The Kelly+Partners Post - Issue 5 - July 2024

In issue 5 of The Kelly+Partners Post, Louise Cordina offers her insights on leading The Cordina Group, a fourth-generation poultry empire. She shares valuable lessons on the importance of differentiation, innovation through adversity, effective family business management, strategic succession planning and more. We also provide practical tools and tips to enhance your well-being, productivity, and health while working from home, courtesy of our friends at EQ Minds. Additionally, we recap the highlights from the Australian Federal Budget, offer tips for investment portfolio diversification, and share timeless wisdom from the king of advertising, David Ogilvy, plus much more.

ISSUE 5

THE CASE FOR

ALTERNATIVES:

DIVERSIFYING

PORTFOLIO ASSET

ALLOCATION

The Case for Alternatives:

Diversifying Portfolio

Asset Allocation with

Kelly+Partners Alternative

Investments

In the realm of investment, the age-

old adage ‘Don’t put all your eggs in

one basket’ holds true, emphasising

the importance of diversification. While

traditional asset classes like stocks and

bonds have long been the cornerstone

of investment portfolios, the landscape

is evolving, with investors increasingly

turning to alternatives to enhance

diversification and potentially boost

returns. This paradigm shift is evident

not only in the portfolios of institutional

investors but also in the strategies of

individual investors seeking to fortify their

financial future.

In Wealth Management, Alternative

Investments refer to asset classes besides

the traditional equities, fixed income

and cash. These may include real estate,

private credit, private equity, hedge funds,

and other non-traditional assets. The

appeal of alternatives lies in their potential

to generate returns that are less correlated

with traditional markets, thus providing

diversification benefits and potentially

enhancing risk-adjusted returns. Despite

these benefits, it is often the case that most

individual or family groups have an under-

allocation to alternatives compared with

their institutional counterparts.

One notable segment where alternatives

have been extensively utilised with

remarkable success is in the investment

portfolios of large US university

endowments. These institutions, entrusted

with safeguarding substantial assets to

support their educational missions in

perpetuity, have long been at the forefront

of innovative investment strategies.

Their embrace of alternatives reflects a

sophisticated approach to asset allocation

aimed at achieving long-term growth

and stability.

Page 10

AVERAGE ALLOCATION TO ALTERNATIVES

Large gap

for individual

investors

Global Pension Assets, Study

2016, Willis Towers Watson:

National Association of College

and University Business Ofcers

2016 Study (Equal-weighted

Average); Money Management

Institute, ‘Disruption of

Alternative Investments through

Wirehouses,’ 2016.

INSTITUTIONS VS. INDIVIDUALS

Pensions

Endowments

Individual Investors

27%

29%

5%

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