Welcome to the WC, wherein you’re trapped in my mind for eight to twelve minutes weekly.
Five weeks ago, when the trade war began in earnest, I wrote a piece on diversifying outside the US.
As you’ve no doubt noticed, the situation has escalated since then.
We, and our members, have taken note. From an Altean in Switzerland this morning:
I am becoming increasingly cautious about investments related to the US or the USD. The odds: Swiss Franc—US Dollar are working against me. Also, the new president doesn’t have my trust, to say it nicely. So, this makes me increasingly reluctant to invest in anything related to US relations (who nowadays guarantees I get my money back? It’s becoming more insecure every day).
Regardless of how you feel about the tariffs, it’s undeniable that the world has changed forever.
There are two ways to approach an increasingly uncertain macro climate:
- Go completely risk off, fleeing to the safest thing possible, or
- Realise risk is rising everywhere, so you may as well hunt higher returns
Today’s issue focuses on the latter.
What’s on the menu today:
- The Failure of Traditional Safe Havens
- Short-Duration Opportunities with Uncorrelated Returns
- Alternative Real Assets for a Fragmented World Economy
- Building an All-Weather Portfolio for the New Reality
- The Path Forward: Thoughtful Opportunism
We’re currently building out Altea’s offering roadmap for the rest of 2025. If you like the look of anything we talk about below, let us know, and we’ll build it for you.
Before we begin: Nothing here is investment advice. Do your own research. Please.
Let’s go. 🚀
Speaking of opportunities abroad, we’re making our seaside villa available this summer.
It’s open from July 26 to the end of August at a bigly discount for Altea members.
If you fancy a couple of weeks in Javea, Spain, please let me know.
Table of Contents
The Failure of Traditional Safe Havens
The instinctive response to uncertainty is to flee to safe assets—Treasury bonds, gold, or cash in “stable” currencies. But this trade war creates a unique problem: the world’s traditional safe haven—the US dollar and its associated instruments—is at the epicenter of the uncertainty.
Treasury bonds, long considered the world’s risk-free benchmark, suddenly carry new dimensions of risk. Policy uncertainty affects interest rate trajectories, while tariff-induced inflation threatens real returns. Meanwhile, the US dollar faces opposing forces: safe-haven status pulling it up while trade restrictions and potential retaliation push it down.
Even gold, that perennial crisis asset, presents a mixed picture. While it should shine in times of currency uncertainty, its price behavior lately has been erratic, influenced by everything from central bank buying to ETF flows rather than purely serving as a monetary hedge.
What we need aren’t just safety-oriented assets, but income-generating safe havens—investments that not only preserve capital but produce meaningful yield in an environment where risks are more evenly distributed across asset classes and geographies than many realize.
If you’re an accredited investor, and you want to diversify into any of these areas, let us know. We’ll build it for you.
Nothing here is investment advice. Do your own research. Please.
Short-Duration Opportunities with Uncorrelated Returns
The key to navigating today’s environment lies not in avoiding risk entirely, but in finding risks worth taking—preferably ones that deliver returns uncorrelated to the trade war’s direct effects.
Trade Finance: Profiting from the Friction
Ironically, trade financing—providing short-term capital for cross-border commerce—thrives during periods of trade friction. As established supply chains fragment and companies forge new trading relationships, the demand for specialized financing grows.
Consider invoice factoring or purchase order financing between Europe and Asia, particularly for essential goods. These 3-6 month facilities typically yield 12-16% annually, with self-liquidating structures that provide natural protection against prolonged market dislocations.
What makes these particularly attractive is their adaptability. As trade patterns shift, capital can be redeployed to the most promising routes. If certain export markets dry up due to tariffs, others inevitably emerge—capital simply follows the path of least resistance.
One particularly compelling opportunity we’re tracking: Wine export finance between European producers and Asian importers. As US tariffs potentially disrupt traditional export markets, European vineyards are pivoting to Asian consumers, creating demand for short-term capital that yields 12-16% with minimal correlation to broader market moves.
