Alternative assets

Alternative assets are a set of financial assets and real assets that do not belong to traditional investment assets (bonds and stocks).

Alternative assets mainly include mutual funds, venture capital companies, real estate, commodities and shares of unlisted companies. But in addition, they include antiques, stamps and coins, investment in wine cellars, etc.

Common characteristics of alternative assets

Despite belonging to the same category, each one of these alternative assets has different characteristics. However, they have several common characteristics:

• They are not very liquid: Alternative assets are more difficult to sell than traditional ones.
• They require a more detailed analysis and a deeper understanding of the sector to invest in them, which entails higher research costs.
• They have very little correlation with traditional assets, which makes them a good investment option when we pursue the diversification from our portfolio.
• They have less regulation and transparency than traditional assets.
• Difficulty calculating your performance and find historical data.

Alternative asset types

Alternative assets, despite having common characteristics, are very different assets. The main alternative assets are:

• Investment funds: They are collective investment institutions. Within investment funds there are many different strategies. Within investment funds we can find traditional investment funds, hedge funds Y ETFs, among others.
• Venture capital: Also known as Private Equity, they are companies that are dedicated to investing in shares of companies that do not they quote in the market.
• Property: Includes residential and commercial properties. Also, investments in collective real estate companies, REITs, Fibras or investment in mortgage debt.
• Raw Materials: These are the goods that must be transformed or treated in order to be consumed, such as wheat, coffee and oil for example.
• Other: It is a very broad category, since there are many types of alternative assets, we have decided to bring them all together under this type. They include investment in wine, collectibles (such as stamps and coins for example), antiques, automobiles, art and intangible assets (like patents).