In a market environment where forward-looking return expectations are lower, we believe it is prudent to look outside of traditional asset classes to find value or avoid certain risks.
Why invest in private markets?
Investors are challenged to meet the growing demands on their portfolios because of volatile public markets. We believe long-term investors will benefit from exposure to alpha-generative opportunities.
Improved return potential
Our aim is to deliver outsized returns over the longer term, focusing on opportunities that are transformational.
Clients can gain access to the non-economic risk premia, especially skill, politics and illiquidity.
Our approach focuses on providing flexibility to investors and highly opportunistic portfolio management across a broad risk spectrum.
While select private markets solutions have some correlation to public markets, added diversification benefits include:
- Allocations to strategies often inaccessible via public markets
- Investment in emerging and disruptive technologies
- Exposure to higher levels of potential alpha
Higher return potential
While private markets are perceived to have higher risks than public markets, they can offer potentially higher returns in compensation for their illiquidity. This is driven by:
- Private market managers' increased industry knowledge, networks, and ability to attract, leverage and deploy senior executives of high quality
- Ability to implement long term corporate strategies without the burden of having to meet short-term earnings obligations
- The use of asymmetric information that doesn't exist in the public sphere, to capitalize on opportunities
Explore the array of alternative investment strategies:
While some industry participants lament private market's inherent illiquidity, this feature also serves as a strength. Longer-term investments have historically outperformed the broader public markets.¹ We believe many of the same characteristics that contributed to private markets' returns in the past, continue to exist and will hold true in the future.
¹Based on a growth of a dollar calculation for 10 and 20 years, using quarterly returns from Thomson Reuters for Private Equity and the following indexes to represent each asset class: S&P 500 Index, Bloomberg US Aggregate Bond Index, NCREIF Property Index, NCREIF Open-End Diversified Core Index (ODCE), and FTSE/EPRA NAREIT Developed Markets Real Estate Index.
Recent private markets thought leadership