Hello and welcome to Alts Cafe
Highlights from the full issue:
- Macro: Unemployment claims last week fell by 11,000
- Real Estate: Blackstone’s apartment REIT goes private
- Startups: The space economy is on the rise
- Private Credit: Q1 saw an uptick in leveraged buyouts
- Crypto: Stablecoins grew by $10 billion in 30 days
- NFTs: Meme coin PUPS is on the rise
- Art: Christie’s launched a buy now, pay later scheme
- Vintage Autos: A 15 mph Ferrari attracted a $450,000 bid
- Coins: US mint sales are dropping
- Farmland: Corn is back and in high demand
- Luxury: Y2K is back
- Wine, Tequila, and Spirits: Vodka is back on top
- Film & Music: Taylor Swift is back on TikTok
- Precious Metals: Costco Gold sales are surging
- Collectibles: Star Wars Chicken Leg Stilts are set for auction
- Websites: Alabama increases internet sales taxes
Let’s go.
Table of Contents
Macro View
Bullish News
- Goldman Sachs raised its forecast for China’s 2024 GDP growth to 5.0%.
- Britain’s economy grew 0.1% in February, on course to exit their shallow recession.
- US producer prices rose 2.1% in March from a year earlier, quelling inflation concerns.
- Unemployment claims last week fell by 11,000 to 211,000 from the previous week’s 222,000.
- Wells Fargo raised its year-end S&P 500 target to 5,535, the highest among Wall Street brokerages.
- The US economy gained over 300,000 jobs in March, outpacing expectations.
- The US manufacturing industry expanded in March for the first time in 16 months according to ISM’s purchasing managers index.
Bearish News
- Futures traders reduced bets on Fed rate cuts in 2024 to the lowest level since October.
- Surging oil prices pose a serious threat to the US economy, with prices potentially rising to $130 per barrel.
- Inflation jumped to 3.5% in March, jeopardizing hopes for predicted Fed rate cuts this year.
- US budget deficit topped $1 trillion halfway through the fiscal year as interest payments increased on the national debt.
- China’s March exports slumped by 7.5% year-on-year, the biggest fall since August.
What are the odds?
Kashi is showing a 17% chance of a June rate cut, down from nearly 93% a couple of months ago.
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
What’s the deal
Altea will acquire 50+ barrels of 100% agave tequila through this SPV to buy and hold for at least 3 years as the spirits age.
The barrels will be acquired, stored, and disposed of through our network of tequila brokers, private collectors, and exclusive brands in Jalisco, Mexico, over the course of 3 to 5 years.
Funding Status: $372k firm commits.
What’s changed since last week
This is going to the lawyers this week.
Frank Auerbach Charcoal
One Frank Auerbach Charcoal
- Investment size: up to $560k
- Duration: 3 – 10 years
- Potential IRR: 15% to 20%
- Fees: 1.5% management | 20% carry
Through the same London art connection that brought us Art Bundle I, which was oversubscribed by 25% and has returned 19% in three months, we have the opportunity to acquire a unique piece by legendary German/British artist Frank Auerbach.
What’s changed since last week:
This deal is accepting signatures and funds on our new Altea-branded investment portal.
New Deals
Alf’s Macro Fund
- Strategy: Global Macro
- Target Return/Vol: 10%+ target return / 10-12% annualized vol
- Minimum allocation: $250,000 (less with an Altea SPV)
- Preferential fee structure for early investors
- Initial Offering Period: Summer 2024
- 2022 and 2023 performance: +25% and +11% total return
What’s the deal
If you’re into macro, you probably know Alfonso from the Macro Compass. If not, I encourage you to sign up.
His fund’s thesis revolves around (a) more aggressive use of fiscal deficits and significant demographic shifts in a world with (b) more volatile growth and inflation that will result in (c) abundant macro opportunities.
The minimum investment is chunky, 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]
Digital Marketing SPV
- Investment size: $2.5M ($5k minimum)
- Potential IRR: 20% to 30%
- Quarterly dividends
- Hold period: Long Term
- Exit opportunities: Yearly
- Diversified portfolio
- Fees: 10% share of distributions
What’s the deal
Onfolio Holdings and Onfolio Agency SPV will co-invest to acquire profitable marketing agencies. Onfolio will acquire, hold, and grow agencies that are already profitable. The investors (you) will participate via the SPV, which will make minority investments into the agencies Onfolio acquires. While Onfolio will hold these agencies forever, investors will receive quarterly dividends and can cash out annually if they wish.
