Where did all the yield go?

July 28, 2021

July 28, 2021

July 28, 2021

Where did all the yield go?

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Looking at how Private Real Estate Debt can achieve a steady and reliable rate of return with low risk to their principal for investors.

Most investors have one common goal: to achieve a steady and reliable rate of return with low risk to their principal. And at a time of low returns, they’re turning to alternative assets to find yield.

Investment is a careful balancing game between risk and return – and for some, there’s a lot at stake. Australians currently have in excess of $2 trillion in investments in superannuation alone.

Australia is a nation of investors, with nearly half the population (46%) holding investments outside of their home and super. And as the next generation of investors begin to plan for retirement, they’re intensifying their search for new options.

Between the end of 2020 and 2025, assets under management in global Private Debt are expected to rise 72%, far outpacing global GDP.

Within private debt, there’s a sub-class focused purely on 1st mortgage-backed real estate debt. Private real estate debt provides loans to commercial borrowers who require funds – with a first mortgage as security. Investors effectively become the bank and receive regular income in the form of interest payments.

With solid returns and low-risk profile, private real estate debt as an asset class holds a strong appeal for investors. And now, it’s no longer a case of having to be ‘invited’ into the deal – platforms like AltX are democratising access for wholesale investors, with a minimum investment of just $50,000.

It’s also a compelling alternative to traditional fixed-income options. With the ten-year yield on Australian Government Bonds just 1.57%, and the official cash rate inching closer to negative returns, private real estate debt rates of 4% to 8% look pretty attractive. And the deals are typically short-term – on average 12 to 18 months.

Sure, you might be able to get those returns (or more) in equities. But if we’ve learned anything in the past year, it’s that the stock markets are extremely volatile. Pricing is subject to market, economic and geographical conditions, putting your capital at risk.

And at AltX, we only offer deals to our investors if we feel confident enough to put our own money into them as well.

Most investors have one common goal: to achieve a steady and reliable rate of return with low risk to their principal. And at a time of low returns, they’re turning to alternative assets to find yield.

Investment is a careful balancing game between risk and return – and for some, there’s a lot at stake. Australians currently have in excess of $2 trillion in investments in superannuation alone.

Australia is a nation of investors, with nearly half the population (46%) holding investments outside of their home and super. And as the next generation of investors begin to plan for retirement, they’re intensifying their search for new options.

Between the end of 2020 and 2025, assets under management in global Private Debt are expected to rise 72%, far outpacing global GDP.

Within private debt, there’s a sub-class focused purely on 1st mortgage-backed real estate debt. Private real estate debt provides loans to commercial borrowers who require funds – with a first mortgage as security. Investors effectively become the bank and receive regular income in the form of interest payments.

With solid returns and low-risk profile, private real estate debt as an asset class holds a strong appeal for investors. And now, it’s no longer a case of having to be ‘invited’ into the deal – platforms like AltX are democratising access for wholesale investors, with a minimum investment of just $50,000.

It’s also a compelling alternative to traditional fixed-income options. With the ten-year yield on Australian Government Bonds just 1.57%, and the official cash rate inching closer to negative returns, private real estate debt rates of 4% to 8% look pretty attractive. And the deals are typically short-term – on average 12 to 18 months.

Sure, you might be able to get those returns (or more) in equities. But if we’ve learned anything in the past year, it’s that the stock markets are extremely volatile. Pricing is subject to market, economic and geographical conditions, putting your capital at risk.

And at AltX, we only offer deals to our investors if we feel confident enough to put our own money into them as well.

Most investors have one common goal: to achieve a steady and reliable rate of return with low risk to their principal. And at a time of low returns, they’re turning to alternative assets to find yield.

Investment is a careful balancing game between risk and return – and for some, there’s a lot at stake. Australians currently have in excess of $2 trillion in investments in superannuation alone.

Australia is a nation of investors, with nearly half the population (46%) holding investments outside of their home and super. And as the next generation of investors begin to plan for retirement, they’re intensifying their search for new options.

Between the end of 2020 and 2025, assets under management in global Private Debt are expected to rise 72%, far outpacing global GDP.

