Alternative Investment Platforms — India
Having a look at the recent announcement by the RBI, the low interest rates offered by Fixed Deposits, and the new margin rules implemented by SEBI for futures and options traders — I came to the conclusion, the fun is over, and we need to look at alternative investments.
While I consider myself a multi-asset investor, my focus was on private equity & venture capital. This falls under a category we call in finance - Alternative Investments. This is typically reserved for ultra-rich, HNWIs and HNIs.
But because FinTech companies are popping up in India that are making it easy for retail investors to invest in this space, or at least trying to make it more ‘standardised’ - new possibilities are opening up, and that’s something I wouldn’t want to miss out on.
And what’s interesting about the alternative investment space is that the return is higher than normal. I like to call Indians, “moderately greedy”.
What I’m looking for is “Max Yield” — that is high returns for medium/moderate risk. It’s not that it’s impossible, it’s just that it requires a bit of extra effort. These returns could be in the range of 10% — 20%.
Typically, retail investors are stuck with Stocks (Equity), Bonds (Debt), Mutual Funds, as well as good old trusted Fixed Deposits (Debt — yes, it’s debt).
But many don’t know is that there are areas of investing that are opening up to retail investors, with different levels of risk and return:
- Angel Investing / Venture Capital
- Asset Lease Financing
- Revenue Based Financing
- Covered (Secured) Bonds
- Peer 2 Peer Lending
- Fractional Real Estate
- Global / US Stock Investing
- Cryptocurrency
And while these alternative investments are less volatile than the stock market, that doesn’t mean they’re less riskier, it just means that their liquidity is less — keep that in mind.
Take for example the Mutual Fund industry. It's meant for those who don't have the time or expertise to invest. The regulatory framework in place now prevents them from investing in unlisted securities i.e. alternative investments.
Money can be made from both listed and unlisted, the latter some times gives you a better return because of information asymmetry, which basically means some information is not public, and therefore not easily verifiable, and there are no analysts covering it.
This creates an advantage, because if you're in the know - you get to see good investments, which generate high returns for moderate risk.
Until now, I haven’t covered these areas - because I wasn’t sure about the options available in India. I only share what I’ve invest in, and if there’s something not right, you will see that in my notes.
So I’m starting a new series on Alternative Investments, and building my portfolio around these areas. While I’m already investing as an Angel Investor & done a fair bit in Cryptocurrency before it became a thing — there are many other areas that I’d like to touch upon.👇🏼
Recently, I covered (pun intended) WintWealth that is a FinTech platform focused on Covered (Secured) Bonds & Market Linked Debentures (MLDs). You can read more about that if you’re a member (which is free btw).👇🏼
The Zen Master
There will be more detailed reviews on other platforms. So if you’re interested to get the full picture — as to what these platforms are like, whether you should try them out, and if so, what have I invested in, you might want to opt for the annual subscription. I’ve reduced the subscription from ₹20,000 (c $275) to ₹18,290 ($250) inclusive of GST.👇🏼
The Zen Master
I’m even considering doing a section on Angel Investing & which startups I’m investing in, if time permits - no promises! Tell me what you think.
In the meanwhile, if you’d like to chat with me, I’m available on twitter @ zencapita – you can drop me a note, or chat on any topic I've written, or even give suggestions for what you would like covered.
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