Index

Citation

Baker, H.K., Filbeck, G. and Spieler, A.C. (2021), "Index", The Savvy Investor's Guide to Building Wealth through Alternative Investments (The Savvy Investor's Guide), Emerald Publishing Limited, Leeds, pp. 197-212. https://doi.org/10.1108/978-1-80117-135-920211010

Publisher

:

Emerald Publishing Limited

Copyright © 2021 H. Kent Baker, Greg Filbeck, and Andrew C. Spieler

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INDEX

Abbey Capital Futures Strategies

, 24

Absolute returns

, 35

Accel Partners

, 60

Accounting for incentive fees

, 74

Accredited investors

, 8, 14, 55

40 Act Fund

, 40

Active investing

, 81

Active management

, 173

Activist investor

, 45

Activist strategies

, 24–25

Adjustable-rate mortgages (ARMs)

, 115

Adventuresincre. com

, 121

Aecom

, 170

Agricultural commodities

, 130

Alerian

, 193

MLP ETF

, 183

Alpha

, 44

Alpha generating strategies

, 45

Alt funds

, 10

Alternative beta exposure (see Alternative systematic risk)

Alternative beta strategies

, 39

Alternative investments

, 3–4, 7–8

pros and cons

, 9

strategies

, 19–20

Alternative systematic risk

, 38–39

Amber Infrastructure Group

, 187–188

American Tower Corporation

, 172

American Water Works Co Inc.

, 171

Analysts

, 60, 73, 140–141

Angel investors

, 56

Apache

, 181

Apollo Global Management Inc.

, 71

Appreciation yield

, 111–113

AQR Capital Management

, 17

Arbitrage

, 15

opportunities

, 83–84

Archer-Daniels-Midland (ADM)

, 137

Asgard Fixed Income I Ltd

, 27

Assets

, 98

risk

, 94

segment

, 158–159

Assets under management (AUM)

, 14, 52, 180

Atlantic Investment Group

, 25

Atlas Arteria Limited (ALX:AU)

, 154–155

Attractive risk-adjusted returns

, 163–164

Auction markets

, 84

Aurelius Capital Management

, 26

Backwardation

, 142

Barclays

, 48

Base metals

, 130

Benchmarks

, 36

capital

, 60

for publicly listed infrastructure securities

, 177–178

Bigger pockets

, 121

Blackstone alternative asset management fund (BAAM fund)

, 17

Blackstone Group Inc., The

, 71

Bloomberg Cotton Subindex Total Return

, 145

Bonds

, 1, 9, 125

Bottom-up replication

, 39

Brent

, 127

Bridgewater Associates

, 17

Brookfield Infrastructure Partners

, 186

Brownfield investments

, 159–160

“Buy and hold” financial assets

, 125

Buyout

, 5

firms

, 65

fund

, 52, 64–66

Canada’s Enbridge

, 172

Capital appreciation

, 92

Capital call

, 59

Capital risk

, 67

Capitalization rate (cap rate)

, 102

Carlyle Group Inc.

, 71

Carried interest

, 21, 70

Carry

, 21

Case-Shiller index

, 106

Cash

cash-on-cash rate of return

, 110–111

equivalents

, 1–2

flows

, 72, 164

yield

, 158

Catch-up provision

, 62

Caterpillar

, 170

Central counterparty (CCP)

, 135–136

Cereal grains

, 130

Cerium

, 130

Chicago Board of Trade

, 135

Chicago Mercantile Exchange (CME)

, 135, 148

Chicago Skyway

, 155

Chief compliance officer (CCO)

, 29

Clawback clause

, 62

Clientele

, 15–16

Closed-end funds

, 2

Co-investment

, 63–64

Coal

, 129

Cognitive capital

, 44

Collateral (see Assets)

Collateral yield

, 141

Collectibles

, 6–7

Commercial real estate

, 87–88

Commodities

, 6, 123–124

advantages of investing in

, 131–132

developments in commodity markets

, 143–144

futures price

, 125

indices

, 144–145

invest in shares of commodity producers

, 137

investors trade commodities

, 134–136

markets

, 139–140

mistakes

, 147–148

mutual funds and ETFs

, 137–138

online resources

, 148–149

participants in commodity markets

, 142–143

potential disadvantages of investing in

, 132–134

primary attributes

, 126–127

retail investors

, 136–139

returns

, 140–142

strategies

, 145–146

types

, 127–130

Commodity Futures Trading Commission (CFTC)

