alternative Investments The definition of an alternative asset is very Broad and differs from source to Source. Sometimes the definition depends on the assets as on the left side, but the definition can also be dependent on the wrapper of the asset IE the derivatives contracts Futures Etc. Also the further out to the right we move on the Spectrum. The more non-financial knowledge is required. This presentation is focused on the main traditional Alternatives of hedge funds private equity and venture capital.

Although assets under management in alternative Investments have grown rapidly. They remain smaller than either fixed income or Equity investable assets, the enthusiasm for alternative Investments was tested during 2008. When assets under management in alternative investment declined as losses were incurred and investors withdrew funds however, alternative Investments continue to represent a significant portion of the portfolios of certain investors by 2012 a Resurgence of interest and alternative Investments occurred the main Concepts or key fundamentals in alternative Investments are as follows correlation, especially in times of a toppy market alternative Investments provide low exposure to General market swings and more idiosyncratic risk yields huge benefits in portfolio Construction.

Fees traditionally they are usually between a half a percent and one percent Alternatives usually involve a management fee and a performance fee IE the fabled 2 and 20, which is more like 1.8 12.8 in today's reality. Usually these fees are higher than in traditional Investments the liquidity varies but is generally much lower. Hence small changes in prices are usually not enough to warrant and exit clip sizes are also crucial. This is similar to selling one bottle of a fine aged wine to selling a thousand bottles. For example, usually the lower liquidity requires much higher patience from investors and typically longer investment Horizon.

Some other factors include High entry and exit costs. This is known as the spread the higher risk associated with these Investments has generally provided higher returns. There is also the potential for very high returns if managers perform. Well, there are usually High minimum investment amounts. There is limited regulation in this sector and the value of Investments can be hard to determine there is no marking to Market of alternative Investments.

Generally. What is so special about Alternatives. This is a quote taken from the Yale University endowment 2017 annual report the heavy allocation to non-traditional asset classes stem from there return potential in diversifying power today's actual in Target portfolios have significantly higher expected returns than the 1987 portfolio with lower volatility alternative assets by their very nature tend to be less efficiently priced than traditional marketable Securities providing an opportunity to explore Market.

Agencies through active management the endowments longtime Horizon is well suited to exploit illiquid less efficient markets such as real estate natural resources leveraged buyouts and Venture Capital end quote.

Who invests in Alternatives other than endowments clearly this game is usually for a group known as sophisticated investors.

These are people or institutions that are willing to invest in less regulated Investments, but they themselves are allowed by the regulator to do so, so this is not usually retail investors. So it is worth remembering that of course a number of asset managers will try to make some of the alternative Investments accessible for retail clients. This is of course a process that is continuing what was non-accessible to retail investors 30 years ago is now to a larger degree accessible institutions such as Pension funds and endowments as well as high net worth individuals have been at the Forefront of those investing in alternative Investments with the expectation of diversifying their portfolio and enhancing their risk return profiles their hopes that alternative investments will behave differently from traditional investment and will provide positive absolute returns throughout the economic cycle may not be realistic alternative Investments are not free of risk.

And their returns may be correlated with those of other risky Investments, especially in periods of financial crisis during a long historical period the average correlation of returns from alternative Investments with those of traditional Investments may be low, but any particular period correlation can differ from the average during periods of economic crisis such as late 2008 correlations among risky assets can increase dramatically.