Alternative Investing Report - April 17, 2025

*as of 4/16; Sources: S&P, BTC, FTSE, DJRE, CL50

More investors are bearish on the stock market than at any time in the past three decades, and a record number are reducing their investment into U.S. equities and expecting to continue to do so. They are likewise the most bearish about the U.S. dollar since 2006. Crypto is also in a bear market, according to Coinbase, with Bitcoin down 23% from its all-time high, and the altcoin market down by 41% since December.

➨ TAKEAWAY: In the short-term, of course, a bear market is not good for investors, but it could also create good buying opportunities across asset classes. Asset classes uncorrelated with public markets or ones with longer-term horizons can become more attractive options. Not surprisingly, investors have also indicated their lowest tolerance for risk in two years, and a flight towards more stable assets should be expected.

There were only 12 VC-backed companies that went public in Q1, and while total exit activity hit its highest value in three years, 40% of it came from the CoreWeave IPO. Remove that outlier, and the total volume would be in line with the past few years of exit activity slowdown. And those companies that have gone public recently have largely struggled - PitchBook’s VC-backed IPO index, which tracks VC-backed companies that went public in the last two years, has fallen 20% since the start of the year. Overall net cash flow has now been negative for four years.

➨ TAKEAWAY: This lack of liquidity has led directly to a slowdown in fundraising, which is on track for its lowest yearly amount raised in a decade. Only 87 funds were raised in Q1, an annual pace which would be a 40% drop from last year and an 80% drop from 2022. Given the current market conditions, expect fundraising and dealmaking to remain stagnant for the time being.

💵 Blackstone branches out: The alternative asset giant is partnering with traditional asset managers Vanguard and Wellington Management in an effort to create portfolios for individual investors that mix public and private assets.

🚀 Figma IPO: The design software startup submitted paperwork to the SEC in the first step towards a public offering, 16 months after Adobe backed out of a deal to buy it for $20 billion.

🏀 Paige Bueckers breakout: The WNBA’s #1 overall pick and recent national champion from UConn is already seeing her cards surpass the value of women’s basketball legends like Diana Taurasi, Sue Bird, and Candace Parker. Bueckers’ cards have risen in value an average of 45% in the last 12 months.

🏡 Homebuilder sentiment: Despite estimates that tariffs will raise the cost of constructing a new home by $10,900, homebuilder sentiment surprisingly edged slightly up in April. Present sales and buyer demand are up, but expectations for future sales slipped significantly due in large part to uncertainty surrounding the tariffs.

🎨 Warhol painting auction: Andy Warhol’s “Big Electric Chair” is headlining Christie’s May contemporary evening sale, and is expected to sell for upwards of $30 million.

🏢 SF office buildings: Ultrarich investors are taking advantage of the post-pandemic drop in value of office real estate in San Francisco, and buying buildings at massive discounts to their previous sales prices, betting on a long-term recovery for the city.

Could AI be the key in finally being able to truly communicate with animals? AI has already been used to analyze dog barks, birdcalls, and whale songs, and now it is being used to try to talk to dolphins. Google, in partnership with marine biologists and AI researchers, has created DolphinGemma, a LLM trained on 40 years worth of dolphin sounds. The model can recognize and predict dolphin vocalizations, as well as generate new ones, which could pave the way for two-way communication with our oceangoing friends.