• It enables targeting in a defined sector or area of activity
• It can moderate and balance exposure to risks
• In many cases, it offers an attractive risk / return ratio and provides significant flexibility with regard to the scope of the investment and its duration.
All of these led to impressive growth in the field: the volume of assets managed in alternative investments amounted to approximately 10.7 trillion dollars in 2020, 2.5 times as much as it was a decade ago, and according to publications, it is expected to increase to approximately 17 trillion dollars in 2025.
Alongside the unprecedented increase in the volume of assets under management, there has been a significant increase in the share of alternative investments from all investments both in the United States and in Europe.
In 2021, alternative investments accounted for 35% of all investments in the United States and about 23% in Europe. Experts estimate that by 2030, the investment market in the United States will be equally divided between the alternative channels and the traditional channels in the capital market.
Investors in alternative investments enjoy 5 unique advantages:
Reducing exposure to market volatility
The alternative investments are less influenced by the state of the global and local capital market and more by the strength of the specific investment channel and therefore moderate the investors' exposure to market volatility. Therefore, their inclusion in the investors' portfolio helps to a considerable extent in reducing exposure to risks.
Entry threshold is accessible
Until recently, alternative investments were the exclusive domain of institutional investors and those with significant capital. Today, investors can choose and adapt such opportunities for themselves, depending on the scope of the investment, the field and territory, and enjoy the advantages that were reserved until now for a limited group.
Focus: Resilience to recession on the one hand and inflation on the other
The global economy is suffering from inflation on the one hand and recession on the other, and all of this in an ever more complex geopolitical environment, which significantly affects the world's leading economies. The focus that we enjoy in alternative investments makes it possible to reduce the exposure, and to choose a channel that is as immune as possible to all of these.
Passivity has never been more attractive
One of the significant differences between the capital and alternative investment markets lies in the fact that there is no tradable market for alternative investments, therefore the investment period is not subject to change by the investor. Hence, this investment may be perceived as passive in the eyes of the investor, it frees him from monitoring and daily operations, and in case of success gives him a return at the end of the period or even during it.
Investment in the personal and collective future
The new investors who have joined the market in recent years strive to adapt the investment vehicles they possess not only to their financial goals, but also to their set of beliefs and personal preferences. Here, too, the field of alternative investments allows for a precise and targeted response.