• Alternative strategies, structures and sponsors

    A common mistake is to treat alternative investments as a single asset class. Alternatives include a spectrum of asset strategies and fund structures. Each alternative is designed to deliver certain benefits and comes with its own specific type of risk. Investors should consider the investment strategy, fund structure and investment expertise of a manager before deciding which alternatives to use in their portfolios.

    Alternative investing strategies

    An introduction to alternative investing


    Middle market lending

    Generating incomeAn investment strategy that seeks to provide a steady stream of current income, or yield, over time. through direct investments in private U.S. companies

    Private U.S. energy

    Investing in private U.S. energy companies with the goal of income and long-term growthAn investment strategy that seeks to grow an investor's principal through capital appreciation, or an increase in the value of a portfolio or asset over the long term

    Private equity

    Identifying, acquiring and operating private middle market companies with an objective of generating long-term shareholder value

    Structures

    Understanding ways to invest in alternatives


    Business development company (BDC)

    An investment that facilitates the flow of capital to U.S. middle market companies

    Open-end and closed-end funds

    Mutual funds and other pooled investments that fall under the Investment Company Act of 1940 and are regulated by the U.S. Securities and Exchange Commission

    Sponsors

    Considerations for selecting an alternative manager


    The manager matters

    The importance of experience and expertise

    Best practices

    How a manager aligns its interests with its investors

    The role of an investment adviser and sub-adviser

    Combining the investment expertise of an investment adviser and sub-adviser can provide a dual layer of expertise and oversight