Alternative Investing Report - December 12, 2024

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*as of 12/11; Sources: S&P, BTC, FTSE, DJRE, CL50

Inflation rose slightly in November, with the Consumer Price Index (CPI) showing a 0.3% gain for the month and 2.7% gain for the past twelve months. These are both up from October’s numbers, which showed a 0.2% monthly rise and 2.6% yearly rise. The core CPI, which excludes food and energy costs, rose by 3.3%, the same as October’s numbers.

➨ TAKEAWAY: While these numbers are still above the Fed’s stated 2% target, the data was in line with expectations, and the Fed is still expected to cut rates when it meets next week. The odds of a 25 basis point cut rose from 88% to 98%, and this in turn led to a boost in both the equities and crypto markets.

Join us on December 16 at 12 PM ET for a discussion about the future of film financing. Dive in with three industry insiders - FilmHedge founder Jon Gosier, Slated’s head of film finance Jay Burnley, and Republic’s head of film Marc Iserlis - about investment opportunities in this exciting asset class.

The beleaguered office real estate sector saw a 28% monthly gain and 18% year-over-year gain in sales volume, with deals in urban offices increasing by 55% year-over-year. Multifamily transaction volume also rose year-over-year (+18%), while industrial (-17%), retail (-19%) and hospitality (-14%) all declined.

➨ TAKEAWAY: The rise in sales volume could be a sign that the office market has finally hit its bottom. In Q3, there was a positive rate of net absorption - more leasing activity than vacancies - for the first time since early 2022. Multifamily has also been seeing strong buyer demand, and 2025 looks promising for apartment buildings. While the other three sectors saw declines in volume, that is attributable more to a lack of inventory than a lack of demand.

🤖 Google releases Gemini 2.0: The newest version of Google’s AI model was released, with the chatbot available to the public. Additional features such as text-to-speech and image generation are now available to developers and will be made fully public in January. This comes on the heels of multiple OpenAI releases this past week, as the AI arms race continues to heat up.

🚀 ServiceTitan IPO: The cloud software company for contractors priced its IPO at $71 per share, above the expected range of $65-$67, giving the company a valuation of $6.3 billion, below its last private valuation of $7.6 billion. It is looking to raise almost $625 million in the offering, which is scheduled to debut today on the Nasdaq.

💵 Private credit market size: Investment data company Preqin expects the asset class to grow 55% by 2029, hitting $2.64 trillion in total.

🚀 Foodtech VC: Q3 funding for foodtech startups is down 9% in the past year while deal count dropped by 34%, but Zepto’s $340 million and Flink’s $150 million funding rounds showed optimism for ultrafast food and grocery delivery platforms.

🥃 Pricey Macallan doesn’t sell: A seven-bottle collection of 40 to 78-year-old Macallan with an estimated value of $640,000-$965,000, and a single 81-year old bottle estimated at $165,000-$230,000 both didn’t sell at a recent Bonhams Hong Kong auction.

🪙 Bitcoin paychecks: Around 30% of employees are open to the idea of getting their salary in cryptocurrency, with 72% of those preferring Bitcoin. Not surprisingly, Gen Z led the way, with 39% saying they’d be open to the idea, with just 15% of Baby Boomers feeling the same.

The AI chatbot company Character.AI is facing a federal product liability lawsuit after its chatbots have engaged in disturbing behavior such as hinting a teenager should kill his parents, exposing a 9 year-old to “hypersexualized content” and promoting self-harm. This follows an earlier lawsuit surrounding a 14 year-old boy who died by suicide after becoming obsessed with one of their chatbots. The company specifically markets itself to children and teenagers, and it is plain to see the danger of AI companions for such vulnerable populations. If these lawsuits are successful, it will set a precedent that AI companies are liable for what their chatbots say and do.