Alternatives

At The Inside Network’s Alternatives Symposium, Kyle McCarthy and David Lewis encouraged investors to define private credit very broadly to reap the benefits of diversification and strong risk-adjusted returns.

Many supply chain issues have been alleviated in the last year as restrictions eased in the wake of the pandemic, said Alceon’s Phil Green, but labour remains a sticking point.

With private equity becoming more accessible, retail investors can now take advantage of the asymmetry-of-information and diversification benefits PE offers, while its safe-haven characteristics stand out in the uncertain macro environment, according to David Chan and Cameron Brownjohn.

The amount of capital being made available to private companies has surged in recent decades, making it possible, and often preferable, to keep companies private for much longer. Liberty Street Advisors’ Christian Munafo and Schroders’ Claire Smith discussed the opportunities and risks for investors as the private-for-longer trend picks up pace.

Market neutral strategies should not only used as lever for investors that want an on-call safety valve for volatility, but retained as a strategic holding to drive portfolio performance throughout market seasonality according to Yarra Capital Management’s Andrew Smith.

Increased traffic volumes and higher earnings have provided valuation support for the infrastructure company, ClearBridge Investments’ Shane Hurst says, with the post-COVID-19 recovery positioning the business for solid growth.

Lending specialist Daniel Zwirn spoke candidly about investor “credit myths”, and the misunderstandings that hold people back in the selection and movement of assets in portfolio construction.

While advisers are not yet seeing substantial client demand for semiconductor and chip stocks, the popularity of the AI chatbot ChatGPT has highlighted opportunities for Australian investors to gain exposure to the surging sector.

Senior secured loans make an attractive proposition in an inflationary environment, says Invesco’s Ashley O’Connor, especially when returns are stable and company defaults are at low tide.

Increasing government expenditure on social infrastructure is driving huge levels of investment into the sector. There are now several options for retail and wholesale investors to gain exposure to this asset class, which was previously open only to institutional investors.

Wind and solar are gauged as the cheapest sources of electricity generation and storage in Australia, with technology costs trending in the right direction for investors.

Recent market turbulence has brought market neutral long short strategies into primacy, with funds able to look at companies with a clear lens and avoid taking large binary positions.