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The catalysts for this
investor appetite can
be found in the last
financial crisis and the
global monetary policy
response that followed,
driving interest rates to
structural lows
TB Amati UK Smaller Companies’ David
Stevenson names three stocks he is using
to benefit from the growing appetite for
alternative assets
Considering
the alternatives
to structural lows, as well as in the
regulatory pressures imposed on
life companies and pension funds to
match long-term liabilities with long-
duration assets. Alternative assets can
include specialist property (such as
self-storage or healthcare), renewables,
infrastructure and financial
instruments such as royalties, debt and
leases. There are many ways to play
this theme in the UK market. Below are
three examples used in the TB Amati
UK Smaller Companies fund.
A
noteworthy feature of capital
markets over the last decade
has been growing institutional
demand for “alternative” assets.
These are assets offering long-term
visible returns, with a low correlation
to equities and bonds. The catalysts
for this investor appetite can be
found in the last financial crisis and
the global monetary policy response
that followed, driving interest rates
ICG is a global asset
manager with a history
of providing mezzanine
debt to private equity
investors; this has broad-
ened its product range to
senior debt, infrastruc-
ture debt and specialist
private equity funds. In
an environment of falling
TRUSTNET
interest rates, ICG’s high-
yielding investments have
been in strong institu-
tional demand and it has
progressed from investing
its own balance sheet to
raising third-party funds,
with a scaling of capacity.
This has also been fuelled
by the growth in the pri-
vate equity sector and its
deal activity.
Watkin Jones is a
contract builder of
purpose-built student
accommodation (PBSA)
and build-to-rent (BTR)
assets. PBSA is well estab-
lished in the UK, provid-
ing modern accommo-
dation to domestic and
international students.
Watkin Jones targets
high-occupancy city-cen-
tre developments, which
generate durable yields
for institutional inves-
tors – to which it also
provides a property-man-
agement service. BTR is
a similar bespoke build
for institutions but is at
an earlier stage in the UK
compared with the US.
erational shift in UK hous-
ing, where there is unmet
Grainger is the UK’s
demand for quality rental
largest listed residen-
properties. Grainger de-
tial landlord. It has been velops, acquires and man-
migrating its business
ages PRS properties and
from legacy regulated
competes with institution-
tenancy properties, which al investors for newbuild
are sold once vacated, to
assets. It recently estab-
private rented sector (PRS) lished a joint venture with
properties. The company
TFL to create PRS homes
represents a play on a gen- close to tube stations.
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