Rich-only investments? Perhaps…
The wealthy have access to a swath of investments that most people don’t even know exist.
Closed-end funds — a long-term investment where money is typically tied up for at least five years — offer the very rich access to big returns and high yields.
Aircraft leasing is one budding area of investment, said Ian Marsh, CEO of asset management for London-based Fleming Family and Partners, a wealth management firm that was initially created to preserve the fortune of Ian Fleming, the creator of James Bond.
His clients work with a company called Doric, which uses investor money to buy planes which are leased to large airlines, such as Dubai-based Emirates Airlines.
Investors will eventually cash out of the fund when those planes are sold, but they can make a 9% annual yield in the meantime from the leases alone. The average yield on the Standard and Poor’s S&P 500 — America’s main investing benchmark stock basket — is about 3%.
Some closed-end funds require hundreds of thousands of dollars to buy in, but Doric’s airline leasing funds have a more reasonable entry fee, says Marsh. Its SKY CLOUD series of funds — which buy Airbus A380-800s and leases them to Emirates Airlines — have a minimum investment of 10,000 euro ($13,822) and 5% one-time fee that is based on how much investors put in.
Ultra high-net worth investors in the UK and elsewhere are also buying up farmland. As the global population grows, demand for food will also increase and those who own prime agricultural land could see good returns, said Marsh. Arable land is a finite resource —the harder something is to come by the better the return.
According to Marsh, good land can earn a yield of about 4% a year for an investor, plus appreciate in value over time.
Few regular investors can afford to invest in a plane fund or buy a plot of rich farmland, but there are some more-accessible closed-end funds that offer a way to invest in global infrastructure, even wine. There are also some publicly listed companies that people can buy on the stock market. For instance, Gladstone Land is a US-listed company that buys farmland.