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Dr. Mark Sinclair
Dr. Mark Sinclair, Mentor Education

Advisers increasing their allocation to alternatives

28 September 2013
Andrew Fairweather Managing Director at Winston.

According to Winston managing director Andrew Fairweather, financial advisers have received the majority of the backlash from clients when hedge fund instruments imploded during the GFC.

Fairweather has commented “advisers have been noticeably increasing their allocation to alternatives recently after bearing the brunt of client anger when hedge fund instruments froze or failed over the GFC but he also confirmed that they are, “slowly returning in a search for diversification.

Winston Capital Partners has indicated that they will be distributing the Select Alternatives Portfolio from Select Asset Management to Australian advisers with Neuberger Berman on board as investment consultant to Select.

Fairweather has highlighted the strength of the US alternatives market which sits at around $700 billion (6 per cent) compared to the Australian (if you use BT Wrap as a proxy) alternatives account for 1 per cent and according to the Winston owner this leaves, “plenty of room for growth.” Fairweather has also suggested that, “there was a place in a mainstream portfolio for alternative investment but a “new way forward was required.”

Select chief investment officer Dominic McCormick has suggested that it is increasingly difficult and challenging to, “continuously create vehicles that make sense for retail investors” but conceded that “alternatives are necessary for a genuinely diversified portfolio.” The CEO was also quick to reiterate that, ”investors are becoming more engaged and now demand a higher level of liquidity and transparency, with lower fees.”

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