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Alternative investments distinguish themselves by applying non-traditional management techniques. The common denominator of alternative investment strategies is the search for performance, namely:
- Stable (and therefore without significant volatility),
- "Absolute" (rather than returns relative to a benchmark and without significant correlation to the trend of the main markets),
- Regularly above money market results.
This objective makes alternative investments the ideal complement for traditional portfolio allocations. The various strategies focus primarily on relative value and intend to take advantage of market inefficiencies or imperfections. This is done by taking upside positions ("long positions") on certain assets while adopting downside positions ("short positions") on other assets, based on technical or statistical analyses.
Management strategies with many advantages.
Alternative investment strategies have developed into a whole new asset class besides equity and bonds, which is now part of the investment range available for diversified portfolio management.
However, a direct investment in hedge funds entails certain risks and constraints:
- Regulatory barriers: hedge funds have historically been located in countries where the protection of investors is quite low.
- Lack of transparancy in management processes: most of the time, it is very difficult for an investor to evaluate the level of risk taken by the manager (leverage level, portfolio concentration, use of derivative instruments, etc)
- Low liquidity: most hedge funds provide monthly or even quarterly liquidity, with notice periods and sometimes, initial lock-up
- Large offer: Difficulty to choose a quality hedge fund amongst the growing number of currently more than 8600 hedge funds
Since inception, Lyxor AM has catered to these concerns with a special approach offering investors a safe, transparent, and liquid access to the world of alternative investments. Launched in 1998, the Lyxor Managed Account Platform provides a secure and easy access to a range of investment solutions designed to satisfy investor needs. |
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