With private markets, one could expect higher returns on investments compared to more traditional investment methods. Whether you're aiming to diversify, earn robust returns, or align your investments with personal values, it can help achieve these goals.
That is because private markets can include other asset classes beyond those in public markets. If you're a wealthy individual ready to break away from the herd and explore opportunities with the potential for higher returns, here are five compelling reasons private markets should be every investor's target.
The addition of assets that are weakly correlated with public markets creates an overall risk reduction for the investors. With its low correlation, your investment won't all rise or fall together, providing your portfolio with much-needed balance. This means that while public markets may swing with global economic changes, your private market investments can remain steady, acting as a buffer against volatility.
The diversification within private markets runs across classes, from private equity funds to real estate. With all having individual sensitivities to economic cycles, they serve to balance the investor's portfolio. This multi-layered strategy saves you from over-investment in traditional stocks and bonds, protecting your long-term wealth.
Investment in private markets is usually accompanied by the possibility of high returns, especially for investors with high-risk confidence. For example, a startup can offer huge growth opportunities, far greater than the returns one could get with traditional public equities when startups successfully scale or are acquired. While higher returns come with increased risk, the potential payoff often justifies the investment for those with a long-term horizon.
Unlike public stocks, private equity, and venture capital investments often require holding for much longer. However, marketplaces like hiive investments make it easy to generate liquidity. Most allow free access to historical and current data on bids, private market transactions, and listings, ensuring investors are making the right decision.
Secondary transactions enable investors to sell stakes in private companies before the traditional exit events of IPO or acquisition. This liquidity allows investors to manage their portfolios while giving venture-backed companies and their shareholders the flexibility to meet financial needs effectively.
Private investments do not face price fluctuation, nor do they follow market sentiments. Long-term investors find them quite appealing since they ensure stability. This is even more appealing to beginners looking forward to investing with less uncertainty.
For example, private real estate investments may provide income and capital appreciation in the long run. These characteristics make private ideal for investors looking to build their wealth with reduced exposure to turbulence in the public markets.
Investing in startups or private equity funds provides capital that enables companies to expand and grow further by hiring more people while developing more products. Beyond the pursuit of profits, these investments contribute to a greater mission for job creation and the advancement of groundbreaking solutions that shape industries and improve lives.
Most private market investments are channeled into innovative sectors such as renewable energy, healthcare, and technology. By investing in these fields, investors can align financial goals with a greater purpose in supporting innovation and sustainable practices.
Private markets provide valid reasons to make investors look beyond conventional avenues. With proper investment platforms, you will have seamless access to these opportunities, making investment in private markets much more viable. Be it for diversification, return maximization, or creating an economic impact; you can't overlook private markets over long-term wealth creation.
For those living in vulnerable areas to extreme weather disasters, recent years have seen some of the worst disasters. In 2024, we have seen severe weather disasters such as, the floods in Afghanistan- Pakistan, typhoon in Japan, the recent hurricane in Florida and more. Now, hurricane Milton is causing severe warnings and evacuations in Florida as they still face the outcome of their last hurricane, Helene.
These disasters cause destruction to lives, families, property and more and the cost of repairing this once they can is substantial. We have taken a dive into the cost to the US economy, businesses and individuals when they are hit by a natural disaster
Between 2020-2022 there were 60 natural disasters which cost over $1 billion in losses. With the worsening climate change, 2023 saw a record number of weather and climate disasters. In 2023, flooding events alone caused a total of almost $7 billion in damages in the U.S.
The cost of property damage and destruction of infrastructure are often the most clear and immediate impacts, as homes, buildings, roads and more are damaged or destroyed. The economic impact also extends to business interruption, loss of jobs, reduced tourism and more which lead to further financial strain.
Hurricane Katrina in 2005 caused an estimated $125 billion in damage, with widespread destruction to property and infrastructure across New Orleans. The storm crippled businesses and left thousands without jobs, contributing to long-term economic stagnation in the region. Housing markets are heavily impacted by property damage. After Hurricane Katrina, housing prices in New Orleans dropped significantly as many properties were either destroyed or made uninhabitable.
