Consulting Services

Alternative Investments

Alternative Investments play an increasing role in portfolio construction. The use of private equity, hedge funds, real estate, and other non-traditional asset classes help many clients achieve return and diversification goals while conforming to portfolio constraints. ACG offers a dedicated staff that can provide education, analysis, manager selection, and monitoring services in the area of Alternative Investments.

Our approach to integrating Alternative Investments into a portfolio takes into account the following considerations:

• Understand Client Objectives, Preferences and Constraints - All too often alternative investors are thrown into a fixed basket of investment strategies, regardless of their significant differences with regard to risk and varying constraints. This approach is not acceptable with regard to traditional assets, yet somehow tolerated with non-traditional assets. Asset Consulting Group takes considerable steps to design an alternative fund portfolio around our client's constraints and tolerance for risk in order to meet the objectives necessary for success.
• Integration With Other Assets - Most alternative investment strategies are implemented without regard to the existing assets or unique holdings of investors. For example, many endowments hold large, concentrated stock positions donated by philanthropists which are not considered when constructing the investment portfolio. We feel that alternative portfolios must be integrated with all existing holdings to maximize diversification.
• Maximize Portfolio Diversification - Asset Consulting Group is a strong proponent of diversification; however, there is a fine line between adequate diversification and dilution. Risk controls must be in place to minimize volatility and risk within the portfolio but it must be prudent and well thought out, allowing the portfolio the opportunity to add real value over the investor's time horizon.
• Avoid the Losers - When performing research on alternative managers, the objective is to avoid the losers and those with suspect approaches. This way, we can feel more comfortable about making potential long run allocations to managers.
• Flexibility - While ACG performs extensive research and analysis with regard to managers and invests a significant amount of time, it is important to not become married to any one manager or strategy. We believe this requires not only careful monitoring but also complete objectivity.