Alternative Alternatives: Risk, Returns and Investment Strategy

In the aftermath of the financial crisis, investors are searching for new opportunities and products to safeguard their investments for the future. Riding high on the wave of new financial opportunities are Alternative Alternatives (AA). However, there is a lack of information on Alternative Alternatives: What are they? How do they work? How can investors profit from them? In Alternative Alternatives, Sona Blessing addresses all of these questions.

Blessing defines Alternative Alternatives based on the following hypothesis: If the origin of the risk lies outside the financial markets, then is should be insulated from the vagaries of those markets. The recent credit and sovereign debt crises have served to defend this hypothesis and have upheld the conclusion that AA assets and strategies offer a risk–return profile that is distinct from those offered by traditional and main stream hedge fund strategies.

AA strategies include timberland investing, insurance risk transfer, asset/loan based lending (aviation, shipping, trade, entertainment, litigation financing, etc,), collectables and extraction strategies such as volatility and behavioural finance. Alternative Alternatives reviews each asset/strategy on a standalone basis, profiling its characteristics, an analysis of its strengths, weaknesses, opportunities and threats (SWOT), and its risk/reward drivers. Blessing describes how to integrate these assets and strategies within a portfolio by examining their peculiarities, the challenges and constraints of each, how they are being used in the real world, how they are implemented, and the results that they have achieved. Finally, the book reviews the scope, scalability and prospects for each asset/strategy in the future.

Alternative Alternatives is a one stop resource on this new investment class, providing an in–depth analysis of these assets and strategies, which will leave investors with everything they need to identify, allocate and manage them.

Preface.

Acknowledgements.

A Note on How to Use This Book.

Introduction.

Epilogue.

1 Timberland.

1.1 Introduction.

1.2 Statistics on Investable Timberland.

1.3 Asset Characteristics.

1.4 Investment Drivers.

1.5 Return Drivers.

1.6 Perceived Risk.

1.7 Real Risks.

1.8 Measuring Risk and Returns: Science, Art, ′Boots on the Ground′.

1.9 Investment Objective.

1.10 Investment Strategy.

1.11 In Practice.

1.12 Country Case Studies.

1.13 Species Case Study.

1.14 Emergence and Outlook.

1.15 2010 And Beyond.

1.16 Opportunities and Challenges Facing Timberland Investors.

1.17 Conclusion.

2 Insurance Linked Risk Transfer.

2.1 Introduction.

2.2 Classification.

2.3 Asset Characteristics.

2.4 Risks.

2.5 Return Drivers.

2.6 Constraints.

2.7 The Players.

2.8 Evolution.

2.9 Non–Life Insurance Linked Risk Transfer.

2.10 In Practice.

2.11 Life Insurance Linked Risk Transfer.

2.12 Pandemic–related Insurance Investing Extreme Mortality Risk.

3 Asset–Based Lending.

3.1 Introduction.

3.2 Aviation Finance, Loan–Based Lending, Leasing.

3.3 Ship Financing, Leasing, Investing.

3.4 Trade Finance.

3.5 Litigation led Investing.

3.6 Lending Against Hospital Receivables.

3.7 Film Financing.

3.8 Music Investing.

3.9 Appendix.

4 Collectables.

4.1 Introduction.

4.2 Investing in Art.

4.3 Case Study Series (with Philip Hoffman, The Fine Art Fund Group).

4.4 Investing in Photography.

4.5 Investing in Wine.

4.6 Investing in Vintage Cars.

5 Extraction Strategies.

5.1 Volatility Investing.

5.2 Behaviour Finance.

6 Place in a Portfolio.

Further Reading.

Index.

Sona Blessing is an independent research specialist and consultant in Alternative Alternatives . She launched and also manages and moderates Opalesque Radio. Prior to this Sona was Senior Adviser and Opalesque s Director of Research as well as Editor of the weekly publication A SQUARE which she researched, and launched in January 2007, and researched, authored and edited until the end of July 2009. She is on the education committee of the 100 Women in Hedge Funds Zurich; has been a guest lecturer on Alternative Alternatives at the Zurich University of Applied Sciences (ZHAW) and is also frequently invited to moderate panels and share her expertise as a speaker and author. In the past she has held positions as a hedge fund research strategist, and a global market strategist. Sona also has extensive experience in business journalism worldwide.