Alternative investments: Key considerations for your allocation
What should you consider when making an allocation to alternative investments?
Alternative investments have proven to be an effective tool to achieve diversification amidst the highly volatile markets of the past few years. However, more could be done to demystify private markets investments. According to our recent survey of defined benefit (DB) plan sponsors, one in five plan sponsors don’t invest in private markets because “it’s too complex.”
This means that many institutional investors could be missing out on the benefits that alternative investments can offer. Aside from portfolio diversification, alternatives offer great downside protection, and certain asset classes are a valuable defense against inflation.
At Mercer, our team of alternative investments specialists can help create an alternative investment strategy that fits your organization’s investment objectives. We have significant knowledge, deep expertise, and global scale and resources – available to help you access all types of alternative investments, tailored to your needs.
Watch this video to see key considerations that should be addressed when making an allocation to alternative investments.
Our alternative investments approach can flex to suit you
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Client-centric flexible approach
Our work begins with the knowledge that no two clients are the same. Whether it’s cash-flow, targeted returns or familiarity with private markets, each organization has its own unique requirements. We know that pension providers, endowment funds, insurance companies and wealth management firms will all have different approaches and needs. Our flexible services allow us to meet these requirements. -
Extensive research platform
We construct flexible private markets solutions across all asset classes. These are designed to help meet each client’s particular needs, objectives and appetite for risk. We offer a range of services, from liquidity budgeting and strategy design to in-depth operational due diligence and standardized reporting. Our dedicated, experienced teams streamline even the most complex of processes to make our clients’ lives easier. -
Global reach, local resources
Our fund selection process is rigorous. Mercer typically reviews more than 2,000 fund offerings each year. Following this global review process, we perform due diligence, assign ratings and make recommendations for investments. These are based on each client’s unique portfolio objectives, cash-flow requirements and risk tolerance.
Our experience in alternative investments*
US$164 billion in global alternatives assets under advisement
US$26 billion in global alternatives under management
240 alternatives professionals
30 years' experience in private markets
27 offices globally
Alternative investment strategies
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Co-investments
Co-investments have the potential to deliver greater diversification, lower fees and higher net returns and, provide a more tailored exposure set. -
Impact investing
Impact investments have the potential to help you find an optimal balance between making a positive change and delivering better returns. -
Infrastructure
Infrastructure investments have the potential to deliver greater diversification, inflation protection and longer-term sustainability. -
Private debt and credit
Private debt strategies have the potential to deliver a higher-yield than listed bonds and retain the potential for capital growth. -
Private equity
Private equity strategies leverage opportunities from the vast number of companies listed under private ownership. -
Real-estate
Investing in real-estate is linked to important sectors of the real economy, including long-term trends such as population shifts.