4 strategies and 8 funds for diversification in challenging markets

Positive returns and surging fund flows - not words we've written often in recent weeks, but that's what parts of the Alternatives asset class are seeing currently. And they're driving impressive growth.

McKinsey's 2022 report on the sector shows the alternatives asset pool grew to US$9.8 trillion, around 20% up from the prior year and a quadrupling since 2009.

Alexandre Ventelon, head of research and investment strategy for Morgan Stanley Wealth Management recently outlined subdued return expectations for traditional asset classes that precipitated a doubling of the firm's allocation to Alternatives.

Equity and bond indices have clocked up some of their worst year-to-date performances in decades. Ventelon says the firm is using Alternatives to cushion portfolio drawdowns and to generate returns that are uncorrelated with these traditional portfolio staples.

You can read his views in more detail below.

An expanding universe for all investors

Institutional and wholesale investors have been championing the alternatives bucket for some time. Australia’s Future Fund, which has a ~45% allocation to alternatives, has long been held up as a local leader in allocating towards the asset class.

However, there’s a perception that Alternatives are out of reach for most investors, with limited choice for strategies and prohibitive minimum investment amounts.

In preparing for Livewire’s Alternatives in Focus Series the team compiled an initial list of 50 alternative funds and listed investment companies/trusts.

To narrow this down we have focused on coverage of four subcategories listed below, these are drawn on classifications published by the Harvard Business Review. 

• Private Equity
• Private Debt
• Hedge Funds
• Real Assets

We also sought participation from strategies that were accessible to all investors with six of the eight funds listed being open to both retail and wholesale investors.

Education is at the heart of this Series, and you can learn about the opportunities in these asset classes by visiting the dedicated Series page. 

8 funds offering exposure to alternative assets

You can also explore each of the eight participating funds by clicking here or by clicking on the individual fund cards listed below.

Invest Unlisted Core Infrastructure Fund

Asset Class: Real Assets - Unlisted Infrastructure
Investor Type: Wholesale Only
Minimum Investment: $50K

Click on the fund card below to view more information on the fund.

Totus Alpha Long Short Fund

Click on the fund card below to view more information on the fund.

Schroder Specialist Private Equity Fund

Asset Class: Private Equity
Investor Type: Retail or Wholesale
Minimum Investment: $20K

Click on the fund card below to view more information on the fund.

Aura High Yield SME Fund

Asset Class: Private Debt - SME Lending
Investor Type: Wholesale Only
Minimum Investment: $100K

Click on the fund card below to view more information on the fund.

RF CorVal Property Fund

Asset Class: Real Assets - Unlisted Property
Investor Type: Retail or Wholesale
Minimum Investment: $10K

Click on the fund card below to view more information on the fund.

Janus Henderson Global Multi-Strategy Fund

Click on the fund card below to view more information on the fund.

Qualitas Real Estate Income Fund (ASX:QRI)

Alternative Asset Class: Private Debt - Commercial Real Estate Debt (CRED)
Investor Type: Retail or Wholesale
Minimum Investment: $500

Click on the fund card below to view more information on the fund.

KKR Credit Income Fund (ASX:KKC)

Alternative Asset Class: Private Credit - Various
Investor Type: Retail or Wholesale
Minimum Investment: $500

Click on the fund card below to view more information on the fund.

Livewire's Alternatives in Focus Series was proudly supported by the following firms