Characteristics of Alternative Investments
Empirical evidence on return performance of alternatives verifies certain key characteristics including:
Diversification: Alternative assets have different return characteristics than traditional as set classes. Their returns are uncorrelated with traditional equity and fixed income, mitigating undue portfolio risk. The level of correlation, however, will depend on the specific type of alternative investment considered.
Potential for higher returns: Alternative investments have the potential to offer investors higher returns. Such higher returns, however, are compensating investors for a higher degree of illiquidity and less transparency surrounding alternative investments.
Longer-term horizons: Alternative investments are relatively illiquid, typically with lock-up investment periods. Institutional investors are required to take a longer-term view when investing in alternatives relative to the more liquid traditional assets.
Long-term investors such as pension funds do not require liquidity, however, and can benefit from the "liquidity risk premium". With plan sponsor's increasing emphasis on long-duration liabilities (and liability driven investments, LDIs), investors can actually earn superior returns by investing in relatively illiquid alternative assets.
It is suggested that over time, alternative investments will gain increasing prominence in institutional portfolios. Many investment analysts are predicting that returns from traditional asset classes, bonds and equity, will not be as compelling over the next decade.
This expectation, combined with increasing investor sophistication, has seen investment in alternative assets become one of the fastest growing trends in the global investment arena. These perceived advantages and the lackluster outlook for traditional assets have rendered the broad alternative asset class as highly desirable.
Stately Investments have recognized the dynamics of this changing marketplace and solely concentrate on identifying and offering high return minimized risk opportunities, with a particular emphasis on the real estate sector.
Consistently diversifying into new and emerging markets, Stately's core activities are concentrated on providing investment products which aim to outperform the traditional investment marketplace, through the provision of high yield, innovative and secure investment opportunities.
Indirect Investments
Indirect investors are those who access a market by investing through a collective investment fund.
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