Nowhere to hide: Are alternative investments the answer?
Challenging market conditions have sparked renewed interest in non-traditional investments such as private equity and hedge funds, but caveats apply
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2022 is shaping up to be one of the worst years for investors. A balanced portfolio (60 per cent equities/40 per cent bonds) has sustained a drawdown of over 20 per cent so far in 2022, a level not seen since the 2008 global financial crisis. Global economies face several challenges this year, but a recession has yet to materialise.
Other than cash, investors have few alternatives for refuge. The question then arises, are non-traditional assets the answer to current market challenges?
Alternative assets
Alternative or non-traditional assets include private equity (PE), private debt, venture capital, real assets, and hedge funds. David Svenson’s Yale Model popularised private assets among institutional investors, and this has since become a core approach among university endowments.
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