Weathering a downturn in the economy requires doing things a little bit differently. When what used to work no longer gets the same results, it’s time to look for alternatives.
Alternative investments are garnering a lot of attention lately. Whether it be art collection, cryptocurrencies or venture capital, family offices investing in alternative asset classes are searching for diversifiers and exploring new ways to preserve their investment portfolios.
This article defines what alternative investments mean for family offices. It discusses the benefits and risks, and suggests an appropriate approach for family offices venturing into alternative investments.
What are alternative investments for family offices
Alternative investments are investments that fall outside of traditionally traded stocks, bonds and cash. As they are not usually correlated with the general financial markets, investors often use them to hedge or preserve capital during market downturns.
In addition, alternative investments provide access to a much broader range of assets. Examples include private equity, hedge funds, real estate investments, commodities, venture capital, and art or collectables.
