Andrea Mody, US Wealth Private Markets Head for Macquarie Asset Management, joined Keith Black, Managing Director of RIA Channel, to discuss innovations in alternative investment vehicles.
Macquarie Asset Management is the world’s largest infrastructure manager. The firm acquired Central Park Group in 2022 to provide advisors and their clients the ability to access third-party managers in private equity and private credit to build more complete portfolios of alternative investments. Private credit has had strong demand with rates and inflation likely higher for longer. As markets readjust to the new normal of higher rates, new allocations to alternative investments slowed in 2023.
Real assets can be attractive for a number of reasons. Core real assets offer high yields and inflation-linked cash flows. Investing in the next generation of infrastructure brings opportunities to participate in the energy transition and decarbonization.
While qualified purchasers have long had the ability to access alternative investments, innovative product structures are broadening access to retail and accredited investors with smaller minimum investments. Investors can access real estate through non-traded REITs, private credit through BDCs, and private equity through registered funds.
Education is required before advisors and their clients make allocations to alternative investments. Managers need to take their time to explain the features of each product in a way that can be easily understood. Advisors are making investments in technology to make it easier to invest in alternatives.
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