Alternative Investing Report - September 17, 2024

_{*as of 9/16}

Fresh off an apparent assassination attempt, former President Donald Trump announced the launch of World Liberty Financial, a crypto platform involving his three sons and his friend Steve Witkoff, who was with Trump on Sunday afternoon when shots were fired. It is believed to be an exchange with the aim of making decentralized finance (DeFi) available to the masses, and may have its own native tradeable token.

➨ TAKEAWAY: Trump is no stranger to controversial and risky business ventures, and potential investors should be wary, not only because of his history, but because it is a likely target for scammers and other bad actors. Additionally, Trump, his family, and other insiders are taking a 70% stake in the business, well above the industry norm in the 20% range. Often, ventures with a murky purpose and an oversized founder share are destined to fail quickly, but in this asset class anything is possible. With Trump’s name brand and cult of personality, the business is sure to attract attention, and there are undoubtedly opportunities for savvy investors, but it comes with a lot of risks.

Luxury retail sales reached $75 billion in the U.S. in 2023, and have seen an annual growth rate of 8.6% since 2020, despite economic uncertainty and persistent inflation. Almost half of luxury stores opened in the past year have been in shopping malls, helping Class-A malls reach a industry-low 5.8% vacancy rate. Luxury brands are flocking to New York and Los Angeles, with 36.9% of new openings coming in those two markets, and have been purchasing real estate themselves, particularly in Manhattan.

➨ TAKEAWAY: In a post-pandemic world, retail has held up better than other areas of commercial real estate as consumers seek in-person experiences. That is especially the case with higher-end items, which people may not feel comfortable purchasing online, and where the store and location is part of the appeal. Over the past few years, higher-end properties have been insulated from the rest of the market, and luxury retail has been no exception.

🚀 Another AI unicorn: World Labs, a new startup from the “Godmother of AI,” Stanford professor Fei-Fei Li, raised $230 million in two separate rounds at a $1 billion valuation, and is developing AI models to be used by artists, designers, and others.

🎨 Possible Van Gogh record: The Dutch artist’s 1887 painting “Les canots amarrés (Moored Boats)” is coming to auction at Christie’s Hong Kong, and with a high estimate of $50 million, could break the record for the most expensive work by a Western artist sold in Asia.

🏡 Affordable suburbs: Areas like Mooresville, NC, Hamtramck, MI and Buckeye, AZ, are some of the fastest-growing places in the U.S., as demand rises for suburbs of major cities that have houses available for $250,000 or less.

💵 Private credit fundraising declining: Even as the asset class grows in popularity, global fundraising is on pace to fall for the third straight year, as institutional investors with exposure to VC and private equity face liquidity issues and do not have as much cash to allocate towards private credit.

⚾ $90K pack of cards: An unopened pack of 1952 Topps baseball cards sold for $91,000, quite a return on the sticker price of five cents, even though it is a “low number” pack, meaning there is no chance a Mickey Mantle rookie will be in it.

🪙 Creator defense fund: NFT marketplace OpenSea and VC fund a16z contributed $6 million to support NFT artists who are facing legal threats, government actions, or simply need legal advice on how to navigate regulations.

🏡 Foreclosures are down: Both foreclosure starts and completed foreclosures declined in August, and the number of properties in foreclosure proceedings dropped by 5.3% from July and by 11% year-over-year.

Ever thought of owning a winery? The Cassidy Hill Vineyard, located in Coventry, CT, just east of Hartford, is on the market with a price tag of $3 million, which includes the vineyard business. The 137-acre property includes a 6,000 square foot winemaking facility, tasting room, barn and an owner’s residence.