There are a wide range of investment companies investing in property. Some specialise in investing in commercial property, others in residential. Some specialise in particular types of property (such as healthcare). Some invest primarily in the UK, others in Europe or even further afield. Property investment companies might own the property directly, or alternatively invest in the shares of property companies.
Private equity means investing in the shares of private companies, as opposed to companies whose shares are traded on stock markets. Private equity often involves investing in companies with the aim of helping them grow and eventually selling them for a profit. These companies can be riskier in the short term, but can deliver strong returns over the long term.
A hedge fund is a fund that employs a wide range of sophisticated investment techniques, including derivatives, often with the aim of producing positive returns in all markets. In a ‘feeder fund’, the investment company invests in a single hedge fund run by the same manager. In a ‘fund of funds’, the investment company invests in a range of different hedge funds run by different managers.
Infrastructure investment companies invest in contracts to develop and run long-term capital expenditure projects in public sectors such as transport, healthcare, schools and renewable energy. These contracts are for the long term (20-50 years) and aim to deliver a stable income over the period of the contract, often linked to inflation.
Investment companies can also invest in a wide range of specialist forms of debt, such as asset-backed securities, distressed and sub-investment grade debt and peer-to-peer loans. These types of instruments tend to provide a high level of income, but can also be more risky than other forms of debt.
Take your pick
Alternatives range from investing in private companies to backing huge infrastructure projects