Our Alternatives Platform

Alternative investments encompass asset classes that fall outside the traditional universe of publicly traded equities and investment-grade bonds. They represent a broad range of investment opportunities. The defining characteristics of alternative investments are their complexity, illiquidity, long-term investment horizons, and low correlation with stocks and bonds.

Historically available only to institutional investors, endowments, and ultra-high-net-worth families, alternatives are now a central allocation in many portfolios.

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Why Alternatives Belong in Your Portfolio

Illiquidity Premium

Investors are compensated for accepting limited near-term access to capital. Lock-up periods typically range from 3 to 12+ years, with this constraint itself generating excess returns above liquid equivalents.

Complexity Premium

Opaque structures, less competitive markets, bespoke terms, and the need for specialization can create advantages for skilled managers to exploit to generate excess returns unavailable in more efficient public markets.

Low Correlation

Alternative investment returns are often driven by factors operating independently of public equity and bond market cycles. This independence can create the opportunity to zig when other asset classes zag and to reduce portfolio volatility through the enhanced and true diversification.

Who Qualifies

Access to many alternative investments requires meeting the SEC’s Accredited Investor or Qualified Purchaser standards, reflecting their complexity and suitability requirements. Our team works with you to evaluate which strategies are appropriate for your goals, time horizon, liquidity needs, and overall portfolio construction — ensuring alternatives play the role they’re designed to play.

Essential Glossary

Alpha

Excess return above a relevant benchmark, attributable to active manager skill rather than market exposure (beta).

Blind Pool

A fund structure in which investors commit capital before specific investments are identified. Requires high confidence in manager judgment and track record.

Carried Interest

The fund manager’s share of profits, typically 20%, earned after investors receive their committed capital plus a preferred return. The primary performance incentive for GPs.

Clawback

A provision requiring the GP to return previously paid carry if aggregate fund performance falls below the preferred return threshold by fund end.

Closed-End Fund

A fund structure with a fixed capital raise, defined investment period, and predetermined termination date. Standard structure for private equity, credit, and real estate.

Commitment

The total amount an investor pledges to a fund, deployed over time via capital calls as investment opportunities are identified.

Cornerstone Investor

An early, large investor in a fund whose commitment validates the offering and may confer preferential economics, co-investment rights, or advisory board seats.

Drawdown

The portion of committed capital that has been called and deployed by the fund. Also refers to peak-to-trough decline in portfolio value during a loss period.

General Partner (GP)

The fund manager responsible for investment decisions, operations, and fiduciary obligations. GPs typically co-invest 1–5% of fund capital to align interests with LPs.

Hurdle Rate

The minimum return investors must receive before the GP is entitled to carried interest. Typically 8% preferred return, compounded annually.

Limited Partner (LP)

An investor in a private fund whose liability is limited to committed capital. LPs have no role in investment decisions and limited information rights relative to GPs.

Lock-Up Period

The period during which investors may not redeem their capital. Common in hedge funds (1–3 years) and essential to the structure of all closed-end private funds.

NAV (Net Asset Value)

The total value of a fund’s assets minus liabilities, divided by shares or units outstanding. In private funds, NAV is based on internal valuations rather than market prices.

Preferred Return

The minimum annualized return (typically 8%) that LPs must receive before the GP participates in profits. Acts as a hurdle to ensure manager compensation is performance-based.

Private Placement

A securities offering exempt from public registration requirements, made directly to a limited number of accredited or qualified institutional investors.

Secondary Market

A market where existing fund interests are bought and sold between investors, providing liquidity for holders of illiquid fund positions — typically at a discount to NAV.

Side Pocket

A separate account within a hedge fund used to segregate illiquid or hard-to-value assets from the main fund, preventing them from affecting the NAV for redeeming investors.

Vintage Year

The year a fund makes its first investment. Used as a benchmark reference point, since economic conditions at deployment time significantly influence ultimate fund returns.

Important Disclosure: The information contained on this page is for educational and informational purposes only and does not constitute investment advice, an offer to sell, or a solicitation of an offer to buy any securities. Alternative investments involve significant risks including loss of principal, illiquidity, and concentration risk. They are suitable only for sophisticated investors who can bear the full loss of their investment. Past performance is not indicative of future results. Return targets and ranges presented are illustrative estimates only and are not a guarantee of performance. All investment decisions should be made in consultation with your qualified financial advisor, attorney, and tax professional. This material is not intended to provide legal, tax, or accounting advice.