Venture capital funds invest in early stage startups and SMEs. Different VC firms have different strategies but they can be broken into 2 main categories; Dividend growth and exit based strategies. Dividend focused VC’s invest in profitable companies with the goal of being paid high dividends in the future, whereas VC funds that have an exit based strategy hope to invest in start-ups that eventually get bought out or IPO. The only consistency amongst all venture funds is that even though they invest in startups, most are not eligible, regardless of merit, it’s just too high risk. Through the NEO fund’s unique approach to Venture capital, we are able to significantly reduce the risk to investors while investing at an earlier stage to maximise returns, while having the ability to give investors exposure to innovative startups with no capital down.
Real estate investment trusts or REITs for short, are investment vehicles that buy and manage real estate. There exist about as many REITs as there are houses, and about as many strategies. REITs are, typically, the most accessible AIFs, many of which are publicly tradable to retail investors. Generally speaking, investing in a REIT will give you two forms of returns; Capital gains (the increase in value of the properties invested in) and rental yield. Rental yield is paid out much like a dividend is paid when you buy a stock. The Cosmos TERA fund has an extremely diverse strategy, investing in residential realestate both within Australia and internationally. The fund aims to protect investors from market fluctuations by investing in both high rental yield properties as well as distressed and undervalued properties which we renovate and sell quickly for capital gains returns. In addition the fund aims to, where possible, develop and redevelop large portions of suburbs, building micro-communities and increasing the value of all the properties within them.
Hedge funds will tend to invest in one of many strategies including; long/short funds, event driven funds, M&A, macroeconomic events, HFT or value investing, to name a few. The problem with highly specialised investment strategies is that most only work under very specific market environments. As a result, investors miss out on countless opportunities, the point is to make your money work for you all the time, not hope for markets and the stars to perfectly align. The DEKA fund aims to provide superior returns to investors while maintaining an extremely high degree of risk mitigation by investing in a diverse asset class through multiple dynamic strategies, allowing the fund to be flexible to the current macroeconomic environment.
Private equity firms differ from VC’s in that they will buy up entire businesses (either public or private). LBO’s, hostile take overs, M&A, these are all terms that may sound familiar and are often tossed around the private equity space. PE's are only open to extremely high net worth individuals due to the risk and structure of the investments. A private equity firm may endeavour to buy and delist an undervalued public company, then sell off the assets for a profit, or re-list the business on a public exchange after cleaning it up. So where does the Cosmos EPI fund differ? We leverage our other funds to grow businesses we take over. Rapidly increasing our turn around time and decreasing the risk to investors. We also have the opportunity to buy entire companies at a market discount from the NEO fund, our VC, when founders want to take an exit.