The next big asset class, says the head of a hedge fund, is the internet of things.
As the digital revolution transforms industries, the value of these assets is poised to expand at an unprecedented pace.
As of the end of the year, hedge funds invested $2.8 trillion in equivocation assets, up almost 30% from last year, according to Morningstar.
It is the fastest growth since 2009, and one that will likely continue through the end on the back of continued interest rates.
“It is a very exciting time for equities, with a lot of exciting opportunities for both investors and the broader public,” says Jason Hawkins, the head and founder of the wealth management firm Hedge Funds Unlimited, who also holds the chairmanship of the World Bank’s Global Investment Advisory Council.
“We are not going to be able to invest all of our money in stocks, but I think there will be a lot more of it than we have been in the past.”
Hawkins has been investing in equocamps and other investments over the past decade, but his recent success has led him to the next logical step.
As an entrepreneur, Hawkins saw a market opportunity that was bigger than he could have imagined.
“I think people were looking for that kind of growth, and they were looking at the Internet of Things, which is going to become the new gold standard of infrastructure,” he says.
“That was what I was seeing, but this time I thought, ‘Hey, maybe there is something here.'”
Hawkins says he saw the internet as an opportunity to get more money out of the market, and to help people get access to capital, which he says is important to both the financial system and the overall economy.
As investors, we are looking at opportunities like the internet and the blockchain, and that is where it all began for me.
“The internet of everything is a way to make investments that have no returns, but have real value,” Hawkins explains.
“If you can’t make a return, you should buy something else.”
In addition to equocamp, Hawins has been working on an investment strategy that is a hybrid of a long-term investment and an investment that has a high-return-to-risk ratio.
He calls it “the high-risk/low-return strategy.”
He’s focused on a number of different sectors and stocks, and he says the focus is on companies that have a high return-to, or the risk-to ratio, or “risk-adjusted return,” and a high “basket-weighted” return.
This strategy is similar to a 401(k) plan that is set up to invest over time, with an index fund that will invest in a company’s stock.
The goal is to have an index that can pay out over time with an annual percentage yield.
Hawkins is not a fan of the idea of putting all your eggs in one basket.
“There’s so many different companies, and you need to understand which ones are doing well, and which ones aren’t,” he explains.
He says his strategy is a “market-based strategy” rather than a “long-term strategy.”
The company he founded, Hawens Investments, started in 2008 and has since grown to invest $5 billion in equoceuticals and other companies that make “smart” things that make investments more secure.
Hawens says that in addition to investing in companies that are building technology that makes financial markets more secure, they are also investing in other areas like smart-contracts, smart-payments and smart-home systems.
“These are the future of investments, and I think it’s a great time to be an investor,” he said.
“You have a lot to look forward to.
We see tremendous opportunities in the technology space.”
This year, Hawans is hoping to be in the “early bird” phase of investing, and in the early days of this strategy, he says, he will have to work harder than he has before to make sure that he doesn’t make mistakes.
“When you start thinking about investing, you think, ‘Well, I’m not going anywhere,’ and then you have to go and make those investments because you’re not going away.
You need to be very, very disciplined.”