Alternatives

(New York)

One of the bright spots in the post-Crisis era has been the collectibles market. Everything from antique cars to high end art has surged in value since the Crisis, making collectibles one of the better returning asset classes. However, at least for the art market, that appears to have changed, as 2016 saw sales shrink 11% to their lowest point since the recession. 2016’s poor performance follows a down year in 2015 as well, when sales slipped 7%. The combined losses have now wiped out all the gains seen in 2013 and 2014. 2016 was particularly poor for auction houses.


FINSUM: Hard to say exactly what slowed the sector down as it had been doing so well. One interesting factor—the declines directly coincide with the bear market in oil.

Source: Bloomberg

(New York)

The real estate investment industry is having a problem. Investors are very eager to put money to work in the asset class, but managers are having trouble finding suitable investments. At the end of 2012, property funds had $136 bn to invest, now that figure is $237 bn. Low rates have driven interest in the sector, but the issue is that there is simply not much for sale, which means investors have a great deal of dry powder yet to be invested. Owners have easy bank financing and low debt levels, which leave them free to hold onto properties until they can get a higher return later.


FINSUM: As this piece rightly points out, a lot of people are investing for yield and not looking at the fundamentals. The market appears to be getting overheated, at least on the commercial end.

Source: Wall Street Journal

(Las Vegas)

The renewables industry, and especially solar, has just hit a major milestone. For the first time in history, solar energy is now the cheapest form of new electricity generation. It is beating out conventional source like coal and natural gas, but also wind energy. The low cost of solar energy is thanks to years of quick advances in technology which made solar panels much cheaper to buy. In 2010, solar energy cost almost $6m per megawatt, but this year that cost is down to just $1.65m. In some cases, solar energy is now half the price of coal.


FINSUM: Whether or not you are worried about the environment, the advancement of solar energy is good news, because it is lowering energy costs across the board.

Source: Bloomberg

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