First, we note that investments in “classic” real estate, such as buying an investment apartment or office as an income asset, are also included in the official definition of alternative investments. However, today it is more correct to look at real estate as a separate investment avenue, rather than as an alternative investment or as part of a fund (as will be described in detail). At the same time, funds that invest in income-producing real estate are alternative investments for all intents and purposes. In this case, the investor invests in the fund together with other limited partners and is the fund manager, who makes the sole decision on the method of investing the invested funds in accordance with the fund's principles document. The real estate fund will invest in income-producing real estate, such as office buildings and apartment buildings in sought-after areas, logistics centers. The fund's profits, which are distributed to investors, come from the income generated by renting out the property or from the profit generated by selling the property after its improvement.
In the past, alternative investments were only available to qualified investors, and the minimum investment threshold was millions of shekels. However, in recent years and due to the growing demand for these investment products, financial institutions, institutional structures and insurance companies have opened various alternative investment avenues with smaller investment amounts that are attractive to the general public and whose minimum investment threshold is hundreds of thousands, sometimes even tens of thousands. At the same time, it is important to note that most alternative investments are not tradable investments, unlike direct investments in the capital market.
Platforms with an extended credit license that allow individuals to lend money to other individuals and / or private companies through a platform. In practice, the investment of each lender is distributed among a large number of borrowers in order to spread the risk of the lender. Borrowers are usually higher-risk borrowers than usual, and therefore the investor (lender) is entitled to a significantly higher return / interest rate than the interest rate in the banking market.
