Alternative investments gaining ground

According to the financial market, more financial advisors indicated that alternative assets will “become as important or more important than traditional investments in the next five years.”

Additionally, baby boomer investors are scrambling to make up for retirement funds lost in traditional markets, and are demanding new solutions.

The aggressive central banks reaction to the financial crisis and public debt explosion could result in a less benign inflation environment. In our meeting we acknowledged that inflation at around 3% - 5% cannot be ruled out for the developed markets in the medium term. Negative real rates on core government bonds are the new normality. For this reason the primary objective of long-term investors should be protection of purchasing power. So, it is not surprising that some investors are moving towards real assets.

Some of these real assets, such as property investments, are already part of investor’s asset allocation, others, like infrastructure investments, are gaining ground in the current environment. Read more