Hello and welcome to Alts Cafe, your weekly wrap of everything worth knowing in the Alts markets
Highlights from the full issue:
- Macro: Wells Fargo upgraded US economy outlook
- Real Estate: Denver ranked hottest housing market
- Startups: Ramp raised another $150 million
- Private Credit: Global PE exit value sank
- Crypto: Crypto.com is hiring
- NFTs: Adidas is making NFT sneakers
- Art: NYC galleries are moving to LA
- Vintage Autos: Classic cars create 79,000 Australian jobs
- Coins: The Trump Liberty Coins scandal
- Farmland: Anheuser announced its US Farmed certification
- Luxury: Rolex introduced new watches
- Wine, Tequila, and Spirits: Bourbon market is on the rise
- Film & Music: Spotify continues to cut artist pay
- Precious Metals: The platinum jewelry market is growing
- Collectibles: Drake landed six rare Michael Jordan Cards
- Websites: Lessy.com sold for $25,000
Let’s go.
Wyatt
Table of Contents
Macro View
Bullish News
- The IMF projected that global growth will hold steady at 3.2% this year and next.
- Goldman Sachs reported its highest earnings since 2021, with profit jumping 28% due to a 26% surge in investment banking revenue.
- The 2-year/10-year Treasury yield spread has been inverted for a record 446 days without triggering a recession.
- Wells Fargo upgraded its outlook for the US economy, lifting its 2024 GDP growth forecast to 2.5%, projecting a 4.1% unemployment rate by year-end.
- China’s economy grew faster than expected in Q1, with GDP expanding 5.3% year-on-year.
- Russia’s economy is expected to grow 3.2% in 2024, exceeding forecast growth rates.
Bearish News
- Moody’s reported that 40% of US corporate defaults in 2023 were repeat offenders.
- Bank of America’s Q1 profits fell 18% due to higher expenses and charge-offs.
- Wall Street pushed out rate-cut expectations, seeing a “real risk” the Fed won’t cut until March 2025.
- California’s minimum wage hike caused more unemployment and population outflows and could lead to a 20% drop in small businesses.
- Insurance and repair costs have pushed car ownership costs to new highs, with insurance prices up 22% since 2008.
- A fall in iron ore prices will punch a $9 billion hole in Australia’s budget over the next four years.
What are the odds?
Everything is in the red as optimism turns to abject terror.
Get $25 to play around with using this link.
What are we doing?
Altea Highlights
Check out the full roundup.
Live Deals
Altea Tequila SPV
- Investment size: $10k minimum
- Hold period: 3 – 5 years
- Potential IRR: 35% to 40%
- Fees: 2% management | 20% carry | nominal one-time subscription TBC
Status: This is with the lawyers now, and we should have documents next week. I’ll be in touch late this week or early next week to begin the KYC, Self-Accreditation, document signing, and funds transfer process.
All going well, we’ll have this wrapped up first week of May.
Frank Auerbach Bundle
One Frank Auerbach Charcoal
- Investment size: up to $560k
- Duration: 3 – 10 years
- Potential IRR: 15% to 20%
- Fees: 1.5% management | 20% carry
Status: This one is live on the Altea investor portal now, and it should be wrapped up early/mid-this week.
New Deals
Two real estate opportunities this week from Altea member Vanessa Mendenhall.
128 Property Portfolio in Philadelphia
Investment Type: Real Estate Raising: $10,000,000 Minimum Investment: $100,000 Average Cap Rate: 10.35% Projected returns: 15.2% IRR Point of Contact: Vanessa Mendenhall
What’s the deal
This investment portfolio comprises 121 residential and 49 multi-family/mixed-use properties in Philadelphia. With a $15.4M acquisition price ($95.5K per unit), it offers an instant equity gain of $4M based on current market value.
Projected 5-year returns include $11.4M gross rental income, $11.1M net profits, and a 15.2% annual return.
Philadelphia’s real estate market shows promising developments, including major investments in life sciences, apartments, and mixed-use projects.
