Insights and knowledge to navigate alternatives with a whole portfolio perspective.

The term “liquid alternatives” or “liquid alts” refers to alternative investment strategies that are packaged in pooled investment vehicles such as mutual funds or exchange-traded funds that are highly liquid, easily traded and traditionally regulated. They are broadly available to advisors and individual investors. Liquid alts employ strategies such as long/short, market neutral, global macro or derivatives to seek less correlated returns. They are not hedge funds or private markets investments.

Private markets are a type of alternative investment distinguished by the fact that they are not listed and traded on public exchanges. Like alternatives broadly, private markets were once harder to access but can now be implemented in portfolios through registered investment vehicles with private underlying assets. Private markets are a growing part of the economy¹, and investors of all sizes are increasingly recognizing that they can offer a potential source of wealth creation that compliments the public sphere.

Private equity involves investing directly in companies that are not listed on public exchanges. Private equity managers (general partners or lead sponsors) use investor capital to help private companies grow and enhance profitability.

Private credit refers to lending conducted outside traditional bank lending channels or public debt markets. Private loans are typically originated between a corporate borrower and a small group or single lender. The loans are negotiated directly by companies that do not have access to or chosen not to seek credit from public corporate bond and loan markets (often medium-sized "middle market" companies).

Real assets are tangible assets (or rights to them) that have intrinsic value in the economy. Examples include real estate (e.g., commercial, residential, industrial); infrastructure (e.g., roads, bridges, utilities); and natural resources (e.g., energy, materials, metals). Real assets are gaining interest from investors as a way to potentially enhance portfolio diversification.

As access expands, investors are seeking out alternatives due to their potential diversification and return benefits. However, some key considerations like liquidity, complexity, and transparency remain important for those including alternatives in portfolios.