Alternative Investing Report - December 16, 2024

In partnership with

*as of 12/15; Sources: S&P, BTC, FTSE, DJRE, CL50

The buy now, pay later company Affirm, whose CEO and founder Max Levchin was a Smart Humans podcast guest, entered into a $4 billion partnership with private credit firm Sixth Street. The partnership will last three years and see Sixth Street committing capital to underwrite Affirm’s short-term loans to consumers. This deal adds to Affirm’s current funding capacity of $16.8 billion, and will help address growing demand for its services.

➨ TAKEAWAY: Private credit has seen increased prominence in the past few years, but that primarily saw firms lending to companies. This partnership is a massive commitment to consumer credit, which can see much higher interest rates, levels of risk, and defaults. As private credit has become a more crowded space, and with interest rates falling, it is no surprise that firms are looking to branch out into potentially more lucrative opportunities.

Today at 12 PM ET - join us 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.

Rents for industrial space in October rose to $8.22 per square foot, a 6.1% increase year-over-year, despite a slight rise in the vacancy rate to 7.2% nationwide. Construction completions fell to 69.3 million square feet in Q3, down from 101.5 million in Q2 and 119.3 million in Q1. Only 184.4 million square feet of construction has been started this year in total, and 358.8 million square feet is in progress, which represents nearly a 50% decline from 2023 and a 80% decline from 2021-2022 levels.

➨ TAKEAWAY: Once the hottest sector of commercial real estate, industrial has seen a minor slowdown, in part because supply started to catch up to demand. However, construction has slowed considerably this year, making it likely that vacancy rates will start falling and rents will rise quicker in the years to come.

💵 Household wealth at record high: The total net worth of American households increased by $4.8 trillion in Q3, a 2.9% quarterly gain, to set a new all-time record. Of that gain, $3.8 trillion was from the rise in value of equity holdings.

🚀 Databricks’ record fundraise: The data, software and AI startup is reportedly nearing a $9.5 billion funding round at a valuation of $60 billion, a significant jump from its prior valuation of $43 billion in September. The round would far surpass OpenAI’s record-high VC round of $6.6 billion earlier this year.

🪙 Bitcoin allocation: Asset manager BlackRock recommended that investors who want exposure to Bitcoin should invest between 1-2% of their portfolio in the cryptocurrency, around what BlackRock says someone should invest in companies like Amazon, Microsoft, or Nvidia.

⚾ $1.56 million Grand Slam: The ball from Los Angeles Dodger Freddie Freeman’s game-winning home run in Game 1 of this year’s World Series sold for $1.56 million, making it the third-most expensive home run ball ever.

🏡 Buying demand rises: Redfin’s Homebuyer Demand Index has risen 8% year-over-year and is at its highest point since April, as more people are requesting tours and buying services from agents. Mortgage applications are up nearly 20% in the last month and pending home sales are up 4% year-over-year.

🚀 Last week’s biggest rounds: There were five fundraising rounds that topped $100 million last week, led by fintech startup One’s $300 million round, and AI startup Liquid AI’s $250 million round.

Tuesday: Homebuilder confidence index released; 1952 Topps Mickey Mantle signed card will be auctioned at Goldin, bidding has already surpassing $450,000.

Wednesday: The Fed’s interest rate decision is announced; The oldest known stone tablet of the Ten Commandments will be auctioned at Sotheby’s with an estimated value of $1 million - $2 million.

Thursday: U.S. GDP report and existing home sales report are released.

Friday: Personal consumption expenditures (PCE) and Core PCE reports released.