Alternative Investing Report - June 23, 2025

*as of 6/22; Sources: S&P, BTC, FTSE, DJRE, GOLD

Over the weekend, the U.S. bombed three Iranian nuclear sites, a move that inserts the country into the ongoing conflict between Israel and Iran. There has not been an escalation as of yet from the U.S. or Iran, but Iran’s parliament voted to close the Strait of Hormuz, a crucial oil transport channel. It is unclear whether that will actually happen, but it could throw the world’s markets into disarray.

➨ TAKEAWAY: Geopolitical uncertainty has had a huge impact on public and private markets so far in 2025 and things just ratcheted up a notch. Stock futures are down and markets could see significant volatility and potential losses today. Crypto prices fell already, with Bitcoin dipping below $100,000 for the first time in six weeks, and the crypto market as a whole shedded more than 4%. If the bombings were truly a one-off and the situation calms down, dips could present a buying opportunity - but the risk is quite high right now.

In this episode of Smart Humans, Slava Rubin talks with Alture Funds' founder and CEO Harold Hofer about the evolution of alternative investing and the importance of yield and diversification.

The median IRR for VC funds since 2021 has been gradually declining, with the median fund from 2021-2024 still in negative territory and earlier funds seeing their performance decline over the past three years. For example, the top quartile of 2017 funds has seen its IRR drop from 44% to 20%. The lack of exits is the main factor, as only 7% of 2022 funds have distributed any cash to investors, and only 37% of 2019 funds have done so.

➨ TAKEAWAY: It is common for VC funds to have negative IRRs towards the beginning of their formation, as exits take time, but even when compared to earlier vintages on a quarter-by-quarter basis, funds since 2021 fall short. For example, after 9 quarters, the average IRR for funds formed between 2017-2020 was 10.35%, while 2021 and 2022 vintages clocked in at -1.6% and -4.2% respectively. The lack of distributions highlights the long-term outlook necessary in the asset class and that investors should always expect illiquidity.

⚾ T206 Wagner doesn’t sell: A PSA 1 example of a 1909 T206 Honus Wagner baseball card was bid up to $4.15 million over the weekend, which would have been the 12th most expensive sports card ever, but it did not meet the reserve price and went unsold.

💵 Infrastructure’s big Q1: Real assets funds raised $52 billion in Q1, which was nearly half of what they raised in all of 2024, as the sector continues to attract investor interest.

🏢 CRE delinquencies rise: Distressed commercial real estate assets rose by 23% year-over-year to $116 billion, the highest number in more than a decade, as high interest rates and high vacancy rates continue to persist.

🤖 Apple eyeing Perplexity: The tech giant has reportedly discussed acquiring the AI search startup that recently valued at $14 billion, in order to expand and bolster its AI division.

🚀 Global IPOs down: Despite a number of recent prominent IPOs such as Circle and Chime, global IPO volume has declined 9.3% year-over-year to the lowest level since 2016.

🎨 Art Basel recap: The most expensive confirmed sale at the Swiss art fair was for David Hockney’s “Mid-November Tunnel” that sold for between $13 million and $17 million, and there was a lot of demand for pieces under $1 million, though many sold for below their asking price.

Monday: Existing home sales report released.

Tuesday: Consumer confidence report; S&P Case-Shiller home price index and FHFA house price index released; the vest worn by Ferris Bueller is auctioned by Sotheby’s.

Wednesday: The NBA Draft takes place in Brooklyn, NY; New home sales; Sotheby’s Summer Sports Classics auction, featuring a pair of million-dollar NBA jerseys and one of the world’s oldest hockey sticks.

Thursday: Pending home sales; Heritage’s Comic & Comic Art Signature auction; A $2 million Michael Jordan card is up for sale at the new Joopiter Auctions.

Friday: Consumer sentiment report; Personal Consumption Expenditures (PCE) and Core PCE indices, the Fed’s preferred inflation metrics, will be released.