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RiverPark Structural Alpha Fund's Justin Frankel

Expert Analysis and Commentary

Where Can Liquid Alternatives Fit in a Portfolio?

Justin Frankel Nov 08, 2014

What They Are

While the entrenched establishment of old Wall Street has a long history of favoring institutions over individuals, and the ultra-high net worth over the mass affluent, Liquid Alts represent an area in which the average investor is making significant inroads in terms of access to top quality investment ideas. Growth in liquid alternatives is expected to surpass that of traditional alternative strategies. Most of this growth is expected to come from smaller investors, who have become increasingly more sophisticated consumers of financial products. In addition, recent experience has taught investors the importance of cushioning portfolios against downside risks in order to improve risk-adjusted returns.

The rise of liquid alternatives doesn’t just represent a democratization of the alternative investing landscape, but an evolution in how investors can gain access to strategies that they could never invest in before. Beyond the reduced barrier to entry in the form of low minimum investments, investors who choose liquid alternatives over traditional alternatives get the added benefits of better reporting, increased transparency, and more liquidity.

Be sure to also check out the Specialized Funds page.

Using Liquid Alts in Your Portfolio

See also our list of 10 Mutual Funds for Hard to Reach Places.

The current investment environment has been great, but strong equity returns, low interest rates, and low volatility is not sustainable indefinitely. To achieve sustainable and repeatable positive returns, the 60% stock, 40% bond asset allocation is no longer sufficient or necessary. Endowments and other institutions have long used alternatives to diversify their portfolios, and the barriers that once made it hard for individual investors to replicate what these institutions were doing have fallen. Liquid Alternatives allow investors to address their need for both risk management and diversification.

The Bottom Line

About RiverPark Structural Alpha Fund

The RiverPark family of funds consists of seven funds across a variety of equity and fixed income offerings, with a combined $3.6 billion in assets under management. The RiverPark Structural Alpha Fund is a Market Neutral strategy , and is one of three liquid alternative strategies offered by the firm.

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