1-800-NO-YIELD – The Property Chronicle
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Real estate, alternative real assets and other diversions



Near-zero yields are making it difficult for pensions and endowments to hit the targets they need to meet their future obligations. It’s pushing disciples of the classic investing strategy of 60% stocks/40% bonds to get more creative.

As an example, the $400bn California Public Employees’ Retirement System (CalPERS), which provides benefits for 2 million current and future retirees, must earn an annual return of at least 7% to meet those obligations. That’s not an easy task when the safe investments that pension funds usually rely on are paying sub 1%.

Creative CIOs are shifting into assets once considered on the fringes of conventional investing, such as single-family rentals, digital assets, supply-chain finance, entertainment royalties, and catastrophe bonds. Institutional investors are now allocating an average 26% of their assets to alternative strategies (up from 11% in 2006).

Allocators will continue to seek higher returns via more esoteric asset-backed structures


About Gareth Jones

Gareth Jones is co-founder and Managing Partner of FinTech Collective, a New York-based early-stage venture capital firm founded in 2012, which is currently investing out of its $150m third fund, with a focus on capital markets, wealth and asset management, banking-lending payments, and insurance. Prior to becoming a venture capitalist, he helped build and sell three category-leading fintech companies: Multex, which IPO-ed and then sold to Reuters; Serverside, which sold to Gemalto, a European digital security company; and CardLab, which was acquired by Blackhawk Networks. Before that he spent three years ‘double handing’ a 36ft sailing boat 33,000 nautical miles from the UK to the Antarctic circle.

Articles by Gareth Jones

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