Elkstone discusses the recent boom in Alternative Investments
Karl Rogers, Chief Investment Officer for Elkstone joined Emmet Oliver on Newstalk Breakfast to discuss why the Irish market is following suit.
Listen to the full interview below.
What are Alternative Investments?
A simple way to understand alternative investments is any that are not traditional markets i.e equities and bonds. Equities are stocks/companies while bonds are debt/loans to companies and/or governments. Alternative investments are any market that is not stocks or loans. A non-exhaustive list includes commodities, gold, real assets like real estate and infrastructure, hedge funds, private equity and venture.
Alternative investments are used to either diversify a portfolio or enhance returns beyond traditional markets. There is a strong misconception that alternative investments add higher risk to a portfolio adding, however, alternative investments actually helps to reduce the risk of an overall portfolio.
How far behind is Ireland from the US when it comes to Alternative Investments?
Uptake of alternative investments is not geographical in nature but rather investor type. Institutional Investors due to their large size and ability to write big cheques that were traditionally required for alternatives were the first movers. This led to endowment investments models best known by Yale and Harvard.
There is now increased uptake from different investor types like Family Offices as highlighted in KKR’s recent report where they have an average allocation of 52% in alternatives.
There is a further move to democratise access where Elkstone has been an Irish first mover through the likes of the Elkstone Venture Club which was established 7 years ago and Elkstone’s Real Estate investment opportunities.
Why have we seen a boom in interest in Alternative Investments recently?
There are two primary reasons for the boom in interest recently. These are structural (the lower bite size access mentioned above) and current market conditions.
Equities and Bonds have been moving together for the past couple of years and so diversification is sought elsewhere. We are in a new market regime of higher interest rates and inflation and alternatives investments can be used to tactical position better for this in the likes of private credit (higher rates) and infrastructure (higher inflation).
Contact our investment team for further information.
About Karl Rogers, Chief Investment Office, Elkstone.
Karl leads the firm’s Alternative Investment Platform. Within this, he leads the Investment Portfolio for PIO & Access clients, the PIO Wealth Management Framework and runs the Elkstone Alternative Fund.
Karl brings a wealth of experience and expertise as a former Hedge Fund Manager and Head of Trading where he specialised in in-efficient commodity markets. Karl is a published expert in investment, trading, hedge funds and alternative investment strategies globally, featuring in the Wall Street Journal, Financial Times, Bloomberg and Forbes. Additionally, Karl speaks regularly at global Alternative and Hedge Fund conferences with iConnections, Context and Pension Bridge Hedge.
Send Karl an email or connect with him on LinkedIn.