Not only did the storm Katrina impact infrastructure but also the essential businesses were halted. Katrina impacted up to 19% of the total US oil production as 24% of the country's natural gas supply is housed in or around areas impacted by the storm. 20 offshore rigs underwent significant damage causing refineries to halt production. This was the first time in the country’s history that the national average gas price went over $3.
Contributions from the government
Federal as well as local government are often the first to respond after a disaster, they will allocate money for emergency relief and reconstruction. Agencies like FEMA (Federal Emergency Management Agency) provide financial assistance to individuals, municipalities, and states to cover the cost of rebuilding infrastructure and homes. In 2027, the hurricane season brought 3 large disasters, the federal relief packages amounted to $130 billion.
At the state and local levels, additional funds are provided, though these governments often struggle to meet the demands of large-scale recovery due to budget limitations. This has led to calls for increased federal support and better pre-disaster planning.
Insurance Companies
If you are a homeowner and you have property insurance you can file claims to cover damage to homes, cars, and other possessions. Unfortunately, not all areas of the US are equally insured, such as those areas prone to specific types of disasters e.g. hurricanes and wildfires. Insurance premiums have increased the prices due to the heightened risk.
For example, after Hurricane Katrina, insurance premiums in coastal areas of the Gulf and Atlantic soared by as much as 20-30% in some regions.
Some homeowners may not be able to afford sufficient coverage, leaving them vulnerable to significant financial losses after a disaster. Additionally, many policies don’t cover flooding unless a separate policy is purchased, as seen in the extensive uninsured losses from Hurricane Harvey, where only about 20% of homeowners in the Houston area had flood insurance.
A 2017 FEMA report highlighted that 40% of small businesses never reopen after a disaster. In these cases, both individuals and businesses are forced to rely on personal savings, loans, or government assistance, which may not be sufficient to cover the full extent of the damage.
Employment: Natural disasters can have various effects on the economy of the local area which ripple through multiple sectors. With productivity down, businesses begin to struggle and even more so if their property has been damaged or destroyed. The money to restore the business may not be immediately available, causing the owners and all staff to be without employment for a prolonged amount of time.
Housing market: When disasters hit, and if the area has been hit multiple times, it is likely to deter future residents. Currently, Florida is facing its second large hurricane within a month, this will likely persuade many to relocate and others to delay or cancel their move into the area. This will have a substantial impact on the housing market.
Investments: For investors, an area prone to natural disasters will likely deter any development in the area. This can include property investment as well as developing the area with more businesses.
The recent announcement from the US Federal Reserve as they made a significant cut to interest rates of 0.50% points marks the largest reduction in interest rates since 2020. Typically, the Federal Reserve adjusts rates by just 0.25 percentage points at a time, so this half-point cut is a substantial move designed to have a noticeable impact on the economy.
The cut brings the federal funds rate to a range between 4.5% and 4.75%, the lowest it has been in two years.
Their goal with this cut is to stimulate the US economy, encourage businesses to and consumers to borrow more money at lower rates. This should lead to more spending and in turn economic growth.
Interest rates in the US and globally have been at a record high over recent years due to a combination of pressures. COVID-19 caused economic disruptions and the supply chain issues that followed caused a surge in inflation in the US and globally. Consumer prices have been rising for goods like groceries, fuel and housing which has prompted the Federal Reserve to act.
They raised interest rates in several increments, hoping to cool down spending and borrowing, which in turn could help bring inflation under control. When borrowing costs increase, both consumers and businesses tend to spend less, slowing economic growth and reducing inflationary pressures. Over the past year, the federal funds rate had been raised to around 5%, one of the highest levels in decades.
