Alternative Investing Report - October 30, 2024

*as of 10/29; Sources: S&P, BTC, FTSE, DJRE, CL50

Blackstone, the world’s largest alternative asset manager, closed a $22 billion direct lending fund, which far exceeded its $10 billion target. It is Blackstone’s first semi-liquid direct lending fund, and represents a significant expansion of their private credit business. Elsewhere, two Goldman Sachs alums launched 5C Investment Partners, a new private credit firm that debuted a $1.6 billion direct lending fund.

➨ TAKEAWAY: Private credit has been one of the fastest growing alternative asset classes, quadrupling in size to $2 trillion in the past decade, as asset managers seek to meet investor demand. Blackstone more than doubling its target raise is an indicator of that demand, as more investors seek to replace traditional fixed-income investments with higher-returning private credit deals. However, with interest rates potentially on the way down, the double-digit returns that have attracted investors may disappear.

U.S. home prices rose by 0.3% in August and 4.2% year-over-year, according to the FHFA House Price Index, which also saw July numbers revised upwards from 0.1% to 0.2%. Price growth is slowing, however, as the annualized rate of growth over the past 4 months is just 1.9%. The S&P CoreLogic Case-Shiller Home Price Index also showed a 4.2% gain year-over-year but monthly prices actually declined by 0.1%.

➨ TAKEAWAY: Housing price appreciation has remained steadily positive this year, but there are signs that it is flattening out, as the market has slowly adjusted to the higher interest rate environment. People who have been waiting to sell their homes are finally listing them, as supply has grown, pushing prices down. With mortgage rates still high, expect price growth to stay relatively stagnant throughout the rest of the year.

🏢 Top cities for multifamily: Nashville, Phoenix, and Austin are the top markets for multifamily real estate investing, due to high population growth, strong local economies, and relative affordability. Other markets ranking highly include Dallas and San Antonio, as Texas continues to attract new residents.

⚾ EBay partners with cllct: The online auction giant is launching a live series of memorabilia auctions with collectibles media company cllct, with the first one set to air tonight at 6 PM ET on eBay Live.

🪙 Bitcoin hits $73,000: The cryptocurrency rose above $73,600 and came very close to setting a new all-time high, falling just short of the $73,800 mark it hit in March, as traders remain bullish ahead of the election.

🤖 Sierra funding round: The AI customer service company co-founded by OpenAI’s chairman raised $175 million at a $4.5 billion valuation, a huge jump over its $1 billion valuation in January.

🏡 Young homeowners better off: 69% of Millennial and Gen Z homeowners say they are better off financially than they were four years ago, compared to 52% of renters who say the same. There is no meaningful gap between homeowners and renters in the Gen X and Boomer generations.

🚀 SEC watching startups: Three venture-backed startups, Skael, Zymergen, and Medly, were charged last week with defrauding or misleading investors as the SEC cracks down on companies that falsify revenue data.

Dogecoin, the original memecoin, has seen its value rise by more than any other cryptocurrency in the top-100 in market cap, as Elon Musk discussed creating a Department of Governmental Efficiency (DOGE) if Donald Trump wins the election. Musk has long been a booster of Dogecoin, and there has a been a long history of his comments moving the market. DOGE-denominated futures have risen by 33% since Sunday, with a clear eye towards a possible Trump victory. Bear in mind that all crypto, and especially memecoins, come with great volatility - last week’s top crypto market mover, ApeCoin, has dropped 16% since then, and was the biggest decliner in the top-100 this week.