Alternative Investing Report - February 10, 2025

*as of 2/9; Sources: S&P, BTC, FTSE, DJRE, CL50

The “Joachim-Ma” Stradivarius violin, dating to 1714, sold for $11.25 million at Sotheby’s, falling short of the $12 million - $18 million pre-sale estimate. Its auction coincided with Sotheby’s “The One” auction, which highlighted 11 unique items from antiquities to modern sports memorabilia. Muhammad Ali’s trunks from the “Thrilla in Manila” fight sold for $1.2 million, while a pair of Kobe Bryant’s sneakers from the game where he tore his Achilles tendon sold for $660,000.

➨ TAKEAWAY: The result for the Stradivarius was a slight disappointment, as there was hope that it would break the all-time record for a musical instrument at auction, which currently stands at $15.9 million. The Ali trunks had last sold for $155,350 in 2012, but carried a $4 million - $6 million estimate late April before it was pulled from that auction, so this result could be framed as subpar in that light. Still, the inclusion of two sports memorabilia items as the centerpieces of the subsequent auction is a strong sign for the asset class.

Today at 12 PM ET - join a briefing covering Elon Musk’s neurotechnology company Neuralink. Vincent’s Slava Rubin and Sacra’s Jan-Erik Asplund will discuss the company’s growth, strengths, challenges, IPO prospects, and much more. Presented by Upmarket.

There is a bipartisan push in the U.S. to ban the use of Chinese AI startup DeepSeek on government devices, which would follow in the footsteps of multiple other countries, including Australia and South Korea, while Italy has banned its use entirely. The U.S. bill cites national security concerns due to DeepSeek’s Chinese ownership, and China’s cybersecurity laws that require companies share their data with authorities upon request.

➨ TAKEAWAY: The nature of gen-AI companies is that they capture an enormous amount of their users’ inputs to help train their models, so there is some merit to these government’s concerns. It is also worth noting that TikTok was banned from governmental devices in 2022 before the social media platform was eventually banned entirely, though that ban is currently pending. This current bill could be the first step towards a total ban on DeepSeek and other Chinese AI companies if it becomes law.

💵 Carried interest tax loophole: President Trump outlined his proposed tax policies, which include eliminating the “carried interest loophole,” which allows partners in investment firms, like venture capital and private equity firms, to have their “carried interest” compensation be taxed at the lower capital gains rate. If this happens, there could be fundamental changes in the fee structures these firms charge their investors.

🏡 Golf real estate: Properties at high-end residential golf communities have seen a surge in demand, with record sales in 2024 at places like Kiawah Island in South Carolina, Timbers Kauai in Hawaii, and Horseshoe Bay in Texas.

🪙 Gemini considering IPO: The cryptocurrency company and exchange founded by the Winklevoss twins is in talks to pursue a public offering as soon as this year, taking advantage of the current pro-crypto administration.

🚀 New unicorns: Ten new VC-backed startups hit valuations of $1 billion or more in January, down from 17 last January. Seven of the new unicorns are AI companies, continuing the 2024 trend.

🏢 BREIT’s evolving portfolio: Blackstone’s massive commercial real estate investment trust is now allocating 13% of its portfolio to data centers (up from 1% in 2020), 10% of its portfolio to student housing (1% in 2020) and 9% of its portfolio to single-family housing (0% in 2020), a good gauge of investor demand within these sectors.

🎨 AI art auction: Christie’s Augmented Intelligence auction opens next week, the first sale of exclusively AI-created artworks at a major auction house.

Today: China’s retaliatory tariffs are scheduled to begin; the AI Action Summit in Paris kicks off.

Wednesday: Consumer Price Index (CPI) and core CPI reports released.

Thursday: Producer Price Index (PPI) and core PPI reports released.

Friday: Valentine’s Day!

Saturday: Goldin’s Winter Vintage Elite auction, featuring multiple six-figure Babe Ruth cards.

Sunday: 2025 NBA All-Star Game in San Francisco.