INVESTMENTS

Alternative investments are supplemental strategies to traditional long-only positions in stocks, bonds, and cash. Alternative investments include return-seeking and wealth preservation vehicles that also often have risk characteristics different from those of traditional stock/bond only investments. Characteristics common to many alternative investments, when compared with traditional investments, include the following: lower liquidity, less regulation, lower transparency, higher fees, and limited and potentially problematic historical risk and return data. Alternative investments often have complex legal and tax considerations and may be highly leveraged. Alternative investments are attractive to investors because of the potential for portfolio diversification resulting in a higher risk-adjusted return for the portfolio. Investors conduct due diligence prior to investing in alternative investments. The due diligence approach depends on the investment method (direct, co-investing, or fund investing). Operational, financial, counterparty, and liquidity risks may be key considerations for those investing in alternative investments. These risks can be analyzed during the due diligence process.

Investors can access alternative invests in two primary ways:

Direct Investment

Direct investment into a property, company, or project (such as buying an apartment building).

Fund investment

Fund investment (asset class options include real estate, alternative liquid ETFs/Mutual funds, hedge funds, private credit, and private equity).