The minimum investment is $100k, but if there’s enough interest from smaller checks, we can potentially put together an SPV to get you in. [Read how that works and what the fees are]
Rancho Cucamonga 265
Investment Type: Real Estate Raising: $5,000,000 Minimum Investment: $100,000 Projected returns: 31% IRR Point of Contact: Vanessa Mendenhall
What’s the deal
The Rancho Cucamonga land development project, encompassing 265 acres, presents a potential investment opportunity with a three-year timeline. The project requires a total capital investment of $18,518,850 and involves the sale of 60 undeveloped 2.5-acre lots and 40 developed lots.
The projected net profit is $31,021,150, subject to market conditions and successful execution of the development strategy. The project is structured in two phases. Phase I focuses on entitlements, planning, and initial dispositions, while Phase II involves continued access development and the sale of improved lots with architectural plans. Comparable sales in the area range from $584,000 to $1,500,000 per acre, suggesting potential market demand for the lots.
The minimum investment is $100k, but if there’s enough interest from smaller checks, we can potentially put together an SPV to get you in. [Read how that works and what the fees are]
ALTS 1 Fund news
Last week, we reported the second quarter in a row of solid returns, and we’re officially opening Alts 1 to new investors this week.
Real Estate
Bullish News
- The Denver metro area was ranked as the hottest housing market in the US for the second year in a row.
- The median price of a single-family home in greater Boston reached a record high of $900,000 in March.
- Aurumys, a Phoenix-based real estate investment start-up, expanded to 6 states and 80 employees in less than 1 year.
- JLL’s Hotels & Hospitality group arranged the $171 million sale of the Hilton Back Bay hotel in Boston.
- LaPour, an award-winning real estate development firm, acquired 6.34 acres to develop Creekside Centennial Tech Center.
Bearish News
- Commercial real estate foreclosures jumped 117% in March as $1.5 trillion in commercial mortgage debt is due by the end of 2025.
- Office property loans saw 6.8% delinquency rates in Q1, up from 6.5% last quarter, covering $2.7 trillion of loans.
- Housing affordability weakened in February 2024 as the monthly mortgage payment rose 11.5% YoY to $2,040.
- A landmarked Financial District tower failed to pay off a $250 million loan at maturity despite being 92% occupied.
- Mortgage rates topped 7%, potentially pushing 15% of buyers out of the market.
- China’s new home prices declined at the fastest pace since 2015, dropping 2.2% YoY in March.
- Apartment occupancy and rent growth are falling in San Antonio, with occupancy projected to drop to 85.5% this year.
- A California condo sold for half its 2019 value, with 17.8% of San Francisco homes selling at a loss in the three months ending February 29, 2024.
How to invest in real estate right now:
Short Denver, long San Antonio.
Startups
Bullish News
- Spend management startup Ramp raised $150 million at a $7.65 billion valuation.
- Stripe raised $694.2 million in a tender offer, valuing the company at $65 billion, a 30% increase from last year.
- HR tech startup Rippling is in discussions to raise at a $13.4 billion valuation, up from $11.25 billion.
- A Revolut investor believes the fintech’s value has jumped 45% to $25.7 billion since last year.
- UK-based small launch vehicle developer Orbex raised $20.8 million to ramp up work on its Prime rocket, capable of placing 180 kg into low Earth orbit.
Bearish News
- Funding for Southeast Asia fintech startups declined 13% in Q1 2024 to $530 million with late-stage funding dropping 64% from Q4 2023.
- AI startup Stability laid off 10% of its staff to “right-size” the business after the CEO’s exit.
- GitLab Inc. (GTLB) stock fell short of the S&P 500, with shares depreciating 6.48% over the past month.
- Twilio’s chief legal officer Dana Wagner saw his pay drop 73% in 2023 as his stock award shrank by over $20 million.
- Electric vehicle maker Rivian cut 1% of its workforce in the second round of layoffs this year, following a 10% layoff in February.
