Three weeks into 2021 and it seems like a good time to take stock and have a look at what’s happening in the world of investments and wealth management this year.
With Christmas being a very low-key affair and people not being allowed to travel, things seemed to go back to normal much earlier than usual.
Brexit was finally put to bed without too much disruption and the virus continues to burn like a smouldering peat bog, flaring up each season. But with a vaccine on horizon for most and the worst fears of Brexit out the way, business confidence is definitely on the rise. Are the Roaring 20s are back ?
We have seen an electric start to our property developments in Kent and Cambridge.
Our first offering, a small 2 bedroom timber framed house was funded in the first week of the year and it looks like we have secured 3 investors for our larger development of 4 terrace houses.
We have secured two more projects, another Kent and one in Sussex. Due to the fast nature of these deals they rarely make it to the website. So if you are interest in development opportunities, please get in touch and we will add you to the list. They are all very straight forward. We secure projects with full planning and developer finance in place. All we require is the equity to close the deal. We manage all contractors and you receive 15% pa during the build. Your security is a second charge against the asset after the bank. The average project length is 8-12 months.
The Cambridge biomedical sector goes form strength to strength as the AstraZeneca vaccine gets a global roll out. This has really highlighted how important the Cambridge Biomedical Campus is and our Cambridge biomedical fund is perfectly positioned to make the most of this over the next few years, click here to find out more and request a brochure. The fund has full HMRC approval so can be used for tax planning under the EIS and SEIS schemes.
We are still seeing lots of interest in our renewable energy opportunities. Our Geothermal project in Hungary continues to perform year after year and generates a genuine 12% net PA for our investors. Click here for more details. We are also working on new solar and gas CHP projects throughout the UK. If you are looking for renewable energy assets do let us know as we can source just about all asset types including energy storage.
We saw considerable increases in the price of all major crypto assts over the Christmas period as predicted here back in November. Bitcoin got a bit crazy towards the start of the year and some of that froth has since blown off. The price has stabilised around the $30k mark and will likely start to increase again once the new US government makes its stance clear on crypto assets. You can’t stop people investing in crypto but you can certainly make it more difficult. The UK recently banned leveraged investments in crypto for retail investors and its not impossible other countries will follow suit. That doesn’t meant to say demand is falling, just slowing down for a bit. Large corporate entities such as Greyscale continue to accumulate very rapidly and we expect this trend to continue and prices to rise due to the finite supply of bitcoins.
Now is not a bad time to be buying the dip before the next move higher later this year.
DeFi is set to transform the finance and banking sector over the next few years. I wont go into too much detail here, but expect to hear a lot more about this space in the coming months.
Artificial Intelligence (AI)
For those looking for more explosive growth potential in the technology sector, our AI Fund is just the ticket. Achieving 214% over the past 4 years this collection of the 42 most exciting AI stocks globally, is chosen using AI then approved by a panel of AI experts. Click here to find out more and request a brochure.
So to conclude, 2021 is going to be a very busy year, we see exceptional opportunities in the property development sector due to pent up demand form Covid-19. Crypto and DeFi will change the way we do business and finance. The UK will be one of the early winners from it”s advanced biomedical sector and the rapid rollout of the vaccine.
We see a great many positives in 2021 and we hope you will join Willow Rivers Wealth for the ride during the return of the ‘’Roaring 20s’’.
There seems to be a great many historical events unfolding at the same point in time, we look at some investment ideas for 2021
It’s only when you stop to write a blog or spend some time to reflect that you realise this is history in motion. As I write this, Donald Trump, the president of the United States of America is calling the election rigged and is questioning the validity of the result. This undermines so many things and erodes trust in just about everything.
No matter what your stance on Bitcoin, it’s independent nature has to have some allure as even the president calls into question the system itself. This recent Twitter thread by Raoul Pal explains it’s long term potential very well and why we should all be holding some Bitcoin.
Brexit negotiations are nearing the end game, with neither party willing to budge and a no deal Brexit is looking increasingly likely. The EU is also threatening our energy security as part of the deal.
We have not even mentioned the virus and its ”cure” announced last week. The timing of which also occurred right after the election. The markets took the news with great gusto. Pfizer was up almost 16% on the day at one point.
So what does all this mean for investors??
The Pfizer cure is only 90% effective and has only had a limited trial, however as I write this Moderna (MRNA) has just announced a vaccine with a 95% success rate, which ironically was fast-tracked by the Trump administrations funding.
This has also seen another stock market move higher, along with oil prices and Bitcoin.
So should we be out on the streets throwing a party and celebrating the end of perhaps the worse year in many peoples lives? Possibly!
However things are going to get worse before they get better, the time lag in producing the vaccine and the onset of winter flu seasons means many more will sadly die and our health systems will be stretched. We will have to endure a miserable winter and a lockdown Christmas before we can get out on the streets.
Spring 2021 will be a time of great prosperity as months of pent up demand are released in an investment boom not seen for some time.
And although now may not seem like the time, now is when you should be planning for this. We have compiled a quick to do list ready for 2021.
