At Holdun, we think long term, both for ourselves and for our clients. While we cannot perfectly predict the future, we can certainly plan for it.
In response to the changing investment environment, more and more investors are looking for alternative investments to improve the structure of their portfolios while still minimising risk and maximising future returns.
In order to meet these growing diversification needs, we have created a number of alternative investment funds across the risk and liquidity spectrum. These funds improve the structure of investors’ portfolios while minimizing risk and maximizing returns.
‘The New Normal’
With the substantial volatility observed in capital markets, investors are turning to alternative investments to improve the structure of their portfolios.
A growing consensus amongst market analysts is that public equity returns over the next several years may be constrained by a combination of slowing economic growth and relatively high equity valuations. Bonds, once the traditional counter to equities in a balanced portfolio are currently at a record high valuations, and these ’safe-haven’ bonds are becoming less attractive with each uptick in interest rates from the zero bound they are currently anchored to.
The structural change in the relationship between equities and bonds has also forced investors to re-assess their asset allocation split. Investors are now exploring alternative investments such as Private Equity, Venture Capital, and Real Estate in a bid to generate superior returns while simultaneously diversifying their portfolio.
The inflow of cash into the alternative investment space is nothing new. The sectors that make up alternative investments have been growing in recent years, increasing from under $3 trillion in 2005 to over $8 trillion in 2020. This recent growth is expected to continue, with assets under management projections of $14 trillion by 2023.
The shortcomings of traditional assets have resulted in the migration of institutional investors into the alternative investment space, utilizing their longer time horizons to take advantage of the illiquidity premium on offer, generating greater risk-adjusted returns in the process.
Historically speaking, retail investors are not quite as vested in alternative investments. While Institutions, on average, hold 30-40% of their portfolios in alternatives, Retail investors have as little as 3% invested in the alternative space.
With that said, many retail investors are becoming aware of the limitations of traditional assets. The latest market uncertainty is functioning as a catalyst for further growth within the alternative investment space. Investors with longer investment time horizons and less need for liquidity are now looking to exploit the excess returns on offer.
At Holdun, we look to ensure all our clients, small or large, have equal opportunity to diversify their portfolio appropriately. The Holdun Funds offer investors a unique opportunity to invest across a broad range of alternative investment funds. Once a domain exclusive to Institutions and Hedge Funds is now available to individual investors, offering shelter from the oscillation of the volatile equity market without sacrificing your upside return.