1	Role of Alternative Assets in Capital Market Development Jelle Sjoerdsma CFA Conference 15 June 2007
2	Alternative Asset Development into / on to Capital Markets
3	Asset Classes Traditional Stocks Bonds Treasury Bills Secondary Derivatives Hedge Funds Alternative Real Estate Private Equity Venture Capital Commodities gold, silver, etc. lumber Collectibles art wine
4	Traditional Asset Features Tradeable in capital market Measurable value during holding period Markets tend to be mostly efficient Liquidity for security holders Quantitative portfolio management Likelihood of earning excess returns is low
5	Alternative Asset Features Infrequently Traded Value difficult to measure during holding period Markets are NOT efficient Low Liquidity Low correlations with other assets can reduce overall portfolio risk Skilled investors can realize excess returns
6	Is TTSE an Alternative Asset ? Liquidity as Trades -------- Market Cap.
7	Asset Classes can develop into a New Capital Market When assets and their trade terms become sufficiently standardised Market grows large and liquid enough Derivatives Exchanges – options and futures Commodity Exchanges – metals, oil (Stock Exchanges)
8	Pools of Alternative Assets can be listed on a Traditional Market Real Estate Investment Trusts (REIT) Venture Capital Trusts (VCT) Public Private Equity Funds Public Hedge Funds
9	Individual Assets can progress to Traditional Market IPO’s by companies backed by Venture Capital or Private Equity VC-backed companies that mature and progress to public status PE-financed companies ready to (re-)gain public status
10	Venture-Backed IPO’s in USA
11	Conclusions Capital Markets Develop with access from Alternative Assets Alternative Assets Develop with access to Capital Markets Today’s Alternative Assets Develop into / on to Tomorrow’s Capital Markets