Alternative Investing Report - October 31, 2024

*as of 10/30; Sources: S&P, BTC, FTSE, DJRE, CL50

The post-Labor Day U.S. IPO window has seen just $7.7 billion in deal volume thus far, down from $9.6 billion last year and below expectations, as several companies have delayed their offerings until 2025. Despite some optimism that the Fed rate cut would lead to increased activity, the looming election has caused companies to hit the brakes for now. In contrast, there have been a number of high-profile European IPOs, as deal volume has quadrupled year-over-year.

➨ TAKEAWAY: Don’t expect any high-profile IPOs the rest of the year, with the holidays fast approaching post-election. The lack of activity does seem to augur well for a big 2025, with some predicting an increase of 30% to 40% in IPO proceeds, a four-year high. A more robust IPO market will lead to a more robust pre-IPO market, with the promise of more exits likely to encourage people to invest in good IPO candidates.

Mortgage rates have increased once again, topping 7% for the first time since July. The average 30-year fixed rate started the month at 6.2% following the September Fed rate cut, but has gradually increased in response to strong economic and job reports that could spur the Fed to slow down cuts. The rise in rates means that the average buyer has effectively lost $33,000 in purchasing power in the past six weeks.

➨ TAKEAWAY: Even without the increase in mortgage rates, the housing market would be slower than usual thanks to election uncertainty. Buyers don’t want to lock themselves in before knowing how the results will affect their financial situations and the housing market in general. Expect the market to remain slow in the short term, even if mortgage rates start coming back down.

This week, Vincent's CEO Eric Cantor was joined by the CEOs of EquityMultiple, AcreTrader, and Groundfloor to discuss how to navigate real estate in the current global environment, and what options are available for everyday investors.

🪙 Coinbase partners with Visa: Coinbase users with eligible Visa debit cards will soon be able to purchase crypto and withdraw funds to a bank account in real time, as traditional finance companies continue to partner with crypto companies.

🥃 Japanese whiskey auction: A rare, complete set of Hanyu Ichiro’s Malt Full “Card” Series containing 54 bottles of single-malt whiskey from the defunct distillery, will be auctioned off next month at Bonham’s and carries an estimated $1.3 million price tag.

🏡 Potential million-dollar markets: Nine of the top ten markets set to hit a million-dollar average house price in the next decade are in the West, led by Boise, Salt Lake City, and Portland.

🤖 Meta eyes AI search engine: The tech giant is working on an AI-powered search engine to work with it's Meta AI chatbot, which currently uses Google and Microsoft Bing to answer user questions.

🎨 Most valuable Tiffany piece: The Danner Memorial Window, a 16-foot high stained glass window, is up for auction next month at Sotheby's and is expected to become the most expensive Tiffany work in history with an estimate of $5 million - $7 million. It last sold in 2000 for $2 million.

🚀 Early-stage biotech: As bigger VC firms focus on more established, later-stage biotech companies, smaller firms are filling the gap in funding for early stage companies, which are higher risk but bring a much higher potential payoff.

AI keeps popping up in the healthcare space, as more companies see the potential for its use in the industry. xAI founder Elon Musk wants people to submit their medical data to Grok, the company’s AI chatbot, to allow it to train itself, but there are obvious privacy concerns. Oracle announced a new AI-powered electronic health record, just the latest company to do so. One concern is that AI is not accurate enough and is still prone to “hallucinations” - where models just make up things - and in an industry where errors can have severe consequences, there still needs to be human oversight.

_{** Alternative investments are speculative and possess a high level of risk. No assurance can be given that investors will receive a return of their capital. Those investors who cannot afford to lose their entire investment should not invest. Investments in private placements are highly illiquid and those investors who cannot hold an investment for an indefinite term should not invest. Private credit investments may be complex investments and they are subject to default risk.}