RSVP to Dom’s Q&A session next week.
ALTS 1 Fund news
Q1 results will be out this week.
Real Estate
Bullish News
- The real estate sector gained ground while the overall US stock market declined.
- CoreLogic predicted a 3.1% year-over-year rise in home prices from February 2024 to February 2025.
- Blue Owl Capital acquired Prima Capital Advisors for $170 million, expanding into real estate finance.
- Blackstone took Apartment Income REIT private in a $10 billion deal, its largest transaction in the multifamily market.
- San Francisco’s housing market reached a 7.5% annual increase in the median house price in Q1 2024.
- In 68 of the country’s largest 100 cities, home prices have doubled in less than 10 years.
Bearish News
- Regulators’ lack of flexibility with CRE borrowers could trigger a banking or municipal finance crisis.
- Market participants anticipate REIT value reduction, with nontraded REIT sales totaling just $900 million in early 2024.
- Grant Cardone instructed his team to “immediately discontinue ALL underwriting on New York City real estate.”
- Vietnam real estate tycoon Truong My Lan was sentenced to death after being convicted of embezzlement, bribery, and banking violations.
How to invest in real estate right now:
Not a great time to be a Vietnamese Embezzler.
Startups
Bullish News
- The space economy, currently valued at $546 billion, is on course to rise at least 41% to $772 billion by 2027.
- The companies on Forbes’ sixth annual AI 50 raised $34.7 billion, up from $27.2 billion on last year’s list.
- Crypto VCs invested $2.5 billion globally in startups in Q1 2024.
- Investors close to Elon Musk are in talks to help xAI raise $3 billion at an $18 billion valuation.
- Venture funding in American and Canadian companies totaled $35.2 billion in Q1 2024, a 14% gain from Q4 2023.
- US digital health startups raised $2.7 billion across 133 deals in Q1 2024.
Bearish News
- Venture funding in Asia fell to its lowest level since 2016, with only $17.3 billion invested in Q1 2024.
- CEOs of Series B companies saw a 9.6% drop in salary in 2024, based on a new Kruze Consulting report.
- Checkr, a background-screening platform last valued at $5 billion, laid off 32% of its workforce.
- Latin American startup investment hit its lowest level in years in Q1 2024, with only $579 million invested.
- Peloton, once valued at $50 billion, saw its valuation plummet to $2.1 billion as of December 2023.
- Nearly half of early-stage B2B startups choose not to do any marketing, despite it being one of the most effective ways to grow.
How to invest in startups right now:
The Space economy is going, you guessed it, to the moon.
Private Equity and Private Credit
Bullish News
- Private credit’s growth to $1.7 trillion AUM boosted the secondaries market, with Apollo targeting $2 billion for its second fund.
- Antares Capital and other private credit lenders provided nearly $1.5 billion to help OEConnection refinance its debt.
- Q1 saw an uptick in leveraged buyouts, hitting around $45 billion compared to $23.3 billion in Q1 2023.
- Private credit outperformed buyout funds by 4.5 times in 2023.
- Hellman & Friedman raised $24.4 billion for its latest flagship fund, focusing on leveraged buyouts in North America and Europe.
Bearish News
- US PE exit activity remained low in Q1, with 201 exits totaling $66.7 billion, down from 431 exits in Q2 2021.
- PE’s share of M&A activity dropped to 39.9% in 2023 from 44.0% in 2022, reversing an eight-year trend of growing share.
- Asia’s PE market plunged 26% in 2023, with Mainland China’s deal value plummeting 58%.
- McKinsey reported PE firms need to bridge the value creation gap as fund performance suffers.
- The DOJ has begun probing PE firms for intentionally withholding information from antitrust enforcers.
- Norway’s $1.6 trillion sovereign wealth fund, the world’s largest, will not invest in PE.
How to invest in PE and Private Credit right now:
Leveraged buyouts are on the rise.
Crypto
Bullish News
- BlackRock and Fidelity’s spot Bitcoin ETFs outperformed 99.9% of all ETFs with continuous inflows for 59 trading days since launch.
