CONTRIBUTORS
Jake Williams
Global Co-Head of Alternatives
Wealth Management Product
Arthur Thomson
Global Alternatives Product Strategy Specialist
The drive to make private markets more accessible for the wealth channel is a big focus for the asset management industry globally. Private markets are seen as a way to deliver better investment outcomes across a variety of client types within wealth, whether within the UK’s defined contribution market, the French unit-linked market, high-net-worth individuals or wealth investors. As legislation and regulation evolves to support the adoption of these asset classes, determining the best vehicle to enable investors access to these products while ensuring risk is managed effectively is a topic of significant focus.
In this paper, we explore the fund structures gaining the most attention from investors outside the US. Reserved Alternative Investment Fund (RAIF), Part II Undertaking for Collective Investment (Part II UCI) , European Long-Term Investment Fund (ELTIF) and Segregated Portfolio Company (SPC) – considering each structure and its suitability.
WHAT ARE THE RISKS?
All investments involve risks, including the possible loss of principal.
Investments in alternative investment strategies are complex and speculative investments, entail significant risk and should not be considered a complete investment program. Depending on the product invested in, an investment in alternative investments may provide for only limited liquidity and is suitable only for persons who can afford to lose the entire amount of their investment. An investment strategy focused primarily on privately held companies presents certain challenges and involves incremental risks as opposed to investments in public companies, such as dealing with the lack of available information about these companies as well as their general lack of liquidity.
An investment strategy focused primarily on privately held assets presents certain challenges and involves incremental risks as opposed to investments in public companies, such as dealing with the lack of available information about these companies. Additionally, an investment in private assets or vehicles which invest in them, should be viewed as illiquid and may require a long-term commitment with no certainty of return. There also can be no assurance that companies will list their securities on a securities exchange, as such, the lack of an established, liquid secondary market for some investments may have an adverse effect on the market value of those investments and on an investor’s ability to dispose of them at a favorable time or price.