It will be interesting to see how the treasury manages this post investment boom. They have obviously run up massive debts during the pandemic and as such will be keen to recoup this. One such suggestion has been to tax drivers on a pay per mile tax, which seems rather unfair, another will be to raid business. What ever they choose lets hope its done in such a way as not to strangle growth.
So keep your head down for a few more months, get your house in order and prepare for the good times again in the spring. If you have any questions or would like any suggestions on how best to play the above please get in touch and we will gladly give you a free consultation.
We selected the development due to it’s close proximity to the Biomedical Campus and the AstraZeneca building.
Money continues to flow into the Biomedical Campus, the government has just committed another £120 million for a new cancer research hospital right next to the AstraZeneca building and a short walk from our development. This will create more jobs and demand for accommodation in the area.
Cambridge Biomedical Campus
Off the back of our time spent in Cambridge we have been introduced to a Biomedical Enterprise Investment Scheme Fund. The fund has been designed to find and invest in early stage biotech companies, with an emphasis on Artificial Intelligence in Cambridge.
The Cambridge based office has a wealth of experience in angel investing and Cambridge Biomedical start ups and they already have a good track record of picking winners.
We are very pleased to be working with them and hope our clients will too.
EIS Relief available
The fund will invest in SEIS and EIS qualified companies. EIS/SEIS is a tax relief scheme created by the UK Government to encourage investment in seed-stage startups and businesses.
If eligible, you can claim back up to 50% of the value of your investment in the form of income tax relief. Therefore, if you make an investment of £100,000, you can save £50,000 in income tax.
The combination of tax relief and arguably the worlds most important industry in the wake of Covid-19 makes this a very compelling investment.
Its been a while since I last wrote a blog back in March about the pain and suffering the COVID-19 was about to inflict on both individuals and markets.
I will be honest and say I did not see the stock market bouncing back anywhere near as quickly as it has. However my call on Gold has been justified with a price rise from $1660 to $1951 as I write this. Thats a 17% return during a global pandemic in less than 6 months… not bad, I know quite a few clients have heeded this advice and even leveraged their position for even greater gains.
Anyway, I am not here to talk about Gold, I do see some more upside but its probably time to take profits and look for the next double digit opportunity.
So back to the virus. I was the first to call for a lockdown of sorts, or at least ban unnecessary large gatherings such as Cheltenham, I was not however promoting a total paralysis of the UK and most other global economies.
There is a great article in the FT this week about Swedens approach, a lesson in common sense. They looked at the bigger picture, i.e the economy, mental health and other indirect effects of a total lockdown. This pandemic is not going away anytime soon, we have to look at ways of managing it rather than thinking it will be destroyed any time soon. The Sweden model is a pretty good template.
I was lucky enough to spend my lockdown in The Netherlands. They also took a simple, sensible approach, keeping business open wherever possible with social distancing and encouraging outdoor activities.
The result was a 7% decline in the economy compared to the Uk’s 20%. Both are now thankfully on the mend due to government stimulus and the virus not being as bad as previously anticipated, but the debt will be around a lot longer.
The world has however changed as we know it. Much of London is still a ghost town as people refuse to go back to the office and get comfortable with home working.
I think the majority of people are shunning the commute rather than the office itself. As someone who spent 5 years crammed on the London Tube at rush hour, I wouldn’t be rushing back if I had an excuse like Covid-19.
So businesses are embracing the new normal, people are moving out to the burbs to have a garden and more space and companies look for smaller offices in more pleasant locations with shorter commutes.
Which brings me nicely on to Cambridge.
Having lived in Oxford for many years, I never spent a great deal of time in Cambridge as it seem to offer much the same experience. Having recently visited the city to view a couple of developments we have funded there, I was surprised by the buzz the city had, even in the middle of a pandemic. Offices were being filled by companies fleeing London, lab space was in short supply due to the demands of COVID-19 research and property prices are being pushed to even higher levels than before the pandemic.
However it was the biomedical campus that really surprised me the most. Has there ever been a better time to boast Europes biggest medical research and health centre? At its heart is the new AstraZeneca HQ, at a cost of one billion pounds its a serious piece of real-estate, just what you need to start a tsunami of followers to a science park.
So Cambridge has become something of a global sweat spot. I spent many of my early years sourcing emerging market property based on similar fundamentals. Its not often you find such compelling drivers on your door step. The other nice aspect of R&D is that it wont be effected by Brexit.
Knowledge still passes freely between boarders as far as I am aware.
I haven’t even touched on what a stunningly beautiful location it it. Picture postcard architecture , weeping Willow trees over the many rivers and wonderful pubs and restaurants, not to mention excellent train connections with London and only half an hour away from Stansted Airport. They are also building a new train station at the science park, which always massively boost property prices.
So to conclude, I think COVID-19 is going to be major boom for this historical city. More and more people will want to work here, pushing up both rents and property prices. Demand for office space which is already undersupplied will see yields on commercial jump very quickly.
We have already completed two development opportunities in the city and we are expecting more. We are also going to be working with a biomedical EIS fund. Investors will be able to invest in a basket of local startups and receive tax breaks for doing it. So to find out more about any of these unique ways to play the Cambridge growth story, please get in touch. There has never been a better time to invest in Cambridge.
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