Business News

Returns drive confidence in alternatives

The solid returns delivered by alternative investments are one key reason for growing interest and confidence in the asset class, particularly from the SMSF sector.

“We’re seeing a significant increase in appetite from the SMSF market and I think it comes down to the returns,” Blue Sky Alternative Investments key account manager Laz Siapantas told selfmanagedsuper.

“They’re looking at things outside the norm – obviously equity markets have had a really good run, but I think investors are looking for something a little different to deliver them both capital growth and yield.”

Siapantas said Blue Sky was pleased so far with its returns, which fostered investor confidence.

“The real estate team has delivered 16 per cent per annum net of fees and across the board as a business we’ve delivered 15.3 per cent per annum net of fees,” he said.

“You need to deliver returns and instil that confidence in investors in order for them to give you capital and put it to work – that’s where we’re at as a business now.

“The confidence is really coming through and it is definitely coming from the SMSF market.”

While interest was high, access to alternatives had only just recently opened up for Australian investors, he said.

“A lot of the direct [offerings] that we do are mainly for sophisticated and wholesale investors, and SMSFs that do meet the requirements of a sophisticated investor can invest into those at minimums of around $50,000,” he said, adding Blue Sky could sometimes further reduce the minimum to provide access.

“In the past, you might have a private equity deal where the minimum investment was $1 million, so it counts most SMSFs out of the space from the word go.

“The fact that we’ve provided access at a lesser amount has given them the ability to invest in the first place.”

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