Nicsa’s Asset & Wealth Management Summit featured a deep dive into the growth of alternative investments. The Summit keynote featured expert insights on the integration of alts with traditional asset classes, distribution strategies, advisor education, and expanding access to non-traditional investments, aiming to support growth in alternative asset adoption.
Speakers:
Doug Krupa, Managing Director and Head of Global Wealth Solutions in the Americas, KKR
David Unanue, Director, Wealth Management Investment Resources, Capital Group
Key Points:
- Evolving Market Demand
- There is a growing demand among institutional and high-net-worth investors for diversified portfolios that incorporate private and public market assets. These hybrid solutions are gaining traction as they provide access to traditionally exclusive asset classes like private equity, credit, and real estate.
- Broadening Access
- Access to alternative investments is a significant challenge, with a small percentage of advisors and investors actively utilizing these options. Although many firms recommend a 15-25% allocation to alternatives, only a fraction of investors follow this guidance due to limited accessibility and understanding.
- Historically, private market investments required high capital commitments, long holding periods, and complex processes, making them less accessible. Efforts are underway to simplify these requirements, with firms focusing on evergreen fund structures that allow investors to stay continuously invested without the need for frequent re-commitments.
- Broadening and simplifying access is a central goal and aligns with industry shifts toward lowering minimum investment requirements.
- Education and Advisor Support
- Education is a core component for increasing advisor comfort with alternatives. Firms like Capital Group and KKR are investing in educating advisors on products with semi-liquid structures, including their benefits and costs. The panel discussed how advisor training programs and informational sessions can increase awareness and knowledge, making advisors more likely to introduce these assets to clients.
- The Role of Private Credit and Fixed Income
- Private credit, alongside fixed income, can offer diversification and income generation within client portfolios. Collaboration between public and private investment firms helps create innovative solutions that meet different investment objectives.
- The panelists noted how the evolving investment landscape, which includes new strategies in private and public credit, could provide a balanced approach to risk and reward, enhancing overall portfolio performance.
Conclusion: The session underscored the importance of enhancing access, simplifying processes, and prioritizing education to make alternative investments more mainstream. By working on these aspects, industry leaders believe they can bridge the gap between traditional and alternative assets, creating more resilient and diversified portfolios for a broader investor base. This approach aligns with the goal of delivering improved investment outcomes and making alternative assets a viable component of standard wealth management.
Nicsa remains at the forefront of fostering innovation and collaboration among professionals in the industry. We invite you to join us at our next event, where you'll have the opportunity to engage with industry leaders, explore cutting-edge technologies, and gain valuable knowledge to drive your business forward. Don’t miss the chance to be part of our dynamic community shaping the future of asset and wealth management: SLF2025
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