The Other Way
Our Investment Vision
The world is rapidly changing as we enter a new age, which some call the Exponential Age, which massively affects investment opportunities. For example, the bond market collapse in 2023 revealed that bonds are no longer a low-risk asset class. Below are the challenges and opportunities that the Altura Capital Hedge Fund has been designed to take advantage of;
Increased volatility in financial markets
Western governments are saddled with enormous amounts of debt and the political class are set on creating more debt to buy votes. We see more and more Government intervention into the economy and markets, creating more turbulence. The pandemic marked the sudden onset of this new age, with the injection of massive amounts of stimulus that was withdrawn just as quickly as inflation showed up. The war in Ukraine and economic turmoil in China shows Governments that are reactionary and leadership that is increasingly out of touch with the modern economy. Our fund is structured so that our three allocations work together to deliver strong returns during periods of high volatility, whether risk assets are going up or down.
Demographic change by Region
Demographics are the largest force driving financial markets over the long term. In the west, the Boomers, who control the majority of wealth, are retiring on mass and need to draw from retirement savings and will divert more of their expenses towards healthcare. China, the world's manufacturing hub, has significant demographic challenges that are fueling its decline and is going to have to rely on robotics. Meanwhile, India and the Middle East have the best demographics and Governments in the region are more forward thinking and looking to become economic leaders in the future. Hence our allocations to Health-tech, robotics and targeting the South Asia and Middle East region.
Inflation, Monetary Expansion and Blockchain
Boomers, who once used to buy bonds for their future retirement now need to withdraw to fund it, at a time when deficits are being increased to buy their votes. Central banks are being forced to pick up the slack and pump in liquidity and put these bonds onto their balance sheet. The result is asset inflation with the biggest beneficiaries being crypto and the tech and why global liquidity is correlate so well with outperformance in Bitcoin and the "Magnificent 7".
As boomers leave the workforce governments need to borrow, whilst, Zoomers chose crypto over bonds. In essence central banks need to buy all that new government debt, throwing fuel onto the Bitcoin bonfire.