- Zoom Video Communications (ZM) stock trailed the S&P 500, dropping 9.04% in the past month. [Ed: I decline all Zoom meetings. It’s trash.]
How to invest in startups right now:
AI startup Stability is wondering why they named themselves that.
Private Equity and Private Credit
Bullish News
- Ares Management reported 19% AUM growth to $418.8 billion in Q4.
- Blackstone reported strong Q1 results, with AUM increasing to $1.06 trillion and nearly $200 billion of dry powder available to invest.
- Vista Equity Partners raised over $20 billion for its eighth flagship fund, the firm’s largest to date.
- Lazard and Elaia Partners formed a strategic partnership to launch Lazard Elaia Capital, a technology-focused PE investment platform.
- EQT reported robust Q1 performance, closing its largest fund at €22 billion and increasing fee-paying AUM to €132 billion.
Bearish News
- Blackstone warned that PE cannot return capital ‘overnight’ to investors.
- PE healthcare bankruptcies exploded 112% in the past 5 years, with some firms having multiple bankruptcies on record.
- EQT, a Swedish PE firm, could face costs relating to Sweden’s carried interest tax review.
- Global PE exit value sank to a 3-year low of $81.2 billion in Q1 2024.
- Pay at China’s PE and venture capital firms plunged as much as 40% in 2023, with annual bonuses falling by up to 50%.
- Senate Democrats reintroduced a bill to raise taxes on carried interest for PE and hedge fund managers from 23.8% to as much as 40.8%.
How to invest in PE and Private Credit right now:
I’m sure it’s a great platform, but “Lazard Elaia Capital” is the best name we could come up with?
Crypto
Bullish News
- Hidden Road Partners, a crypto prime brokerage, is raising funds in a Series B round, bringing its valuation to nearly $1 billion.
- Crypto.com added 700 employees since November and plans to add another 700, aiming to triple its registered user base from 80 million.
- 6,767 BTC exited exchanges on April 12, the highest since January 2023.
- Kraken acquired TradeStation Crypto to expand its regulatory licensing in the US.
- Cardano saw a 28,372% surge in large holder inflows, skyrocketing from 54.93 million ADA on April 13 to 6.32 billion ADA on April 14.
- Hong Kong conditionally approved its first spot bitcoin and ether ETFs.
- Solana’s price surged over 7% after unveiling updates to enhance network efficiency.
- Coinbase and Grayscale unveiled new TV spots set to air during NBA and NHL playoff games. [Ed: this is where your fees go]
Bearish News
- A former security engineer was sentenced to three years in prison for hacking two decentralized crypto exchanges, stealing over $12.3 million.
- The Terra Luna Classic community rejected a proposal to establish a core developer team, causing LUNC’s price to plummet to $0.0001004.
- A victim in Delaware County, Pennsylvania, lost tens of thousands of dollars in a cryptocurrency scam.
- Ethereum price data casts doubt on the strength of its $3,000 support level as ETH derivatives show declining risk appetite.
- Hedgey Finance, a token infrastructure platform, lost approximately $44.5 million in a theft across the Arbitrum and Binance Smart Chain networks.
How to invest in Crypto right now:
All eyes on ETH this cycle (or not, I suppose)
NFTs
Bullish News
- Magic Eden’s NFT trading volume soared 194.4% to $756.5 million in March, marking six consecutive months of growth.
- CyberKongz’s ‘Prometheans’ Bitcoin NFT collection hit $4.8 million in total volume under 24 hours on Magic Eden.
- Nova Frontier X, a mobile web3 game, attracted over 100,000 waitlist sign-ups ahead of its spaceship NFT launch on April 16th.
- Gamma.io unveiled its FUKU NFT Collection of 10,000 unique NFTs inscribed directly onto the Bitcoin blockchain.
- STEPN partnered with Adidas on a limited collection of 1,000 generative NFT sneakers minted on the Solana blockchain.
