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10 Reasons for Liquid Alternative Investments
Cash and Returns
Alpha generation targets significant additional returns above negative cash (annualised target returns 3-5%).
Positive Returns Throughout Rising and Falling Markets
Protect capital through hedging and short alpha positioning, achieving market neutrality.
Reduce Overall Portfolio Risk and Volatility
Seek differentiating stream of returns. leading to low correlation with other asset classes. Reduced volatility increases the risk adjusted return profile.
Gains Access to Best Minds in Investment
Manager's skills come with constraints such as capacity, and managers seek to protect capital in the short term.
Alignment of Interests
Internal Manager Capital and strong conviction align managers and institutional investors with the additional risk needed to achieve superior returns.
No Illiquidity Premium
Liquid strategies with the right scalability and appropriate investment vehicle offer appropriate liquidity required by the investors. However, one should invest across the market cycle, for a minimum of 3 to 5 years, and resist unwelcome freedom that liquidity brings. Knowing what is in the portfolio helps to make this decision.
AIFs via Managed Accounts Give Control of Assets
AIFs bring otherwise offshore strategies (with Board of Directors appointed by the Fund Manager) into regulated vehicles (with an independent Board of Directors).
AIFs via Managed Accounts: You Know What is in Your Portfolio
Complete portfolio transparency at the position level, allowing for full monitoring, risk management and regulatory compliance.
Up to Daily Valuation
No pricing opacity, limiting valuation risks and achieving 'true' liquidity.
AIFs via Managed Accounts Allow Enhanced Solvency Ratios and ESG Compliance
Market neutrality aspects help reduce solvency capital requirements of insurance companies. Portfolio transparency allows for application of various ESG reporting and internal adherence to ESG policies.