Many market analysts project low or negative equity and bond returns across the next decade—but there are always alternatives.

Advisors and investors frequently lament the expensive fees, high minimums, illiquidity and difficulty in accessing alternatives, but innovative managers are stepping in to offer time-tested investments and strategies to a broader audience. “There are a lot of products now, even from larger managers, which are available to a wider audience than just qualified investors,” says Aaron Steinberg, director of hedge fund and alternative asset management sales at BNY Mellon Pershing. “They could be offered in liquid alternatives, ’40 Act funds, open-ended funds, closed-end funds, business development companies or interval funds.”

Though the pace of liquid alternative fund launches has cooled during the bull market, alternative strategies in private equity, real estate and private debt are increasingly available via pooled vehicles or on platforms from the likes of iCapital, Artivest and CAIS. More liquid, accessible or inexpensive alternative strategies are launching at a time when advisors are struggling to allocate client capital, says Mitch Rubin, co-CIO and managing partner at New York-based RiverPark Funds.

“There’s a lot on the minds of advisors,” says Rubin. “We’re at or near the end of some historic multi-decade bull market in bonds, interest rates are moving higher, whatever the advisor is doing in fixed income feels treacherous. Then there’s the question of what to do with equity market exposure after such a strong, long-term run. The dilemma doesn’t necessarily dictate itself to longing a bond or equity fund, but to adding an alternative. Institutions can go 10%, 15%, 20% into alternatives, but most advisors haven’t had the tools to do that.”

Rubin co-manages the $100 million RiverPark Long/Short Opportunity Fund (RLSIX), a strategy that has been offered since 2009 as a hedge fund, but was converted into a ’40 Act mutual fund in 2012. Like most alternative managers, Rubin uses a patient, long-term approach to investing, but through the open-ended structure also offers daily liquidity in his fund.

“There are projections of 0% to 4% growth globally, but there will still be a bunch of businesses growing secularly at 15% to 20% or more,” says Rubin. “There are also businesses who, in a strong economy, are struggling to grow or are shrinking. We expect those vectors to widen. With a long/short strategy, you can have both sides of the research expressed while also having a natural hedge to the market.”

RiverPark’s managers aim to compound at 7% to 15% annually through any kind of market. The strategy has offered five-year average annualized returns of 7.19%, according to Morningstar, but carries an average 3.17% expense ratio. RiverPark decided to go to the liquid alternative universe with its long-short strategy, but some managers are reticent to abandon the illiquidity premium, which can help boost a strategy’s returns.

Earlier this year, a partnership between New York-based Oppenheimer Funds and the Carlyle Group launched the OFI Carlyle Private Credit Fund, an interval fund to offer investors multi-strategy access to the private credit space.

“What we’ve found is that there’s a tremendous amount of interest in this type of investment, but the only way to access it traditionally has been through a limited partnership structure with less liquidity, higher minimums and higher fees,” says Ned Dane, head of the private client group at OppenheimerFunds. “To access this kind of product, even for a wealthier client, in the past you would have needed quite a large portfolio to create the broad diversification. Even for advisors serving wealthy families, this solution is interesting because of its flexibility.”

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