- eToro’s CEO predicted the market capitalization of crypto projects will exceed $100 trillion.
- The supply of leading stablecoins USDT and USDC grew by $10 billion in the past 30 days.
- Thai crypto exchange Bitkub may be valued as high as $3 billion in IPO.
- BCA Research said Bitcoin’s “non-confiscatability” makes it the new gold, with the price potentially rising above $100,000.
Bearish News
- The SEC intends to sue Uniswap, alleging the DeFi platform illegally offered unregistered securities.
- Coinbase CEO Brian Armstrong sold over $5.9 million in company stock due to high valuation concerns.
- The crypto market experienced a flash crash on Friday, with $668 million in long positions liquidated in just four hours.
- A South Korean city has planned to seize crypto assets of 5,208 tax-delinquent residents who owe more than $369 in taxes.
- Crypto security firm Blockaid said half of Solana pre-sales are scams.
How to invest in Crypto right now:
I would’ve guessed that much more than half of Solana pre-sales are scams.
NFTs
Bullish News
- Dubai hosted the largest-ever digital art exposition, with over 166 square meters of digital art pieces.
- SAGA and TNSR, rising tokens in the NFT sector, attracted over $13 billion in staking and $3 million in seed funding.
- Collector Artudito acquired CryptoPunk #7804 for $16.4 million and a full Autoglyphs set for $14.536 million.
- NeurochainAI’s first NFT collection sold out in 1 second on AVAX.
- Meme coin PUPS hit an all-time high of $47.44 as its NFT sales skyrocketed by 6,948% over the past seven days.
- The Tensor NFT Marketplace broke $640 million in trading volume, with TNSR seeing a 36% jump since launch.
Bearish News
- NFT sales volume marked the fourth consecutive week of falling sales on Friday with an almost 14% drop.
- The Chairman of Animoca Brands suggested the US has fallen behind in Web3.
- Donald Trump’s first batch of 45,000 NFTs has seen zero transactions in the last fourteen days.
How to invest in NFTs right now:
Either Trump collectors have diamond hands, or the collection is properly dead.
Artwork
Bullish News
- Sotheby’s plans to borrow about $500 million through bonds backed by personal loans made to art collectors.
- Christie’s launched a buy now, pay later scheme for art up to $1 million.
- Yayoi Kusama made $80.9 million at auction in 2023, beating David Hockney as the top-selling contemporary artist.
- Lucio Fontana’s Concetto spaziale carries an estimate of $30 million at Sotheby’s upcoming auction.
Bearish News
- Art collectors in high-risk areas have seen insurance premiums swell and coverage shrink due to extreme weather.
- Christie’s withdrew four ancient Greek vases from a New York auction after they were traced to a convicted antiquities dealer.
- A German art museum fired a worker and pressed charges after he hung his own painting onto the gallery wall.
- A gang allegedly preyed on America’s small museums for almost two decades, stealing cherished items valued at $4 million.
How to invest in Artwork right now:
That museum worker knows how to make his own opportunities. Shoot your shot, kumpel.
Vintage Autos
Bullish News
- New data found that the classic car market surged by 82% compared to a decade ago.
- Michigan Governor Gretchen Whitmer signed House Bill 4183 into law, expanding the ability to use classic cars.
- A 2022 Ford GT is set to be auctioned off by RM Sotheby’s with an expected sale price of $1.2 million.
- A 2014 Ferrari F12tdf prototype with a top speed of just 15 mph attracted a $450,000 bid on Bring a Trailer.
Bearish News
- A vintage Ferrari mechanic was arrested for theft, trafficking stolen property, forgery, and fraud.
- A study by The Better Business Bureau found a rise in vendor scam reports in 2023, with car sales as the most damaging type.
- Used and new car prices have been declining, and it may take time for the market to find a bottom.
- Seven classic cars have dropped in price, with the Jaguar E-Type Series 3 Roadster dropping by £10,000 since 2020.
How to invest in Vintage Autos right now:
Who wants to go faster than 15mph in a Ferrari anyway?
Rare Coins
Bullish News
- A rare 1921 Saint-Gaudens Double Eagle, MS62 PCGS sold for $144,000 to lead Heritage’s March US Coins Auction to $6.2 million.
