Liquid Alternatives: “Create Interesting Revenue Streams Without Locking Up Money For Ten Years”

February 25, 2021 | Latest News, Liquid Alternatives, News

But manager selection is key, says Patrick Ghali, co-founder of Sussex Partners.

Though many liquid alternative strategies have disappointed in recent times, investors can nevertheless create “interesting revenue streams” by combining various strategies. This they can achieve without locking their money up for up to 10 years, says Patrick Ghali, co-founder at hedge fund advisory Sussex Partners.

Patrick Ghali recommends strategies to use

Ghali suggests that strategies such as alternative risk premia, relative value volatility, market neutral, and macro could be used advantageously; however, he emphasizes that investors need the right managers to implement these strategies. (City Wire Selector)

“A lot of investors are worried about where market valuations are, and can you create a liquid alternatives portfolio that can provide you with a steady return instead of having to go to the illiquid side of the equation. What we found is you can now do that,” says Ghali.

“You now find there are managers who are very good and have a Ucits product that’s bigger than their offshore product, for example.”

Managers are getting better at liquid alt investing

Hedge funds, on average, outperformed Alt Ucits strategies in 2020. However, Ghali sounds a cautionary note on longer lock-up strategies that suffer from risks such as illiquidity, liquidity mismatch, and valuations.

‘What’s nice about liquid alternatives is there is an objective price, there is no question about the value. You get a little bit more volatility but with the illiquid stuff you feel like there is no volatility but in reality, you’re exposed to market gap risk,’ Ghali told City Wire Selector.

Further, Ghali feels that manager quality in liquid alternatives is improving, and this could work in favor of investors.

Investing in alternatives

According to Ghali, investors would do well to create alt “buckets” comprising a mix of strategies, time frames, and diverse geographies.

Ghali said there were now skillful managers available to implement strategies such as market-neutral, macro including Asian macro managers, and for trading treasuries and gold in a Ucits format.

Related Story:  Hercules Investments Launches A Liquid Alternatives Mutual Fund

Free Industry News

Subscribe to our free newsletter for updates and news about alternatives investments.

  • This field is for validation purposes and should be left unchanged.


Latest Alternative Investment News
Venture Capital/ESG: Adam Neumann Co-Founded Flowcarbon Raises $70M Via VC Funding And Token Sale

Flowcarbon, co-founded by Adam Neumann, known for WeWork, is a climate technology company seeking to formalize the market for carbon offsets on the blockchain. The startup announced Tuesday its $70…
Digital Assets: The Terra (LUNA) Implosion – Sidelights
May 25, 2022     Digital Assets, Latest News, News

One hapless investor lost about 3 billion won ($2.4 million) in the LUNA and UST implosion earlier this month. A Korean social media personality going by the name of “Chancers”…
Artificial Intelligence: AI Could Bring Us Fresh Insight Into Earthquakes
May 25, 2022     Artificial Intelligence, News

Scientists have long held the view that earthquakes are impossible to predict, being random events. But the potential for damage these natural events have, including the loss of life, have…
Digital Assets: Swiss Venture Firm CV VC Launches African Blockchain Early-Stage Fund; Issues African Blockchain Report
May 24, 2022     Digital Assets, News, Venture Capital

CV VC announced Monday at Davos the launch of its African Blockchain Early-Stage Fund to bring the advantages of the blockchain and its own expertise to enable Africa to transact…