Like the sound of Trade Finance? Let us know, and we’ll build it.
Litigation Finance: When Tension Creates Opportunity
Perhaps counterintuitively, trade disputes create fertile ground for litigation finance—funding commercial lawsuits in exchange for a portion of the settlement.
With the spike in contract breaches, force majeure claims, and intellectual property disputes crossing borders, specialized litigation funds focusing on trade and IP are seeing their opportunity set expand dramatically. Returns in the 20-25% range are achievable for portfolios of well-underwritten cases, particularly in hubs like Singapore that specialize in international commercial arbitration.
What makes litigation finance particularly resilient is its fundamental disconnect from financial markets. Case outcomes depend on legal merit and judicial decisions, not economic conditions or policy shifts. Even in worst-case scenarios—like severe trade disruption or currency volatility—judgments are still rendered and settlements still paid.
Like the sound of Litigation Finance? Let us know, and we’ll build it.
Luxury Asset-Backed Lending: Stable Yield in Unstable Times
Another pocket of opportunity lies in loans secured by high-value tangible assets—art, watches, classic cars, and wine collections. These short-duration loans (typically 6-24 months) yield 10-15% annually and are secured by assets that often maintain value even in economic downturns.
The high-net-worth individuals who own these assets frequently need liquidity but don’t want to sell their collections, especially during market uncertainty. By lending against these items at conservative loan-to-value ratios (typically 40-60%), investors can generate stable income with a tangible backstop.
What’s particularly attractive about this strategy now is that luxury assets often hold value better than financial assets during periods of currency instability. A rare timepiece or blue-chip artwork has intrinsic value that transcends any single currency’s fluctuations.
Want to invest in Luxury-backed lending? Let us know, and we’ll build it.
Alternative Real Assets for a Fragmented World Economy
Beyond short-duration income strategies, certain real assets are positioned to benefit structurally from the new trade landscape.
Southeast Asian Industrial Real Estate: The China+1 Windfall
Perhaps the clearest winner in the trade realignment is industrial real estate in Southeast Asia. As manufacturers diversify their supply chains away from China (a trend accelerated but not created by recent tariffs), countries like Vietnam, Indonesia, and Thailand are seeing a manufacturing boom.
Warehouses and industrial parks in these emerging manufacturing hubs can generate yields of 6-8% from rental income alone, with potential for 18-25% total returns when including appreciation as demand outstrips supply. While development risks exist, partnerships with established local operators can mitigate much of this uncertainty.
The beauty of this strategy is its asymmetric risk profile. Even if US-China tensions ease, the “China+1” diversification trend is unlikely to reverse—it has already gained too much momentum. Companies have learned the hard lesson of concentration risk and are unlikely to abandon their newly diversified manufacturing bases.
Keen to invest in this megatrend? Let us know, and we’ll build it.
Resources Streaming: Inflation-Protected Cash Flow
Resource streaming deals—where investors provide upfront capital to mining operations in exchange for the right to purchase a portion of future production at a fixed discount—offer another compelling opportunity.
Precious metals streaming in stable jurisdictions like Canada or Australia combines inflation protection with operational insulation. While traditional mining equity fluctuates wildly with commodity prices, streaming deals provide more predictable returns (typically 11-14% IRR) with significantly less downside.
These deals shine particularly brightly in stagflationary environments—precisely the scenario many economists warn could emerge from sustained trade tensions. Should inflation rise while global growth slows, precious metals prices typically increase, enhancing returns for streaming investors who have locked in below-market purchase prices.
Want to invest in resource streaming? Let us know, and we’ll build it.
Regional Food Systems: Necessity Over Discretion
Food production and processing infrastructure in regions with reliable domestic demand offers another avenue for trade-insulated returns. As global agricultural trade faces disruption, local food systems gain strategic importance.
From vertical farming operations in urban centers to processing facilities for local produce, these investments tap into essential consumer demand that remains relatively stable even during economic turbulence. While yields vary by specific strategy, many of these opportunities can deliver 14-18% returns while providing genuine diversification away from financial markets.
