Certain key sectors have one thing in common: Investors have a chance to win big -- but they can also lose everything. These high-risk, high-reward sectors tend to attract less capital than surer bets, and for good reason.
And yet many of these same sectors deserve more capital when looked at over longer time horizons, or in terms of human and economic value that could be created.
The historical risks are clear. Cancer drug development can yield drugs that generate billions of dollars for pharmaceutical companies, or the drug trials can fail expensively. Building power generation and distribution capacity in Africa can stabilize value chains and drive GDP growth faster than ever, with the potential to make many African regions some of the most vibrant and resilient economies in the world -- if you have confidence that investment managers can uniquely handle the institutional and political risks.
Likewise, restaurants can win or lose, but part of their future success might be a more holistic approach to local and regional sourcing, for which patrons have proven they'll pay more. Can a bigger vision for regional investments in hospitality create returns at scale while also helping to transform local food economies?
Alternative investments structured for new risk-reward profiles
Clarety's structured approach to alternative investments is based on two core components:
- Lower or eliminate the value at risk through co-investments or innovation in project selection, management, and exit.
- Bring in A-teams to work alongside Clarety to build operations and execution plans that capture as much opportunity as possible.
Clarety's network of world-class experts, many with significant experience in private equity, growth, and exit, includes the world's most respected people in their sectors.
But the first component is Clarety's approach to building an overall alternative investment structure that can build in many attractive performance indicators. These may include:
- Innovation in project selection
- Innovation in stakeholder management
- Asymmetry in gross returns, where downside risk may be softened or eliminated
- Lower overall volatility
- Reduction or elimination of market correlation
- Early liquidity that improves investment IRR
- Ability to redirect funds from the co-investment and/or project returns to create stronger performance once a fund's hurdle has been reached
These characteristics may not appeal to the risk-hungry investors who would otherwise happily invest in African infrastructure, restaurants, or cancer research and be content losing their investment. But our vision is to attract capital from a much larger pool. These investors want to preserve wealth while taking advantage of some of the most exciting, important, and worthwhile investments of the 21st century. They want risk-adjusted returns that have an impact in areas that matter to them.
All of our initiatives are imbued with this vision: Investors, people, and the planet can all benefit from looking at risk-reward in a new way.
Our structured alternative investment approach captures a solution that, we believe, will engage far more capital in sectors that hold promise for new ways of being entertained, fed, healed, developed, and empowered.
NOTE: Please see our disclaimer on our home page.