3CL Seminar: 'Are Alternative Investments Essential for Financial Development?'

Speaker: Professor Assaf Hamdani, University of Oxford, Faculty of Law

Abstract: Are Alternative Investments Essential for Financial Development? (co-authored with Genevieve Helleringer)

Private capital investments have expanded well beyond traditional leveraged buyouts and venture capital. Funds managed by so-called “alternative asset managers” now engage in direct lending and invest in infrastructure, real estate, growth companies, secondaries and other asset classes.

Much of the legal and financial literature treats the rise of alternative investments with suspicion. This skepticism has become more urgent with the recent move in the United States towards increasing the exposure of retail investors in pension account to alternative investments. In this project, we approach the topic from a different perspective. What if alternative investments are, like banks and stock exchanges, an essential element of a well-functioning capital market?

We develop a framework for analyzing the question from the perspective of financial markets, national policymakers and investors. Alternative investments are essential where they finance firms, projects, or sectors more effectively than banks or public markets, such that otherwise viable activity would either go unfunded or be funded only at materially higher cost. We identify the conditions under which alternative investments may become essential, using the recent example of alternative investments in AI infrastructure. We also consider implications and concerns for policymakers and academics.

Professor Assaf Hamdani is the Professor of Corporate Law at Oxford University and a Fellow of Jesus College.

His research areas are corporate law and governance and financial regulation. His work examines issues such as the tension between entrepreneurial vision and investor protection, corporate governance and innovation, institutional investors, shareholder activism, corporate governance of controlled firms, and regulatory competition. He has published in leading journals such as the California Law Review, Columbia Law Review, Journal of Law and Economics, Stanford Law Review, University of Pennsylvania Review, and Yale Law Journal.

3CL runs the 3CL Sullivan & Cromwell Lunchtime Seminar Series, featuring leading academics from the Faculty, and high-profile practitioners.

All seminars take place in B16 in person from 1pm to 2pm if not indicated otherwise. A sandwich lunch is available for all participants from 12:30pm just outside of B16.

Enquiries to: 3cl@law.cam.ac.uk