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Investments

Alternative Investments Series, Part 2: How to Evaluate Alts for Clients

May 8, 2025

Key Considerations When Employing Alternatives

Investments should be assembled understanding how they can work together in a portfolio


Alternatives Investment Rationale

Alternative investments can alter the return, diversification and volatility profile of an investment portfolio

There is no guarantee that benefits will be achieved. Alternative investments include risks such as illiquidity, long time horizons, reduced transparency, and significant loss of principal.


Alternative Strategies Role in Portfolio Construction

Alternatives can diversify the types of portfolio risks and gain exposure to different areas of the market.

There is no guarantee that benefits will be achieved. Past performance does not guarantee future results. Alternative investments include risks such as illiquidity, long time horizons, reduced transparency, and significant loss of principal.
Sources: Lipper, NCREIF, Cambridge Associates, HFRI, J.P. Morgan Asset Management. Global equities (large cap) and global bonds dispersion are based on the world large stock and world bond categories, respectively. *Manager dispersion is based on: 4Q 2010 – 4Q 2020 annual returns for global equities, global bonds, and U.S. core real estate. Hedge fund returns are based on annual returns from 4Q 2010 – Nov. 2020. U.S. non-core real estate, global private equity and U.S. venture capital are represented by the 10-year horizon internal rate of return (IRR) ending 3Q 2020. Private Credit returns based on Preqin Pro Private Debt Median Net IRR and Quartile Boundaries by Vintage Year (2008-2018). Data is based on availability as of Feb 28, 2021. 


Considerations for Manager Evaluation are Critical

Potentially evaluate managers/strategies based on four criteria: people, performance, strategy / process and structure (e.g. fund vs. direct  investment) with criteria reviewed where applicable


Deeper Level of Diversification

Source: John Hancock Investment Management


Private Equity Spectrum: Capture Themes and Industry Expertise

Business Stage: There is a wide variety of private equity strategies that invest in different stages of a business’ life cycle to capture innovation.

Differentiation: Aside from understanding at which point in a life cycle a private equity fund invests, one must understand the fund’s points of differentiation. The Investment Office focuses on funds that have proven an ability to differentiate themselves in multiple facets.

Source: Robertson Stephens, Charlesbank


There is no guarantee that benefits will be achieved. Alternative investments are speculative and involve substantial risks including significant loss of principal, high illiquidity, long time horizons, uneven growth rates, high fees, onerous tax consequences, limited transparency and regulation, and are only available to qualified investors.

Investment advisory services offered through Robertson Stephens Wealth Management, LLC (“Robertson Stephens”), an SEC-registered investment advisor. Registration does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the Commission. This material is for general informational purposes only and should not be construed as investment, tax or legal advice. It does not constitute a recommendation or offer to buy or sell any security, has not been tailored to the needs of any specific investor, and should not provide the basis for any investment decision. Please consult with your Advisor prior to making any investment decisions. The information contained herein was compiled from sources believed to be reliable, but Robertson Stephens does not guarantee its accuracy or completeness. Information, views and opinions are current as of the date of this presentation, are based on the information available at the time, and are subject to change based on market and other conditions. Robertson Stephens assumes no duty to update this information. Unless otherwise noted, any individual opinions presented are those of the author and not necessarily those of Robertson Stephens. Performance may be compared to several indices. Indices are unmanaged and reflect the reinvestment of all income or dividends but do not reflect the deduction of any fees or expenses which would reduce returns. A complete list of Robertson Stephens Investment Office recommendations over the previous 12 months is available upon request. Past performance does not guarantee future results. Forward-looking performance objectives, targets or estimates are not guaranteed and may not be achieved. Investing entails risks, including possible loss of principal. Alternative investments are speculative and involve substantial risks including significant loss of principal, high illiquidity, long time horizons, uneven growth rates, high fees, onerous tax consequences, limited transparency and limited regulation. Alternative investments are not suitable for all investors and are only available to qualified investors. Please refer to the private placement memorandum for a complete listing and description of terms and risks. This material is an investment advisory publication intended for investment advisory clients and prospective clients only. Robertson Stephens only transacts business in states in which it is properly registered or is excluded or exempted from registration. A copy of Robertson Stephens’ current written disclosure brochure filed with the SEC which discusses, among other things, Robertson Stephens’ business practices, services and fees, is available through the SEC’s website at: www.adviserinfo.sec.gov. © 2025 Robertson Stephens Wealth Management, LLC. All rights reserved. Robertson Stephens is a registered trademark of Robertson Stephens Wealth Management, LLC in the United States and elsewhere.

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