Private Markets Intelligence – February 2025
In this article
- Hunting for the Next Big Alternative. From tokenized art to AI-backed racehorses, investors are exploring new frontiers in private markets.
- State of VC in LATAM. Brazil leads, but Uruguay’s startup scene is growing at a record pace. Here’s why investors are taking notice.
- Cash Flow in Private Markets. Timing matters. Strategic cash flow planning can make or break your returns.
Hunting for the Next Big Alternative
In collaboration with Wyatt from Altea
Retailization and Access: The New Investor Class
The boundary between institutional and retail alternative investing is blurring. Wealthy individuals are projected to double their private market allocations by 2025, and firms like BlackRock are launching “one-stop” private market funds for retail” (1). Expect more innovation in fund structures (evergreen funds, interval funds, secondary LP markets) to provide the access and flexibility that HNW investors demand, further fueling growth in alternatives.
Technology: The Great Enabler
Advancements in tech are both investment themes and enablers. AI is a hot theme—private investors are funding AI startups and related infrastructure, hoping to ride the next tech wave. But beyond being an investment focus, tech is transforming market infrastructure: tokenization and blockchain are increasing liquidity and transparency (e.g., digital tokens for real estate and art, blockchain provenance for collectibles) (2). AI is also lowering barriers to entry for niche asset classes and investment vehicles that were previously inaccessible. Tools like Deep Research allow investors to rapidly gain deep knowledge of emerging markets compressing what used to take weeks into hours. This same accessibility is making it easier for new deal sponsors to navigate technical and regulatory complexities, paving the way for more solo sponsors to enter the space.
From Gold to Grain: Where Capital’s Heading Next
- Gold & Inflation Hedges: With economic uncertainty still looming, investors are keeping their hedges close. Gold demand remains strong, with central banks and private investors supporting its best performance in a decade. (3)
- Farmland & Timberland: Long favored for stability, these real assets continue to attract investors despite record-high valuations in 2024.
- Rare Spirits: Whisky and tequila are gaining traction as investable assets, with structured cask investments and strong global demand driving interest. (4)
- Collectibles: Fine art and luxury watches remain popular, with fractional ownership platforms expanding access to blue-chip assets. (5)
- Racehorses: AI-driven analytics are transforming bloodstock investing and pinhooking, enhancing pedigree analysis, valuation, and auction strategies in this evolving alternative asset class.
- Film Finance: Collateral-backed mezzanine debt is emerging as a compelling strategy, offering short-term loans with high IRRs, while DeFi and tax incentives continue to reshape entertainment funding.
- Alternative Yield Strategies: Sustainable agriculture is drawing institutional capital, with farmland and managed funds offering stable returns. (6)
The Takeaway
Alternative investments aren’t just expanding—they’re evolving. As tech reshapes access and liquidity, investors are moving beyond the usual suspects of PE and real estate, targeting assets once considered too niche or illiquid. From tokenized art to AI-backed racehorse syndicates, the hunt for uncorrelated returns is pushing boundaries. But with easier access comes heightened noise—navigating these markets now requires sharper diligence and a clear edge.
If you’re interested in adding these types of assets to your portfolio, get in touch with Wyatt at Altea or visit alts.co/altea
Sources
(1) Harvest Returns
(2) Fintech Futures
(3) My Art Broker
(4) World Gold Council
(5) Wealth Briefing
(6) Knight Frank
Insights
What’s the deal with VC in LATAM?
- Latin American venture capital has, and continues to be, dominated by Brazil. It has the largest population, highest GDP, and produced 48% of the nearly 3,000 startups sprouted in Latin America since 2013(a).(1)
- Entrepreneurs in Spanish-speaking Latin America have been hard at work too. The number of startups generated outside of Brazil has grown at a 23% CAGR since 2020(a)., outpacing Brazil’s growth by 5%.
- Notably, activity has been stirring in Uruguay, which posted a 40% CAGR from 7 startups in 2020 to 32 in 1H 2024. Clockwork is bullish on the Uruguayan entrepreneurial ecosystem and maintains a presence in the country since 2017.
- Funding for LATAM ventures has remained consistent over the last two years at ~USD $1B every quarter. A third ofVC-backed startups in the region have raised funds within the last 18 months. (1)
(a) As of 1H 2024.
(1) Source: LAVCA Association for Private Capital Investment in Latin America
INVESTMENT BEYOND BRAZIL: Half of the region’s VC-backed Startups are based in Spanish-speaking Latin America, with the number of companies outside of Brazil growing at a compound annual growth rate of 23% since 2020.
The Takeaway
Latin America is an active market for VC investing. Connecting with fund managers focused on the region is a great way to gain access to the region’s current and future industry disruptors. Clockwork works closely with premier managers and has gained access to new and exciting opportunities.
Cash flow planning for private investors
Are you planning your cash flow? In private markets investing liquidity sources and uses can fluctuate significantly from month to month, and unforeseen mismatches in timing can cause real harm. At Clockwork, we provide expertise, technology, and strategic insights to give you the clarity and control needed to achieve your financial goals.
