Real assets: what contribution to asset allocation, especially in times of crisis?

Sacrificing some portfolio liquidity can be profitable. Ultra-low bond rates, equities that are highly volatile and thus sometimes seen as too expensive, the search for yield and the search to capture a liquidity premium are all pushing institutional investors toward the unlisted or «real asset» universe.

Yet under the label of «real assets» are assets as varied as real property, business loans, real estate loans, an infrastructure project, a private equity investment and infrastructure debt. In short, many asset classes and sub-classes whose positioning on an economic or inflation cycle is different, where the correlations among them are weak enough that they should be considered separately and not as a single unit, at different stages of the cycle and not in the same way. However, these are markets whose prices originate with transactions that often involve a small number of investors, so there is often no point in looking for price or performance histories, because that information is not public. In fact, when you invest in these asset classes, you aren’t buyingmarkets, you’re buying properties.

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