One structure we’re particularly interested in: short-term export prepayment for sustainable seafood from Indonesia to Japan and Korea. These 3-6 month financing arrangements yield 14-17% annually and tap into essential regional food trade that’s minimally exposed to US-centric disruptions.
Like the sound of this niche asset class? Let us know, and we’ll build it.
Building an All-Weather Portfolio for the New Reality
The strategies above share important characteristics that make them well-suited to today’s uncertain environment. But how should investors think about combining them into a coherent portfolio approach?
The Duration Barbell: Balancing Liquidity and Appreciation
Rather than choosing between quick liquidity and long-term growth, consider a “barbell” approach that combines both:
- Short-duration yield strategies (30-40% of allocation): Trade finance, litigation funding, and asset-backed lending provide current income and liquidity, allowing for rapid capital redeployment as conditions evolve.
- Medium/long-term real assets (40-50%): Industrial real estate, resource streaming, and agricultural investments offer inflation protection and appreciation potential, anchoring the portfolio with tangible value.
- Opportunistic allocation (10-20%): Maintained for unique situations that arise from market dislocations—distressed assets, special situations, or highly asymmetric opportunities.
This structure generates immediate income while building long-term value, giving you both financial returns and strategic optionality.
Geographic Diversification Is Necessary But Not Sufficient
While reducing US exposure makes sense for many investors right now, simply shifting to another single country or region creates a new form of concentration risk. True diversification requires thinking beyond geography to consider fundamental economic factors:
- Trade exposure: How dependent is the investment on cross-border commerce?
- Currency regime: Is the local currency pegged, managed, or freely floating?
- Political alignment: Is the host country likely to be caught in trade crossfire?
- Structural demand: Does the investment serve essential needs or discretionary wants?
The strongest portfolio combines investments that answer these questions differently, creating genuine diversification rather than simply moving all chips to another part of the table.
Robustness: The New Portfolio Metric
Traditional risk measures like volatility or drawdowns fail to capture the kind of uncertainty we’re facing. Instead, assess investments through the lens of “robustness”—the ability to perform acceptably across multiple potential futures.
We’ve developed a simple five-star robustness rating for alternative investments, considering:
- Performance across multiple economic scenarios
- Sensitivity to policy shifts
- Liquidity under stress
- Inflation response
- Geographic risk exposure
The most robust opportunities aren’t necessarily those with the highest expected returns in any single scenario, but those that maintain solid performance across a range of possible futures. In our analysis, Trade Finance/AR Factoring and Precious Metals Streaming score highest on this robustness metric, while more scenario-specific plays like specialized real estate or venture capital score lower despite potentially higher returns in optimal conditions.
The Path Forward: Thoughtful Opportunism
The current trade environment presents genuine risks—no thoughtful investor would suggest otherwise. But the binary choice between hiding in cash and making speculative bets misses the nuanced middle ground where the best opportunities live.
By combining short-duration income strategies with carefully selected real assets, investors can build portfolios that not only weather the current uncertainty but potentially thrive because of it. The key is selectivity, structural advantages, and diversification that goes beyond simple geographic spreading.
As our Swiss member rightly points out, guarantees are scarce in today’s world. But that doesn’t mean opportunity is equally scarce—quite the opposite. The reconfiguration of global trade flows is creating pockets of opportunity with asymmetric risk profiles for those willing to look beyond conventional asset classes and geographies.
In the coming weeks, we’ll be sharing specific deal opportunities that embody the principles discussed here—investments structured to provide both meaningful current yield and appreciation potential while minimizing direct exposure to US-centric trade disruptions.
The world is indeed changing forever. But change, while unsettling, has always been the seedbed of investment opportunity for those positioned to capitalize on it.
Nothing here is investment advice. Do your own research. Please.
That’s all for this week; I hope you enjoyed it.
Cheers,
Wyatt
Disclosures
- I live in Spain, so if you all buy homes here, my property value will go up.
