Alternative Investing Report - August 14, 2024

_{*as of market close August 13}

Both public and private investment into clean energy grew during the first half of 2024, with spending reaching a record-high in Q2. Climate-focused funds have raised more in 2024 so far than they did in all of 2023. Not every climate-adjacent industry is thriving, though, and startups in the sector have been having trouble attracting VC money.

➨ TAKEAWAY: Silicon Valley loves a challenge, and solving climate change is an urgent and difficult one. Funds are raising money but not deploying it, partially because they are waiting on the results of the November election to see who is elected. The dry powder will be spent somewhere, and with the effects of climate change accelerating, expect this sector to grow exponentially.

Private real estate investment trusts (REITs) run by major investment firms like Blackstone, Starwood and KKR, have been popular among individual investors since the opportunity to invest was opened to them in the past few years. As interest rates rose and crippled the commercial real estate market, the same investors have been looking to get their money out, by requesting redemptions. However, the firms have been limiting the amount of capital that can be redeemed, which has only caused more investors to run for the exits. Blackstone’s BREIT only recently met all redemption requests for the first time since 2022.

➨ TAKEAWAY: Because these REITs aren’t publicly traded, investors are at the mercy of managers for liquidity, but also for accurate valuations. Public REITs have seen their net asset value (NAV) drop by 14% since 2021, and the FTSE Nareit Index is down 22% in that timeframe. Meanwhile, private REITs, which set their own NAVs, are down just 4% and BREIT has reported 4.1% annual gains, values that have been called into question. True valuations are opaque in the real estate market, where value is often only known at the time of a sale. If interest rates drop meaningfully, this could just be a bump in the road for private REITs, but investors need to always consider liquidity options and the incentives of those managing their money.

In the latest episode of Smart Humans, Slava Rubin talks with Frec CEO and founder Mo Al Adham about direct indexing and tax loss harvesting.

📉 Tally shuts down: The a16z-backed fintech startup, which helped customers consolidate credit card debt, announced it was shuttering after running out of cash. It had raised $172M in funding and was last valued at $855M, but warning signs flashed in April when it shut down its consumer app and announced a pivot to B2B that never materialized.

🏡 Q2 home price gains: Nearly 90% of metro areas saw price gains on single-family existing-homes in Q2, as the median price rose 4.9% year-over-year to $422,100.

🚘 Race car auction: A 1954 Mercedes-Benz W196 Streamliner is among the 11 high-end cars being auctioned by the Indianapolis Motor Speedway Museum later this year, and carries an estimated value of $50 - 70 million.

🪙 SEC looking at Uniswap: It turns out that the crypto VC firms who received subpoenas include major players like a16z and Union Square Ventures, and it is about their relationship with decentralized exchange Uniswap. Stay tuned, this could be a big development.

🚀 Balderton’s $1.3B Europe raise: The London-based VC firm announced two new funds to invest in European startups, a promising sign amidst an underwhelming fundraising environment on the continent.

📜 Historical Letters: A 1543 letter written by Martin Luther is estimated to sell for $250,000 this week at RR Auctions, among other letters from historical figures such as Beethoven, George Washington, and Albert Einstein that are on the block.

🪙 SEC sues NovaTech: The agency accused the crypto company of defrauding more than 200,000 investors of $650 million in a pyramid scheme. This came two months after NovaTech was sued by the New York AG, who estimated damages in excess of $1 billion.

🍷 Spanish wines: The country had a stellar year at the Decanter World Wine Awards, particularly with their red wines, and Decanter named their list of 15 to drink and invest in for the future.

Coin: Sui (SUI)
Price: $0.94
Price change last 7 days: +53.7%

While most major coins saw single-digit increases in the last week, the native currency of the SUI Layer-1 blockchain saw the biggest gain of the top 100 cryptocurrencies by market cap. The SUI blockchain is designed to allow faster transaction speeds. This rise in price coincides with the launch of Grayscale’s SUI trust, which allows accredited investors to easily invest in the token.