Click to view the full article.

In Case You Missed It

In The News:

Forbes: 19 Financial Investment Trends to Consider in 2024

Market Update:

Private Equity Investors Grow Restless for Deployment

Rising Cost of Risk on Gulf Coast

Economic Update:

Fed Takes a Breather on Interest Rates

Financial Education:

Investing in CRE Through a Self-Directed IRA

Looking Beyond Returns: Balancing Rick & Return

What We Are Reading

1. What is the Future of the 60/40 Portfolio? - "'Traditionally, 60/40 means 60% stocks/40% bonds,' says Bruce Phelps, head of institutional advisory and solutions at PGIM. 'Now, it's 60% public assets (stocks and bonds) and 40% private assets' such as private equity, real estate, private credit, venture capital and infrastructure." (Chief Investment Officer)
2. KKR and Alternative Industry Race for Individual Investors - "The big alternative firms are intensifying their focus on retail distribution. And a special focus is on individual investors with assets of $1-5 million - this segment of U.S. household has jumped nearly 60%, to 12.7 million, in the 15 years ending 2022." (Forbes)
3. What's a Real-Estate Fund Worth? Depends on Who's Doing the Math - "...in a corner of the market that has grown rapidly - real-estate funds - the NAV label, while ubiquitous, doesn't have the same meaning. In most cases the funds, known as nontraded real estate-investment trusts, have broad leeway to define their NAV measurements however they want." (The Wall Street Journal)

Capital Corner

Asset Allocation

Value Proposition for Alternative Investments

The data from JP Morgan's chart succinctly explains the benefits of augmenting a traditional stocks-and-bonds portfolio with alternative investments. This trend is mirrored in the recent uptick of allocations by pension funds, endowments, and other institutional investors now reaching upward toward 40%.

Experts Respond

Dr. Bharat Sangani Remains Bullish on CRE

Investor Asks: Is commercial real estate still a core focus for you going into 2024?

"Those who declare 'there are no issues within the real estate sector,' are misinformed or not deeply involved in the business. Real estate enterprises commonly operate with leverage and when interest rates rise so do challenges––as the nation has recently experienced. Fortunately, the overall economy has remained healthy. As interest rates begin to decrease and a soft landing continues through 2024, the outlook is undoubtedly positive, and I see opportunities for growth and value creation. Moreover, the longer-term investment horizon inherent in CRE serves as a steady anchor for all my ventures, mitigating the risks associated with any market volatility we may be subject to today."

- Dr. Bharat Sangani, CEO, Encore Enterprises

Sector Spotlight

U.S. Multifamily Market

Positioned for Growth Through 2024

• "After hitting a 40-year high for completed units in 2023, the U.S. multifamily market is expected to see a 25% pullback next year that should help balance out the market." (CoStar )
• "Overall, 2024 has the potential to reverse two years of rent growth pulling back and quickly transition from stabilizing to recovering by the second half of the year. … Demand appears poised to expand above 400,000 units if the economy avoids recession and potential new renters feel more confident in signing an apartment lease." (CoStar )
• "With interest rate stability, cap rates and property values should stabilize allowing buyers and sellers to agree on asset value to facilitate more transaction volume." (Fannie Mae ) 
• "Despite the short-term supply headwind, over the longer-term the multifamily market will continue to be supported by the overall shortage of housing, an expensive for-sale housing market, and the next generation of renters entering prime renter age." (Fannie Mae )

Company News

Ignite Expands Into 2024

Looking Back/Experience Forward

In preparation for a promising 2024, Ignite has strategically positioned itself to leverage an anticipated easing of interest rates and lending conditions. Thanks to the exponential expansion of our internal team, we are enhancing our investor outreach by generating a more extensive and frequent array of content. Over the past year, our efforts have gone beyond the surface as we quietly laid the groundwork for new initiatives set to unfold in 2024. These initiatives not only promise innovative investment opportunities for our investors but will also contribute to the evolution and democratization of alternatives within the broader investment community. Stay tuned. 

On Your Desk

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