The global economy is enjoying a period of recovery and investors are hungry for new investment ventures. The question remains what alternative investments exist out there for them?
This was the question asked at a panel discussion on “Alternative investments in South Africa” held at the Summer place in Hyde Park on Thursday and hosted by Metta Capital.
The panellists included Sasfin deputy chair David Shapiro, founder of cannon asset managers Adrian Saville, founder of investment website Justonelap.com Simon Brown, Grovest chief executive Jeff Miller and Blockchain lead firstrand group Farzam Ehsani.
Ultimately, Saville said that economic growth was key in driving investors to spend.
“The world economy is in good shape, the single the most important influence on asset class performance is economic growth, and economic growth in 2017, was better than economic growth in 2016, and 2016 was better than 2015 and current 2018 looks better than 2017”, he said.
Ultimately as part of exploring the investment territory, investors should research and find the most attractive asset class that offers more gains.
Giving the audience a stint of advice on investment, Shapiro said “enjoy the ride”, suggesting it was a good time for investors to invest.
“If the S&P goes above 3000 … people usually say these are worrying signs, should we ignore that,” Michael Avery chairing the panel asked?.
“At this point, this is market you want to own, I don’t agree that there is fear out there”, said founder and director of investment website Justonelap.com Simon Brown.
The fourth industrial revolution has also resulted in new experimentation and new ventures that could see the investment industry pushing investment fees down to zero, Eshani said.
Asked about alternative investing in cryptocurrencies, like bitcoin, he said people have a lack of understanding and appreciation for this asset class. “It crosses borders and jurisdictions quicker than anything else we know.”
Eshani said the advent of blockchain – the revolutionary technology upon which bitcoin and other cryptocurrencies are built – will decrease costs and this, in turn, will begin to threaten traditional business models.
“We still see a tremendous amount of cryptocurrency in the market”, said Saville. “We are at the centre of the change in paradigm.”
Miller said investing in alternative assets classes known as section 12J funds, offers attractive tax benefits.
The South African Revenue Service introduced the Section 12J tax incentive to stimulate the growth of small to medium-sized business through venture capital investment.
Investing in a section 12J company’s venture capital fund, offers a high risk but tax deductible investment. Investing in a portfolio of such funds could mitigate some of the risk, Miller said.