Alternatives

What Is An Alternative Fund?

Alternative funds typically invest in a variety of strategies and asset classes to provide risk and return profiles that have lower correlations to traditional asset classes, such as stocks and bonds. These funds may be attractive for investors seeking to reduce volatility and improve returns in their portfolios.

Types Of Alternative Funds

There are a number of different types of alternative funds, each with their own characteristics and level of risk.

Real Assets

These funds typically invest in tangible assets that derive their value from their substance and physical properties. Real assets include real estate, public and private infrastructure, natural resources, precious metals, and commodities.

Real Estate

These funds typically invest in land plus anything permanently fixed to it, including buildings, through direct investment, partnerships, or real estate investment trusts (REITs). Property types include commercial and corporate facilities in addition to raw land, multifamily residential properties, and farm land.

Infrastructure

These funds typically invest in basic physical systems owned and operated by governmental entities and businesses. These projects can include transportation, communications, water and sewage, and electric systems that are vital to economic development and prosperity.

Hedge Strategies

Also referred to as alternative strategies, these investment strategies use both long and short positions in markets and securities as well as derivatives in an attempt to minimize market beta returns while seeking alpha and risk-adjusted returns. Some of the most common strategies are long and short equity, global macro, relative value, and credit.

Private Equity

Private equity funds typically invest in equity capital that is not quoted on a public exchange. Instead, the funds take direct ownership positions in private companies, which potentially may provide above-market returns and control of the investment, at the risk of reduced liquidity and diversification.

Private Debt

Private debt funds typically invest in non-listed debt issues, including bonds, notes, and loans issued by private companies. As with private equity, private debt positions may potentially provide greater returns and control than what is available in the public markets, but with reduced liquidity.

Our Approach

We offer investors broad alternative investment capabilities spanning hedge strategies and real assets through a multi-boutique structure. We are focused on seeking new, uncorrelated active return sources by following disciplined, risk-controlled investment processes.

Innovative Thinking from Specialized ExpertiseA Rigorous Approach to Alternatives InvestingSound Risk Management
Each portfolio team within our alternatives group is comprised of specialists who are leaders in their disciplines, backed by the strength of Franklin Templeton’s global operating platform. We believe that our research-driven global perspective and a focus on active risk management can further enhance the potential portfolio benefits of alternative investments. Our teams’ practices are complemented by the firm’s centralized risk management framework, providing improved risk transparency. This helps us pursue the desired return profiles in the most efficient manner.

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