Alternative Investing Report - October 25, 2024

*as of 10/24; Sources: S&P, BTC, FTSE, DJRE, CL50

Sales at the major art auction houses fell by 26% in the first six months of the year, according to the Art Basel and UBS 2024 survey of global collecting. For wealthy collectors, the average allocation to art fell from 22% of their portfolios in 2021 to 15% in 2024. However, 91% of those collectors were optimistic about the global art market’s performance over the next six months, which is up from 77% in 2023, indicating that a turnaround could be on the horizon.

➨ TAKEAWAY: Macroeconomic factors such as high interest rates and geopolitical uncertainty have certainly contributed to the slowdown in the art market. However, there is also a generation gap at play, as older collectors start to exit the market and younger collectors start to enter. Expensive 19th and 20th century Impressionist work may not be as appealing to Millennials and Gen Zers, leading to an oversupply. The next decade is going to bring a generational wealth transfer, and with that, a transfer of art, which could also create oversupply issues.

The volume of angel investing deals in the U.S. has fallen by 64% since 2015 and is on pace to drop by a third this year. Institutional investors have gradually taken over, crowding out individuals who want to invest into startups. Tech giants like Google, Microsoft and Apple have also put billions of dollars into early-stage companies. Startup accelerators and incubators such as Y Combinator also reduce founders’ dependence on outside funding.

➨ TAKEAWAY: It has become difficult for individual investors to get access to seed-stage and early-stage deals as they face competitors with deeper pockets. Many people who used to seek angel deals are now investing into venture funds instead, which does help diversify portfolios and lower risk, but it lacks the allure of hitting it big with a single investment. Crowdfunding platforms do offer retail investors the chance to become angel investors, and represent a viable alternative.

As we enter a new rate cycle, new opportunities are arising for real estate investors. Next Tuesday at 11 AM ET, join a discussion about how best to build your portfolio in a shifting rate environment.

 🚀 General Catalyst’s big raise: The VC firm announced $8 billion in new funding, as it looks to invest in early-stage startups primarily in the U.S., Europe and India and in the AI, defense, climate, healthcare and fintech sectors.

🏡 New homes sales rise: Sales of newly built single family homes rose by 4.1% in September to the highest rate in 18 months, in contrast to yesterday’s news that existing-home sales continue to decline.

🪙 Kraken blockchain: In 2025, the crypto exchange will be launching Ink, an Ethereum-based layer 2 blockchain that will create a single DeFi ecosystem with lending, yield farming and futures trading.

🦸‍♂️ DC comics auction: A complete collection of over 12,000 DC comic books will start being sold this weekend at Heritage Auctions, as the Christine Farrell collection’s first auction begins.

🏡 Homebuying demand steady: Buyer demand is at its highest level since May, even as mortgage rates rose and election uncertainty continues.

🚀 Petcare VC: Vetted Capital, a VC firm focused on pet-related startups, is aiming to raise between $150 million and $300 million for its first fund, as VC funding to pet companies is at its lowest level since 2016.

Monday: 🏡 Home sale profits, 🪙 Crypto usage increase
Tuesday: 🚀 Stripe acquires Bridge, 🏡 Relocation trends
Wednesday: ⚾ Ohtani HR ball auction, 🤖 Perplexity fundraise
Thursday: 📝 Accredited investor test, 📉 Byju’s failure

Have a great weekend!