What Are Alternative Investments?

Alternative investments are unlike traditional stocks and bonds. Most often they are illiquid (not easily converted to cash), privately held (not purchased on the public stock market), have minimum investment amounts, require you to either be an accredited investor or qualified purchaser and in return offer higher expectations of returns.

Because of these characteristics, alternatives require significant due diligence to properly understand the risks of investing in this type of asset.

Alternatives vary greatly, but some of the main categories include:

⦁ Hedge funds
⦁ Venture capital
⦁ Real estate
⦁ Private equity or debt
⦁ Commodities
⦁ Infrastructure

Alternative Investments in Portfolios at Durbin Bennett

As mentioned above, these types of investments are not readily available to everyone like publicly traded stocks and bonds. Typically, alternatives are accessed only through institutional investors or if you meet the specified ultra or high net worth requirements. Because of our strong rapport with our network of alternative managers, Durbin Bennett is uniquely able to provide our clients with access and insight into some of these unique investments.

No doubt stocks and bonds play an important role in our client portfolios. However, where appropriate, we go one step further and also incorporate alternative investments to provide uncorrelated returns to the stock market (additional diversification) and steadier return streams (reduced volatility) for our clients.

We refer to our investment philosophy as a “Core-Satellite” approach. The portfolio’s core holds highly diversified stocks and high-quality bonds. The portfolio’s satellites are split between true alternatives (assets uncorrelated with the stock market) and real assets (assets with tangible value).

Our Investment Philosophy

Alternative Investments Due Diligence at Durbin Bennett

At Durbin Bennett, we have a dedicated investment team that is responsible for constantly researching and performing institutional-level due diligence on satellite investments as well as on our core components. We typically look at over 500 alternative investments per year and formally approve 2-4 funds for client investment.

Our Due Diligence Process

Investment Selection Process

Examples of alternative investments we currently provide access to include:

  • Private lending
  • Hedge funds
  • Private real estate
  • Private equity
  • Infrastructure leasing
  • Green energy

How Can We Help?

Give us a call or fill out our contact form to learn more about how you can gain access to alternative investments in your portfolio.

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