What are Alternative Investments?

With more investors looking outside traditional stocks and bonds, alternative investments are gaining popularity as an excellent option to grow returns, generate income, and provide diversification. The alternative investment landscape offers a broad range of opportunities—as long as you know where to look and how to tap into them to meet your goals.

Alternative Investments Include:

Private Credit
Hedge Funds
Real Estate
Commodities
Private Equity
Art
And many more

Traditional vs. Alternative Investments

TRADITIONAL INVESTMENTS

High liquidity profile

Traded on public markets

Highly regulated

Highly volatile
Returns linked to movements
in global markets

Smaller investment amount

High correlation with markets

ALTERNATIVE INVESTMENTS

Potential illiquidity

Asset in public and private markets

Lower regulation or unregulated

Less volatile

Returns less linked or sometimes
not linked to global markets

Mainly for wealthy, accredited investors

Lower correlation with markets

Alternative investments are:

PRIVATELY
HELD

These assets are not publicly traded on various markets and platforms. By trading in the private market, much of the volatility and beta effect can be avoided.

TOP-TIER
INVESTORS

Most are held by institutional investors such as pension and endowment funds, or sophisticated high net worth and family office investors.

SPECIALTY
INVESTMENTS

They include private equity, hedge funds, managed futures, real estate, commodities, derivatives, private credit, and more.

How Alternative Investments Serve
Your Clients’ Portfolios

Alternative investments as part of a well-crafted overall portfolio can help an investor seeking to enhance or change their overall risk/return profile. During times of public market risk or volatility, alternative investments can offer a non-correlated way to protect capital while staying actively invested.

Modern portfolio theory is continuing to evolve with many leading analysts making the case that alternatives should be alongside traditional stock and bond positions in a well-balanced portfolio. Through careful selection and a diversified approach into alternatives, investors can enhance their optimization for return or reduced risk.

See A Diversified Portfolio in Action Here

INVEST LIKE AN INSTITUTION

Smart institutions know that alternative investments enhance returns and offer more expansive diversification for their portfolios.

UTIMCO ENDOWMENT PORTFOLIO AS OF 2022

Alternative Investment: 64.2%

A. Hedge Funds: 16.7%

B. Private Equity: 27.8%

C. Natural Resources: 4.7%

D. Infrastructure: 3.1%

E. Real Estate: 7.9%

F. Strategic Partnerships: 4.0%

Traditional investments: 35.8%

G. Public Equity: 26.4%

H. Global Fixed Income: 4.3%

I. Treasuries:1.3%

J. Cash: 1.7%

K. Inflation Linked Bonds: 2.1%

Alternatives Applied In Modern Portfolio Theory

ENHANCE RETURN, SAME RISK

LOWER RISK, SAME RETURN

OPTIMIZING FOR RETURN

An investor who is satisfied with their current risk and volatility profile from their traditional stock and bond portfolio can target alternative investments which can increase their overall portfolio return without adding significantly to risk.

OPTIMIZING FOR RISK

For investors seeking a lower risk profile and reduced exposure to potentially volatile markets, alternative investments can be used to reduce public market risk while maintaining an acceptable return or yield profile.

The Power of Diversification

Portfolio diversification is perhaps the best method to protect against potential losses and preserve capital.
We approach diversification through three levels: Asset Class, Manager Selection, and Transaction Exposure.

ASSET CLASS

Each is carefully selected with a view on how correlated they may be to other Asset Classes in the portfolio. The goal is to have different and dissimilar risk and return profiles such that the majority of the portfolio is performing well at all times.

MANAGER SELECTION

Within each Asset Class, we seek different management teams who demonstrate a best-in-class ability to operate in their space while also exhibiting differences in scope, scale, geography, or style from other managers alongside them.

TRANSACTION EXPOSURE

Through each investment with a manager, we seek access to a diversified portfolio of transactions. Examples include exposure to a large portfolio of loans, a significant number of properties, or other varied assets.

Through diversification at all levels, we believe the risk of exceptional loss or draw down can be mitigated while delivering consistent, predictable returns.

DIVERSIFICATION AT THE
OVERALL PORTFOLIO LEVEL

DIVERSIFICATION
WITHIN EACH SEGMENT

Real Estate
Bridge Lending

DIVERSIFICATION OF LOANS,
TRANSACTIONS, ETC.
WITHIN EACH INVESTMENT

Why Fairway Asset Management

PROVEN ALTERNATIVE INVESTMENT STRATEGIES

Over a decade of consistent, proven success helping RIAs and High Net Worth investors navigate the world of Alternatives.

KNOWLEDGEABLE
INVESTMENT SOURCING

We review hundreds of investments, sourcing leads through conferences, referrals, and industry contacts to select the top investments within various segments.

DILIGENCE

We conduct in-depth initial and ongoing due diligence with every investment. Our broad experience across the alternatives landscape is key to successfully vetting investments and actively managing our portfolios.

TRANSPARENCY &
INDEPENDENT VERIFICATION

Our philosophy is “trust, but verify” and transparency is central to everything we do. We are Verivest Verified and are independently audited by Spicer Jeffries, LLP and other CPA firms at every level.

EXECUTION

Our responsive management team is ready to meet your and your clients’ needs, including client education, events, individual meetings, and more.

REPORTING AND MONITORING

Get monthly and quarterly updates, monthly account statements, an annual audit for each portfolio, and an annual K-1 Tax Statement.

Partner with Us

Contact us to schedule a meeting
Learn how we can help you and your clients navigate the world of alternative investments
Become a Fairway Management partner with access to all of our alternative investment prodcuts, experience, and services

Meet Your Clients’ Goals
with Alternative Investments

STEP OUTSIDE STOCK MARKET VOLATILITY AND PUBLIC MARKET RISK.

Help your clients meet their goals with professional service and more confidence.

Keep Your Eye on the Green with Alternative Investments