Wealth management and asset management, in the long run, are cognitive realizations. But perception of the market and the world close to the truth is difficult in itself. NOAH Wealth’s GPTalk is a series of interviews with top and outstanding managers from around the world that NOAH Wealth connects through its unique GP ecosystem accumulated over the years. Through questions that can see the truth, NOAH Wealth shares their good decisions, changes, and true trends of past and future investments.
In this issue, we share with you a selection of exclusive conversations between NOAH Wealth and Brian Kingston, Managing Director of Beaufort Asset, a giant in the alternative investment space. The session was co-organized by Brookfield Oaktree Wealth Solutions, the wealth management arm of Beaufort.
Founded in 1899, Brookfield Asset Management Inc. (BAM) from Canada has a history of more than 100 years, with a history of more than 120 years of management and operations in the real estate, renewable energy, infrastructure and private equity sectors; and approximately $850 billion of assets under management, making it one of the largest asset management companies in the world, redefining the alternative. management firm that has redefined the alternative investment space.
Based on the in-depth exchange between Yin Hao, Managing Director of Gopher International Private Equity Primary Funds and Brian Kingston, Managing Director of Brookfield Asset in September, we have selected part of the Q&A to bring you an exclusive forward-looking outlook on the investment opportunities in real assets.
Is the real estate market adjustment over and is it time to start laying out?
Brookfield Asset: This question is not easy to answer because real estate prices are subject to interest rates, high interest rates will reduce the capitalization rate of real estate, and the U.S. is now in a cycle of interest rate hikes, the real estate market transactions shrink, and prices fall. But the good news is that now that the Fed’s tightening cycle is coming to an end, and transactions are slowly starting to recover, we think the prime time to start thinking about investing in real estate again is approaching – it could be in the next 2 weeks, or a few months time – although the exact timing is uncertain, but it’s time to start paying attention to the real estate market.
If the U.S. economy is shaky and there is a consumer downturn, could the real estate market see a fundamentally-driven second wave of declines?
Brookfield Asset: The main difference between the current real estate market and that of 2008 during the subprime crisis is that in ’08 there was a high vacancy rate then, whereas now, due to the high interest rate environment, real estate developers have a high cost of borrowing money, and there is no flooding of supply. Even if the U.S. enters into a small recession in the future, real estate prices will rebound quickly after the fundamentally-driven decline, as there is no oversupply.
And the U.S. has also launched some fiscal stimulus plans to promote infrastructure construction, only the current part of this allocation is not yet in place, once the plan is really on the ground to implement, will inject vitality into the real estate market.