Alternative assets include hedge funds (and their countless strategies), private equity, and directly owned real estate. The promise of these alternative strategies - reduced volatility, non-correlation with traditional investments, and increased performance - is, in reality, quite hard to realize. Most investors (and investment advisors) simply don't have access to quality managers or the resources to build diversified exposure to this sector. We believe that, done correctly, there is significant benefit in employing alternative strategies.
Prudent investing in alternative strategies requires:
- Breadth of knowledge
- Independent thinking
- A value orientation and contrarian approach
- Intense due diligence
- Access to quality managers
- Broad diversification
- A watchful eye on fees and taxes
Our preferred approach is to partner with fund-of-funds or multi-strategy managers who have a long track record of adding value by treating investors as partners, sourcing fresh ideas, and gaining access to top-quality managers.