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 pubic 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. The opportunity could be a private equity fund that accesses expertise in a specific sector, such as renewable energy, or a private debt offering. It could even be something unique to you, which we can help you analyze, such as investing in a startup by someone you know and trust.

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

Gino Perrina, LNWM’s Chief Investment Officer, has more than a decade of experience analyzing a wide variety of alternative investments and assessing and managing the risk involved. He and the rest of the Investment Strategy and Research team at LNWM research many promising opportunities and reject most. They are not beholden to any one private equity firm or hedge fund. And they are keenly aware of the downside of alternatives and private market placements – higher fees, lower transparency, potentially higher taxes and lack of liquidity. They 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, while company listings on public US stock exchanges have dropped by about 50%. LNWM Senior Investment Analyst Josh Hile and LNWM Client Advisor Brian Whitaker 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.