Knowledge hub

Frequently asked questions 

1-Are alternative investments only for institutions and family offices?

This used to be the case. But thanks to product innovation and institutional-calibre managers making accredited investor products more accessible, these once exclusive investments are now available to a wider range of investors, with lower minimums and more flexible features.

2-Can I use public market equivalents to achieve the same results as private markets?

While public market equivalents (PMEs), may share certain traits with private markets, they generally produce dramatically different results. Historically, private equity and private credit have offered an illiquidity premium compared to their traditional counterparts.¹ Private real estate offers a diverse range of opportunities and has historically delivered differentiated returns, risk profiles and income characteristics compared to public REITs.² Additionally, private and listed infrastructure present different opportunity sets, while natural resources differ from commodities and equity-oriented surrogates (such as gold miners, manufacturers, food processing companies).

3-Are all hedge funds created equally and are they all absolute return strategies?

Hedge funds encompass a wide range of strategies, including equity-hedged, event-driven, relative value, macro and multi-strategy approaches. Equity-hedged strategies aim to provide hedged exposure to markets and serve as a growth surrogate. Event-driven strategies seek to capitalise on changes in the capital structure, such as M&A and convertible arbitrage. Relative value strategies aim to exploit mispriced securities, while macro strategies adopt a defensive or diversifying approach. Multi-strategy funds allocates across these strategies in an opportunistic manner.

4-Do investors require access to liquid investments?

While investors usually need some liquidity, they may not always need their entire portfolio to be liquid. Research indicates the presence of an illiquidity premium,³ representing the excess return for holding illiquid assets (private equity and private credit) over an extended period. This allows private equity managers ample time to execute their strategy and capture potential returns. It may also foster discipline in retaining investments during volatile periods.