The United States is experiencing a period of rapid growth in electricity demand, which is expected to continue for at least the next decade. This growth is driven by economic development and expanded electric use in various sectors. Electric vehicles, tech manufacturing and the expansion of data centers to power AI applications are major factors in the growth of electricity demand.

To support this, the US electricity grid is undergoing significant upgrades and modernization efforts. This is driven by factors like aging infrastructure, increasing demand, the need to integrate more renewable energy sources, and the desire to enhance resilience against extreme weather events. The Biden Administration allocated $1.5 billion towards four major transmission upgrades, and another $5 billion loan guarantee for a massive Midwestern power line project.

But as we survey the energy landscape in early 2025, a compelling case for nuclear expansion is emerging. With electricity demand projected to surge 9% by 2028 and potentially triple in the coming decades, we're facing a critical decision point for America's energy future.

This installment is the last in my series on alternative investments. While this series has been nowhere near exhaustive on the subject, it has highlighted a few of the more common investment types in the alternatives arena. You can read the previous issue on private credit funds here and the original overview on alternative investments here.

A few months ago I stumbled on a briefing by the Cato Institute that proposed a mammoth move by the Federal government that at the time I thought could never happen. No, it has nothing to do with Greenland becoming the 51st state. (Although I can agree with some of the arguments made to purchase it!)

It has to do with what Bloomberg calls a “stodgy 87-year-old company” – Fannie Mae and its corporate relative Freddie Mac. These two companies guarantee roughly 70% of US home mortgages.

The report proposed that these two government-sponsored enterprises (GSEs) be privatized by sending the corporations into receivership. The sale out of receivership would require Congressional approval, but it would effectively remove $8 trillion of liabilities from the government’s balance sheet. This plan was originally proposed by the Trump administration during his first term. Now that plan has resurfaced after some of his top allies have renewed the call to privatize the two mortgage backers.

Private credit funds are debt-like, non-publicly traded instruments provided by non-bank entities, such as private credit funds or business development companies (BDCs) to fund private businesses. These funds typically engage in direct lending to private companies at above market rates.