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What are Alternative Investments?
Quite simply, Alternative Investments are products that are not classed as Traditional Investments, like Bonds, Cash or Stocks and Shares.
Alternative Investments are often considered "Speculative", and usually only taken out by Experienced or High Net Worth Individuals - In the UK, these are known as Sophisticated or High Net Worth Investors.
Alternative Investments typically are not Regulated Products and as such, are not covered by Regulatory Compensation Schemes, should the Investment fail, like a Regulated Product might be.
What are the Benefits?
Some Investors utilise Alternative Investments to diversify their Investment Portfolios, because they tend to behave differently to Traditional Investment, like Stocks, Shares or Bonds.
Typically, Stocks and Shares follow market trends and can fluctuate, meaning there is volatility and the returns will be reflective of this.
Alternative Investments by their very nature are Uncorrelated to Traditional Assets, so do not have the same fluctuations. Alternative Investments tend to provide Fixed Returns over a set term, so their place within an Investment Portfolio could be valuable.
What are the Risks?
Every Investment carries a Risk - Some Risks are greater than others.
For Example, a Savings Account is considered Low Risk, because they are typically held with large Financial Institutions, which have a very low chance of going "bust" - There are plenty of capital in reserves should the Institution get into trouble, or if there is an adverse Market Event.
Stocks and Shares are considered riskier than Savings Accounts, because you have bought a "Share" in a particular Company - the value of the Shares will be determined by the performance of the Company, and the Companies perceived value in the Market Place.
It is easy to access your funds from the above, as Savings Accounts are usually instant access, and Stocks and Shares can be traded relatively easily.
Alternative Investments are different - The Company in question will issue Loan Notes to Investors, typically secured over a project, or the Companies Holdings and Endeavours - These Loan Notes will carry a Fixed Rate of Return, and will be for a set Term - Typically 2 - 5 Years (quite common for Property Developers raising money in this manner)
Alternative Investments are not typically "liquid", meaning you can rarely get your money out before the Term is over - They typically are not Transferrable - so you can not sell them to another party (like Stocks and Shares).
Unlike Savings Accounts, and Stocks and Shares, typically little information is available with regards to Alternative Investment Providers, meaning it is harder to do Due Diligence, as there is less information in the Public Domain - Plus, there is little recourse should the investment fail, compared to Traditional Products.
In the past, because of this, some Alternative Investment Products have been mismanaged, or turned out to be Scams - It is worth pointing out that not all Alternative Investment Products are "bad" - The ones that have been going a long while are there because they have a robust Business Plan, they have proper Management, and they are Transparent in their Projects, and keep the investors up to date. such as those behind the Property Portfolio Bond.
Can I have more information on the Property Portfolio Bond?
Yes..you can!
But, before we can give you any information on the Property Portfolio Bond, it is a Regulatory Requirement that you complete and submit a Sophisticated Investor Certification Form, or a High Net Worth Investor Certification Form.
Once we are in receipt of this, you will be able to become a Member of the Site, and download all the Information you require, including the Due Diligence, Track Records and Media Exposure.
You will also be able to Invest through your Membership Area, should you wish to, or you can speak to one of our Agents who will be able to help facilitate this for you.