Alternative Investments – Capital Funding for the Future
Apr 10, 2024
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Kimberly Flynn, an expert in asset management and alternative investments, discusses the complexities of alternative investments and their impact on M&A. She explores how private equity and VC firms utilize M&A, options for raising capital, and the future of alternative investments in investment portfolios.
Alternative investments offer diversification from traditional investments, crucial for retirement portfolios.
Private equity firms are adopting evergreen structures to stabilize funding and attract wider investor base.
Deep dives
Role of Alternative Investments for Retirement Portfolios
Alternative investments, such as private equity and real estate, play a crucial role in retirement portfolios, offering diversification from traditional stock and bond investments. Large institutional investors have long utilized alternatives to enhance returns and manage risk. Individuals approaching retirement benefit from alternative investments due to their income-generating potential and ability to diversify from traditional assets like bonds.
Shift Towards Accessible Alternative Investments for Individual Investors
With the retirement burden increasingly shifting to individuals, there is a growing trend towards making alternative investments more accessible to retail investors. By providing access to private market opportunities like real estate and private credit, individual investors can enhance their portfolio diversification and potentially improve their retirement outcomes.
Growth of Evergreen Structures in Private Equity
Private equity firms are leaning towards evergreen structures, a form of permanent capital, to diversify and stabilize their funding sources. Evergreen structures offer flexibility and ongoing capital deployment opportunities compared to traditional fund-closing cycles. Firms like BlackRock and Alliance Bernstein are embracing evergreen models to expand their product offerings and attract a wider investor base.
Strategic M&A Driving Expansion in Asset Management
Strategic acquisitions are reshaping the asset management landscape, with traditional firms seeking to integrate alternative investment capabilities. Firms like BlackRock and Alliance Bernstein are strategically acquiring firms to enter the alternative investment space and provide higher-priced products with enhanced fee structures to investors. This M&A trend is driven by the need to offer a broader range of investment options in response to market dynamics and changing investor preferences.
The world of alternative investments is complex but compelling for middle-market business owners and entrepreneurs to understand. Kimberly Flynn discusses how M&A fits into the world of asset management. She defines alternative investments, explains how they fit into investment portfolios, discusses institutional money management, looks at how private equity and VC firms utilize M&A, considers options for raising capital, and speculates on the future of alternative investments and the potential impact on M&A.