The Assetizer · 28 March 2024
"A New World - A Vision for the Future" – Free download of Chapter 6 of Assetization
In the concluding Chapter 6, Patrick Loepfe and Philippe A. Naegeli share their visionary outlook on how 'Assetization' is set to reshape the financial landscape, heralding an era of democratization, innovation, and personalized investment.
Chapter 6 serves as the culminating vision of Patrick Loepfe and Philippe A. Naegeli's groundbreaking exploration into the concept of Assetization. In this final chapter, they articulate a future where Assetization not only democratizes the investment world but also triggers a significant transformation of the investment markets. They foresee a financial system that is safer and more predictable, supported by a landscape that allows for more personalized, belief-driven investment strategies. Furthermore, they anticipate that Assetization will bring unprecedented flexibility and accessibility to capital markets, spurring a wave of financial innovation that could even alter the very language of finance. For more, you can download the full chapter as a PDF.
Welcome to the Assetized Future
Imagine a time in the not too distant future. You're logging into your personal investment platform, which has been set up by your asset manager. In front of you is a dashboard. In one section you can monitor your portfolio of traditional investments. In another, marked alternative investments, you find a message waiting. An artist you recently met at a vernissage in town has just assetized a portfolio of new work. You bookmark the message. Then you check on your sports investments. One of the young soccer players whose early career you invested in has signed a lucrative contract. You make a mental note that now could be the time to sell out of the investment and take the profit. Next you check on your investment in a sizeable area of the Amazon rain forest, one which – thanks to your and other investors' funding – will not be developed, but rather kept in its natural state. You didn't make this investment with the idea of turning a profit, but wanted to do something with a direct positive impact on climate change. Even though you notice that the value of these shares has risen on the secondary market, you don't sell – this is one for the planet. Finally, you go to the section entitled My Products. As the owner of a small business, you've recently decided to raise capital to expand operations, and have assetized part of your future cash flow in the form of direct bonds. You see that your issuance is almost fully subscribed.
This little vignette is meant to give a taste of what an assetized future might look like. Will it actually be this way? We can't be sure of course. But we believe strongly that Assetization will spur a number of important changes. In this final chapter, we speculate about what these might look like.
Democracy is Coming to the Investment World
We believe that the assetized future will be more democratic in terms of access to investment opportunities as well as the ability to issue financial products. This will ultimately provide almost endless choice, both for asset managers who will initially be the ones creating products, and ultimately for end investors, who are the ones who will be asking and increasingly bringing ideas for new opportunities.
This kind of choice will take some getting used to. There will be new asset classes. New types of markets and market structures will arise. Investment professionals and clients will have to learn how to properly navigate this new world. For investors, more choice will bring more opportunities for earning a return, greater diversification and ultimately stronger, more resilient portfolios. It should give investors more opportunities to invest in "hard assets" like art, real estate or collectibles. These types of assets tend to hold their value over time, and so can be a good hedge against inflation.
Besides more choice in investments, people will need to get used to the fact that they can now easily securitize things themselves. Initially, this will happen via asset managers, who will be able to provide a much more personalized service than they do today. Over time, individual investors will increasingly have access to the tools of Assetization themselves, and be able to create their own products and distribute via various online marketplaces...