Bloomberg likens the process to a mountain surrounded by rising flood waters: The base is easily traded markets, such as stocks. Higher up are bonds and derivatives, then niche investments such as aircraft leasing, movie rights, and drug royalties, followed by human-heavy dealmaking such as mergers and buyouts. Alpha from esoteric assets are at the peak and most immune to automation (for now!!!).
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Robots are eating money managers lunch
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Ganti’s answer is to look for what are known in the industry as esoteric assets—the most obscure stuff he can find. He’s arranged alternative funding for charter schools in the U.S. and paid cash upfront to collect judgments due at Brazil’s supreme court. His team also has purchased nonperforming loans at a discount in Portugal and partnered with local experts in Mexico to fund government infrastructure programs. It’s even provided interim financing for refugee camps in Italy. The point about these investments, he says, is that they require “high human capital” to manage, even if they’re plentiful. “It’s like dark matter,” Ganti says. “They dwarf the visible stuff lit up by markets.”
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