This has had a substantial effect on the economy, the housing market has begun to cool due to higher mortgage rates and businesses pulling back on investments. Inflation has began to moderate as the Federal Reserve begins their balancing act to ensure inflation doesn’t reignite whilst avoiding a recession.
While inflation has eased in recent months, there are concerns that the high interest rates were beginning to stifle growth too much. By making borrowing cheaper through this significant 0.50 percentage point cut, the Fed aims to boost both consumer spending and business investment. This recent cut should support economic growth in the US for 2025.
Lower interest rates can make it cheaper for businesses to expand, hire more employees, and invest in new technologies. For consumers, this can mean more affordable loans for things like homes, cars, and education. As borrowing costs decrease, individuals are more likely to take out loans, which in turn can drive up demand for goods and services, helping to boost the economy.
With reduced interest rates, consumers might feel more confident about making big-ticket purchases, such as homes or cars, knowing their monthly payments will be lower. In turn, this renewed confidence and spending can have a ripple effect, encouraging businesses to expand and invest more heavily, further stimulating the economy.
This rate cut has several implications for US families, particularly when it comes to managing everyday expenses. One of the most immediate effects will be felt in mortgage rates. Families looking to buy a home or refinance their current mortgage may see lower interest rates, which can significantly reduce monthly payments. A 0.50% reduction in interest rates can translate to thousands of dollars saved over the life of a mortgage, making homeownership more affordable.
Those with credit card debt or personal loans may notice lower interest rates on their outstanding balances making it easier to manage repayments. Financing a new car or making large purchases will become more affordable as loans will be more accessible. This will allow families to have an increase in spending money which will be poured into the economy through purchases and days out.
Changes in U.S. monetary policy often ripple through global markets, and countries like the UK could be affected. For instance, the UK’s financial markets often move in tandem with the U.S., particularly in terms of bond yields and currency exchange rates. If U.S. interest rates decline, it can weaken the dollar, making other currencies like the British pound stronger in comparison. This can affect UK exports, making British goods more expensive for U.S. consumers.
US rates can also promote central banks such as, the Bank of England to consider their own policy adjustments.
the next major Federal Reserve decision is set for November 7th, just after the U.S. elections. The timing of this announcement has sparked debates about how political and economic factors will intersect. Many are questioning whether future rate cuts will continue or if the Fed will pause to reassess the state of inflation and economic growth post-election.
Living without roommates or a partner is becoming more popular despite the high costs of living making this more difficult.
Within the last year the amount of people living alone has risen from 178,000 to 237,000.
When trying to become a solo homeowner it is also worth taking a look at the mortgage-to-salary ratio in your area so you know whether you can afford the repayments there.
Alan Boswell Group have compared the cost of living alone to the square footage of a 1 bed flat, studios and single room occupancies to determine the cheapest and most expensive areas of the UK to live alone.
The cheapest places to live alone are in the North of England or in the midlands with an exception of Plymouth which sits at NO. 9 on the Alan Boswell list with the price per square meter at £11.77.
Price per square meter is £8.85 making it the cheapest place to live as a single occupant.
Price per square meter is £9.17.
Price per square meter is £9.22
Price per square meter is £9.91.
Cities in the South of England are the most expensive to live alone with an average price per square meter of, £18.09 which is a 76.95% increase from the North which is, £10.22 per square meter.
Price per square meter is £23.39.
Price per square meter is £19.33.
Price per square meter is £19.32.
Price per square meter is £17.40.
Living alone will always be a more expensive option than sharing the cost of rent and household bill with a partner or roommate.
The average monthly costs of living alone are reported at £651 excluding the costs of rent. These costs include, council tax, household bills, groceries, phone bills and more.
Those who live alone are spending on average 92% of their disposable income on living expenses compared to 83% for couples.
Living alone also means spending on average, £15 more on grocery shops per week.
This explains the data that 47% of young singles have no savings at all.
There are a few ways in which you can reduce your spending including, lowering your energy bills through useful tips to lower your energy usage or installing a smart meter.