, 138, 149

Commodity trading advisor (CTA)

, 146

Commodity. com

, 149

Common stock

, 169

Communications

, 157, 172

Comparable sales

, 103–104

Completion risk

, 160

Concession agreement

, 157

Conservative distribution coverage ratio

, 186–187

Contango

, 142

Convenience yield

, 132, 140

Convergence of hedge funds and PE

, 83–84

Convertible bonds

, 80

arbitrage strategies

, 26

Core alternative investments

, 4–5

Core real estate investment strategies

, 99–100, 158

Core-plus investment strategies

, 100, 158

Corporate governance

, 24

Correlation

, 131

Cost

, 120, 175–176

of carry

, 142

CoStar

, 121

Counterparty risk

, 135

Covalis Capital Master Class A

, 28

Credit risk

, 39

Crowdfunding

, 108–109

Crown Castle

, 172

Currency risk

, 166–167

Dairy products

, 130

Deal-by-deal basis

, 62–63

Debt conversion to equity

, 80–81

Debt instruments

, 79–81

Defined benefit plan

, 67–68

Dell

, 56

Derivatives

, 13, 18, 126

Desired exposure

, 78

Direct approach

, 17

Direct capitalization

, 102

Direct equity ownership

, 96

Direct real estate investing differ from owning shares in REIT

, 106–108

Discount rate

, 103

Discounted cash flow (DCF)

, 102–103, 105

Discretionary traders

, 22–23

Distressed debt

, 80

Distressed debt strategies

, 25–26

Distribution provision

, 62–63

Distribution to paid-in capital (DPI)

, 75–76

Distribution waterfall

, 61–62

Diversification

, 20, 64, 78–79, 93, 113, 131, 163, 176

Dividend yield

, 169

Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010

, 15

Dominion Energy

, 171

Dow Jones Brookfield Global Infrastructure Composite Index (DJBGI Index)

, 177–178

Downside capture

, 36–37

Downstream companies

, 182

Drawdown

, 67

Dry powder

, 57

Due diligence

, 8, 17, 79

on hedge funds in fund selection process

, 33–34

lack of

, 119

Duke Energy

, 171

Dunham Dynamic Macro Fund (DNAVX)

, 40

Dutch West India Company

, 88–89

Economic clauses

, 61

Economic infrastructure (see Hard infrastructure)

Economic insensitivity

, 164

Edison International

, 171

Education

, 43

Endogenous risks

, 165

Endowments

, 14

Energy

, 128, 157, 171–172

Energy Transfer

, 185–186

Enterprise Products Partners

, 186

Environmental and social risks (E&S risks)

, 167

Equity hedge funds

, 28

Equity multiple

, 111

Equity REIT (eREIT)

, 95–98

Eurekahedge

, 85

Event-driven hedge funds

, 24–26

Examples of infrastructure mutual funds

, 173–175

Exchange-traded funds (ETFs)

, 2, 10, 88, 156, 176–177

ETF. com

, 149, 193

exposure to PE through

, 68

shares

, 126

strategies

, 38

Exchange-traded note (ETN)

, 183

Exelon Corporation

, 171

Exogenous risks

, 165

Expansion

, 60

Expenses

, 61, 180

ratio

, 180

Expert management

, 20

External support

, 32

ExxonMobil (XOM)

, 137

Fair Isaac Corporation (FICO)

, 115

Fat tails

, 21

Fees

, 33

structure

, 16

Fiduciary risk

, 64

Financial activists

, 24

Financial markets

, 88

Financial profile

, 187

Financing structure

, 119–120

Fixed-income

allocations

, 113–114

arbitrage strategies

, 27

Fixed-rate mortgage

, 115

Flight-to-quality

, 129

Flight-to-safety (see Flight-to-quality)

Foreclosure

, 117

Foreshadowing changes in market dynamics

, 19

Fortune

, 12

Free cash flow

, 162

Freeport-McMoRan (FCX)

, 137

Frontier MFG Core Infrastructure Fund (FMGIX)

