How to ensure alts exposure adds value to your portfolio

investmentnews.com:

As private market assets have increased in prominence in recent years, advisors are also increasing asset allocation in alternatives to clients’ portfolios.

As several advisors told InvestmentNews, clients have been asking more and more for alternatives to be in their portfolios, which means advisors have to consider private markets as part of their portfolio.

“Clients are just not satisfied with the standard 60/40 stocks and bond portfolio. Companies are staying private much longer and we recognize that as well,” said Aaron White, chief growth officer and wealth advisor at Adero Partners.

Over the last several years, Adero has built out a “defined approach” to delivering alternative investments consistently and predictably, White says, because they have established relationships with ongoing funds.

“They’re open every year and a half so we can build out what that ramp looks like as you’re first introducing private equity, private credit or real estate to a portfolio,” he added. “As you build that allocation through capital calls, how does that look three years from now? Five years from now? How do we manage the cash flow around our clients’ lifestyle?

“We’ve really spent a lot of time building out the alternatives platform for our clients and have gotten really good reception and really good results for them,” White said.

A report released from KKR earlier this year found that family offices expect 52 percent of their portfolios to be invested in alts, up from 42 percent in 2022. Those surveyed said they were most focused on investing in private credit, infrastructure, and private equity.

Marti Marache, founder and CEO of Harbor Asset Private Wealth, said she specializes in alts because it allows her to keep exposure to