Alternative investments
Alternative investments are capital investments that are not part of traditional financial products .
General
Traditional financial products are, for example, sight deposits , savings deposits , time deposits , savings (bank) letters and bonds with banks or bonds from other issuers ( standard bonds for corporate bonds , government bonds , including high-yield bonds ), stocks , precious metals , real estate or even life insurance . They are all categorized according to the financial risk in certain asset classes that correspond to the risk tolerance of an investor ( risk class ).
In addition, forms of investment have become established that are usually not marketed ( banking ) or brokered ( investment brokerage ) by credit institutions and are therefore often not subject to any banking supervision . They are not subject to any official banking regulation , so that there is no protection of investors , creditors or consumers . Alternative investments were practically unknown in Germany until 2000. If they were assigned to an asset class, they would belong in the worst class that could be associated with a total loss .
Alternative investments are not based on indices ( benchmarks ), but - with every market development - are geared towards steady profits.
species
The main alternative investments are:
It is controversial whether real estate or ship financing are to be viewed as alternative forms of investment or whether they still belong to the classic investments. Some authors also count precious metals , collector's items ( stamp collections , works of art or coin collections ) or weather derivatives as alternative forms of investment.
Legal issues
Alternative investments are primarily preferred by alternative investment funds (AIF). These AIFs are subject to the provisions of the Capital Investment Code (KAGB). According to a circular from BaFin , capital management companies are also allowed to grant money loans, provided this is done in the context of portfolio management . AIF capital management companies may only grant a cash loan within the framework of collective asset management if this is based on Regulation (EU) No. 345/2013, Regulation (EU) No. 346/2013, Regulation (EU) 2015/760 of the European Parliament and the Council of April 29, 2015 on European long-term investment funds, Section 3 (2) in conjunction with Section 4 (7) of the Law on Investment Companies (UBGG), Section 240 KAGB, Section 261 (1) No. 8 KAGB, Section 282 (2) sentence 3 KAGB, section 284 (5) KAGB or section 285 (2) or (3) KAGB ( section 20 (9) KAGB).
Pursuant to Section 1 (3) KAGB, all investment funds that are not “undertakings for collective investments in securities” ( UCITS ) are considered to be AIFs . Accordingly, the investment assets of an AIF must consist of assets that do not contain any securities . The KAGB stipulates that cash loans may only be granted for the account of closed special AIFs, i.e. closed AIFs whose shares may only be acquired by professional and semi-professional investors - and not by private investors . Directive 2011/61 / EU on the managers of alternative investment funds applies . Only the AIFs are therefore subject to regulation, not the individual financial products.
features
Alternative forms of investment have many common characteristics and are non-traditional assets with promising economic value added that do not belong to a typical portfolio. Classic valuation methods are usually not applicable to these, so that investors need a long-term planning horizon . Most alternative forms of investment have poor liquidity (or are illiquid ) and have relatively high transaction costs when buying . Not all market data is always available, so information about risk and return may be incomplete. Therefore, many of these types of investment require due diligence or detailed financial analysis .
Asset and risk class
The investor protection is that closed Alternative Investment Funds (AIF) may not be purchased by private investors. Individual risks in alternative investments are usually only considered for institutional investors with a high risk appetite . In the case of asset allocation , care must then be taken to ensure that there is good risk diversification with an acceptable risk mix through high granularity with an acceptable cluster risk .
Alternative investments belong in the worst asset class because they have high financial risk , high volatility and low liquidity . This also applies to the risk class, because only risk-taking investors should choose this financial product. Private investors are not allowed to invest in closed AIFs; for reasons of investor protection they are only allowed to acquire individual risks.
See also
Literature / web links
- Michael Busack / Dieter G. Kaiser, Handbook Alternative Investments , Volume 2, 2006, Gabler Verlag, Wiesbaden, ISBN 3-8349-0298-5
- Federal Association of Alternative Investments eV (BAI)
- Association of Alternative Investments
Individual evidence
- ↑ Michael Busack / Dieter G. Kaiser (eds.), Handbook Alternative Investments , Volume 1, 2002, p. 21
- ↑ Investment Alternatives from March 1, 2012, Alternative Investments: Against Average , accessed on July 14, 2019
- ↑ Christian Hoppe, Derivate auf Alternative Investments , 2005, p. 46
- ↑ Michael Busack / Dieter G. Kaiser (eds.), Handbook Alternative Investments , Volume 1, 2002, p. 6
- ^ H. Kent Baker / Greg Filbeck, Alternative Investments: Instruments, Performance, Benchmarks, and Strategies , 2013, p. 7
- ↑ BaFin, circular of May 12, 2015, Gz .: WA 41-Wp2100 - 2015/0001
- ↑ OJ. L 123 of 19 May 2015, p. 98
- ↑ BaFin of October 17, 2016, Loan Fund: Lending by Alternative Investment Funds
- ^ Greg N. Gregoriou, Encyclopedia of Alternative Investments , 2008, p. 14 f.
- ^ H. Kent Baker / Greg Filbeck, Alternative Investments: Instruments, Performance, Benchmarks, and Strategies , 2013, p. 25
- ^ H. Kent Baker / Greg Filbeck, Alternative Investments: Instruments, Performance, Benchmarks, and Strategies , 2013, p. 25
