Alternatives

How do investors stay on top of diversification and maintain adequate levels of non-correlation when markets oscillate with every breath, when asset relationships are as fickle as they are malleable?

The private markets have surged in popularity as investors hunt for a potent combination of yield and downside protection. But in a big selloff, the strategy that will do best is one that’s genuinely uncorrelated.

The technology subsector in venture capitalism is thriving, especially in New Zealand, where the government is putting its money where its talent is. An increasingly vital part of this growth is WNT Ventures’ Maria Jose Alvarez, who has already been marked as a ‘women of influence’ in her adopted home.

Alternative fund manager Alceon and advice group Findex reflect on the genesis of Alceon’s Australian Property Fund, and why a finite number of key partnerships is better than mass market capital.

The “NewSpace” field has opened up in the wake of government entities pulling back their spaceflight programs across the world, which has given rise to a whole new class of Infrastructure-as-a-Service investment opportunities.

Melbourne-based specialist investment firm Horizon 3 is backing its knowledge in what is a very broad sector, but one that offers investors the chance to achieve a high level of return with low correlation.

Of all the sectors poised to take over this century, venture capitalists are most enamored with green technology and the infrastructure that supports artificial intelligence.

Listed infrastructure companies own and manage key assets across utilities, transportation, communication, and social sectors. Despite the allure of steady returns, consistent income generation and capital growth potential, these investments also carry their share of risks and complexities.

Liquid alts will only become more in demand if the positive relationship between bonds and equities remains sticky, Harrex explained. Investors will need another diversifier, and the liquidity will only make them more attractive.

It’s possible to get equity-like returns from insurance-linked securities with much lower volatility. But a supposed asymmetry of information in the market keeps investors from allocating.

Diving into alternative investments can be a daunting prospect, but a rewarding one for advisers looking to supplement their growth sleeve and add fresh diversifiers. A panel discussed some tips for those starting out on their alts journey.

Advisers may be holding back from private equity investment because they have an exaggerated view on the liquidity risks involved, but providers offer more liquidity now than ever, and smart advisers are capitalising on this.