Alternative Investing Report - March 13, 2025

*as of 3/12; Sources: S&P, BTC, FTSE, DJRE, GOLD

The February Consumer Price Index (CPI) report rose by 0.2% monthly and 2.8% yearly, both slightly below expectations and an improvement over January’s numbers. Core CPI, which excludes food and energy prices, rose 0.2% monthly and 3.1% yearly, the latter number marking the lowest core CPI reading in almost 4 years. Markets had a mixed reaction, with the S&P 500 up, but the Dow Jones Industrial Average down.

➨ TAKEAWAY: While the inflation results were positive, there is still a lot of anxiety over the current tariff situation, none of which is incorporated in the February report. The report next month will be watched closely, and is widely expected to show inflation rising. And despite the promising inflation report, the markets still expect the Fed to hold interest rates steady when it meets next week.

BlackRock now projects that the private credit market could grow to $4.5 trillion by 2030, revising their previous forecast of $3.5 trillion by 2028. Either way, it represents substantial growth from estimates of the market’s current size that range from $1.6 trillion to $2.1 trillion. One reason given for the projected growth is the massive amount of financing necessary to unleash all of the AI-related infrastructure being built in the next few years.

➨ TAKEAWAY: The private credit market’s growth is also due to direct lenders working more frequently with traditional banks on major deals, as well as the growing number of distressed companies seeking loan restructuring. Individual investors now have more avenues than ever to access the asset class, with more coming, as Blue Owl Capital just filed with the SEC to launch a retail private credit fund.

🏢 Apartment rent growth: U.S. apartment rents rose by 0.4% in February, the highest February reading in three years, with occupancy rates also rising, suggesting that rental demand is on the way up. Chicago saw the highest year-over-year rent increases, while Austin had the biggest decrease.

🤖 New AI robotics unicorn: Dexterity, an AI-powered industrial robot startup, raised $95 million at a post-money valuation of $1.65 billion, as the sector stays hot.

🪙 Russia considering crypto trading: The Bank of Russia proposed that investors with at least $1.1 million in deposits be allowed to trade cryptocurrencies as part of a three-year experiment.

📷 Rare camera goes to auction: A prototype from the Leica-0 series will be auctioned as part of the 100th anniversary celebration of the Leica-1 model, and is likely to fetch millions - the last Leica-0 series camera sold for $15.7 million in 2022.

🚀 ServiceNow acquiring Moveworks: In the biggest acquisition of a VC-backed private tech company so far this year, the cloud software company ServiceNow is buying Moveworks, an enterprise AI company, for $2.85 billion.

🏡 High-risk markets: Unemployment and affordability issues could cause housing declines in markets such as Washington D.C., which could see mass firings of government workers, as well as New York City and Chicago, where an inordinate percentage of income goes to housing costs.

The rise of AI is not limited to pre-IPO investing when it comes to alternative assets - for example, AI is now being used as a tool in wine and whiskey investing. Most importantly, AI is being used in detecting counterfeits and authenticating rare bottles. It can also assist investors in predicting price trends by analyzing auction results and identify undervalued vintages and distilleries. Of course, AI cannot yet taste or smell, so there is still room for human evaluators, but don’t be surprised if that changes in upcoming years.