After two years marked by disruption, loss, lockdown, and reopening, we’re on the horizon of a year of discovery.
We expect a year of two halves. It seems that elevated growth and inflation for the first half will create opportunities in developed markets such as the US and UK including the eurozone. But with expected lower growth and inflation to come in the second half, we also see healthcare, a relatively defensive sector, as well-positioned to provide us with great potential. Meanwhile, continued low rates, yields, and spreads mean investors will need to think differently to find yield.
Looking further ahead, the net-zero carbon transition and surging technological disruption are proving to be the biggest investment trends of the decade.
This brings opportunity in Greentech, renewable energy and sustainable solutions, and in enabling technologies like AI, big data, and cybersecurity.
We hope that this year ahead 2022 brings you the context, perspective, and ideas you need to navigate our changing world.
Some different and exciting ideas for 2022 that may be winners
Healthcare: Long Term Care Fund (Spinal & Brain Damage) – This fund targets existing purpose-built, high-end care homes for brain and spinal damage with high occupancy levels producing consistently high net profit margins. Acquiring businesses at a discount to standard industry EBITDA ratio to improve investor yields and increase capital appreciation.
The merger of The Huntercombe Group (Project Oak) and the Fund’s Operating Company is expected to complete by years end and the post-merger, fully synergized Group could have a capacity for almost 1100 service users, an increase in average weekly fees from c.£2,500 to c.£3,300, and a rise in Revenue from c.£120M to close to c.£250M.
The fund is working on several large projects which should come to fruition in 2021 which could make 2022 the biggest year for the Fund to date.
Healthcare with ESG: Supported Housing Fund: This is a long-term opportunity to create and invest in a residential property portfolio that provides the provision of supported housing to some of the most vulnerable in UK society. The strategy comes with long-term government-backed inflation-linked leases linked to the CPI. The basic rental agreement rate is 6.25% (before fund expenses) but with a bit of leverage the CPI reaching 5% and the growth of real estate assets in the UK with an exciting and realistic exit strategy, this could be one of the best investments of 2022.
Reverse Mortgage Fund: The demand for retirement lending products is expected to increase and drive penetration as more retirees need additional sources of income to pay for their health and lifestyle choices, especially given shrinking pension pots in the wake of dwindling membership of defined benefit schemes and low yields on their savings.
Fixed Income Opportunities in Renewable Energy: This Fund focuses on asset-based direct lending by investing in a diversified portfolio consisting of rural, commercial, and industrial loans, leases, and finance agreements in the United Kingdom.
The strategy is an absolute return – alternative investment designed to outperform traditional equity and fixed income-based investments in terms of annualized market-based risk. This is achieved by investing in a portfolio that carefully manages individual client and sector asset allocation risk to generate a steady stream of interest income with a low default risk both in individual cases and the wider asset class.
Most of the lending activity will be project finance (typically renewable energy and waste to energy infrastructure but may also include specialist machinery, equipment, and vehicles) and secured on assets including land, buildings, personal guarantees, and sometimes government support incentives. Underlying borrowers include agricultural, farming, and food-related businesses.
Lending Funds in the US: Commercial banks worldwide have significantly reduced funding sources available to private and corporate clients due to central banks’ requirements of increased capital adequacy and to tightening of lending conditions. As a result, there is now a large, growing, and effective market of non-bank credit to individuals and corporations. This fund intends to take advantage of this opportunity in the real estate sector, characterized by a high level of collateralization and very low volatility.
- Real estate assets pledged as collateral to the fund’s investors
- Assets are in areas among the highest real estate demand in the world
- All investments are monitored and supervised by one of the world’s leading accounting firms
- Opportunity to invest in the world’s strongest economy
- Fixed, predictable interest rate with almost no volatility
- The fund does not depend on the performance of the capital markets
- Interest rates do not depend on changes in real estate prices
- The fund is diversified across many different borrowers and properties
Dan Dobry was the founder of the Union of Financial Planners in Israel (UFPI), served as the first Chairman and President of UFPI. Dan was the Global Council Representative for Israel for the Global Community (FPSB) from 2012 – 2018 and from January 2019 is a member of the Committee for Standards and Qualifications for the European Union (SQC).