Tapping into private equity and venture capital funds can help investors protect their portfolios against equity downturns, says Crestone Wealth Management.
In a statement, Crestone chief executive officer Michael Chisholm pointed to the emerging technology sector as a point of access to returns that were uncorrelated with traditional asset classes.
“The challenge for investors is to find opportunities that tick the right boxes as investable assets, plus have the bonus of helping to solve some of the bigger problems in the world today,” he said.
Crestone recently hosted a number of venture capital investors at a panel discussion, which heard VC investors should invest in technology firms with a point of differentiation to cushion portfolios in an equity downturn.
“Such investments not only present opportunity to high-net-worth and ultra-high-net-worth investors to access a growing arena of high growth assets, but also provide investment opportunities that are uncorrelated to traditional assets and asset classes,” Mr Chisholm said.
Invited panellists included Square Peg Capital co-founder and partner Paul Bassat, AirTree Ventures co-founder and partner Daniel Petre, AgriDigital co-founder and chief executive Emma Weston, and Blackbird Ventures founder and managing director Niki Scevak.
Yesterday, InvestorDaily reported on a number of institutional investors that provided Blackbird Ventures a $225 million capital injection.
Mr Bassat said valuations not be a primary consideration when weighing up technology firms to invest in, but rather, investors should ask: “Is this an amazing company and is it solving important problems?”
“You need to ask the question of whether a company can disrupt a market place,” Mr Petre added.
Mr Bassat said, “We’re no longer living in a world where you can be the best in your suburb. You’ve got to be the best in the world to have a sustainable business in most areas.”
The best time to invest was before a business initiates an initial public offering (IPO), he added.
Mr Basset also said investors had to become better at harnessing capital that was available in the superannuation industry, as it was a source of funding that would create value “not just for tomorrow, but also for future generations”.
The panel also highlighted the impact of artificial intelligence would have over the next 10 years, advising investors to choose businesses that could “apply AI well”, according to the statement.
AI, which will be a “defining theme” in the next two or three decades, “will change the world in ways we can’t imagine”, Mr Basset said.
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