Investing in Alternative Assets with AI

+ a quick look at key AI-focused events happening this week

April 09, 2025

Good to have you back at AI in Investment Research and Finance—your weekly companion in decoding markets with Artificial Intelligence (AI).

As investors look to navigate heightened volatility and diversify beyond traditional assets, alternative investments have become a core component of modern portfolios. From hedge funds and private equity to real estate, digital assets, and rare collectibles, these instruments offer differentiated sources of return—but also introduce analytical challenges that conventional tools often struggle to address.

In the first quarter of 2025, the S&P 500 fell 4.3%—its worst quarterly performance since 2022. The Nasdaq Composite declined even more sharply, dropping 8.1%, as renewed trade tensions and fresh tariffs rattled investor sentiment. Even digital assets weren’t spared: Bitcoin and other major cryptocurrencies dropped sharply, with Bitcoin sliding nearly 30% from its January high.

Against this backdrop, attention has shifted toward alternative assets with historically lower correlations to public equity markets. This week, we focus on real assets and collectibles—two segments that often demonstrate resilience during market dislocations, yet remain difficult to evaluate due to their illiquidity, limited transparency, and fragmented data sources.

📊 Research Snapshot: Alternative Assets in 2025

  • Real Estate Investment Surge: In today’s economy—where capital increasingly chases intangible assets—real estate remains a dominant store of wealth. A 2021 report by McKinsey & Company found that it accounted for two-thirds of global net worth in 2020.​ More recently, CBRE’s 2025 U.S. Investor Intentions Survey found that 70% of commercial real estate investors plan to buy more assets this year than in 2024—a clear signal of growing confidence in the sector’s resilience, even amid persistent macroeconomic uncertainty.

  • Collectibles Market Expansion: Once considered primarily passion-driven purchases, collectibles are increasingly viewed as legitimate investment assets. Demand continues to climb—fueled by nostalgia, pop culture, and celebrity influence. Landmark sales like the 1952 Mickey Mantle baseball card ($12.6 million) and Beeple’s digital artwork ($69 million) underscore the asset class’s financial potential. Even vintage vinyl saw a 30% surge in U.S. sales in 2023, reaching 41 million units. Reflecting this momentum, the global collectibles market was valued at $294.23 billion in 2023 , with projected growth of 5.5% annually from 2024 to 2030.

That said, investing in real-estate or collectibles is rarely about short-term gains. As Kiplinger notes, most collectibles require a multi-year horizon. These assets are typically illiquid, and quick exits may lead to suboptimal outcomes. A patient, long-term approach is often key to unlocking value.

🤖 Prompt Like a Strategist: AI for Real Assets & Collectibles

🏢 Real Estate Market Positioning

Prompt:
“As an investment strategist, analyze commercial real estate trends in three major global cities (e.g., London, New York and Singapore) over the past 12 months. Identify movements in cap rates, leasing activity, and refinancing volume. Highlight sector-specific risks (office, industrial, retail) and shifts in investor sentiment. Cite relevant market reports and data sources.”

🧠 Why it works: Blends macro trends with local data to inform risk assessment, sector views, and portfolio tilts.

And here’s how to push the analysis further:

🔁 Follow-Up Prompt 1

“Based on the commercial real estate trends identified in London, New York, and Singapore, recommend sector allocations for a diversified global real estate portfolio. Justify overweight, neutral, or underweight positions in office, industrial, and retail segments.”

🧠 Why it works: Links insights to portfolio construction — a direct bridge from research to positioning.

🔁 Follow-Up Prompt 2

“Model the impact of rising interest rates on refinancing activity and asset valuations in the commercial real estate markets of the US, Canada and the UK. Identify potential opportunities for distressed asset acquisitions or debt-based strategies.”

🧠 Why it works: Adds a macroeconomic lens and helps uncover timing windows for special-situation plays.

🔁 Follow-Up Prompt 3

“Compare investor sentiment and institutional flows into REITs across three regions (U.S., Europe, Asia-Pacific) over the past 12 months. What does this suggest about short-term and long-term positioning in listed real estate securities?”

🧠 Why it works: Tracks sentiment and flow data to shape public-market exposure decisions.

Created by Ideogram

🎨 Collectibles Investment Monitor 

Prompt:

“As a portfolio analyst focused on alternative investments, summarize recent auction and secondary market trends across collectible categories (e.g., vintage sports cards, vinyl records and art toys) in the UK. Highlight price movements, emerging demand patterns, and shifts in buyer demographics. Include sources for auction results and market activity.”

🧠 Why it works: Uncovers early momentum and sentiment shifts in niche markets—especially valuable where traditional data is scarce or delayed.

To go deeper, try these follow-up prompts:

🔁 Follow-Up Prompt 1

“Compare price performance and transaction volume across three collectible categories (e.g., vintage sports cards, vinyl records and art toys) over the past six months in the UK. Identify which categories show breakout potential or signs of market saturation.”

🧠 Why it works: Quantifies demand trends, helping spot inflection points and avoid hype-driven traps.

🔁 Follow-Up Prompt 2

“Assess how shifts in two separate buyer demographics (e.g., millennial vs. Gen Z collectors) are influencing pricing dynamics and market depth in specific segments like vinyl and designer toys in the UK.”

🧠 Why it works: Links demand trends to evolving consumer profiles—useful for anticipating where capital might flow next.

🔁 Follow-Up Prompt 3

“Map the correlation between macroeconomic indicators (e.g. inflation and interest rates) and high-end auction results in collectibles in the UK. What does this suggest about the role of collectibles as a store of value?”

🧠 Why it works: Tests the thesis that collectibles can act as inflation hedges or non-correlated assets—key to alt-portfolio positioning.

The Bottom Line
In a volatile market, alternative investments like real estate and collectibles offer valuable diversification and mostly long-term growth potential. These assets help investors navigate uncertainty and capitalize on emerging opportunities.

How are alternative investments shaping your 2025 strategy? Share your insights with us for a chance to be featured in the next issue.

(To ensure our next newsletter lands in your Inbox, please add our email address to your contact list: [email protected])

📊 Key Economic Data Releases to Watch This Week:

  • April 9, 2025 – United States FOMC Meeting Minutes: Clarifies the Fed’s March decision to hold rates, cut growth forecasts, and raise inflation projections.

  • April 10, 2025 – United States CPI (March): A key inflation gauge that could shift expectations for future rate moves.

  • April 11, 2025 – United Kingdom Monthly GDP (February): Snapshot of U.K. performance across manufacturing, services, and construction.

  • April 12, 2025 –  China Trade (March): Insight into global demand and China’s export momentum.

🕒 Upcoming AI & Market Events

📈 AI in Markets: Key Trends This Week

  • A recent survey reveals that 79% of wealth managers believe AI has the potential to accelerate earnings growth over the next decade, with 58% already implementing AI tools to uncover hidden opportunities and evaluate market risks.

  • Engineering software startup Rescale secured $115 million from investors including Applied Materials and Nvidia. Rescale plans to use AI to accelerate complex physical system simulations, reducing processing time from days to seconds with up to 98% accuracy. This advancement aims to enhance efficiency in product design across industries.

  • PyannoteAI, a French voice intelligence startup specializing in "speaker diarization," raised $9 million in a seed round led by Crane Ventures and Serena. The company's technology enhances AI-human interactions by accurately differentiating between multiple speakers in audio transcriptions. This funding will support the expansion of their research team.