, 173–174

FTSE Global Core Infrastructure 50/50 Index

, 178

Fund, 74 (see also Exchange-traded funds (ETFs))

fund-as-a-whole basis

, 62–63

management

, 176

Fund of hedge funds (FOF)

, 17

Funding risk

, 67

Futures contract

, 135

Futures exchanges

, 139

Futures markets

, 134–135

Gabelli ABC Fund

, 25

Gates

, 16

General obligation (GO)

, 189

General partner (partnership)

, 12, 53, 59, 62–64, 82, 182

Geographic location

, 159

GetREFM. com

, 121

Global Infrastructure Partners (GIP)

, 187

Global macro and managed futures funds

, 22–24

Global macro strategies

, 23

Gold

, 132

Goldman Sachs MLP Energy Infrastructure Fund (GLPIX)

, 183

Greenfield investments

, 159–160

Greylock Partners

, 60

“Hands-on” investing

, 96

Hard commodities

, 127–128

Hard infrastructure

, 157–158

Hard money loans

, 116

Harvest Partners

, 66

HBK Capital Management

, 42

Hedge Fund Research

, 36

Hedge funds

, 4–5, 11–12

40 Act Fund

, 40

activist investing movement

, 45–46

advantages

, 19–20

advocates

, 20

approaches

, 17–18

benchmarks

, 36

categories and subcategories

, 22–28

disadvantages or drawbacks

, 20–22

due diligence on

, 33–34

financial industry and society

, 18–19

funds of

, 41–42

gain exposures

, 40

growth

, 13

invest in

, 47

investors

, 16

manager selection

, 42

online resources

, 47–48

PE differ from

, 54

performance

, 35–38

primary concerns investors

, 46–47

regulation

, 28–30

replication strategies

, 38–39

selection criteria

, 30–33

strategies

, 12–13

taxed

, 30

traits

, 43–45

work

, 14

Hedger

, 124–125

High-potential returns

, 131

High-quality portfolio

, 187

Home equity line of credit (HELOC)

, 116

Homeownership

, 88–89

Horizon price

, 103

Hospitality

, 91

Hurdle rate

, 61

Hurt money

, 61

Idiosyncratic risk

, 94

Illiquidity

, 58

Implied volatility

, 27

Income yield

, 111–113

Indexed approach

, 17–18

Indirect investment

, 18

Individual investors

, 191–192

Industrial commercial property

, 91

Inflation hedge

, 114, 131, 164–165

Infrastructure

, 6, 151–153

attributes of infrastructure investments

, 160–162

benchmarks for publicly listed infrastructure securities

, 177–178

Brownfield and Greenfield investments

, 159–160

classification

, 156–159

ETF

, 176–177

examples

, 154, 178–179

examples of infrastructure mutual funds

, 173–175

examples of infrastructure stocks

, 170–172

funds

, 156

individual investors

, 191–192

investing in

, 162–165, 190–191

investors

, 175–176

investors gain exposure to

, 168

invests in

, 155–156

MLP

, 181–187

municipal debt

, 188–189

mutual funds attractive vehicle for investing in

, 172–173

online resources

, 192–193

owns

, 153–155

PE fund

, 187–188

pros and cons of investing in infrastructure stocks

, 169–170

publicly-traded vehicles

, 168

risks

, 165–167

selection criteria

, 179–181

stocks

, 169

tradeoffs

, 189–190

Initial public offering (IPO)

, 53

Institutional Investor

, 13

Institutionalization of hedge funds

, 83

Interest rate risk

, 26, 189

Interim internal rate of return (IRR)

, 60, 68–69, 71

investors use IRR to measure performance

, 71

manipulation due to timing of distributions

, 73

multiple IRRs

, 73–74

primary advantages and disadvantages of using

, 72–74

Internal rate of return (IRR)

, 109–110

Invesco Global Listed Private Equity Portfolio

, 68

Investing in futures

, 138–139

Investment Adviser Public Disclosure (IAPD)

