Displaying items by tag: alternatives

Natixis Investment Managers and CoreData Research conducted a survey of 11,000 investors. One of the most interesting results was that those who were invested in model portfolios were less stressed, had more confidence, and trust in their advisors relative to individuals not invested in a model portfolio. 


11% of model portfolio clients felt stress while 23% of non-model portfolio investors were stressed. Similarly, 45% of model portfolio investors felt confident about their finances, compared to 24% of non-model investors. Further, 78% of model portfolio investors saw volatility as an opportunity. In contrast, only 47% of non-model portfolio clients felt the same way. 


Only about half of the respondents were invested in a model portfolio despite the benefits. Currently, about 51% of wealth managers and RIAs offer third-party model portfolios. However, it does present an opportunity for advisors as it frees up more time for financial planning, client service, and prospecting. 


Ronnie Colvin, the founder of Fractional Planner, said “Model portfolios make life easier for the advisor because the allocation percentages and the investments in the portfolio are predetermined. So the advisor doesn’t have to go and scour the market for various investments to fill a target allocation.” He added that model portfolios can help with managing risk while also leading to a more customized experience given that there are model portfolios optimized for tax efficiency, sustainability, income, and alternatives.


Finsum: Model portfolios offer certain advantages for clients and advisors according to a survey of investors. These include increased levels of confidence, less stress, and more trust in their advisors. 

Published in Wealth Management

2023 has been a year defined by twists and turns that has defied the expectations of most market participants. Amid the tumult, alternative assets have been a source of resilience especially as the industry continues to evolve. According to Prequin’s Head of Private Equity Research Insights Cameron Joyce, the best opportunities are in private debt and secondaries.


In terms of various categories within the asset class, rising interest rates have been a major headwind for private equity. This has limited deal activity and exits, however there are indications that the climate could be improving as we head into 2024, while long-term investor demand remains strong. 


Similar to private equity, venture capital has also been hamstrung by tighter monetary policy in terms of exits and valuations. Real estate has also been negatively impacted by rising rates, resulting in a weaker fundraising environment and muted deal activity. It’s also become more challenging for mid-sized and smaller funds given that many investors are gravitating towards larger funds.


Private debt has been relatively strong due to its seniority in the capital stack and floating-rate structure. This has been increasingly important for companies given that banks have raised lending standards. For investors, private debt has been effective in terms of dampening volatility while delivering above-average returns. 

Finsum: Alternative assets performed quite well in 2023 amid a turbulent year for financial markets. Here’s a roundup of some of the key categories within the asset class.


Published in Wealth Management

Alternative investments have captured the attention of institutional investors for decades, with private equity making up the lion's share of the alts category. Today, however, private credit is making waves and grabbing its piece of the investment pie.


As recently noted by Institutional Investor, "private credit has arguably become the most powerful transformational force in the financial world since the 2008 economic crisis." This rise to prominence can be attributed to a confluence of factors. Traditional lenders, reeling from the recent banking crisis, have become more risk-averse, leaving a gap in credit availability. Stepping into this void are alternative investment managers, offering much-needed capital to businesses.


With some investment managers now packaging their private credit holdings into vehicles accessible through financial advisors, an entirely new world of opportunity has opened to individual investors, allowing them to diversify their portfolios with this exciting asset class.


Private credit presents a compelling option for advisors seeking to enhance portfolio diversification and reduce correlation. While the credit crunch of early 2023 has eased, private credit firms remain active, diligently finding new markets to deploy their capital. If this trend continues, it ensures a steady supply of investment opportunities for both institutional and individual investors.

Finsum: Learn how the surge in private credit is creating portfolio diversification options for both institutional and individual investors.


Published in Wealth Management
Saturday, 02 December 2023 09:40

Alternatives Can Help Differentiate Your Practice

According to a report and survey conducted by Cerulli Associates, Invesco, and the Investment & Wealth Institute, most advisors believe that alternative investments can help differentiate their practices from competitors, recruit high net worth clients, and help with consolidating and recruiting assets. Yet, half of the advisors surveyed report an allocation to alternatives that is less than 5% despite self-reporting that the optimal allocation was 13%. 


Most decisions to allocate to alternative investments are driven by advisors given that clients are often unaware of these options and their benefits. Many alternative investments are only available to retail investors through advisors such as investing in private markets. This can also help in recruiting clients who may be interested in these types of investments in addition to better returns, income, and diversification for clients. 


The survey results also showed that 56% of advisors see increasing allocations to alternatives due to increasing liquidity, and 52% believe that increasing transparency will also lead to more allocations. Some of the drawbacks of the asset class are high levels of complexity and less liquidity that require advisors to spend time in conducting due diligence especially if they are recommending it to clients. 

Finsum: According to a report on advisors and their perspectives on alternative investments, most advisors are underexposed to the asset class despite it offering specific benefits to clients and advisors.


Published in Wealth Management

UBS conducted a poll of wealthy clients, working with a specialized portfolio advisory group. In response, it has increased its recommendation for exposure to alternative asset classes such as private equity, private debt, real estate, structured products, and hedge funds from 16% to 22%. Endowments and large single-family offices have already increased allocation to private markets, but wealthy investors are making up ground. 


This is due to an increase in the number of options which allow clients to immediately invest in private markets with lower amounts and less restrictions on withdrawals. According to Daniel Scansaroli, the head of portfolio strategy in UBS’ CIO Americas office, “The concept of investing in private markets is not new to our clients, but the accessibility of the market has changed in the last couple of years with what many of the private sponsors are calling a democratization.”


Currently, the firm recommends an allocation of 30% to private markets, 30% to bonds, and 40% to stocks and believes this is the new benchmark. It favors this over the traditional 60/40 portfolio as it would have generated an incremental 1.4% in incremental returns even after accounting for fees. 


It believes that private markets offer more opportunity than public markets due to the ‘illiquidity premium’, assuming that investors can remain patient. Over multiple timeframes, private equity, venture capital, private credit, and real estate have shown to outperform the S&P 500. 

Finsum: UBS conducted a survey of its wealthy clients and found that they are looking to increase their allocation to private investments. 


Published in Wealth Management
Page 3 of 18

Contact Us



Subscribe to our daily newsletter

We use cookies to improve our website. By continuing to use this website, you are giving consent to cookies being used. More details…