- The “Holy Grail” of modern Greek coins, an 1852 gold 20 drachmai, sold for $1.17 million at Nomos Ag’s auction.
- Stack’s Bowers and Ponterio’s Spring 2024 Hong Kong Auction will feature nearly 9,600 lots with estimates exceeding $27 million.
- Three rare Royal Mint 20p “mule” coins from 2008, minted without a date, sold for £151.99 on eBay.
Bearish News
- US Mint sales of American Eagle and American Buffalo gold bullion coins dropped in March, with just 12,000 ounces and 5,000 ounces sold, respectively.
- The cost of producing US coins has increased significantly, with a cent now costing 3.07 cents.
- Wyoming coin shop owner Justin Foster, was accused of faking the theft of a client’s $100,000 coin collection left for appraisal.
How to invest in Rare Coins right now:
And that’s just my 6.14 cents.
Farmland
Bullish News
- Farmland in North Dakota and Minnesota broke sales records in March, with prices reaching $11,200 per acre.
- Brazil could expand its crop area by more than a third by converting pastureland.
- The global farm equipment rental market size is anticipated to grow from $50 billion to $98.35 billion in 10 years.
- Ag land values in Nebraska’s East Region are the highest in the state at $9,730 per acre.
- The April WASDE report showed an increase in demand for corn, with corn used for ethanol raised by 25 million bushels.
Bearish News
- Nebraska’s farm income is projected to fall this year, despite ag land values rising up to 6% in some regions.
- The USDA predicts farms will face a 25% decrease in income this year.
- The US has lost 20.1 million acres of farmland since the 2017 census.
- A study found that as organic farm acreage grew in California, nearby conventional farms applied more pesticides.
- Vietnam’s organic agriculture sector faces high production costs, with organic vegetables priced 3 times higher than conventional ones.
How to invest in Farmland right now:
I don’t doubt the WASDE report, but I’ve never heard anybody “demand” corn.
Luxury Goods
Bullish News
- Tag Heuer opened its largest boutique at sea, a 550-square-foot space on Carnival Jubilee.
- Kering hired Stefano Cantino, former LVMH SVP, as the newly created deputy CEO of Gucci.
- The luxury resale market is experiencing a Y2K resurgence, with Fendi baguettes and Dior Saddle Bags in high demand.
- Sotheby’s “Rough Diamonds” auction of uniquely designed watches achieved $1.3 million, nearly double its high estimate.
Bearish News
- Kering warned Q1 sales would be down 10% as China’s economic turbulence hits the market.
- Capri’s stock closed at a nearly 23% discount from Tapestry’s acquisition deal price.
- Burberry Group shares fell 1.72% on Friday, closing £14.87 below its 52-week high.
- Swiss watch exports contracted by 3.8% year-on-year in February.
How to invest in Luxury Goods right now:
Something is a bit poetic about buying a dive watch on a cruise ship.
Wine, Tequila, and other Spirits
Bullish News
- The Lakes Distillery is set to be acquired by sparkling wine producer Nyetimber for £46 million.
- Sean Combs sold his half of the tequila brand DeLeon to Diageo for $200 million this year.
- Mast-Jägermeister grew its sales to €961.7 million in 2023.
- Sotheby’s set a new record in wine and spirits sales in 2023 with $159 million.
- Ireland’s wine imports saw a 5.3% increase in volume and a 7.9% rise in value.
- Vodka has enjoyed a resurgence, generating $7.2 billion in sales in 2023.
Bearish News
- Ireland has announced that starting in 2026, alcohol containers must bear labels warning of a “direct link between alcohol and fatal cancers“.
- Non-alcoholic marketplace Boisson filed for Chapter 11 bankruptcy due to infrastructure costs.
- Constellation Brands’ wine and spirits net sales declined by 9% for fiscal 2024, with cases shipped down 12.2%.
- A federal judge ruled that Woodford Reserve undermined unionization efforts at its Kentucky distillery.
How to invest in Wine and Spirits right now:
Time to welcome Vodka back to her throne.
Music and Film
Bullish News
- Warner Records surged to third place in Q1 2024 current market share, up from seventh in Q1 2023.
- Luminate’s 2023 data revealed global music streams surged by 34% to 7.1 trillion.