, 32

Investment Advisers Act of 1940

, 15, 69–70

Investment assessment

, 79

Investment Company Act of 1940

, 10, 15, 28–29, 40

Investments

, 1

fees

, 21

philosophy

, 30–31

strategies

, 15, 99–101

Investopedia

, 192

Investors

, 1–2, 21, 60, 73, 112, 140–141

education

, 47

gain exposure to infrastructure

, 168

with limited capital access PE market

, 67–68

protection clauses

, 61

trade commodities

, 134–136

use IRR to measure performance

, 71

use to value real estate property

, 102–105

iShares Global Infrastructure ETF (IGF)

, 179

iShares US Infrastructure ETF (BATS: IFRA)

, 179

J-curve effect

, 64

JHancock Infrastructure Fund (JEEBX)

, 175

JPMorgan Alerian MLP Index (AMJ)

, 183

July expiry WTI futures

, 135

Jumpstart Our Business Startups Act of 2012 (JOBS Act of 2012)

, 108

Kinder Morgan, Inc

, 172

KKR & Co Inc.

, 71

KPS Special Situations Fund

, 66

Land

, 91

monopoly

, 104

ownership

, 88

Lanthanum

, 130

Lazard Global Listed Infrastructure Portfolio (GLIFX)

, 174

Lease rate

, 132

Lenders

, 115–116

Leverage

, 12, 21–22

yield

, 112

Leveraged buyout fund (LBO fund)

, 5, 52, 65

Limited liability companies (LLCs)

, 30, 70

Limited partner (partnership), 12, 30, 53, 59, 82, 182 (see also Master limited partnerships (MLPs))

Limited partnership agreement (LPA)

, 59

features

, 61–63

Limits on redemption

, 33

Lipper Leaders

, 193

Liquid alternative investments

, 10

Liquidity

, 16, 143

issues

, 162

providers

, 18–19

risk

, 66–67, 94–95

Load fund

, 174, 176

Loan-to-value ratio (LTV ratio)

, 117

Local market

, 120

Lock-up periods

, 16, 22

Long positions

, 28

Long-short funds

, 28

Long/short investing

, 12

LOWERCASE Capital

, 60

Macquarie Global Infrastructure 100 Index

, 178

Macquarie Infrastructure Corporation

, 170

Magellan Midstream Partners

, 186

Managed account

, 29

Managed futures strategies

, 23–24

Management fees

, 61

Manager reputation

, 31–32

Manager selection

, 42, 77–78

Manufacturing and sales

, 60

Margin

, 18

Margin call

, 148

Mark-to-market

, 136

Market capitalization (market cap)

, 185

Market neutral strategies

, 28

Market risk

, 66, 94

Martin Marietta Materials

, 170

Master limited partnerships (MLPs)

, 156, 181

examples

, 185–186

factors

, 186–187

pros and cons

, 184–185

structured

, 182–183

ways

, 183–184

McLean Industries, Inc

, 52

Mechanical trading

, 23–24

Merchant power plant

, 159

Merger arbitrage strategies

, 25

Metals

, 129–130

Mezzanine debt

, 80–82

Million British Thermal Unit (MMBtu)

, 182

Millionacres

, 121

Minority Enterprise SBICs

, 52

Mixed-use commercial property

, 91

Modified internal rate of return (MIRR)

, 75

Monetary Authority of Singapore

, 30

Morningstar

, 47, 192–193

Mortgage

, 88

lenders

, 116–117

rates

, 114–115

Mortgage REITs (mREITs)

, 96–98

Mortgage-backed securities (MBS)

, 98

Motley Fool

, 85, 192

MSCI ACWI Infrastructure Index

, 178

Multi-strategy funds

, 41–42

Multiples of invested capital (MIC)

, 75–76

Municipal bond

, 188–189

Municipal debt

, 188–189

Mutual funds, 2, 14–16, 88 (see also Hedge funds)

attractive vehicle for investing in infrastructure

, 172–173

investors

, 16

Mutually exclusive projects

, 73

NAIOP. org

, 121

National Association of REITs

, 121

Natural gas

, 128–129, 139–140

Neodymium

, 130

Net asset value (NAV)

, 61

valuation date

, 82

Net operating income (NOI)

, 102

Neuberger Berman Group LLC

, 71

New York Mercantile Exchange

, 135

New York Stock Exchange (NYSE)

, 182

NextEra Inc

, 171

NFA

, 149

Norfolk Southern Railway

, 171

Nucor Corporation

, 170

Nuveen Global Infrastructure Fund (FGNCX)

