Alternate Investment, concept and contribution

Alternate Investment

1. Alternate Investment 21–F–227 Doshi Bhavin

2. What is an Investment Investment involves making of a sacrifice in the present with the hope of deriving future benefits .

3. Evaluation of Investing Grains Bullions Coins Real Estate Cash Fin ancial Assets Motive has been moved from Security to Returns , Medium has changed from Physical to Paper securities.

4. Traditional Financial Assets (Long Only) Demand & Term Deposits Government Schemes Post office Money Market Instruments Bonds & Debentures Shares & Securities Mutual Funds Many mores

5. What is an Alternate Investment Investment instruments used to reduce risks through diversification

6. Today’s Alternate Investment In today’s times, alternative investments can be considered any financial instrument excluding traditional asset classes like stocks, bonds, or cash-related instruments. There are many types of alternative investments like : Private equity (PE), V enture capital (VC), H edge funds, R eITs , Commodities and more.

7. History of an Alternate Investment Many regard the first U.S. transcontinental railway, built between 1864 and 1869, as the first modern day alternative investment. The railway was funded by private capital , as two companies came together to provide funding in conjunction with government bonds. As this transaction fell outside the traditional investment asset classes, it has now been deemed an alternative investment, even though investors did not call it an alternative investment in those times.

8. History of an Alternate Investment Alternative investments as we know them today were shaped in the 1900s. The first leveraged buyout occurred in 1901 when J.P. Morgan acquired the Carnegie Steel Company. MIT President Karl Compton co-founded one of the first venture capital firms in 1946: American Research and Development Corporation (ARDC). It was a public company which raised capital from universities, insurance companies, mutual funds, and investment trusts to make private market investments in companies Another early venture capital firm was J.H. Whitney & Company , also founded in 1946, which invested in entrepreneurs after World War II who were not able to secure funding from banks. The first hedge fund was developed in 1949 by Alfred Winslow Jones , who has since been regarded as the “father of the hedge fund industry”. His strategy was to create a “hedge” by shorting stocks that he believed would drop in value or use leverage on stocks he believed would increase in value.

9. Purpose of an Alternate Investment Diversified Portfolio Cu shion in times of market volatility Hi gher returns Cater to HNI clients Massive pooled amount allows flexibility to managers Structured ownership & strategic returns Rely more on the strength of each specific investment

10. Characteristics of an Alternate Investment Alternative investments can provide an interesting opportunity for investors to diversify their portfolios, dampen the impact of market volatility and help them achieve their long-term investment objectives, even during times of market uncertainty.

11. Characteristics of an Alternate Investment Lower liquidity H igher fees & Transaction cost L imited benchmark data Higher risks Non-linear returns L ess regulation L ower transparency Difficult to valuation Enormous ticket size Longer d uration

12. Purpose of an Alternate Investment Alternative investments can provide an interesting opportunity for investors to diversify their portfolios, dampen the impact of market volatility and help them achieve their long-term investment objectives, even during times of market uncertainty.

13. Purpose of an Alternate Investment Diversified Portfolio Cu shion in times of market volatility Hi gher returns Cater to HNI clients Massive pooled amount allows flexibility to managers Structured ownership & strategic returns Rely more on the strength of each specific investment

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