- South Korea-based Beyond Music acquired Puerto Rican singer Yandel’s music rights, entering into the $1.1 billion Latin music market.
- The Motion Picture Association has partnered with Congress to pass “judicial site-blocking legislation” to tackle digital piracy, costing the industry $71 billion yearly.
- The global in-store background music market is anticipated to grow to $2.61 billion by 2030, at a CAGR of 6.3%.
- Margot Robbie’s company LuckyChap is producing a live-action feature film based on the Monopoly board game.
Bearish News
- Paramount investors argued to the board that the Skydance deal prioritizes Redstone’s interests over shareholders, causing the stock to fall 7%.
- Taylor Swift’s songs returned to TikTok after a 10-week hiatus due to a licensing dispute with Universal Music.
How to invest in Music and Film right now:
Altea is going to Nashville this autumn.
- Est. dates: October 21 – 25
- Est. cost: $7,000 – $9,000
Metals and Gems
Bullish News
- Costco’s gold sales could hit $100-$200 million per month.
- Kentucky became the 45th state to end sales taxes on gold and silver.
- Copper prices climbed to a 2024 high as Citi called the start of the metal’s second bull market this century.
- Silver outshined gold in April, adding 12% compared to gold’s 5% gain.
- Silver is approaching a three-year high, while platinum is testing resistance at $1,000 an ounce.
- Zimbabwe’s new gold-backed currency, the ZiG, has risen steadily in its debut week of trading.
Bearish News
- The UK and US blocked the trade of new Russian aluminum, copper, and nickel at the LME and CME.
- Metals are Russia’s second-largest export commodity after energy, with exports decreasing from $25 billion in 2022 to $15 billion last year.
- A man was arrested for a $100,000 precious metals fraud scheme targeting an elderly homeowner.
- Gold and silver rallied despite a stronger US jobs report, but technical analysis suggests the metals are overbought.
- Stronger-than-expected US CPI data put downward pressure on large parts of the commodity complex.
How to invest in Metals and Gems right now:
Hey Siri, give me directions to a Costco in Kentucky.
Collectibles
Bullish News
- Giant chicken leg stilts from the original 1977 “Star Wars” movie are set to sell at auction for up to $2,100.
- Darren Rovell founded Cllct to take a journalistic approach to the $500 billion collectibles market.
- A rare type 1 photograph of Mickey Mantle sold for a record-breaking $843,750 at auction.
- eBay entered a definitive agreement with Collectors to boost its collectibles offering, a market expected to reach $628 billion by 2031.
- A rare sealed hangtag copy of Castlevania for the original NES sold for $90,100 on eBay.
- O.J. Simpson’s memorabilia sales skyrocketed following his unexpected passing, with items going from $150 to $2,500.
Bearish News
- An Oakland County man was accused of stealing $18,000 worth of trading cards from several stores.
- The graphic novel market in the US sagged nearly 20% from pandemic highs, with DC having its lowest sales since 2004.
- The mastermind behind a nearly 20-year sports memorabilia theft ring admitted to melting down Yogi Berra’s World Series rings for scrap.
- Shohei Ohtani’s former translator allegedly spent $325,000 on trading cards using an account involved in illegal transfers.
How to invest in Collectibles right now:
Melting down a World Series ring is the real crime.
Websites and Domains
Bullish News
- The .ai domain name tripled in size over the past 12 months, reaching 425,060 registered domains as of April 12, 2024.
- A California man was awarded a $486,432 judgment against Epik Inc. over a stolen domain name.
Bearish News
- X (Twitter) automatically modified links that included “twitter.com” to read “x.com“, have caused confusion and potential phishing risks according to DomainTools.
- A proposed digital ads tax in Nebraska would devastate small businesses that rely on affordable advertising to reach their audience.
- 47% of marketers worldwide are working on a plan to approach cookie-free targeting.
- Roll-up companies in India like Mensa and UpScalio are struggling with a debt overhang as funding dries up and interest rates rise.
- An Alabama House committee approved a bill that would increase the state’s Internet sales tax by about 1.5%.
- Google delisted 17,317 URLs from its search engine in response to UK blocking orders over the past two years at the request of music industry group BPI.
How to invest in Websites and Domains right now:
Check out Dom’s SPV above.
RSVP to Dom’s Q&A session next week.
Cheers,
Wyatt
