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CONTRIBUTORS

Jake Williams

Global Co-Head of Alternatives
Wealth Management Product

George Szemere

Head of Alternatives
EMEA Wealth Management

Preview

Private asset funds continue to gain momentum as wealth investors look to access associated benefits – diversification, yield and improved risk-adjusted returns. ‘Democratization of private assets’ is the phrase used to capture this trend. Reasons for this move include:

  • technological developments.
  • increasing need for private capital.
  • evolving regulatory and legislative landscape.

On the last point, regulators are evolving the frameworks in which funds operate, increasing their availability outside of the institutional market. In response, managers are making funds available but doing so in a way that balances this access with liquidity.

In this paper, the first in our ‘Accessing Private Assets’ series aimed at providing transparency on private asset products, we explore how managers support the periodic liquidity (subscriptions and redemptions) available to investors in semiliquid fund structures.

WHAT ARE THE RISKS?

All investments involve risks, including possible loss of principal.

Investments in alternative investment strategies are complex and speculative investments, entail significant risk and should not be considered a complete investment program. Depending on the product invested in, an investment in alternative investments may provide for only limited liquidity and is suitable only for persons who can afford to lose the entire amount of their investment. An investment strategy focused primarily on privately held companies presents certain challenges and involves incremental risks as opposed to investments in public companies, such as dealing with the lack of available information about these companies as well as their general lack of liquidity.

An investment strategy focused primarily on privately held assets presents certain challenges and involves incremental risks as opposed to investments in public companies, such as dealing with the lack of available information about these companies. Additionally, an investment in private assets or vehicles which invest in them, should be viewed as illiquid and may require a long-term commitment with no certainty of return. There also can be no assurance that companies will list their securities on a securities exchange, as such, the lack of an established, liquid secondary market for some investments may have an adverse effect on the market value of those investments and on an investor’s ability to dispose of them at a favorable time or price.