We argued for years that even mass market clients needed at least a slice of liquid alternative investments to properly balance a "standard" portfolio. Last year proved it and made alt-friendly managers like Apollo look like prophets.
Apollo was always prescient in finding ways to bring private equity and other "challenging" asset classes to the retail investor. It took the simultaneous crash of stocks and bonds to prove their argument.
Something needed to be added to the vanilla mix of 60% stocks and 40% bonds, especially in a world of negative real yields. When that became clear to everyone last year, Apollo put out a white paper you can read HERE.
But being early isn't the most important thing. The important thing is making sure crisis teaches us to do things differently.
I don't think many of us want to get caught in another situation where both ends of a theoretically uncorrelated portfolio crash at once. If nothing else, the clients won't allow it. They're well aware that the "balanced" solution buckled last year.
When it buckles once, it can buckle again. They want better. And unlike previous generations of investors who needed substantial assets to merit even a taste of anything beyond stock and bond funds, they have access to liquid vehicles.
You can give them that access. I know investors like my in-laws have already jumped from long-established advisory relationships because 60/40 failed them and the advisor of record couldn't suggest anything better than "hang in there."
Apollo isn't alone in being right, but they'll be at INSITE and are worth investigating for a slice of your book.
