Alternative Assets

Description

Alternative assets include:

• Infrastructure – such as airports, toll roads and other utilities;
• Private equity – holding an interest in a private company that is not ‘listed’ on a stock exchange;
• Opportunistic growth assets – assets that do not match the profiles of the asset classes listed in this section.

How it makes a return

Infrastructure – The Government often leases the asset or the asset may generate income directly from the public, for example, commuters pay to use a toll road, or the asset may be leased over a long period from the government.

Private equities – similar to returns generated from listed shares.

What affects the investment value?

Infrastructure – changes in demand, interest rates and development costs can affect the return.

Private equities – similar to shares.

Risk and return characteristics

Risk/Return level = Moderate to High

Infrastructure – generally moderate risk/return level, although some assets may be higher risk/return. This is because of the income earning nature of many infrastructure assets.

Private equity – high risk/return level

Private equity is riskier than listed equity due to the small size and structure of the business.

Opportunistic Growth – moderate to high risk/return level, depending on the type of asset.