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Anissa Cavallo |
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Managing Director |
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Dear Ellen,
I was disappointed recently by a journalist who doesn’t understand English. Referring to the “economist hoi polloi,” this less than professional writer was trying to describe an elitist crowd of financial academics. In fact hoi polloi means the common herd, but like many aspects of language it is widely misinterpreted and as a result often misused.
Alternative assets do not escape this disappointing reality. According to popular belief they are high risk investments available only to the elite, and as a result used sparingly if at all in retail portfolios.
According to the Oxford dictionary an Alternative Asset is an item of ownership that follows nontraditional or unconventional ideas. Funnily enough they may also be the secret to better than average returns, particularly in volatile markets like now. |
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Tom Elliott |
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Managing Director - MM&E Capital |
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| ALTERNATIVE INVESTMENTS |
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To many people the term 'alternative investments' conjures visions of computer driven trading programmes, obscure tax havens and/or investing in esoteric commodities like jojoba beans. In fact, the reality is far more prosaic; alternative investments may be better summarised as investment strategies that provide consistent positive returns uncorrelated with conventional asset classes like equities, bonds, real estate, etc.
The first key facet of an alternative investment, i.e. consistent and positive returns, sounds an obvious goal. Yet in this era of negative stock market returns, there are plenty of conventional fund managers (like Perpetual) still getting paid large sums simply to lose less money than the overall market. In contrast, alternative managers only get paid well if they actually make their clients money.
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Ben Kilmartin |
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Head of Product &
Business Development- Life Settlements Funds |
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| BOND LIKE RISK WITH 11% YIELD*: IS IT NIRVANA OR SIMPLY AN ALTERNATIVE ASSET? |
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Life Settlements Funds' newest addition to the team, Ben Kilmartin, doesn’t think so. Kilmartin, who has spent most of his career dealing in Alternative Assets, believes that he has found the secret to low risk high returns in sunny old Queensland.
“The fact is alternative assets are not born equal, as there are many factors that can influence their pricing and volatility, for example the maturity of the market. The life settlements market is old enough to be highly regulated and sophisticated but it's also relatively undiscovered enough to offer excellent bargains. ”
After six years working as a portfolio manager with JP Morgan Asset Management in the UK, Kilmartin was then lucky enough to be posted in Australia for four years. When he was given the opportunity to work in New York he lasted only 12 months before he and his wife agreed that Australia was the place to bring up their two children.
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Peter Costello |
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Liberal Party MP |
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| WHAT PEOPLE IN THE KNOW (& OTHERS WHO AREN'T) THINK OF ALTERNATIVE ASSETS ....... |
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BDM Direct conducted a review of several non financial service people to find out what they really think of Alternative Assets.
The former Treasurer of Australia, recent novelist and current Liberal Party MP, the Hon Peter Costello MP had this to say: “When I think of an Alternative Asset I think of something from an alternative lifestyle – earthy, beads and dreadlocks, bangles, flowing saffron robes, lentils and rice. Is that what you mean?” Ah yes Mr. Costello that’s exactly what we mean...
Olympic Gold Medal Winner Duncan Free is extremely familiar with adversity. But winning gold against all odds does not necessarily make you an expert on financial terminology. “I think alternative assets are great! I'd love to have one...perhaps in the form of a 1967 Ford Mustang Shelby GT!!!” Funnily enough Duncan is pretty much spot on. Vintage cars are indeed a form of alternative asset. They don’t necessary perform in line with the equity markets and could indeed retain their value in bear markets.
READ MORE
van Eyk Article - A New Paradigm in Alternative Asset Allocation
by Head of Strategic Research - Dr Nigel Wilkin-Smith
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