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We believe almost all investors could benefit from adding alternatives to their portfolios.
Overview

Alternative investments include a diverse range of investment styles but each has a valuable role to play. This could be improving returns, providing an income, protecting against volatility or diversifying a portfolio.

What are alternatives?

An alternative investment is a financial asset that does not fall into one of the conventional investment categories like equities, bonds and cash.

There is a huge variety of alternative products, including hedge funds, private equity and real estate. Even in the hedge fund category there are numerous different investment styles, such as market neutral, directional or multi-strategy.

Many of these were once only available to larger investors and institutions but are now available to a wider audience.

Alternatives have gained popularity as a counterbalance to often volatile equity markets and as an alternative to bonds during periods of historically low yields. They may also be particularly attractive when investors feel uncertain about what lies ahead for markets.


Whilst they have many benefits, when compared with traditional equity or bond funds they can be more complex, less regulated and it may take longer to redeem your investment.

Benefits of investing in alternatives

Our alternative investment strategies have been carefully curated over time and are designed to deliver specific benefits for our clients, including:
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We are likely to see turbulent times in markets ahead, and the value alternatives can provide for clients – whether by helping to grow their assets or protect them against adverse events - is invaluable.

Sébastien Eisinger
Sébastien Eisinger Managing Partner Head of Investments

Why Pictet for Alternatives

We are one of Europe’s leading alternatives managers, with USD 45bn in AUM and a track record which stretches back to 19891.
 
Finding alternative investments means uncovering a diverse range of the best ideas and teams. For these to thrive at Pictet we allow them the freedom to manage investments as they see best, while providing our  support as Europe’s leading alternatives manager. We don’t impose excessive constraints or a ‘top-down view’ on how our teams invest. In doing so, we ensure that their diversity and independence remain their strength.

We ensure however that all of our investment teams are aligned with the focus on continuity, longevity and risk-control – or the avoidance of excessive risk-taking, that has served us - and our clients - well, during our 200+ year history.

What are the risks?

We believe that alternative investment strategies offer great potential for investors. There are risks however, and it’s therefore important to find an experienced investment manager.

Investments in fixed income may be subject to the default/credit risk of issuers, interest rate risk as bond prices move inversely to changes in interest rates, and liquidity risk. Investing in higher-yielding or non-investment grade bonds might mean the risk of the issuer defaulting on the capital repayment is higher.

These strategies could also invest in emerging markets, where investments can be higher risk and more volatile, or denominated in a foreign currency meaning a change in exchange rates could affect their value.

These strategies may use derivatives, or include the use of leverage, which could amplify losses in certain market conditions.

They may invest in Contingent Convertible ("CoCo”) investments, which may result in losses when regulatory or issuer-motivated triggering events cause a total loss of the investment or a conversion to equity.

These strategies may invest in Sukuk investments, which can lead to losses because of the lack of uniform regulatory standards and weak legal frameworks for settling disputes and defaults, among other risks.

Alternative investments may carry liquidity risk, such that markets with low volumes may result in difficulties valuing and/or trading some assets.

Investing in distressed securities frequently involves a reorganization/bankruptcy of the company issuing the securities. The results of such reorganization are highly uncertain. The uncertainty is linked to idiosyncratic factors affecting that issuing company. Portfolio Manager’s implication could be needed on restructuring negotiations. The law frame affecting reorganization/bankruptcy for that issuing company will have an impact on the financial profit or loss. Valuation of these securities is also highly uncertain.


These strategies may be exposed to counterparty risk, where losses occur when a counterparty does not honour its obligations related to contracts such as over-the-counter derivatives; or to operational risk – such as losses resulting from human errors, system failures, incorrect valuation and safekeeping of assets.

Alternative investment strategies may also carry sustainability risk, in that ESG-related risk events or conditions could cause a material negative impact on the value of the investment if they were to occur.

All forms of investment involve risk. The value of investments and the income derived from them is not guaranteed and it can fall as well as rise and you may not get back the original amount invested.

Ways to invest
Equity Market Neutral

Market neutral strategies aim to generate returns which are independent of market movements, and are purely based on the skill of the manager. We currently manage two strategies, one focused on Europe, our Agora strategy, and one Global - Aquila. Both seek to achieve high single-digit net returns over the market cycle with low correlation to equity markets.

Equity Directional

Each of our equity directional strategies aims to achieve long-term capital growth with strong capital protection in down markets. They are long / short strategies but unlike market neutral do not aim to reduce all market exposure. We manage four strategies focusing on: Europe (Corto Europe), Greater China (Mandarin), and two Global strategies – Atlas, and a higher risk/return version – Atlas Titan.
 
Global macro emerging markets fixed income

Our global macro emerging markets fixed income strategy Sirius seeks to be highly liquid and to invest in a wide range of emerging markets sovereign bonds, rates and FX instruments. The strategy has no directional bias or benchmark constraints and takes long/short positions through the use of derivatives.

Unconstrained global credit

Our unconstrained global credit strategy, Strategic Credit allocates across global credit markets and is designed to reduce downside risk, protect capital, and capture higher yields. The strategy also aims to achieve a low correlation to traditional asset classes.
 
Distressed and special situations

Our Distressed and Special Situations strategy follows an absolute return long/ short credit approach which focuses on financially stressed and distressed companies, predominantly in Europe. Whilst the strategy focuses on larger capital structures and more liquid securities, it is a less-liquid strategy for investors. This provides sufficient time and capital for it to generate strong net absolute returns across the cycle and low correlation to traditional asset classes.
 
We offer distinct global multi-strategy approaches to meet our clients’ needs. Our flagship investment solution is a multi-strategy fund of hedge funds which aims to achieve superior risk-adjusted returns with limited correlation to traditional asset classes.
 
Our Diversified Alpha which aims to build a diversified portfolio and achieve steady market neutral returns that are uncorrelated to traditional asset classes, with a conservative volatility profile. It is managed by an investment committee who allocate capital to ~10-20 strategies managed at Pictet. 
 
Our expertise spans a wide range of private equity investments including primary and secondary funds, as well as co-investments. We launched our first customised private equity portfolio in 1989 and started co-investing in 1992. Since then we have developed a wide network of global partners leading to the winning of numerous investments across private markets. We also have representatives on the advisory boards of several prominent private equity firms, leading to enhanced deal transparency and preferential access to opportunities.

We offer a diverse range of strategies including buyout, growth, and distressed debt.
 
We offer a range of direct and indirect real estate strategies covering prime, core, core plus opportunistic and value added.

Our core plus real estate strategy, Elevation Core Plus, offers access to a diversified portfolio of Western European residential and commercial assets, with potential for both consistent, inflation-protected income (or yield) as well as additional returns through selective improvements such as improving sustainability criteria. 
Funds

Please select a representative fund from the list below to find out more

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