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What Is An Alternative Investment ?

Alternative investment are sometimes defined as any investment that is nontraditional.

Institutional-quality investments exhibit risk and return charactereristics that are acceptable to insitutional investors ,including pension funds, foundations, endowments.

  • Real assets
  • Hedge Funds
  • Private Equity
  • Structured Products

Regulatory

  • Real Assets
    Natural Recources environmental regulations
    Infrastructure regulations have substantial influence
  • Hedge Funds
    exploit differing taxation and regultion among countries
  • Private Equity
    -
  • Structured Products
    Moderate influence

Securities

  • Real Assets
    Real estate securitization of cash flows
    Commodities driven by trading in futures contracts
  • Hedge Funds
    -
  • Private Equity
    Moderate influence
  • Structured Products
    Unique cash flow distribution methods(primary differentiator)

Trading

  • Real assets
    -
  • Hedge Funds
    proprietary active trading strategies (primary differentiator)
  • Private Equity
    Moderate influence
  • Structured Products
    -

Compensation

  • Real assets
    Intellectual property how should owner of rights be compensated
  • Hedge Funds
    performance based fees
  • Private Equity
    Moderate influence
  • Structured Products
    Moderate influence

Institutional

  • Real assets
    Real Estate often privately held insvestments
  • Hedge Funds
    -
  • Private Equity
    Not publicly traded (primary differentiator)
  • Structured Products
    Moderate influence