Displaying items by tag: alts

Cliffwater Corporate Lending Fund (CCLFX), a diversified interval fund specializing in corporate middle market direct lending, has successfully completed its seventh offering of privately placed Senior Secured Notes, raising $1.37 billion. 

The Notes, which are secured by the Fund’s assets and have staggered maturities ranging from 3 to 12 years, will help support continued growth as the Fund's net assets increase in line with equity inflows. As of July 31, 2024, CCLFX reported over $21.2 billion in net assets, up from $15.6 billion at the end of 2023, demonstrating its robust expansion. 

Operating as an interval fund, CCLFX offers investors exposure to a diversified portfolio of loans, primarily in first lien senior secured positions, and focuses on generating consistent income with low price volatility. This recent transaction highlights the Fund's effective use of debt capital markets to finance its strategy.

Finsum: We have seen a huge uptick in popularity of interval funds and are projected to hit big targets in the coming years.

The financial volatility of recent years has made it clear that traditional retirement strategies may no longer suffice. The old 60/40 portfolio split between stocks and bonds has proven inadequate, as demonstrated in 2022 when both asset classes declined significantly.

 Retirees now face unique challenges such as sequence of return risk and inflation, which require a more adaptive investment strategy. Alternative investments, like private equity and venture capital, can offer opportunities for diversification and potential outperformance over traditional assets. Meanwhile, alternative strategies, such as long/short equity and merger arbitrage, provide potential protection during market downturns. 

Despite their complexity and potential downsides, incorporating alternatives can help retirees achieve a more resilient portfolio that balances growth, income, and capital preservation.

Finsum: Moreover, stocks and bonds are experiencing increasingly high correlation in returns compared to the last four decades, which should draw more inflow into alternatives. 

As the stock market hovers near all-time highs, investors are seeking a balance between optimism and caution, with alternative ETFs gaining traction as a popular choice for risk management and income generation. 

The latest data reveals that while U.S. equity and fixed-income ETFs lead in demand, alternatives ETFs are growing rapidly, reflecting a shift toward more diversified and protective strategies. These funds offer exposure beyond traditional stocks and bonds, incorporating elements like commodities, digital assets, and derivatives to manage risk and generate returns. 

Notably, products like the Global X Nasdaq 100 Tail Risk ETF and Fidelity's options-based portfolios are attracting attention for their innovative approaches to downside protection and income. The appeal of alternatives ETFs lies in their simplicity and accessibility, allowing even complex strategies to become core components of investor portfolios.

Finsum: Most of the time the downside of alts is the liquidity component, being able to use ETFs is a great way to counteract this. 

Vice President Kamala Harris is positioning herself as a supporter of policies that foster the growth of emerging technologies, including the digital assets industry. Her campaign adviser emphasized her commitment to stable, transparent regulations that promote innovation while safeguarding consumers. 

This approach contrasts with former President Donald Trump's stance, which has garnered support from some in the cryptocurrency community due to his promises to reduce regulation. 

Harris aims to balance innovation with responsible oversight, addressing concerns about economic stability and corporate responsibility. Additionally, she has made multiple statements around cutting red tape and bureaucracy for innovation. 

Finsum: The path to higher bitcoin prices might be stable regulation in the long run.

Family offices are pivoting from conventional asset allocations towards a heavier focus on alternative investments like private equity, real estate, and venture capital. J.P. Morgan's recent report indicates that nearly half of these portfolios now consist of alternative assets, with larger family offices taking the lead in this shift. 

This approach is driven by the desire for higher returns, reduced volatility, and better alignment with long-term wealth preservation and growth goals. These offices are capitalizing on their ability to invest in illiquid assets, which offer the potential for higher returns over time.

 By engaging more directly in private companies, family offices are leveraging their entrepreneurial expertise to achieve greater alignment with their wealth preservation objectives. While traditional public markets still hold a portion of these portfolios, the emphasis is clearly shifting towards alternatives that can better meet the complex, multi-generational needs of these families.

Finsum: With macro volatility looming alts could offer more risk cover and should be heavily considered.