Bearish News
- Digital Basel, an NFT art platform, shut down after facing accusations of plagiarizing Art Basel, falsely claiming to sell artworks from prominent galleries.
- PayPal no longer offers purchase protection for NFTs, putting them in the same category as financial products and investments.
- The value of Bored Ape NFTs has plummeted 90% from its peak of 120 ETH to 10 ETH, its lowest value since August 2021.
How to invest in NFTs right now:
Do NFT sneakers run small or large?
Artwork
Bullish News
- Four Joan Mitchell paintings from a private collection could realize $50 million at Sotheby’s auction.
- Sotheby’s Financial Services announced a groundbreaking $700 million securitization backed by art-secured loans, a first-of-its-kind transaction.
- The Louvre acquired Jean-Siméon Chardin’s Basket of Wild Strawberries after a successful fundraising campaign that raised €24.3 million.
- A $525,000 Mary Abbott painting led reported sales at EXPO Chicago 2024, which welcomed over 35,000 visitors.
- The Nelson-Atkins Museum of Art will auction Monet’s iconic painting “The Mill at Limetz“, which could fetch $25 million.
- 11 established New York art galleries are flocking to Los Angeles.
Bearish News
- A Connecticut man was sentenced to 14 months in prison for selling 145 fake Peter Max paintings for $1,325 to $2,833 each.
- 46 paintings and hundreds of silk ties stolen from artist Gabriele Beyer’s home in 2021 were found 300 kilometers away in a thrift store donation. [Ed: hundreds of silk ties??]
- A fire ripped through the Old Stock Exchange building in Copenhagen, causing “400 years of Danish cultural heritage” to go up in flames.
- AI discovered that the famous painting Madonna della Rosa wasn’t entirely painted by Raphael.
- The Metropolitan Museum of Art returned an ancient Sumerian sculpture to Iraq as its collection faces increased scrutiny for stolen objects.
How to invest in Artwork right now:
Turns out people don’t wear silk ties like they used to.
Vintage Autos
Bullish News
- A stunning red 1966 Aston Martin DB6 Vantage Saloon is set to cross the block at Barrett-Jackson’s Palm Beach Auction.
- Mecum Auctions’ Houston event drew enthusiasts and collectors, with 730 cars sold for a remarkable total of $29.4 million in sales.
- The 12th and final example of the limited-production 2022 Bentley Bacalar will be auctioned next month through Mecum Auctions.
- A survey found that Australia’s classic car owners spend $9.9 billion annually on historic cars, contributing $25.2 billion to the economy and creating nearly 79,000 jobs.
Bearish News
- The Murphy Auto Museum in Oxnard will close in July after 22 years, with revenue declining from nearly $281,000 in 2020 to about $188,000 by 2022.
- A well-known exotic car mechanic was arrested in Arizona for allegedly selling Ferraris he didn’t own.
- Luxury and exotic car sales plunged in Korea after company cars were forced to wear green license plates, with Bentley registrations sinking 77% in Q1 2024.
- A Houston classic car restoration business owner has been accused of swindling customers out of over $100,000 for work never performed.
- The Better Business Bureau saw an increase in fake vintage car sales online in Horry County, costing victims thousands of dollars.
How to invest in Vintage Autos right now:
Seems like an overreaction to green license plates.
Rare Coins
Bullish News
- The Bob R. Simpson Collection, Part XII, will bring elite trophies to Heritage’s CSNS US Coins Auction in May.
- SINCONA is offering rare Persian coins from the 16th through 19th centuries in its May auction.
- The US Mint released rolls and bags containing Innovation dollars for Alabama, logging starting sales of a combined 980,800 coins.
- A 1948 Franklin half-dollar graded MS 68 Full Bell Lines by PCGS realized $84,000 at Stack’s Bowers Galleries’ March 26 Rarities Night.
Bearish News
- Thousands of dollars in rare coins were stolen during a smash-and-grab vehicle break-in outside a Castle Shannon convenience store.
- A Casper coin shop owner allegedly arranged for a convicted burglar to steal a client’s $100,000 collection.