, 174

Offering memorandum or document

, 31

Office

, 91

Oilseeds

, 130

OnTrack Core Fund (OTRFX)

, 40

Open-end funds

, 2

Operational risk assessment

, 79

Opportunistic asset segment

, 159

Opportunistic real estate strategies

, 101

Option

, 27

Organized markets

, 130

Pacific Gas and Electric Company (PG&E)

, 171

Participants in commodity markets

, 142–143

Pass-through vehicles

, 30, 70

Passive investing

, 81

Passive management

, 173

Past performance

, 33

Peer groups

, 42, 68–69

Peer-to-peer lending (P2P lending)

, 116

Pelham Long/Short Small Cap Ltd Class A

, 28

Pension funds

, 14

Performance

, 12, 16

Physical commodities

, 136–137

Planning

, 119

Political risk

, 166–167

Pooled investment vehicles (PIVs)

, 2, 14–15, 53, 88, 137

Portfolio allocation strategy, asset classes in

, 113–114

PowerShares DB Commodity Index Tracking (DBC)

, 138

Pre-IPO

, 60

Precious metals

, 129–130

Predictable cash flows

, 92, 186

Preferred return (pref return) (see Hurdle rate)

Price for future delivery

, 125

Price risk

, 125

Prime broker

, 34

Principal risk

, 133

Private equity (PE)

, 5, 51–52, 125, 152

advantages

, 57

buyout fund

, 65–66

co-investment

, 63–64

debt instruments

, 79–81

differ from hedge fund

, 54

differ from public equity

, 54–55

disadvantages or drawbacks

, 57–58

drawdown and vintage year

, 67

factors

, 78–79

financial industry and society

, 55–56

funds taxed

, 70–71

history

, 53

index

, 77

industry

, 52

investing

, 55

investors use IRR to measure performance

, 71

investors with limited capital access PE market

, 67–68

LPA features

, 61–63

manager selection

, 77–78

measures

, 74–77

mezzanine debt

, 81–82

online resources

, 84–85

performance

, 68–69

primary advantages and disadvantages of using IRR

, 72–74

recent trends and innovations in PE investing

, 82–84

regulation

, 69–70

risks

, 66–67

VC work

, 59–61

works

, 53–54

Private investment in public equities (PIPE)

, 84

Private participation in infrastructure (PPI)

, 154

Private REITs

, 97, 99

Professional experience

, 43

Professional network

, 120

Property-specific risk

, 95

ProShares DJ Brookfield Global Infrastructure ETF (TOLZ)

, 179

ProShares Global Listed Private Equity

, 68

ProShares Hedge Replication

, 18

Proxy fight

, 46

Public companies

, 56

Public equity, PE differ from

, 54–55

Public market equivalent method (PME method)

, 69, 76–77

Public non-listed REITs (PLNRs)

, 97, 99

Public-private partnerships (PPPs)

, 154

Publicly-traded vehicles

, 168

Qualified investors

, 14

Quantitative easing

, 38

Quartile

, 42

Rare-earth metals

, 130

Real assets

, 123–124

Real estate

, 87–88

advantages

, 91–93

asset classes in portfolio allocation strategy

, 113–114

challenges and risks

, 93–95

and characteristics

, 89–90

critical features of REITs

, 101

crowdfunding

, 108–109

direct real estate investing differ from owning shares

, 106–108

foreclosure

, 117

indices

, 105–106

investing

, 5–6

investment matrix

, 96

investment strategies

, 99–101

investment trusts

, 2

investors use to value real estate property

, 102–105

lenders

, 115–116

mistakes

, 119–120

mortgage lenders

, 116–117

mortgage rates

, 114–115

online resources

, 121

primary property types

, 90–91

REIT

, 97–99

return of real estate investment

, 109–113

tax advantages and disadvantages

, 118

ways

, 95–97

Real estate investment trust (REIT)

, 95, 97–99

critical features of

, 101

direct real estate investing differ from owning shares in

, 106–108

Real Estate Solutions

, 121

Recapitalization

, 53

Recourse

, 97

Refinancing

, 115

Regulation

, 15, 19

of hedge funds

, 28–30

of PE

, 69–70

Regulatory risk

, 166–167

Reinvestment rate assumption

, 73

Relational capital

, 44

Relative value strategies

, 26–27

Renaissance Technologies

, 17

Replication strategies of hedge funds

, 38–39

Residential real estate

, 87

Residual value

, 76

Retail

, 90

investors

, 3, 40

Return on equity (ROE)

