By Daniel S. Kern, Chief Investment Officer, TFC Financial Management

This week I’m headed to Lisbon, Portugal to take part in the Horasis Global Meeting which convenes top delegates from around the world to discuss globalization and how best to draw upon its benefits. This year, I’ll be part of a panel discussion on alternative investments with some leading financial thinkers. I’m eager to hear their thoughts as there is a lot going on globally in the alternative investments space. As public markets become more corelated, alternative investments are important to individuals and institutional investors as they offer diversification and return enhancement possibilities.

For TFC clients we care about staying abreast of emerging alternative investments including opportunities to invest in hedge funds, private equity, insurance linked securities, and private real estate. We also are knowledgeable about esoteric and interesting return opportunities such as litigation financing and music royalties.

One trend I’m hoping the panel gets to address is the economic impact of shrinking defined benefit plans. Companies today are replacing the pension plans of our parents’ generation with 401ks. This trend closes off a big source of funding for hedge funds and private equity shops who have traditionally made their living selling to private and public pension funds. The question looms: How will hedge funds and private equity shops replace those assets? The good news is that investments that ten years ago were unavailable are now open to TFC and our clients. 

At Horasis the conversation is always viewed through the lens of major geopolitical themes and dislocations. I expect to come back with an update about Brexit and additional insight into recent economic developments in Asia after seeing several current and former political leaders. Check back here for my post-Horasis wrap up.