If you are on a low income then learn a few ways you can still budget and use you money efficiently to stay afloat.
Setting yourself a budget which prioritises rent and bills to help you keep track of your money. This can be done by using finance apps.
Don’t be defeated by high living costs and a low budget, learn ways to make your money work for you.
Good news today as the inflation rate remains steady at 2% - the Bank of England’s target. The Office of National Statistics reported the forecasts from economists had placed the inflation rate at 1.9%, which unfortunately has not been met.
The Bank of England was hoping for service inflation to be down to 5.1% however, this remains at 5.7%.
The so called, Taylor Swift effect could be causing hotel prices to be up by 9.8% up from 7% as her Eras Tour makes it’s way around the UK. With summer starting, the season of concerts and getaways begins causing hotel prices to increase.
The Bank of England next meet every 6 weeks to discuss any changes and decide on the base rate. They will meet next on the 1st August.
Many hope they will drop the base rate from it’s current 5.25% however with several sectors remaining high this could be unlikely.
We hear a lot about the benefits of investing and the need to increase your income through investments. However, this isn’t always an option for everyone and starting to invest can be a big decision and should be thought out.
Investing is a great way to build on your income as well as create financial independence. Cash in your bank account will be losing value without a great interest rate which is hard to come by due to inflation. With investing, your money will adapt with inflation and the value of your money is protected.
If you are ready to invest find out which type of investing suits your goals and situation the best.
You Gov shares decline more than a third after pollings this morning and warnings come that annual profits would fall short of their forecasts.
You Gov do not make the majority of their revenue from the electoral polls and instead they are a company which conducts market research for businesses to generate their income.
They have shared 9 public polls since the announcement of the UK election date.
They conduct opinion polling throughout this period for the upcoming election, they share the consensus of the UK public on the political parties to reveal predictions on which way it could go.
Financial Times shares the updated expected profit for You Gov which has fallen from £48,3million in 2023 to between £41 - £44 million now.
Most would expect You Gov to experience a boost during election time however this is a small factor towards their revenue.
The Financial Times reveal what the company feels are the factors to blame for their plummeting shares…
Today, the Conservative party have announced their manifesto with Rishi Sunak stating their pledges for their time in parliament if they are voted in on July 4th.
The Conservative manifesto lay priority on cutting taxes, improving investment which continues their economic trend of using trickle-down economics, in which cutting businesses and income taxes could see results in a greater economy for the UK.
Two leading energy groups, RWE Renewables and PPC Renewables have financed their 940-megawatt portfolio of solar farms in Amyntaio, Western Macedonia through their Meton joint venture company.
RWE Renewables is a leading company in the field of renewable energy and with investments just like this one they are on their way to the success of the transition.
PPC Renewables is a 100% subsidiary company of PPC acting as a pioneer at national and European level in wind and solar energy since the 80s. They are one of the largest renewable energy developers in Greece. This is PPC’s first joint venture with another large private entity in Greece.
This joint venture is vital for the country’s energy transition and will build the largest combined capacity currently in Europe.
Lambadarios law firm acted as legal counsel to RWE Renewables through this project. Their banking and finance corporate teams led by Partners, Prokopis Dimitriadis and Konstantina Siozou as well as Kateria Gini and Christina Kyrgialani. Real Estate matters were handled by Sophia Alonistioti and due diligence issues dealt with by Constantinos Lambadarios, Melina Katsimi, Margarita Kontogeorgou and Sotiria Bouranta.
It was announced this week that inflation rates have finally fallen to a ‘normal’ rate of 2.3% after a long road of rising rates. This is much closer to the Bank of England’s target of 2%.
The Bank of England has held their rates at 5.25% setting this to tackle the rising inflation. With the inflation rate falling so significantly this could mean the UK could see rates coming down this year. Inflation falling typically means the mortgage rates can fall with it.
The rising wages set in April and the energy price cap which was set in April as well this has been a driving factor in falling inflation.
