PT  - JOURNAL ARTICLE
AU  - Jan Loeys
AU  - Nikolaos Panigirtzoglou
TI  - Are Alternatives the Next Bubble?
AID  - 10.3905/jai.2006.670100
DP  - 2006 Dec 31
TA  - The Journal of Alternative Investments
PG  - 54--76
VI  - 9
IP  - 3
4099  - https://pm-research.com/content/9/3/54.short
4100  - https://pm-research.com/content/9/3/54.full
AB  - Institutional investors have been steadily increasing their allocation to alternative assets in recent years. The alternative world currently comprises of about $3 trillion in assets and spans a wide variety of asset classes and strategies such as real estate, private equity, commodities and hedge funds. Many investors now view alternative assets as an effective solution to the mediocre performance of traditional assets. Is this shift into alternatives just creating another bubble? This article investigates whether the recent performance of alternative assets will continue to persist in the future. The analysis uses three signals to detect a bubble: excess returns, expensive valuation, and speculative activity. The results show that among commodities, energy demonstrates most evidence of being a bubble whereas non-energy commodities show less evidence. The results also show that hedge funds and private equity do not demonstrate much evidence of being a bubble.TOPICS: Real assets/alternative investments/private equity, commodities, private equity, financial crises and financial market history