What are Real Assets?

What are Real Assets?

Currently many market participants speak about real assets. We will give you a brief overview.

What do we mean by real assets? Real assets belong to the asset class of “alternative investments” and are real investments in tangible assets, which you can watch and touch.

Real Assets are e.g. real estate and real estate loans or long-term infrastructure investments, energy & natural resources, raw materials, corporates and corporate loans. Such investments are essentially for a relatively low correlation to traditional asset classes such as stocks or bonds. With real assets you can also generate a certain protection against inflation, since in times of high inflation real assets can outperform the conventional asset classes. Real asset are stable in value and generate long-term stable cash flows.

In particular, infrastructure investments and renewable energy usually bring another positive aspect to your portfolio: Sustainability – this issue is becoming increasingly important, especially among European investors.

Why Real Assets? With high volatility and low interest rates, the interest rises to real assets.

  • Diversified returns
  • Exposure to global growth
  • Low correlations
  • Inflation protection

So how can you invest in real assets?

  • unlisted Real Assets vs listed Real Assets
  • direct vs indirect
  • single transaction vs Pooling vs Operating company

What are the requirements for Real Assets?

  • Yield
  • Volatillity
  • Overseeable risk
  • Liquidity
  • Sustainability

However, knowledge of alternative assets, and particularly real assets needs to be strengthened considerably. We also support you in this area.

 

In the next few years huge investments in infrastructure are needed in Europe. Who will finance all this? Banks, which previously held the finance function, excrete increased. Alternatives must and will establish themselves. This development is also supported by the regulators.

For this reason the business models of banks need to change.

Banking 4.0: After the saving & credit model, the traditional investment banking and arranging through the capital market, the customers are waiting for creative solutions that combine the real economy with the capital market. Banks and long-term investors in the medium term need to work together. The strict sectoral thinking within the Financials is a thing of the past.

For the successful realization of our projects we combine short-term financing with long-term market requirements. So we create a stable and additional value.

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About The Author

Heinz Hofstaetter
Over 20 years of international experience in senior management positions in the areas of consulting, banking, finance, asset management, valuation and Real Assets.