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rivate real assets, such as real estate, infrastructure, and natural resources, offer a tangible alternative to traditional investments. These physical assets can generate returns through long-term contracts, income, or asset appreciation, making them an attractive option for investors seeking alternatives to equities and bonds.
Key benefits of private real assets include:
* Long-term, inflation-resistant income streams
* Lower volatility compared to public markets
* Steady returns over time
However, these investments often come with significant risks, including illiquidity, high minimum investments, and limited access. Investors should be aware that private real assets can carry asset-level risks, such as tenant vacancies or regulatory delays.
Private real estate includes income-generating properties not traded on public markets, while infrastructure investments involve long-lived physical systems like toll roads and energy pipelines. Natural resources include timberland, farmland, and energy-related assets like mineral rights.
Investors can access private real assets through specialized funds, platforms, or syndicates. Dedicated platforms, such as Fundrise and Yieldstreet, provide a straightforward way to gain access to these investments. However, institutional funds often have high barriers to entry, making platforms an attractive option for individual investors.
Private real estate investing is typically done directly or via a private partnership, syndication, or REIT, while public real estate investing is achieved indirectly through a publicly traded REIT. Infrastructure opportunities require careful evaluation of factors such as project development, maintenance needs, and regulatory risks.
Investors should be prepared to tie up their money for several years or more due to lock-up periods associated with private real asset investments. Despite these challenges, private real assets can add durable income, inflation resistance, and diversification to a portfolio, making them an attractive option for long-term investors willing to think beyond public markets.
