Lending markets

4 Strategies and 8 Funds for Diversification in Tough Markets – Livewire Exclusive

Positive returns and rising fund flows – these are not words we have written often in recent weeks, but this is what parts of the Alternatives asset class are seeing right now. And they generate impressive growth.

McKinsey’s 2022 report on the sector shows that the pool of alternative assets reached $9.8 trillion, about 20% more than the previous year and a fourfold increase since 2009.

Alexandre Ventelon, CIO of Morgan Stanley Wealth Management recently described subdued return expectations for traditional asset classes that precipitated a doubling of the company’s allocation to alternatives.

Stock and bond indices posted some of their worst year-to-date performances in decades. Ventelon says the company uses Alternatives to cushion portfolio declines and generate returns uncorrelated with these traditional commodities.

You can read his opinions in more detail below.

An expanding universe for all investors

Institutional and wholesale investors have been championing the alternatives for some time. The Australian Future Fund, which has an allocation of around 45% to alternatives, has long been considered a local leader in asset class allocation.

However, there is a perception that the alternatives are out of reach for most investors, with limited choice of strategies and prohibitive minimum investment amounts.

In preparing for Livewire’s Alternatives in Focus series, the team compiled an initial list of 50 listed alternative funds and investment companies/trusts.

To reduce this, we have focused on covering the four sub-categories listed below, these are taken from the classifications published by the harvard business review.

  • Capital investment
  • Private debt
  • Hedge funds
  • real estate

We also looked for participation from strategies that are accessible to all investors, with six of the eight funds listed being open to retail and wholesale investors.

Education is at the heart of this series, and you can learn more about the opportunities in these asset classes by visiting the dedicated series page.

8 funds offering exposure to alternative assets

You can also explore each of the eight participating funds by clicking here or by clicking on the individual fund maps listed below.

Invest Unlisted Core Infrastructure Fund

Asset class: Real Assets – Unlisted Infrastructure
Type of investor: Wholesale only
Minimum investment: $50,000

Click on the fund fact sheet below to view more information about the fund.

Totus Alpha Long Short Fund

Asset class: Hedge Fund – Long/Short Equities
Type of investor: Retail or wholesale
Minimum investment: $25,000

Click on the fund fact sheet below to view more information about the fund.

Schroder Specialty Private Equity Fund

Asset class: Capital investment
Type of investor: Retail or wholesale
Minimum investment: $20,000

Click on the fund fact sheet below to view more information about the fund.

Aura High Yield SME Fund

Asset class: Private Debt – SME Loans
Type of investor: Wholesale only
Minimum investment: $100,000

Click on the fund fact sheet below to view more information about the fund.

Real estate fund RF CorVal

Asset class: Real estate – Unlisted properties
Type of investor: Retail or wholesale
Minimum investment: $10,000

Click on the fund fact sheet below to view more information about the fund.

Janus Henderson Global Multi-Strategy Fund

Asset class: Hedge Fund – Multi-Strategy
Type of investor: Retail or wholesale
Minimum investment: $25,000

Click on the fund fact sheet below to view more information about the fund.

Qualitas Real Estate Income Fund (ASX:QRI)

Alternative asset class: Private Debt – Commercial Real Estate Debt (CRED)
Type of investor: Retail or wholesale
Minimum investment: $500

Click on the fund fact sheet below to view more information about the fund.

KKR Credit Income Fund (ASX:KKC)

Alternative asset class: Private credit – Miscellaneous
Type of investor: Retail or wholesale
Minimum investment: $500

Click on the fund fact sheet below to view more information about the fund.

Livewire’s Alternatives in Focus series has been proudly supported by the following companies