Alternative Investments

We take a look at how alternative investments offer a diverse range of opportunities beyond the traditional, with a particular focus on venture capital

- Shannon Manuel

TRADITIONAL INVESTMENTS

SUCH AS STOCKS, BONDS, AND MUTUAL FUNDS HAVE LONG BEEN THE CORNERSTONE OF INVESTMENT STRATEGIES. However, as investors constantly seek opportunities to diversify their portfolios and mitigate risk, alternative investments are gaining traction among savvy investors.

Alternative investments refer to financial assets that do not fall into the conventional categories of stocks, bonds or cash. They encompass a wide range of assets, including real estate, private equity, hedge funds, commodities, collectibles and cryptocurrencies. These investments often involve complex strategies and require specialised knowledge and a higher level of expertise to manage effectively, due to higher risks and higher potential returns compared to traditional assets.

There are several factors driving the growing interest in alternative investments. Prolonged low interest rates have reduced the attractiveness of traditional fixed-income investments, pushing investors seeking higher returns towards alternatives. Increased volatility in global markets has prompted investors to diversify their portfolios with assets that can provide stability and are less correlated with traditional markets. And innovations in technology have made alternative investments more accessible.

Venture Capital

One of the most well-known types of alternative investment is venture capital (VC). It's a subset of private equity that focuses on investing in early-stage companies with high growth potential. These start-ups are often in the technology, biotech and clean energy sectors, where innovation drives rapid growth.

VC offers numerous benefits, to both investors and the companies they support.