One of the key reasons that alternatives have become so popular is that the listed markets are shrinking – Dino Zuccollo of Westbrooke Alternative Asset Management.
SIMON BROWN: I’m chatting to Dino Zuccollo of Westbrooke Alternative Asset Management. Dino, I appreciate the time today. You and I have spoken on alternative assets many times over the years. I suppose the first question is what is an alternative asset? Is it really just something as simple as it’s not listed on a recognised exchange?
And then of course, private equity is one that we all know well as an alternative to the listed equity markets that we’ve probably all got exposure to.SIMON BROWN: One of the key things – and I’ve chatted with a number of folks over the years around this as well – is that globally markets are the traditional market. The listed market is shrinking, and that’s not just in terms of which would correlate to private equity. That’s even bonds, etc.
And so I’m pretty sure a lot of the listeners today are used to the traditional 60:40 portfolio which generally incorporates 60% equities, 40% bonds. The question being asked by many is whether that old paradigm doesn’t need to be re-looked at in order to incorporate an element of alternatives so as to get your properly diversified investment portfolio into the future.
SIMON BROWN: I take your point. So in fact, the 15% is still that growing amount, which leads to my next question. What are the largest classes of alternatives and the fastest growing? I think at the moment in the current market the fastest-growing alternative asset class is private debt, and that really is on the basis of the fact that we’re in a very high interest-rate environment at the moment. We’ve obviously had a successive series of increases in interest rates over almost two years.
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