Within private debt, there’s a sub-class focused purely on 1st mortgage-backed real estate debt. Private real estate debt provides loans to commercial borrowers who require funds – with a first mortgage as security. Investors effectively become the bank and receive regular income in the form of interest payments.

With solid returns and low-risk profile, private real estate debt as an asset class holds a strong appeal for investors. And now, it’s no longer a case of having to be ‘invited’ into the deal – platforms like AltX are democratising access for wholesale investors, with a minimum investment of just $50,000.

It’s also a compelling alternative to traditional fixed-income options. With the ten-year yield on Australian Government Bonds just 1.57%, and the official cash rate inching closer to negative returns, private real estate debt rates of 4% to 8% look pretty attractive. And the deals are typically short-term – on average 12 to 18 months.

Sure, you might be able to get those returns (or more) in equities. But if we’ve learned anything in the past year, it’s that the stock markets are extremely volatile. Pricing is subject to market, economic and geographical conditions, putting your capital at risk.

And at AltX, we only offer deals to our investors if we feel confident enough to put our own money into them as well.

Most investors have one common goal: to achieve a steady and reliable rate of return with low risk to their principal. And at a time of low returns, they’re turning to alternative assets to find yield.

Investment is a careful balancing game between risk and return – and for some, there’s a lot at stake. Australians currently have in excess of $2 trillion in investments in superannuation alone.

Australia is a nation of investors, with nearly half the population (46%) holding investments outside of their home and super. And as the next generation of investors begin to plan for retirement, they’re intensifying their search for new options.

Between the end of 2020 and 2025, assets under management in global Private Debt are expected to rise 72%, far outpacing global GDP.

Within private debt, there’s a sub-class focused purely on 1st mortgage-backed real estate debt. Private real estate debt provides loans to commercial borrowers who require funds – with a first mortgage as security. Investors effectively become the bank and receive regular income in the form of interest payments.

With solid returns and low-risk profile, private real estate debt as an asset class holds a strong appeal for investors. And now, it’s no longer a case of having to be ‘invited’ into the deal – platforms like AltX are democratising access for wholesale investors, with a minimum investment of just $50,000.

It’s also a compelling alternative to traditional fixed-income options. With the ten-year yield on Australian Government Bonds just 1.57%, and the official cash rate inching closer to negative returns, private real estate debt rates of 4% to 8% look pretty attractive. And the deals are typically short-term – on average 12 to 18 months.

Sure, you might be able to get those returns (or more) in equities. But if we’ve learned anything in the past year, it’s that the stock markets are extremely volatile. Pricing is subject to market, economic and geographical conditions, putting your capital at risk.

And at AltX, we only offer deals to our investors if we feel confident enough to put our own money into them as well.

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AltX is an online investment platform offering alternative income – generating investments, delivered seamlessly.

Disclaimers

AltX Pty Ltd (ACN: 618 796 115, AR no: 1270087), is an authorised representative of AltX Funds Management Pty Ltd (ACN: 113 502 604, AFSL no: 291314). The information on this website has been prepared for accredited wholesale clients – only who are interested in learning about the different products they can access via AltX. This information is factual information only. Any displays of potential investments are for example purposes only, and may not actually be available to investors. It does not take into account any of your personal objectives, circumstances or needs and does not constitute financial advice. Choosing an investment is an important decision and, before making any investment decision, you should consider obtaining financial advice, always read the disclosure documents as listed against every deal on the AltX investment platform and understand the associated risks as explained as on the AltX investment platform. 

Past performance is not an indicator of future performance. Expected or forecasted returns may not reflect actual performance. Any displays of potential investment opportunities are for sample purposes only, and may not actually be available to investors.

The information on this website does not constitute an offer to sell securities or a solicitation of an offer to buy securities. Further, none of the information contained on this website is a recommendation to invest in any securities.

AltX Pty Ltd is not a bank and is not regulated by the Australian Prudential Regulation Authority, and investing in AltX products is not the same as depositing money in a term deposit offered by a bank.

