Alternative Investments: Poised For Growth
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Over the past few years, the securities market has evolved to accommodate the ever-changing needs, preferences, and behaviors of its inhabitants. While history has, until recently, only seen individuals investing within their comfort zones, the past few years have witnessed a departure from traditional financial activity and a gradual mainstreaming of alternative investments and risk-taking.

One of the more popular non-traditional investment products being handled by today’s alternative asset managers are hedge funds, which are multi-populated, high-capital, high-yield, and low risk fund pools created by the partnering of one fund manager and several hedge fund investors.

Another would be the venture capital investments, which are cash infusions reserved for startups and early-stage companies in need of growth, strategy, and executive boosts.

Finally, private equity is an alternative investment category that refers to a pool of funds strung together via partnerships with private and public investors, with the purpose of buying stakes in struggling companies, improving the purchased companies’ stock, and selling the improved companies at a universally favorable profit.

While the benefits and advantages of owning and handling alternative assets of this nature include a fairly considerable degree of hedging or protection from market inflation, the ease and availability of investment diversification, a significant increase in exposures in opportunities – especially as compared to that observed in traditional investing, and least but not least, a respectable and often realized potential for more robust returns.

Still, this growing domain of alternative investments management can be quite challenging, as associated fees for operating non-traditional investment products tend to be higher, the products themselves tend to be more volatile than traditional investments, and many of these investments are illiquid, which means that investors have to wait longer before they can exit and divest accordingly.

This is where the support of asset servicing firms can make all the difference. With their commitment to speed, flexibility, accuracy, and integrity, some of these firms’ fund administration and support services gather, streamline, and interpret data, creating valuable, insight-rich analysis to guide alternative asset managers into making better, more effective decisions.

Specializing in the tedious day-to-day middle and back-office functions such as client service and investor relations, investor due diligence, fund accounting, benchmark and fund performance reporting, monthly Net Asset Value calculations, agency and regulatory compliance, and federal and state income tax return preparations, these asset servicing firms leave managers free to focus on strategy, strength of execution, and sustained viability in their non-traditional assets or alternative investments.


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