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Alternative Investor focus on real assets expected in 2009

 January 2009 - Investor focus on real assets is expected to grow in 2009 as demand for greater transparency will enhance the asset class.  A real asset is a tangible asset that has an intrinsic value and includes: land, art, property, equipment, raw materials, infrastructure and intellectual property.    

Investors are expected to explore the role that real assets can play in their portfolios through opportunistic, tactical or strategic investment. While many investment professionals agree that real assets provide diversification benefits, there has been surprisingly little research into the appropriate allocation of real assets in an investment portfolio.  

Many of the gains reaped by HNWIs in recent years have been a result strategic diversification of their holdings by moving into a broader range of asset classes.  Inspite of recent market turmoil, most analysts expect this trend to continue in 2009 although tempered by a demand for lower volatility as investors become more risk averse.  

While clients will shy away from products of great complexity, there will be growing interest real assets such as art, wine and collectibles. Equally important, investors are likely to emphasize diversification within their alternative investment portfolios, among various established and new types of alternative strategies.