For decades, the 60/40 portfolio – 60% equities and 40% bonds – was the cornerstone of wealth management. Yet, the traditional model is facing significant headwinds. Changing macroeconomic conditions, inflation uncertainty, and shifting equity-bond correlations have all eroded the reliability of this approach. In this context, alternative investments are gaining attention as a potential complement to traditional strategies.
Private equity, private credit, real assets, and hedge funds are no longer viewed solely as niche allocations. Instead, they are increasingly considered components of a broader, more resilient portfolio framework. Among these, hedge funds may deserve renewed consideration – not only for their diversification characteristics but also for their potential to navigate complex market conditions with greater flexibility.
Rethinking diversification: the rise of alternatives
Alternatives are not a monolith – they include a diverse spectrum of investment types that may behave differently from traditional asset classes. Each type can serve a distinct role:
- Private equity targets high-growth companies, often inaccessible through public markets.
- Private credit may offer stable income through direct lending and bespoke financing.
- Real assets like infrastructure and real estate can act as hedge against inflation and contribute to portfolio diversification.
- Hedge funds, long overlooked by private investors, might offer both diversification and liquid flexibility – particularly in volatile or uncertain markets.
You can now read the full whitepaper at the link below
