Thought Leadership in Real Asset Investing

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In the face of economic instability and changing market conditions, investors are becoming more inclined to explore alternative assets as part of their allocation strategy. 

Most investors construct their portfolios by allocating their investments to traditional assets, such as equities, fixed-income securities, and liquid funds. These can offer both growth and a degree of diversification. Nevertheless, certain investors pursue diversification that extends beyond these traditional asset categories.

Industry experts have heralded the advantages of diversifying investments into alternative assets instead of adhering to the conventional ’60/40′ allocation of stocks and bonds.

Michael Underhill, CIO of Capital Innovations and past president of ADISA, identified the main drivers of the growing appetite for alternative assets, along with the importance of education, the emerging trends in the space, and what he’s telling his clients, among other topics.

The Inflation Reduction Act (IRA) is an historic landmark in U.S. law-making that is estimated to grow the U.S. renewables market from $64 billion in 2022 to nearly $114 billion by 2031. In turn, many other industries are being indirectly and positively impacted by the passing of that law. We feel it's critical that investors take advantage of this opportunity and capitalize and pursue investments in renewable energy production and infrastructure deployment as well as opportunities in the energy transition, digital transformation and enhancement/asset improvement of aging infrastructure. 

ADISA President Michael Underhill welcomed conference attendees in the opening session with an unveiling of a partnership with The Milken Institute.  

"ADISA believes in building, developing and retaining a diverse talent pipeline and fostering a connected culture within a welcoming, inclusive and equitable environment, and has partnered with the Milken Institute HBCU Strategic Initiative and Fellows Program for our 2023 Spring Conference, April 24-26.

HBCUs generate 25% of all bachelor’s degrees in STEM fields for African Americans and award 14% of all African American engineering degrees. Through our partnership with Milken, ADISA hosted students from this program to foster the next generation of leadership in the alternative investment industry. We look forward to continuing the partnership at our Annual Conference in Las Vegas, October 9-11."

There is a deep and varied opportunity set of attractive investment opportunities in the renewable and sustainable energy sector.  We are focused on investments that address the renewable and sustainable energy opportunity, including energy transition, to potentially capture value-creation and drive investment returns. While the energy transition is expected to unfold over several decades, there is a clear trend towards decarbonization at a global level. The push for decarbonization was originally driven by national and regional policies but continues to accelerate as renewable energy economics become increasingly favorable. Recent improvements in, and de-risking of, renewable energy generation and storage technologies have led to cost parity with traditional generation resources in many markets. The costs of renewable energy have continued to decline over the past decade with the global levelized cost of energy (LCOE) of utility-scale solar PV and on-shore wind falling 85% and 56% respectively between 2010 and 2020. (IRENA, Global Energy Transformation 2021) Additionally, battery technology has made significant progress over the same period, with costs declining approximately 90%. (IRENA, Global Energy Transformation 2021)