As 2012 lightens up, financial advisors have signaled they are ready to go the distance as far as alternative investment opportunities are concerned. Many are embracing the “go anywhere” approach in order to achieve portfolio goals. Approximately 33% of alternative investment advisors have predicted that the Multi-strategy and Managed Futures stratagems are likely to have the greatest potential over the next twelve months. This is in contrast to Market Neutral solutions or Long/Short interest providers who are expected to experience a drawdown in the coming year as advisors are counting on shifting their alternative investment categories and holdings. These are some of the December 2011 Cogent Research findings which were based upon a nationwide sample study of 1,643 retail investment advisors.
A Place for The Alternative Investment
As demand heightens for alternative investment opportunities, asset managers will have to employ specific channel and segment strategies while targeting alternative investment stakeholders. For instance, it is probable that providers dedicated to Managed Futures products will experience even a greater demand (more than 15% of Assets Under Management in alternative investments) with larger houses expecting 40% alternative investment AUM.
Considering the latest flows and trends in the industry, there is an increase of interest in alternative investments among financial advisors. However, unlike instances in traditional asset classes, these investors have resorted to using a wide spectrum of firms, as well as ETF, traditional mutual funds, hedge fund managers, and other alternative investment specialists to handle their needs. ”Even though we expected a wide range of providers, we were amazed to discover that close to 300 distinctive firms and asset managers were considered by alternative investment stakeholders”, said Antonio Ferreira, the co-author of the Cogent Research report. While brands such as BlackRock, PIMCO and Natixis were listed in their top alternative investment consideration group, up-and-coming providers such as Virtus, Hussman and Natixis are also being considered as potential options amongst AI sellers.
These results are an indication that financial advisors are carrying out a thorough due diligence in their hunt for the finest alternative investment solution in every single alternative investment approach. As a whole, these findings demonstrate that while huge alternative investment firms get consideration, small brand names are following very close behind in their quest for capturing not only Managed Futures and Multi-strategy flows, but also other major categories of alternative investment.
