By tapping into the markets abandoned by banks, private credit investors are able to obtain higher yields than bonds, more stability than stocks, and greater portfolio diversification. Higher yields are still available to private credit investors. Yields of around 7%-10% can be obtained on private loans to mid-sized companies. Even higher yields are possible when investing in distressed debt. While there is greater risk than in the public bond market, there are also higher returns.
Emerging markets offer favorable conditions for the growth of direct lending. Direct lending is not only profitable for investors, it also supports communities by providing more affordable credit to job-creating small businesses. Non-bank lending plays a substantial and growing role in emerging economies.
Current valuation levels make the traditional case for global investing much stronger. International stocks provide the benefits of diversification, and they also produce high returns on their own. The run-up in US stock prices means that foreign stocks are currently under-owned, relatively inexpensive, and likely to outperform. Frontier markets provide unique opportunities to reproduce the past successes of the emerging markets.
Global investors can no longer afford to ignore the growth of Africa. The total economic output of Sub-Saharan Africa is predicted to reach over $2 trillion by 2020, up from just $300 billion in 2000. Pro-market economic reforms, favorable demographic developments, and the adoption of new technologies also contribute to a steadily improving investment environment.
Litigation finance is most appropriate for institutional investors and high-net-worth individuals because of its lack of liquidity and complex nature of modeling the variables that will make up the return, including size and timing of the settlement, and assessing the ability for the defendant to pay. Litigation finance is for sophisticated long-term investors like hedge funds and family offices.
From 2005 to 2010 Kijana Mack worked for Cambridge Associates, world’s largest insitutional investment consulting firm. As a leader in the Capital Markets Group, Kijana gained experience across multiple asset classes, and learned the level of service necessary for world’s most sophisticated clients.
Ashton Global has historically used ESG factors which are vital when valuing companies in emerging and frontier markets. We utilize the Five Forces Model from Michael Porter when applying ESG analysis to our investments. Ashton Global looks at the effects of ESG goals on fair value and revenue, and we also carefully evaluate the consequences of ESG for project costs.
Kijana Mack, Senior Managing Director
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