Alternatives

For capital allocators concerned about exposing their clients to too much risk in real estate debt, specialists say asset discernment and due diligence are key to protecting investments in a rapidly growing sector.

Track record is vital, but a lack of comprehensive and independent research is often forcing investment teams to do their own due diligence when it comes to alternative managers.

“Volatility is the most persistent diversifier,” says Atlantic House Australian head Andrew Lakeman. “People are starting to realise that, as well as realising that diversity of assets in a portfolio – with different names – does not necessarily mean that you are diversified.”

In this head-to-head battle, Atchison Consultants analyst Mishan Dahia pitches Magellan and Clearbridge against each other in an infrastructure performance match up. Which one leads, and which one lags?

Bonds and equities are suddenly firm friends, but this is far from the first time they’ve positively correlated. And it’s not the only reason liquid alternative investments are being brought into focus as a non-correlated diversifier, managers believe.

As the world turns towards critical minerals like lithium to power electric vehicles, alternative access to investment in these sectors will become crucial pieces of the supply chain puzzle.

The prevailing market dynamic has changed, with inflation fanning volatility and bonds no longer providing diversification ballast against equities. Active managers that have been employing alternatives for years are well placed to accommodate the new paradigm.

Australians have an “amazing love affair” with property, but many are limited in their investment exposure. At AIA’s recent annual conference, investors heard how three alternatives to direct ownership provide portfolio benefits with less hassle, particularly for income-seeking retirees.

With demand for healthcare assets trending in one direction, the surging alternative asset manager has launched its second unlisted institutional fund for the calendar year.

The energy transition is full of unknown unknowns, but there are still ways to get some certainty over returns as the world changes how it generates and distributes energy.

A confluence of challenges for small caps and technology stocks has led to a dearth of companies developing into IPO candidates in the last 18 months, but that hasn’t stopped private equity teams from working hard to build up their assets.

Despite facing rising interest rates, a higher cost of capital and concerns about their borrowing base, non-bank lenders have made their place in the Australian economy in moments like this, when funding is needed and otherwise hard to get, says Thinktank’s Jonathan Street.