Quick Take | Responding to the Growth in Liquid Alternatives

StopwatchAt the NICSA Strategic Leadership Forum in February, in a breakout session on “Liquid Alternatives: Time for Investor Education and Risk Awareness,” representatives from DST Systems and session sponsor State Street talked about the growth of liquid alternatives funds. Here’s the quick take from that session:

What makes liquid alternatives different?

  • Use of hedge fund ‘like’ strategies and portfolios
  • Sub-advisors are often alternative investment managers
  • Often have higher risk factors, such as the use of leverage and shorting
  • Require longer build times to market
  • Receive increased regulatory and compliance focus
  • Need retail investor education to understand potential risks

The package has been attractive to investors.

US Retail Alternatives Growth

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