Alternative and Private Market Investments

Expand Your Opportunity Set

Are you making the most of new investment opportunities beyond the traditional markets? As your wealth manager, we are constantly seeking to expand your opportunity set by targeting investments in alternative assets and the private markets. Our goal: atypical sources of return to reduce your overall portfolio risk while attaining targeted results.

Hedge funds and other alternative investments trade in the public markets to take advantage of pricing inefficiencies and trends. The focus and the strategies vary widely, resulting in different levels of correlation with the returns in traditional markets.

By contrast, private market investments are not publicly traded. You may already have substantial private market investments through ownership of a business, investment real estate or other assets. However, those exposures are usually not diversified and carry idiosyncratic risk.

Our goal is to assess and suggest only the alternative and private market investments we are convinced will add value to your portfolio in context of everything else you own.

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What Is Right for You

We are not in the business of pushing alternative investments. In addition to offering a true benefit to your portfolio, all non-traditional investments we suggest to you must align with your wealth plan, your finances and your goals. For this reason, we explore with you each of the following topics and more:

Diversification. Perhaps you own a business or have a sizable real estate portfolio. If so, you might already have most of your assets in the private markets and need to reassess and perhaps rebalance before committing more.

Liquidity.  How long can you afford to tie up capital? Often, a longer holding period provides a higher return, assuming the investment performs as expected.

Taxes. Non-traditional investments are taxed differently and often require the filing of a Schedule K-1 with the IRS. We can advise you on what tax reporting will be required and when, including taxes on stock issued to you at a startup, such as Qualified Small Business Stock.

Impact. We can present to you options for direct investment in private equity and/or private debt funds that align more closely with your values, such as ventures in renewable energy, affordable housing or neighborhood revitalization.

Family circumstances. What happens to ownership of your private market investment if you get married or divorced during the time that your money is tied up? It is important to know (and prepare for) the rules of community property and other factors.

Your estate. There are many trust and estate strategies you can use to specify what happens to your assets, including private market investments, while increasing tax efficiency and privacy.

Deep Due Diligence + Expertise

The Investment Strategy & Research team at LNWM has decades of experience analyzing a wide variety of alternative investments and assessing and managing the risk involved. We research many promising opportunities and reject most. We are not beholden to any one private equity firm or hedge fund. And we are keenly aware of the downside of alternatives and private market placements – higher fees, lower transparency, potentially higher taxes and lack of liquidity. We propose investments only when they are convinced the benefits to your portfolio will outweigh the risks.

Private Market Investments: Atypical Sources of Return

During the past decade, private markets have soared in size and investment options. LNWM’s David Baker (Senior Director, Investment Strategy & Research) and Brian Whitaker (Senior Director, Client Services) team up to explain where we see opportunity in private market investments, and how we help our clients consider private investments in context of their needs and goals.