Explore research and market commentary from Altera, including our take on the state of private markets, the changing landscape of alternatives access, and the evolution of impact investing.
Similar to private equity (PE), venture capital (VC) investments are both focused on taking ownership stakes in private companies. The difference between the two lies in where the target companies fall in their lifecycle. Simply put, venture investments are made at an earlier stage of a company’s development.
This new operating model continues to evolve as impact investing grows in investor acceptance. One important development for charitably minded investors is the rise of the Donor Advised Fund, or DAF.
This report will not attempt to address each potential type of investment in the Alternatives category. Instead, we will focus on sectors that have gained wide acceptance among institutional investors and have sufficiently long histories over which to evaluate their characteristics.
Private equity funds are appropriate for long-term investors who seek returns in the form of capital appreciation, as opposed to income. There are many approaches to acquiring private companies, but all PE funds are illiquid investments that promise higher returns in exchange for patient investor capital.
In today’s environment of low interest rates and uncertain economics, investors are challenged to find return-enhancing investment vehicles that fit their risk parameters. Simultaneously, they are seeking asset types that have a low correlation of returns versus their existing allocations.
