Alternative investments are a new frontier for retail investors, filled with opportunity and risk compared to traditional equity and fixed income allocations. Learn about North Capital's Private Markets Separately Managed Account (SMA) Strategy.
ALTS FRONTIER
Alternative investments are predominately private market investments or semi-liquid public funds that invest in private securities and loans. Private market securities are not registered and are generally available only to institutions and accredited investors, typically with with high minimum investment amounts. Alternatives are illiquid and do not trade on organized exchanges, so North Capital does not make recommendations about them to retail investors. However, we believe it is possible to capture a significant portion of the returns available from alternatives and private markets through a simplified approach that is accessible to all investors, while offering high liquidity and transparency. By offering a managed portfolio of publicly-traded sponsors, managers and service providers in the alternatives space, we serve advisory clients who wish to capitalize on the expansion of private markets while maintaining liquid and transparent portfolios.
North Capital Private Markets SMA
INVESTMENT OBJECTIVE
The North Capital Private Markets separately managed account strategy seeks to capitalize on the growth and expansion of private markets by investing in the public equity securities of 20 to 30 of the most important companies that manage private funds and other alternative assets or that otherwise have a significant business serving the private markets sector. The strategy also may allocate to public securities that invest in underlying private markets, provided the investments are listed and freely tradable. This a discretionary investment strategy that does not track or seek to track any private markets index.
BACKGROUND
Private markets include the markets for debt and equity securities or loans issued by non-public companies and partnerships, together with interests in private or public funds that invest in private market securities. Private market assets also include investments in real assets such as infrastructure and real estate, investments in crypto assets such as Bitcoin, and investments in other alternative investment strategies, such as venture capital, private equity, private debt, hedge funds and commodity trading advisors.
Private markets have been expanding rapidly and today represent a significant part of the U.S. capital markets. According to Ernst and Young, “Private market fundamentals remain strong, with several positive tailwinds, including increased capital allocation from institutional funds, and companies opting to stay private longer.” Blackrock estimates “…private markets growing from $13 trillion today to more than $20 trillion by 2030.”
Private markets are a segment of the capital markets in which securities are generally not registered (except for registered funds that invest in private market securities) and are therefore non-public or private. Transactions typically take place directly between issuers and investors, or between sellers and buyers in secondary markets, without the use of a public exchange. Because many transactions in private markets are between institutional investors, retail investors are not able to invest or participate in such private market opportunities.
Alternatives and Private Markets
PORTFOLIO MANAGERS:
James P Dowd, CFA, CPA
Michael T Weaver Jr, CFA
Minh Le, CFA
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FEES:
0.65% per annum
0.35% per annum (RIAs)
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AVAILABILITY:
Schwab