Corporate treasury: how to invest in a low interest rate universe?
Many companies, small or large, have surplus cash, but often find it difficult to value it correctly in an environment marked by low returns on traditional investments and a return of inflation. However, it is still possible to obtain attractive returns without too much risk, provided that the investment horizon is longer than 5 years and that certain asset classes are favored.
Optimizing reserves in the short and medium term without taking risks has become a real headache for business managers or financial directors. In the past, companies with an investment horizon of less than 5 years could protect their assets by relying on traditional short-term investments. This era of traditional cash management is now over. Money market and bond instruments such as SICAVs no longer pay interest or even have negative returns. The situation is the same for guaranteed investments such as term deposits and funds in euros (accessible through capitalization contracts). Added to these low or negative returns is the resurgence of inflation, which further erodes the capital invested. As for the equity markets, they are too volatile by nature for companies concerned about preserving their capital in the short term.
Focus on the long term
More solutions are available for companies considering investments beyond 5 years. It is still necessary to know which type of products to turn to in order to obtain the best returns without jeopardizing cash flow! In this context, real estate is clearly a preferred asset class. Paper stone offers returns well above the inflation outlook and offers more stability in the long term. But not all strategies are equal and some are riskier than others, especially when major crises arise unexpectedly, as is currently the case with the coronavirus pandemic. For example, the coronavirus pandemic could eventually have a negative impact on traditional real estate funds, which usually focus on specific sectors such as offices and retail.
Choosing Highly Resilient Assets
Hence the interest in opting for real estate investment products whose objective is to control income by choosing assets that are extremely stable and capable of overcoming any economic disruption, no matter how serious it may be! Cacik Fund, offered by Unik Capital Solutions, is a European real estate portfolio, of the premium type, long-term and with a very conservative approach. All of Cacik Fund's assets not only respect real estate fundamentals (ideal location, first-rate tenants, long-term firm rents), but most of them come from sectors with proven resilience such as food retail, e-commerce logistics, medical homes and clinics.
And why not invest in bare ownership?
Another interesting alternative for a medium-term investment period is bare ownership. Unik Capital Solutions offers a solution to invest in bare ownership which is based on the temporary sharing of ownership and use of a property. All the solutions described above are intended for professionals only and may involve a risk of capital loss.