Mutual Funds & Fixed Income offerings are more popular with Retail Investors. However,
High Net-Worth Investors are on constant lookout for specialized offerings that
could generate high returns even if it means taking higher risks. For such Investors
the options are PMS or AIF. While PMS services are focused only on the listed space,
AIFs provide a wider bouquet of investment offerings.
An Alternative Investment is an asset that is not one of the conventional Investment
types, such as stocks, bonds and cash. Most Alternative Investment assets are held
by Institutional Investors or accredited, High-Net-Worth Individuals because of
the complex natures and limited regulations of the investments. Alternative Investments
include Pre-IPO deals, Complex Equity Strategies, Private Equity, Hedge Funds, Managed
Futures, Real Estate, Commodities, Derivatives Contracts etc.
Wealthy Investors can avail of such Investment Opportunities by Investing through
AIFs, which are not available normally. For example, a lot of Pre-IPO deals happen
via AIFs at attractive valuations.
Alternative Investments typically have a low correlation with those of standard
asset classes, which makes them suitable for Portfolio Diversification. Because
of this many large Institutional Investors, Ultra High Net-Worth Individuals & Family
Offices invest a small portion of their Portfolios in such Offerings.
AIFs offer a chance for our Investors to go off the beaten track and Invest in securities
that are unavailable to the common investor. While AIFs can also invest in listed
equities, the structure allows for investments in securities which are unavailable
under say a traditional mutual fund platform.