A Fidelity panel of alternative investment professionals share their knowledge on opportunities and risks in nontraditional asset classes within today's changing macroeconomic backdrop.
Download the full paper
Rising interest rates, higher inflation, global economic uncertainty, and heightened
market volatility have transformed the investment landscape, creating potential
opportunities for advisors and institutional investors considering alternative strategies.
But alternative markets encompass many complexities, requiring specialized
investment knowledge to navigate them successfully. A recent panel of Fidelity
alternative investment professionals shared their insight about current conditions
across private equity, private real estate, direct lending, and liquid alternatives.
Private equity continues to provide a key source of capital for business owners
and portfolio managers, while headwinds in the macro landscape have created
potential opportunities with lower valuations.
In private real estate, the shift in interest rates has led to materially lower activity,
but with significant capital on the sidelines due to dislocation or volatility, active
investors can take advantage of correcting values.
Given growth of direct lending and the unique potential benefits of equity-like
returns, floating rates, and lower volatility, the risk-return profile for the asset class
Some liquid alternative strategies are well-positioned to benefit from higher
interest rates, and with low correlation to equities and bonds, may offer an
attractive option for investors.
*Diversification does not ensure a profit or guarantee against a loss
Alternative investment strategies may not be suitable for all investors and are not intended to be a complete investment program. Alternatives may be relatively illiquid; it may be difficult to determine the current market value of the asset; and there may be limited historical risk and return data. Costs of purchase and sale may be relatively high. A high degree of investment analysis may be required before investing.
Past performance is no guarantee of future results.
Information provided in, and presentation of, this document are for informational and educational purposes only and are not a recommendation to take any particular action, or any action at all, nor an offer or solicitation to buy or sell any securities or services presented. It is not investment advice. Fidelity does not provide legal or tax advice.
Before making any investment decisions, you should consult with your own professional advisers and take into account all of the particular facts and circumstances of your individual situation. Fidelity and its representatives may have a conflict of interest in the products or services mentioned in these materials because they have a financial interest in them, and receive compensation, directly or indirectly, in connection with the management, distribution, and /or servicing of these products or services, including Fidelity funds, certain third-party funds and products, and certain investment services.
Registered investment products (including mutual funds and ETFs) and collective investment trusts managed by Fidelity Management Trust Company (FMTC) are offered by Fidelity Distributors Company LLC (FDC LLC), a registered broker-dealer. Fidelity Institutional Asset Management (FIAM) investment management services and products are managed by the Fidelity Investments companies of FIAM LLC, a U.S. registered investment adviser, or Fidelity Institutional Asset Management Trust Company, a New Hampshire trust company. FIAM products and services may be presented by FDC LLC, a non-exclusive financial intermediary affiliated with FIAM and compensated for such services.
Before investing have your client consider the funds', variable investment products', exchange-traded products', or 529 Plans' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or a summary prospectus, if available, or offering statement containing this information. Have your client read it carefully.
The use of the term "advisor(s)" throughout this site shall refer to both investment advisors and broker dealers as a collective term.