Expected Returns for Alternative Asset Classes (plus Reading Habits w/ David Senra) (EP.219)

<p>The type of assets which usually come to mind when considering investments are stocks, bonds, or cash, but what are the alternatives? And what kind of returns do alternative asset classes offer? In today’s episode, we delve into the returns which can be expected from alternative asset classes such as private equity, venture capital, angel investing, private credit, hedge funds, direct real estate, and cryptocurrencies. Hear an in-depth analysis based on empirical studies and the expertise of your hosts, Ben and Cameron, to discover whether there is any merit to alternative asset classes as investments. We unpack the extra layer of complexity associated with predicting returns on alternative assets, how to approach calculating returns, and why the associated fees are an essential consideration. We also hear details about an interesting conference Cameron recently attended and briefly recap cryptocurrencies as an investment. You’ll also hear our conversation with our 22 in 22 reading challenge guest David Senra about his reading habits, the books that most inspire him, and his advice for people who want to read more.</p> <p> </p> <p><strong>Key Points From This Episode:</strong></p> <p> </p> <ul> <li>Outline of today’s main topic: expected returns for alternative asset classes. <strong>(0:01:51)</strong></li> <li>Why predicting returns of alternative asset classes has an extra layer of complexity. <strong>(0:03:18)</strong></li> <li>How to approach estimating the returns of private equity, specifically buyouts. <strong>(0:05:04)</strong></li> <li>We unpack historical data regarding the returns of private equity. <strong>(0:07:35)</strong></li> <li>Calculating the returns on venture capital and reasons to be cautious about it as an asset class. <strong>(0:16:35)</strong></li> <li>The distribution of returns from venture capital based on the market numbers. <strong>(0:20:09)</strong></li> <li>Learn what angel investing is and its associated returns. <strong>(0:20:54)</strong></li> <li>What returns on angel investi