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Alternative Investment Solutions
Although traditional investment strategies certainly have their place within proper financial planning, alternative investment services provide you with more nuanced and modern approaches for promoting financial growth. Whether through hedge fund accounts or real estate investments, our alternative investments team is here to guide you through the process.
What are alternative investments?
The term alternative investments is used as a label to encompass any form of financial asset that does not fit into a traditional investment category, such as stocks, bonds, and currency.
Instead, alternative investments can typically refer to any of the following:
- Hedge funds
- Private equity (shares in a non-stock exchange company)
- Private credit
- Venture capital
- Real estate
- Infrastructure
- Arts and antiques
- Various other commodities
Needless to say, integrating one or more alternative investment services into your portfolio is an excellent way to diversify your financial assets and reduce any potential risks.
Such investments are designed to complement traditional assets, potentially offering increased and diversified returns not mirrored by the trends of conventional markets. As a result, you’ll have greater flexibility to accommodate the needs of your wealth planning solutions, helping you to better achieve your financial ambitions going forward.
Our alternative investment options
Hedge funds
Hedge funds offer a sophisticated investment approach, utilising a broad set of strategies to explore opportunities beyond the reach of conventional investment managers. These funds are designed to enhance portfolio diversification and cushion against market volatility. Their agile strategies empower managers to swiftly adjust to shifting market dynamics.
Private equity
Private equity funds are investment vehicles that pool capital to invest in private companies outside the public stock markets. These funds aim to deliver unique, market-independent returns by harnessing opportunities in specialized sectors worldwide, on both equity and credit fronts.
Private Credit
Private Credit involves non-bank financial entities extending loans to small and medium-sized enterprises (SMEs) that are typically unrated. Historically, banks were the primary lenders to this segment. However, post-Global Financial Crisis regulatory changes have led to a significant reduction in bank lending, paving the way for alternative lenders to step in.
Real estate
Our focus within the Real Estate sector is on private (non-listed) real estate ownership, encompassing both commercial (including offices, retail spaces, logistics, and hospitality) and residential properties.
Infrastructure
Infrastructure investment targets essential, long-term physical assets used by the general population. This category includes communication infrastructure, like mobile towers and satellites, utilities, including water, waste management, and renewables, alongside energy and transportation infrastructure, such as airports, ports, and toll roads.
Open ended Solutions
Our expanding array of open-ended private market solutions offers investors improved flexibility when accessing their investments without the traditional capital call process. This innovative approach aims to seamlessly blend the benefits of private market investments with the liquidity often associated with public markets.
Why should you choose our alternative investment solutions?
Through decades of hard work and dedicated research and innovation, our alternative investments team are rightly known for their thorough understanding of alternative assets and the marketplace they operate in.
Driven by a commitment to prioritise our clients' evolving needs, our range of alternative investment solutions and services have been continuously adapted to meet the needs of an evolving modern world, ensuring each solution is perfectly suited to our clients' unique needs and requirements, as well providing several distinct characteristics:
- Diversification benefits: By providing a low correlation with traditional assets, alternative investments can enhance your portfolio’s diversification for greater returns overall
- Liquidity variance: Alternative investments present higher levels of variance in their liquidity opportunities. Closed-ended funds require a commitment for the entire investment term with limited exit options, whereas open-ended funds may allow withdrawals on a more regular schedule
- Adaptable fee structures: Far more flexible than traditional investment opportunities, many alternative investments can come with higher structural fees. However, these fees are a reflection of both the quality and output such investments can provide. The intricate nature of their operations means that a certain level of due diligence is both required and expected in their operation, due to the complexities involved. Unlike passive investments, alternative investment services demand an active management style in order to make returns, and thus don’t always adhere to benchmarks in the same way as traditional assets. But the potential returns offered by such investment types can more than makeup for their higher operating costs
- Exclusivity: In the past, the alternative investment class was typically reserved for use by institutional investors. However, now high and ultra-high-net-worth clients can invest in this area depending on their investment knowledge and risk profile
- Reduced transparency: By their nature, alternative investments typically avoid revealing the competitive advantage they have over traditional investments, which may result in infrequent or appraisal-based asset valuations
- Variable returns: As each alternative investment is tied to the performance and skill of their managers, returns can vary significantly which is why we engage top-tier managers for better outcomes. Please note, however, that past performance is not indicative of future performance Selecting alternative investment services with HSBC
Whether you’re new to the world of alternative investments, or you simply want insight into which investment type you should tailor your financial planning to in the future, all of our clients have access to the following benefits:
- Selective management: Thanks to their expert training, our alternative investments team excels in navigating through complex solutions, market insights, and differing projections to offer bespoke advice and high-conviction investment solutions for our clients
- Knowledge sharing: At HSBC, we’re committed to educating our clients about the nuances of their alternative investments. We aim to enhance your understanding of their benefits, behaviours, and the various products available
- Long-term perspectives: Thanks to our level of expertise, we’re able to provide a long-term perspective when investing in alternative strategies, providing clients with guidance on how they can diversify and enhance their portfolios
- Decades of expertise: Our long-established history in the alternative investment space, and our advantageous global reach, have earned us a prestigious reputation, making us a preferred partner for clients and fund managers alike. We facilitate access to new alternative investment opportunities, offering unparalleled services, resources, and connections for our clients
Our unique HSBC benefits
- Infrastructure
Our clients can benefit from using our institutional platform, enabling direct access to compelling investments, lower minimum investment requirements, and institutional share classes.
- Leverage
Our broad investment capabilities include providing clients with access to unique hedge fund and private equity investment opportunities for greater leverage on their returns.
- HSBC network
Positioned as a global leader in asset investment, our extensive investment network significantly benefits our clients when it comes to investment opportunities and returns.
- Execution
With access to our world-class global trading platform, staffed by expert trading teams, our clients can be sure that they're getting the most out of their chosen investments.