Investments Review 3: Mature Alternative Investments

We start with our best investment ever in dollar terms: gold. 

I first invested in gold back in 2006. Then there was a long period where there was no gold investment or trading till 2018 when I inherited a gold sovereign. Maybe this sparked my interest in investing in gold again starting in 2019. We invest via gold ETFs. We gradually ramped up our investment as cash became available to the end of 2021. Since then we have maintained the gold allocation at around 10% of gross assets and withdrawn cash of around AUD 350k in total. This has gone primarily to funding venture capital investments. Total AUD profit has been almost $500k and it now constitutes 9.9% of net worth with an IRR of 16.9%. At this point this beats our venture capital investments hands down. So, on a short-term basis we should have stuck with gold. In the long term, who knows? On the other hand, this remains a large investment.

Next is our investment in Regal Investment Fund (RF1.AX). It now includes hedge funds, venture investments, real assets, and private credit. We bought at the IPO and then doubled our investment a little while later. We cashed out around the post-pandemic peak and then bought back in. However, the fund has not replicated its amazing performance of 2020-21 but on the other hand has not done badly and so we have been content to let our net investment drift down with dividends and occasional trades. More recently we have added to our position again including through a share placement:

At this point, I am happy to wait and see, as it has gained 26% over the last year. Lifetime IRR is 26.5% and net worth share is 3.6%. 

Wilson Alternative Assets (WMA.AX) is another diversified alternatives fund. Unlike RF1 it continues to trade at a large discount to NAV. We ramped up our investment into 2021 and then let it drift down with distributions paid out. As a result the value of the investment has been constant for a few years but profit has slowly increased. Here I am waiting for some more closing of the gap to NAV, as when Wilson took it on they promised to close the gap or put the future of the fund to a vote.

IRR has been 10.7% and currently it makes up 3.0% of net worth.