Financial markets predict a cut in June or August for mortgage rates with the inflation rate holding steady.
2 out of a 9 person monetary policy committee voted for a 0.25% cut in interest rates which is an improvement from just 1 vote previously. This could be a sign they are on their way to making the cut.
Economists predict that the interest rates could be cut to 4.75% or 4.5% by the end of 2024 and by the end of 2025 to 3.5%.
The forecasted inflation rate was 2.1% before the announcement this week of 2.3%. This slight difference could add concern that it is not falling as quickly as predicted and the Bank of England could see this as a reason not to cut interest rates.
The bank of England set the base rate which is currently at 5.25% which sets the rate of borrowing money for mortgages and other loans. For first time buyers this has made it almost impossible to get onto the property market with the cost of living and high interest rates making it a challenge to save enough. In May the average 2 year fixed rate mortgage was around 4.74%.
In the first quarter of 2024, repossessions increased by 36% as people struggled to pay off their mortgage.
Those who are remortgaging this year could be in a for a lucky break if the interest rates fall in time allowing them to get a better deal.
Since 2018 8 council have declared bankruptcy including 4 in the past 15 months which are, Woking, Nottingham, Birmingham and Thurrock.
Almost 1 in 10 councils in England have warned that they will go bankrupt in the next 12 months due to financial trouble.
A survey based on 160 responses from 128 councils out of 317 shows the widespread concerns and struggles. It found that 9 in 10 council plan to raise council tax whilst others will be raising the price of services such as parking and waste disposal.
They expressed their struggles over the costs of children’s services and the soaring homelessness bills as the biggest risk factors for district councils.
In late 2023 Birmingham council effectively declared bankruptcy following a £760 million equal pay liability bill.
This led to drastic measures including a 10% increase in council tax.
The equal pay liability was not the leading factor here despite the council highlighting this aspect.
The Birmingham council has also been experiencing a faulty IT system which meant their finances were unavailable and potentially inaccurate for about 7 months.
They paid over £100m to have a badly implemented upgrade which only created IT issues as well as being £100m down.
Due to this they are still waiting for the figures to be audited and verified as their outgoings and incoming payments could not be accurately checked. The figure could be severely overstated and the reactions unnecessary.
Many councillors believe this problem should be corrected before declaring bankruptcy as well as taking drastic measures for its over 1million residents.
Northamptonshire issued a notice in 2018 and was the first local authority to do so in 20 years. Since, Slough, Croydon, Thurrock, Woking, Birmingham and Nottingham have all issued a notice of bankruptcy. Many others have warned that a notice could be in their near future too.
Over the next two years there will be a predicted £4bn gap in funding for councils.
At the start of 2024, the Department for Levelling Up, Housing and Communities added £600m to the annual local government finance settlement. They aimed to support local authorities with social care as well as rural services.
In February, they confirmed that councils would be provided £64.7bn funding for the 2024-25 financial year including the earlier £600m. The rise assumed that all councils would agree to the maximum council tax increase, 5% for unitary and county councils, and 3 per cent for district councils.
Later in February they announced that 19 councils would receive the Exceptional Financial Support framework with 11 receiving funding for previous years including, Birmingham, Bradford, Cheshire East, Croydon, Eastbourne, Havering, Nottingham, Plymouth, Stoke-on-Trent, and Woking.
The UK property market has seen sky rocketing prices including rising mortgage rates making it more difficult for people to get on the property ladder. House prices have been falling slowly even in places like Manchester.
East of England, South East and South West have seen the largest price falls in the last year with the average home costing £344,000.
This is still +30% above the UK average.
Zoopla has recorded that there is currently an increase in sales and demand for house meaning on either side of the transaction this could be getting easier
There is 15% more property sales agree than in 2023.
An 11% uplift in buyer demand as buyers return to the market.
There are also 21% more homes for sale which is increasing the choice for buyers.
London will always win the top spot and currently the average price here id £523,400 which is almost two times more than the UK Average.