© 2024

AltX Funds Management Pty Ltd

AltX is an online investment platform offering alternative income – generating investments, delivered seamlessly.

Disclaimers

AltX Pty Ltd (ACN: 618 796 115, AR no: 1270087), is an authorised representative of AltX Funds Management Pty Ltd (ACN: 113 502 604, AFSL no: 291314). The information on this website has been prepared for accredited wholesale clients – only who are interested in learning about the different products they can access via AltX. This information is factual information only. Any displays of potential investments are for example purposes only, and may not actually be available to investors. It does not take into account any of your personal objectives, circumstances or needs and does not constitute financial advice. Choosing an investment is an important decision and, before making any investment decision, you should consider obtaining financial advice, always read the disclosure documents as listed against every deal on the AltX investment platform and understand the associated risks as explained as on the AltX investment platform. 

Past performance is not an indicator of future performance. Expected or forecasted returns may not reflect actual performance. Any displays of potential investment opportunities are for sample purposes only, and may not actually be available to investors.

The information on this website does not constitute an offer to sell securities or a solicitation of an offer to buy securities. Further, none of the information contained on this website is a recommendation to invest in any securities.

AltX Pty Ltd is not a bank and is not regulated by the Australian Prudential Regulation Authority, and investing in AltX products is not the same as depositing money in a term deposit offered by a bank.

© 2024

AltX Funds Management Pty Ltd

AltX is an online investment platform offering alternative income – generating investments, delivered seamlessly.

Disclaimers

AltX Pty Ltd (ACN: 618 796 115, AR no: 1270087), is an authorised representative of AltX Funds Management Pty Ltd (ACN: 113 502 604, AFSL no: 291314). The information on this website has been prepared for accredited wholesale clients – only who are interested in learning about the different products they can access via AltX. This information is factual information only. Any displays of potential investments are for example purposes only, and may not actually be available to investors. It does not take into account any of your personal objectives, circumstances or needs and does not constitute financial advice. Choosing an investment is an important decision and, before making any investment decision, you should consider obtaining financial advice, always read the disclosure documents as listed against every deal on the AltX investment platform and understand the associated risks as explained as on the AltX investment platform. 

Past performance is not an indicator of future performance. Expected or forecasted returns may not reflect actual performance. Any displays of potential investment opportunities are for sample purposes only, and may not actually be available to investors.

The information on this website does not constitute an offer to sell securities or a solicitation of an offer to buy securities. Further, none of the information contained on this website is a recommendation to invest in any securities.

AltX Pty Ltd is not a bank and is not regulated by the Australian Prudential Regulation Authority, and investing in AltX products is not the same as depositing money in a term deposit offered by a bank.

© 2024

AltX Funds Management Pty Ltd

AltX is an online investment platform offering alternative income – generating investments, delivered seamlessly.

Disclaimers

AltX Pty Ltd (ACN: 618 796 115, AR no: 1270087), is an authorised representative of AltX Funds Management Pty Ltd (ACN: 113 502 604, AFSL no: 291314). The information on this website has been prepared for accredited wholesale clients – only who are interested in learning about the different products they can access via AltX. This information is factual information only. Any displays of potential investments are for example purposes only, and may not actually be available to investors. It does not take into account any of your personal objectives, circumstances or needs and does not constitute financial advice. Choosing an investment is an important decision and, before making any investment decision, you should consider obtaining financial advice, always read the disclosure documents as listed against every deal on the AltX investment platform and understand the associated risks as explained as on the AltX investment platform. 

Past performance is not an indicator of future performance. Expected or forecasted returns may not reflect actual performance. Any displays of potential investment opportunities are for sample purposes only, and may not actually be available to investors.

The information on this website does not constitute an offer to sell securities or a solicitation of an offer to buy securities. Further, none of the information contained on this website is a recommendation to invest in any securities.

AltX Pty Ltd is not a bank and is not regulated by the Australian Prudential Regulation Authority, and investing in AltX products is not the same as depositing money in a term deposit offered by a bank.

© 2024

AltX Funds Management Pty Ltd