WA MAGAZINE JanFeb PDF A - Flipbook - Page 7
How the Pros Pick Private Equity
According to Crystal Capital Partners, these are the criteria that
matter when selecting a PE manager. “Alignment” refers to coinvestment or manager cash in the strategy, “skin in the game.”
BEYOND 60/40
64%
Track Record
56%
Investment Focus
49%
Reputation
42%
Fees
29%
Alignment
NOTE: Percentages sum higher than 100% because
participants were allowed to pick multiple options.
MASS MARKET TOO
Betterment Adds
Donor-Advised Funds
T
he rich aren’t the only ones eager to start giving it away
while they’re still alive. Betterment has teamed up with
charitable donation platform Daffy to help app investors
assign securities to their favorite causes as well.
The goal is not so much going around estate
taxes as maximizing the impact of charitable
giving here and now. Account holders have their
choice of 1.5 million orgs. The system picks
the best lots and tracks the deductions.
And advisors working with Betterment
get the tools they need to deepen what
could otherwise be a basic transactional
relationship. Numbers are impersonal.
Causes are not.
Betterment notes the ability to facilitate philanthropy is especially valuable
when investors get a windfall. Even in
that scenario, what’s critical is making
sure your clients know you’re open to
it now, while they’re alive and can feel
good about how you’re helping them
make the world a better place.
THEWEALTHADVISOR.COM
THADVISOR.COM
Modern Portfolio Makes
Room for Alts
T
he days when an advisor could offer a relatively alert
client a basket of stocks, bonds, and cash as something
cutting edge are officially over. Instead, an overwhelming
majority of your competitors and colleagues (92%) are already
working with once-exotic “alts.”
With that in mind, the only questions left revolve around how
much of the portfolio is in play and which assets in the sprawling
alternative investments category we’re talking about. CAIS and
Mercer talked to a lot of advisors and came up with answers.
The allocation piece is easy enough. We like round numbers.
Most (76%) of advisors have opened up at least 5% of the client
book to alts, and the decision to push that exposure beyond 10%
amounts to a coin flip.
But what assets are these? Most advisors are now comfortable with the private versions of familiar publicly traded investments, with private debt, private equity, and private real estate
racing for widest deployment.
However, classic natural resources plays, infrastructure, and
structured notes are rapidly leaping from institutional-only
environments to the investor mainstream as well. Allocations to
structured notes are particularly passionate: while relatively few
advisors are buying them for clients, most of the ones who are
doing it are making a lot of room in the portfolio.
We’ll be talking a lot more about this in the new year, but the
through line is clear. If you aren’t here yet, you’re behind. Time
to catch up.
How Much Advisors Allocate to Alts
8%
0%
26%
10%+
16%
1–4%
50%
5–9%
Source: CAIS/Mercer
JAN/FEB 2025 | 7