- A fake image online claimed Donald Trump promoted “Trump Liberty Coins,” supposedly selling for $149 and redeemable at Bank of America for $100,000.
How to invest in Rare Coins right now:
If I ran Casper coin shop, I’d blame the robbery on a ghost.
Farmland
Bullish News
- Anheuser-Busch announced the national rollout of its US Farmed certification, supporting farmers across the US.
- The Purdue University/CME Group Ag Economy Barometer increased to 114 in March, a 3-point rise from February.
- FarmTogether announced a new crowdfunded offering for the Great Valley Citrus Grove in California, targeting a 9.6% average cash yield.
- India will likely receive above-average monsoon rainfall in 2024, boosting the country’s farm output and economy.
- State, county, and municipal governments will invest over $1.3 million to preserve 520 acres of farmland in Pennsylvania.
- The SOLAR Act, introduced in the US House of Representatives, aims to protect prime farmland by establishing guidelines for solar panel projects.
Bearish News
- The Tulare Lake Basin in California was placed on probation due to rapidly declining groundwater levels.
- The market for almond and walnut orchards in the Sacramento Valley slowed as prices dropped to $18,000-$28,000 per acre.
- Foreign investors must report their US agricultural land holdings to the USDA or face penalties up to 25% of the land’s fair market value.
How to invest in Farmland right now:
India, don’t forget your umbrella.
After our trip to Mexico, there was significant interest in acquiring cash-flowing agave farmland.
Altea members get first dibs, but you can get on the waitlist in case there’s extra space.
Luxury Goods
Bullish News
- Rolex introduced several new watches at Watches and Wonders 2024, including the Perpetual 1908 in platinum.
- Louis Vuitton’s “Voyager” traveling show in Shanghai featured its pre-fall collection and attracted over 1,000 invitees.
- FENDI revealed new high-end home furnishings at Milan Design Week.
- Gucci will stage its cruise 2025 show, creative director Sabato De Sarno’s first, at London’s Tate Modern on May 13.
Bearish News
- LVMH’s fashion and leather goods business grew only 2% in Q1 2024, a sharp decline from 18% a year ago.
- Richemont is reportedly preparing to sell off Yoox Net-a-Porter for next to nothing less than seven years after acquiring it.
- The FTC is considering stopping the acquisition of Capri Holdings by Tapestry, the owner of Coach.
How to invest in Luxury Goods right now:
Is FENDI’s home collection the perfect Mother’s Day gift?
Wine, Tequila, and other Spirits
Bullish News
- Sotheby’s wine and spirits auctions reached a record $159 million in 2023, marking the third consecutive year of record highs.
- A bottle of 60-year-old Macallan 1926 whisky sold for a record $2.7 million at auction.
- The global bourbon spirits market is predicted to rise from $8.2 billion in 2022 to $12 billion by 2030.
- Asia accounted for 42% of market share for wine and 55% for spirits in Sotheby’s 2023 auctions.
- BevNomad launched with a focus on bringing highly rated craft beers and premium spirits to new markets.
- The global precision viticulture market is anticipated to grow from $1.61 billion to $4.60 billion in 10 years.
Bearish News
- China’s wine imports in 2023 were one-third the level of 2017, falling about 60% to $1.2 billion.
- LVMH’s wine and spirits arm saw revenue decline by 12% organically in Q1 2024.
How to invest in Wine and Spirits right now:
Last chance to get in on our tequila SPV. Let me know if you’re interested.
Music and Film
Bullish News
- Universal Music Group generated 51% of its 2023 recorded music revenues in North America.
- Concord agreed to buy Britain’s Hipgnosis Songs Fund for $1.4 billion, gaining rights to artists including Shakira and Neil Young.
Bearish News
- The Justice Department is preparing an antitrust lawsuit against Live Nation, alleging it leveraged its 80% market dominance in the largest venues to suppress competition.
- Spotify reclassified its Premium plans as ‘bundles’, reducing mechanical royalty rates paid to songwriters and publishers in the US.
