Insight
Getting started in alternatives
A handpicked collection of expert analysis and practical guidance to help you succeed in the world of alternative investing.
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Alternative Investments Mid-Year Outlook
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Private equity: Secondaries anyone?
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Private credit: Opportunities in today’s market environment
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Alternative Allocations: Due diligence meetings
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Alternative Allocations: Evaluating and allocating to alternatives
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Alternative Allocations: Opportunities in secondaries
Navigating Private Markets
Our Private Markets Insights series offers timely analysis and industry perspectives on developments shaping private markets, providing investors and their advisors with a deeper understanding of asset class trends. These resources deliver both foundational knowledge and expert insight to support informed decision-making in private market investing.
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Private Markets Insights: Private Equity Secondaries - A primary allocation
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Private Markets Insights: Not a simple open and closed case
Market insights
Explore insightful articles from our specialist investment teams. Our experts share their knowledge and perspectives on various topics, offering valuable insights to enhance your understanding of the alternatives market.
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Benefit Street Partners-Alcentra: Multifamily: A shelter from the commercial real estate storm
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Clarion Partners: The endurance of US rental housing investments
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Benefit Street Partners: A story about the drongo, the meerkat and debt markets
Frequently asked questions
1-Are alternative investments only for institutions and family offices?
This used to be the case. But thanks to product innovation and institutional-calibre managers making accredited investor products more accessible, these once exclusive investments are now available to a wider range of investors, with lower minimums and more flexible features.
2-Can I use public market equivalents to achieve the same results as private markets?
While public market equivalents (PMEs), may share certain traits with private markets, they generally produce dramatically different results. Historically, private equity and private credit have offered an illiquidity premium compared to their traditional counterparts.1 Private real estate offers a diverse range of opportunities and has historically delivered differentiated returns, risk profiles and income characteristics compared to public REITs.2 Additionally, private and listed infrastructure present different opportunity sets, while natural resources differ from commodities and equity-oriented surrogates (such as gold miners, manufacturers, food processing companies).
3-Are all hedge funds created equally and are they all absolute return strategies?
Hedge funds encompass a wide range of strategies, including equity-hedged, event-driven, relative value, macro and multi-strategy approaches. Equity-hedged strategies aim to provide hedged exposure to markets and serve as a growth surrogate. Event-driven strategies seek to capitalise on changes in the capital structure, such as M&A and convertible arbitrage. Relative value strategies aim to exploit mispriced securities, while macro strategies adopt a defensive or diversifying approach. Multi-strategy funds allocates across these strategies in an opportunistic manner.
4-Do investors require access to liquid investments?
While investors usually need some liquidity, they may not always need their entire portfolio to be liquid. Research indicates the presence of an illiquidity premium,3 representing the excess return for holding illiquid assets (private equity and private credit) over an extended period. This allows private equity managers ample time to execute their strategy and capture potential returns. It may also foster discipline in retaining investments during volatile periods.
Footnotes
1. Source: The Illiquidity Premium and the Market for Private Assets | Portfolio for the Future | CAIA. As of April 14, 2019.
2. Sources: Franklin Templeton Capital Markets Insights Group, MSCI, Bloomberg, MSCI Private Capital Solutions and Morningstar, as of December 31, 2023. Clarion Partners Investment Research, NCREIF, REIT.com, S&P, Bloomberg, 2022Q2. Note: Past performance is not indicative of future results. Valuations and incomes may change more rapidly and significantly than under standard market conditions.
3. Source: The Illiquidity Premium and the Market for Private Assets | Portfolio for the Future | CAIA. As of April 14, 2019.
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