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Positive and Uncorrelated Returns in a Wide Range of Markets

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December 11th, 2020




Carmine Meoli

Higher returns and lower risks thanks to alternative investments The demand for alternative investments is rising. According to an October 2020 analysis by the hedge fund news platform “Hedgeweek”, the COVID-19 crisis is “sharpening the appetite among European investors for alternative investments such as real estate, private equity, Venture Capital, hedge strategies, precious metals, infrastructure debt, and currencies.” 63 percent of investors in alternatives do not anticipate changes to their investment plans in response to COVID-19, the 2020 Preqin Global Alternatives Report shows. 29 percent of the respondents to the Preqin survey expect to invest more in alternative investments in the long term than they would have prior to the pandemic. Among the drivers of the shift towards alternative investments are investors seeking higher returns and lower risks at the same time. Furthermore, the McKinsey Global Private Markets Review 2020 states that private market AUM grew by 10 percent, reaching $6.5 trillion which is another all-time high for private markets. New Stableton Crisis Alpha Strategy offers protection in crises One of the benefits which can be achieved with alternative investments is avoiding stock market volatility, a statistical measure of the variation of asset prices over a certain period of time. In a 2019 blog post on volatility, we wrote that “even professional allocators have started to turn a blind eye towards the fact that, the longer this party lasts, the harsher the reality might sink in once the music stops playing.” Rising capital markets have spoiled investors and current risks are ignored. The risk of a market crash is increasing due to low-interest rates and high market valuations. Our Crisis Alpha Strategy is a trading- and volatility-based, liquid multi-manager strategy that capitalizes on swift market moves. Therefore, the new Stableton strategy can pool resources and offer more security than individual investments. The highlights of thew Crisis Alpha Strategy include: High liquidity: Most of the underlying strategies are trading extremely liquid instruments. These strategies can therefore immediately react to changing market regimes and profit from swift market moves. Flexibility: As mentioned above, the primary focus is to profit from significant market moves. However, most of the selected strategies can adjust their trading to calmer market environments while staying alert to volatility. Diversification: The Stableton Crisis Alpha Strategy allows for easy diversification across multiple managers, strategies, and sources of trading profits with a low minimum investment of 5,000 USD. Professional management: The strategy is of institutional quality. We are partnering with top-tier providers of trading-oriented strategies. Pre-screened and validated investment strategies decrease risks for financial intermediaries Private markets are becoming larger, deeper, and more complex. Identifying the best investment opportunities requires working with an experienced alternatives partner. At Stableton, we offer industry-leading expertise and bankable solutions to source and identify alternative investment opportunities directly and across an ever-increasing network of deal-sourcing partners. Strategies are pre-screened and validated. The recently launched Stableton Crisis Alpha Strategy offers attractive, non-correlated returns across all market conditions. It has been designed to offer protection in times of crisis, such as the COVID-19 pandemic. Through an investment into the Crisis Alpha Strategy, financial intermediaries gain exposure to an actively managed portfolio consisting of alternative investment strategies. It is an efficient and diversified way of investing with investment opportunities starting at 5,000 USD. By enabling low investment minimums, the diversification essential for alternative investments is much easier to accomplish.

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