Our monthly newsletter is designed to serve as your primary source for navigating the world of alternative investments.
Over the past 12–18 months, the focus on meaningful diversification has increased dramatically, with more investors appreciating how alternative strategies can materially benefit portfolio performance.
Coming out of the 2008 financial crisis, global interest rates were at zero and the “long and strong risk assets” trade was in full effect. Equity declines were typically short-lived and accompanied by positive contributions from fixed income.
That relationship changed overnight as the Federal Reserve began to raise rates and pivoted away from the various market liquidity measures previously instituted. The diversification benefits of traditional stock/bond portfolios were no more.
Private market and hedge fund strategies, however, provided portfolios with true diversification, meaningful protection, and in many cases, growth over the course of 2022.
We believe the benefits of these alternative investment offerings remain and can help investors navigate through the next market cycle with diverse sources of return, more ways to protect their capital, and differentiating strategies.
Head of Investment Products
MONTHLY MARKET ROUNDUP
WEEKLY MARKET PULSE
CHART OF THE MONTH
Since the 2008 financial crisis, equity and bond markets were negatively correlated when risk assets declined. However, a paradigm shift occurred in 2022 as higher rates, inflation, and quantitative tightening dampened liquidity. No longer able to depend on the automatic diversification from bonds, many investors are increasingly relying on hedge funds for uncorrelated returns.
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The material herein has been provided to you for informational purposes only by Institutional Capital Network, Inc. (“iCapital”). This material is the property of iCapital and may not be shared without the written permission of iCapital. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission of iCapital.
This material is provided for informational purposes only and is not intended as and may not be relied on in any manner as legal, tax or investment advice, a recommendation, or as an offer to sell, a solicitation of an offer to purchase or a recommendation of any interest in any fund or security. You should consult your personal accounting, tax and legal advisors to understand the implications of any investment specific to your personal financial situation. This material does not intend to address the financial objectives, situation or specific needs of any individual investor. Alternative investments are complex, speculative investment vehicles and are not suitable for all investors.
This material may contain forward looking statements. Forward looking statements include, but are not limited to assumptions, estimates, projections, opinions, models and hypothetical performance analysis. Forward looking statements involve significant elements of subjective judgments and analyses and changes thereto and/or consideration of different or additional factors could have a material impact on the results indicated. Due to various risks and uncertainties, actual results may vary materially from the results contained herein. The information contained herein is an opinion only, as of the date indicated, and should not be relied upon as the only important information available. Any prediction, projection or forecast on the economy, stock market, bond market or the economic trends of the markets is not necessarily indicative of the future or likely performance. The information contained herein is subject to change, incomplete, and may include information and/or data obtained from third party sources that iCapital believes, but does not guarantee, to be accurate. iCapital considers this third-party data reliable, but does not represent that it is accurate, complete and/or up to date, and it should not be relied on as such. iCapital makes no representation as to the accuracy or completeness of this material and accepts no liability for losses arising from the use of the material presented. No representation or warranty is made by iCapital as to the reasonableness or completeness of such forward looking statements or to any other financial information contained herein.
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including the U.S., where such distribution, publication, availability or use would be contrary to law or regulation or which would subject iCapital to any registration or licensing requirement within such jurisdiction not currently met within such jurisdiction. Persons into whose possession this document may come are required to inform themselves of, and to observe, such restrictions. It is the responsibility of the recipient of this document to comply with all relevant laws and regulations.
Products offered by iCapital are typically private placements that are sold only to qualified clients of iCapital through transactions that are exempt from registration under the Securities Act of 1933 pursuant to Rule 506(b) of Regulation D promulgated thereunder (“Private Placements”). An investment in any product issued pursuant to a Private Placement, such as the funds described, entails a high degree of risk and no assurance can be given that any alternative investment fund’s investment objectives will be achieved or that investors will receive a return of their capital. Further, such investments are not subject to the same levels of regulatory scrutiny as publicly listed investments, and as a result, investors may have access to significantly less information than they can access with respect to publicly listed investments. Prospective investors should also note that investments in the products described involve long lock-ups and do not provide investors with liquidity.
Alternative investment products and services may be offered through iCapital Securities, LLC. Structured investment products and services may be offered through Axio Financial LLC and/or SIMON Markets LLC. iCapital Securities LLC, Axio Financial LLC, and SIMON Markets LLC are each a registered broker/dealer, member FINRA and SIPC, and an affiliate of Institutional Capital Network, Inc. (“iCapital”). Annuities and insurance services provided by SIMON Annuities and Insurance Services LLC, an affiliate of iCapital. iCapital Advisors, LLC, a subsidiary of iCapital, is an investment adviser registered with the U.S. Securities and Exchange Commission (“SEC”). Outcome Driven Strategies, LLC and Cornerstone Advisory, each an investment adviser registered with the SEC, provide investment advisory services for the structured investment separately managed accounts described herein. Outcome Driven Strategies, LLC is jointly owned by Axio Advisors LLC and Cornerstone Advisory (not affiliated with iCapital). Alaia Capital LLC, an investment adviser registered with the U.S. Securities and Exchange Commission (“SEC”), acts as a portfolio consultant to m+ funds and is an affiliate of iCapital. These registrations and memberships in no way imply that the SEC, FINRA or SIPC have endorsed the entities, products or services discussed herein. iCapital and iCapital Network are registered trademarks of Institutional Capital Network, Inc. Additional information is available upon request.
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