- Epidemic Sound reported continued operating losses of SEK 486 million in 2023 despite its music being played 2.5 billion times daily.
How to invest in Music and Film right now:
Spotify continues to find more ways to pay artists less.
Metals and Gems
Bullish News
- The global platinum jewelry market size is expected to exceed $5.33 billion by 2033, with a CAGR of 5.86%.
- Wall Street is bullish on copper due to rising demand from the energy transition and AI boom.
- The Invesco Electric Vehicle Metals Commodity Strategy No K-1 ETF (EVMT) could benefit from rising copper prices, as copper is its second-largest holding.
- Gold logged a fifth consecutive weekly rise, with spot gold up 2.2% for the week.
- With gold prices surging, investors are wondering where to buy 1-ounce gold bars.
Bearish News
- The US lacks a domestic mining and rare metals supply chain due to insufficient industry and political support.
- Nornickel said new Western sanctions on Russian metals will increase price volatility and supply uncertainty.
- The US and UK restricted exchange trading of new Russian aluminum, copper, and nickel.
- Zimbabwe’s new gold-backed currency slid on the black market, trading around 20 to the dollar vs the official 13.41.
- Upper Peninsula residents asked the Michigan DNR not to grant Keweenaw Land Association’s metallic mineral rights request for 10,631 acres.
How to invest in Metals and Gems right now:
You can buy a kg of gold from Walmart.
Collectibles
Bullish News
- The trading cards market reached $21.4 billion in 2024 and is expected to hit $58.2 billion by 2034.
- Drake landed six rare Michael Jordan cards, including a 1986 Fleer MJ rookie card worth up to $700,000.
- PSA data revealed that grading volume for Caitlin Clark’s NIL trading cards skyrocketed by 12,279% in March compared to their May 2023 release.
- Warren Buffett’s autograph across an uncut sheet of dollar bills sold for $20,740 at a Goldin auction.
- Keith Richards’ custom guitar and George Harrison’s 1965 sitar are set for auction at Nate D. Sanders on April 25.
- Kartoon Studios announced a collaboration with VeVe and Multiverse Clothing Company to release exclusive Stan Lee digital and physical collectibles.
Bearish News
- Adidas’ first batch of unsold Yeezy shoes scored a hit, but the company reported a $58 million loss in 2023 due to the Yeezy breakup.
- Richard Brendan Globensky, a former Augusta National warehouse coordinator, was accused of stealing millions in Masters merchandise over a dozen years.
- Culturecom Holdings’ share price slid 49% over twelve months, with revenue falling 33% in just one year.
How to invest in Collectibles right now:
Get smart about women’s sport.
Websites and Domains
Bullish News
- Lessy.com sold for $25,000 to a discount app for supermarkets.
- D3 received the equivalent of $5 million in ape coin for the .ape gTLD deal.
- The price paid for Chat.com in 2023 was confirmed to be $15.5 million, making it one of the top 2 all-time publicly reported domain sales.
- Wix Studio expanded its Marketplace to allow Partners to sell website templates alongside their services.
- Webflow acquired Intellimize, an AI-powered website personalization startup, in an eight-figure deal.
Bearish News
- The Justice Department seized four domains used by a Russian domain spoofing service to create over 40,000 spoofed websites.
- Researchers found nearly 30 phishing sites spoofing the E-ZPass electronic toll collection service.
- The LabHost phishing-as-a-service platform, which had 40,000 phishing domains, was disrupted with 37 arrests including the original developer.
- The reincarnated BreachForums cybercrime marketplace is offline after attacks by R00TK1T and the pro-Russian Cyber Army of Russia.
How to invest in Websites and Domains right now:
Paying ape coin for .ape seems fair.
That’s all for this week
Cheers,
Wyatt
Disclosures
- We hold BTC, ETH in our ALTS 1 Fund.
- There are a couple of affiliate links above. If you click them, we may get a couple of bucks.
