Wealth Outlook 2024 - Slow then grow

75 Wealth Outlook 2024 | Opportunistic Investing with and in unregulated financial companies found themselves under water in 2022, and their investors waited out lengthy redemption delays, regulators focused most of their attention on curbing the issuance of commercial mortgage- backed securities which are underwritten and often held on the balance sheets of the large, systemically important banks. — Buying stock in large private equity firms managing private credit funds benefits from three income streams: investment returns, management fees and performance fees. We believe the immediate risk for alternative managers is the tax reclassification of some of their profits from capital gains to ordinary income. As noted, the managers presently receive preferential treatment, but that has come under scrutiny as legislators seek new sources of income. As banks continue to face new regulatory challenges to their businesses, unregulated financial firms remain ready to step in to meet demand and fill the void. The shadow banking system is not without its own stresses and risks. And over time we expect regulation may well increase. But for now, there should be a good runway for continued growth accessible through the three strategies presented. Before considering these strategies, qualified investors should consider their investment objectives, risk tolerances and liquidity profile. The strategies discussed can be speculative and entail significant risks that can include losses due to leveraging or other speculative investment practices, lack of liquidity, volatility of returns, restrictions on transferring interests in the fund, potential lack of diversification, absence of information regarding valuations and pricing, complex tax structures and delays in tax reporting, less regulation, higher fees than mutual funds and advisor risk.