"Alternative Investments" is a term used to describe investments other than stocks and bonds. While stocks and bonds provide the foundation of traditional investment portfolios, sophisticated investors are increasingly looking to alternative investments such as managed futures and hedge funds to provide diversification and the potential to enhance overall portfolio performance.
The potential benefits of alternative investments include:
- Portfolio diversification through innovative strategies
- Access to exclusive managers who are not generally available to the public
- Access to global markets
- Ability to profit in any economic environment
- Reduced portfolio volatility
- Capital appreciation over the long term
Managed Futures
Managed futures refers to professionally managed investments that take positions in currency, financial, energy, metals and agricultural markets by purchasing futures contracts in global futures markets. These investments can take either long or short positions in these markets based on expected profit potential.
Hedge Funds
Hedge fund investments, usually structured as private investment partnerships, encompass a wide variety of skill-based investment approaches. Although hedge funds primarily invest in debt and equity markets, they have broad flexibility in implementing an investment strategy, which may include short selling, the use of leverage and derivatives. Skilled management is the key to success in these highly complex and specialized investments.
Real Estate
Investments in real estate, whether land, office buildings, retail shopping centers, multifamily housing or industrial warehouse properties, have long histories as alternative asset components in institutional portfolios. To provide better investor access, proven real estate managers may sponsor publicly or privately offered real estate investment funds or trusts with lower levels of entry.
Morgan Keegan offers a number of these investments, including non-traded real estate investment trusts or REITs; real estate mutual funds and separately managed accounts of real estate securities providing opportunities to meet a wide range of clients’ needs and objectives in this area.
Private Equity
Privately negotiated equity investments in public as well as private companies can be integral to the success of many products and services. Such investments range from venture or startup capital to capital used to “buy out” a company, i.e. LBO financing. In private negotiations, better-than-market rates of return are typically sought to compensate for relative illiquidity.
A private equity fund of funds vehicle gives its manager the ability to allocate capital to more than one type of private equity investment and to more than one private equity fund manager. Because of its investment banking expertise, in addition to seeking such opportunities outside of the firm, Morgan Keegan may periodically sponsor this type of vehicle.
Exchange Funds
Exchange funds are private funds structured to provide investors, who own concentrated equity holdings at a low cost-basis, the opportunity to achieve diversification and defer tax liability by exchanging their stock shares for interests in a diversified portfolio. Morgan Keegan provides access to some of the most experienced exchange fund sponsors.
Morgan Keegan has the experience and resources to identify, evaluate and select successful alternative investment opportunities structured to meet a variety of investor needs. We invite you to talk with your Morgan Keegan financial advisor or to fill out our Contact form to learn more about the alternative investment opportunities available at Morgan Keegan.
Alternative investments (managed futures and hedge funds) are sold to qualified investors only. Alternative investments provide limited liquidity and contain risks. Such risks include, but are not limited to, the general risks of investing in securities and derivatives as well as the risks involved with the use of leverage and short sales. An investment in an alternative investment is speculative and should not constitute a complete investment program or portfolio. The information and opinions provided herein are not intended for distribution to, or use by, any specific person or entity in any jurisdiction or country where such distribution would be contrary to law or regulation, nor should it be considered a solicitation or offer by Morgan Keegan & Company, Inc. or any of its affiliates to purchase or sell any investment service, advice or product.