, 109–110

Returns

, 5, 9, 37, 76, 138

of capital

, 183

enhancement

, 20

persistence

, 42

of real estate investment

, 109–113

Revenue bonds

, 189

Risk

exposure

, 31

management skills

, 44

measurement

, 21

PE firms

, 66–67

risk-adjusted performance

, 35–36

risk-free rate

, 36

risk-return profile

, 175

Roll return

, 141

Roll yield (see Roll return)

S&P Global Infrastructure Index

, 178

S&P Goldman Sachs Commodity Index (GSCI)

, 144

Savvy Investor’s Guide to Building Wealth Through Traditional Investments, The

, 2, 10

Savvy Investor’s Guide to Pooled Investments, The

, 2

Scale

, 73

Secondary markets

, 54, 82–83

Securian AM Dynamic Managed Vol Fd (VVMIX)

, 40

Securities Act of 1933

, 15

Securities and Exchange Commission (SEC)

, 14, 47, 70, 84, 99

Securities Exchange Act of 1934

, 15

Security Exchange Commission

, 138

Seed capital

, 60

Self-development skills

, 45

Self-investment

, 16

Sequoia Capital

, 60

Sharpe ratio

, 36

Short positions

, 28

Short sale

, 117

Short selling

, 12, 28, 38

Simon Property Group (SPG)

, 95–96

Since inception IRR (SI-IRR) (see Interim internal rate of return (IRR))

Small Business Investment Companies (SBICs)

, 52

Social capital

, 43

Social infrastructure

, 157

Soft commodities

, 127–128

Soft infrastructure

, 157–158

Sovereign wealth fund

, 156

SPDR Gold ETF

, 136–137

SPDR Gold MiniShares

, 137

SPDR Gold Trust (GLD)

, 138

SPDR® S&P Global Infrastructure ETF (GII)

, 179

Speculators

, 124–125, 142–143

Spot markets

, 134–135

Start-up capital

, 60

Stocks

, 1, 9, 125

Structural capital

, 44

Subjectivity

, 77

Subordinated bonds with warrants

, 80

Sun Capital Partners

, 65–66

Systematic risk

, 19

Systematic traders

, 23

Systematic trading

, 23–24

Systemic risk

, 46

Tangible alternative investments, 3–10 (see also Alternative investments)

Task execution

, 44

Tax advantages

, 92–93

TC Energy

, 172

Technical analysis

, 24

Technological risk

, 167

Termination clause

, 63

Thoma Bravo Fund

, 65–66

Tiger Fund

, 13

Time value of money

, 72

Total value to paid-in (TVPI)

, 69

capital

, 75–76

ratio

, 69

Tracking error

, 180

Traditional investments

, 1–2

Traditional systematic risk strategies

, 38

Tranches

, 98

Transparency

, 16

lack of

, 22

Transportation

, 157, 171

Transurban Group

, 171

Trophy properties

, 96

Tudor Investment Corporation

, 42

Tyson Foods (TSN)

, 137

Unit

, 182

Unit investment trusts

, 2

United States Oil Fund (USO)

, 138

Unitholders

, 182

Unlevered yield

, 112

Upstream companies

, 182

Urban Land Institute

, 121

Usage risk

, 160

Utilities

, 157, 171

Valuation

, 58, 104–105

Value-add strategies

, 100

Value-added segment

, 158–159

VanEck Gold Miners (GDX)

, 138

Venture capital (VC)

, 5

firms

, 58

fund

, 52–53, 56, 60

stages

, 60

work

, 59–61

Vintage year

, 67

Vista Equity Partners Fund

, 65–66

Volatility

arbitrage strategies

, 27

risk

, 39

Vulcan Materials

, 170

Waterfall

, 61–62

Wellington Management Company LLP

, 42

West Texas Intermediate (WTI)

, 127

Whitebox Relative Value Partners

, 26

Williams Companies

, 172

Yale University’s Endowment Fund

, 56

Yttrium

, 130