David Copeland, Co-Founder and Chief Investment Officer of Strategic Wealth Partners, joined Julie Cooling, Founder and CEO of RIA Channel, at the CAIS Alternative Investment Summit to discuss the role of alternative investments in client portfolios.
David Copeland has been using alternative investments for 25 years, long before the inception of Strategic Wealth Partners 15 years ago. Copeland lives in the Chicagoland area, where the first fund of hedge funds was founded.
Clients of Strategic Wealth Partners average a 30% allocation to alternative investments, but portfolios are customized to the needs of each client. Clients are looking to move away from the volatility of the equity markets and are seeking to achieve reasonable and consistent returns.
Investors don’t always realize where risks may reside in investment portfolios. Copeland identifies the risks in each investment and discusses those risks with clients. Longer-duration government bonds are not risk-free, as was evident in their 2022 decline in the face of rising interest rates. Illiquidity is a key risk in alternative investments. Illiquidity can be good for investors, as liquidity can lead to poor behavior and be counterproductive if investors use that liquidity to buy high and sell low.
While many investors focus on earning high returns in alternative investments such as private equity and venture capital, Copeland prefers strategies with greater cash flow and more predictable income and exits than is typically available in PE and VC. Strategic Wealth Partners performs due diligence on a variety of alternative investment managers, sourcing opportunities through clients, CAIS, and a database of managers provided by a consulting firm.
Resources:
Investing in Alternative Equity at Strategic Wealth Partners