June 28 (Bloomberg) -- Gold and fixed income investments hold no appeal for billionaire Nathan “Natie” Kirsh, the owner of Jetro Holdings Inc. Real estate is more attractive, although you have to choose carefully. And if you want to invest in art, Kirsh says, you need an expert, Bloomberg Markets magazine will report in its August issue.
Real estate has undergone a multi-decade shift, according to Kirsh. Retailers’ locations are less attractive than they used to be, he says, as Internet sales undermine brick-and-mortar businesses.
The 81-year-old, who is worth $5.6 billion, according to the Bloomberg Billionaires Index, knows the retail industry well. His largest holding, Brooklyn, New York-based Jetro, sells groceries and supplies to restaurants and bodegas. Commercial, industrial and residential real estate is stronger, says Kirsh, a South African citizen who owns apartments in New York, London and Johannesburg.
The following are excerpts from a June 5 interview conducted at Kirsh’s apartment on Central Park West in New York.
Bloomberg News: Where are the best opportunities in fixed income?
Kirsh: I wouldn’t touch bonds.
Bloomberg News: Hedge funds?
Kirsh: Hedge funds are a different story. It depends on what manager and what their assets are. I would never do that 2-and-20 crap. I’d have to have a friends and family rate.
Bloomberg News: Gold. Opportunity, bubble, mystery?
Kirsh: I wouldn’t touch it. It earns you nothing. It is just there because it’s there.
Bloomberg News: What’s your economic outlook?
Kirsh: I see the global economy in dire danger, and that’s from one thing: the euro. The euro is a poison pill for Europe. It’s putting everybody back on the gold standard. You see huge unemployment developing everywhere. Where does that lead? You’ll see one of two things: either communism or fascism. Communism is outdated, so it’s going to be fascism. You can’t have 50 percent of young people without work.
Europe is too big an economic bloc to be ignored. When it implodes, it’s going to affect everybody. And it is imploding.
Bloomberg News: What’s safest: a global equities fund, Treasuries or a top-tier Picasso?
Kirsh: Well, bonds are just money, so let’s get rid of that. My daughter believes in art, so if you walk around this apartment, you’ll see lots of what she’s been investing in. To invest in art, you need a real specialist. Really, you’re left with equities.
Bloomberg News: Your view on real estate?
Kirsh: Thirty years ago, if you had good retail sites, that was the gold standard. Then there was commercial and industrial, and those were OK, and then residential, which was pretty much in the dark.
Today, it’s the other way around. Residential is hot, commercial and industrial are fine, and the stuff that’s under serious threat is retail. That’s because of Internet shopping. Real estate is still a store of wealth, but you’ve got to be careful how you’re doing it.
Bloomberg News: Where’s the best city to buy an apartment today?
Kirsh: The one you live in as well as all the major cities people migrate to. Paris, London, New York, San Francisco are all good.
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