Alternative Investments

Alternative investments offer diversification and improved risk-adjusted returns through exposure to private markets and non-traditional asset classes.

November 24, 2025

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- Non-traditional assets outside public stocks, bonds, or cash. This category includes private equity, venture capital, hedge funds, private credit, real assets, and collectibles, often offering portfolio diversification and higher return potential.

Scenario:

A family office with a $200 million portfolio seeks to reduce public market exposure and improve risk-adjusted returns. It allocates $30 million to alternative investments, including hedge funds, private equity, and real assets.

Why This Matters:

Offers diversification, potential for higher returns, lower correlation with public markets, access to unique strategies, alpha generation.

The Process:

The CIO screens managers, reviews historical performance, and assesses fit with the family’s risk profile. Allocations are made via limited partnerships or direct investments, with ongoing monitoring of performance and liquidity.