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Advisers seek ‘Alternatives’ edge from third party funds

Advisers seek ‘Alternatives’ edge from third party funds

Advisers seek ‘Alternatives’ edge from third party funds

• The most popular way to access ‘alternatives’ exposure for most advisers (56%) is through third-party multi-asset funds
• Two in five (42%) advisers believe anything beyond stocks/bonds can be defined as an alternative investment

New dedicated adviser research by Seneca Investment Managers, the boutique Multi-Asset Value investment specialists, found that third party funds are the first port of call for advisers when seeking exposure to alternative assets on behalf of their clients.

When asked how they plan on getting exposure to alternative assets on behalf of clients, the most popular route for advisers (56%) is through third-party multi-asset funds. Indirect investment follows (e.g. indexes, listed funds like private equity, REITs and property trusts), with nearly half (49%) of advisers open to this route to market. Just 1% of advisers didn’t plan on accessing alternative investments at all.

The research also suggests advisers are becoming increasingly open-minded about what constitutes an alternative asset. As many as two in five (41%) advisers consider most assets with returns that is negatively correlated to the stock market as potentially representing alternative investments. This broad-brush view becomes further established when we discover that even ‘lesser researched’ assets could be considered ‘alternative’ by two in five (43%) advisers, while two-fifths (42%) feel anything outside of traditional capital market investments like stocks and bonds would be considered an alternative asset.

Advisers’ openness to what constitutes an alternative asset bodes well for clients where there are various new solutions in the market of alternative investments. Though this
is often blocked by the risks around the inaccessibility (43%) and liquidity (34%) associated with holding them.

Steve Hunter, Head of Business Development, Seneca Investment Managers, said:
“It’s a big, bad world out there, and alternative investments can take on many definitions depending on who you are talking to. Inaccessibility has long been an issue for investors so it’s good to see more products in the market, and to see these carry greater appeal to the investor. However, alternative assets can pose unnecessary risks to clients return objectives if investments are not well understood.”

Media enquiries to:
Newgate Communications
Emily Church / Henry Adefope / Alasdair Coleman
+44 (0) 20 3757 6865

1. Research commissioned by Seneca Investment Managers was conducted by Censuswide amongst 202 advisers between 18.09.2019 – 25.09.2019

About Seneca Investment Managers
Seneca Investment Managers, based in Liverpool with a national coverage, operate a Multi-Asset value approach to investing. Investors in our funds range from institutions such as pension funds and charities, through to financial advisers, discretionary private client managers and personal investors.
Seneca Investment Managers has a heritage stretching back to 2002 and prides itself on the ability to identify and invest where there is both quality and unrealised value.
Past performance should not be seen as an indication of future performance. The value of investments and any income may fluctuate, and investors may not get back the full amount invested.
Seneca Investment Managers Limited (0151 906 2450) is authorised and regulated by the Financial Conduct Authority and is registered in England No. 4325961 with its registered office at 10th Floor, Horton House, Exchange Flags, Liverpool, L2 3YL. FP19 361.

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