Alternative investments with Maven Investor Partners

Gaining exposure to alternative assets can offer significant benefits. The low correlation of alternatives with traditional markets provides valuable diversification, reducing portfolio volatility. A mix of asset classes is regarded as the optimum way to construct a robust and highly diversified portfolio.

Moreover, the illiquidity premiums and skilled management inherent in private markets offer higher return potential. Alternatives like private equity and real estate inherently diverge from the patterns of traditional listed markets, offering a potential buffer against negative market trends and tapping into opportunities absent in the traditional 60% equity vs. 40% bonds portfolio structure.

The greatest pull for investors is the potential for higher returns, where many alternative assets have delivered impressive long-term performance. Research from the British Venture Capital Association (BVCA) shows that private equity funds managed by its members achieved a 17% annual return over a decade, significantly outpacing the 6.5% yield of the FTSE All Share Index. 

For most private investors, alternative investments will not be suitable due to the higher risk profile, but for those who do qualify, it is important to evaluate and understand the risks and merits of such investments. 

That said, there is a strong motivation from investors, private equity firms, and even many regulators to improve accessibility to alternatives, such as private equity, to enable all investors to benefit from the potential performance and diversification benefits.

New initiatives such as ELTIF 2.0, the revised European Long-Term Investment Fund introduced by the EU, and FCA-authorised Long-Term Asset Funds (LTAFs), are helping to create a secular shift towards inclusivity and unlocking private markets for all. 

Today, alternative funds and direct investment opportunities are more accessible to experienced investors and family offices, prompting significant capital inflows and fuelling growth in the alternatives sector. Options now include syndicates that enable professional investors to co-invest directly in private companies on a deal-by-deal basis or direct-to-consumer platforms that provide self-certified investors or accredited investors through private banks access to PE funds by pooling investments.