Key Takeaways
- • UBS Asset Management's Unified Global Alternatives (UGA) unit argues in a new paper, "Investing, reimagined: Rethinking the building blocks of a portfolio," that private markets portfolios can no longer rely on a passive buy-and-hold approach.
- • The paper frames the core investor question as "no longer whether to allocate, but how to manage these exposures actively and thoughtfully over time."
- • UBS positions multi-alternative solutions as the answer, bundling private equity, private credit, infrastructure, real estate and hedge funds into a single investable vehicle under unified governance and risk management.
- • The paper contends that illiquidity does not eliminate risk, and that longer capital lock-ups make deliberate, active allocation more important as market conditions evolve.
- • According to UBS, active management in private markets does not mean frequent trading.
Summary
UBS Asset Management's Unified Global Alternatives (UGA) unit has published a paper arguing that private markets portfolios can no longer rely on a passive buy-and-hold mindset. Titled "Investing, reimagined: Rethinking the building blocks of a portfolio," the paper states that for investors the question "is no longer whether to allocate, but how to manage these exposures actively and thoughtfully over time." UBS presents multi-alternative solutions as its answer to that challenge.
Multi-alternative solutions combine several alternative asset classes within a single investable vehicle, typically private equity, private credit, infrastructure, real estate and hedge funds. According to UBS, bringing these strategies together under unified governance and risk management, with active management applied on top, provides investors with a broad range of return drivers. The structure also offers integrated portfolio construction, diversification across strategies and vintages, and streamlined oversight.
The paper treats the asset classes as complements rather than substitutes. Private equity and venture capital provide access to fast-growing private companies, while private credit contributes income. Real assets offer stable cash flows with potential inflation protection. Hedge funds and absolute return strategies are described as aiming to perform across market environments and potentially offering downside protection during periods of stress.
The central argument is that illiquidity does not make risk disappear. Citing structural uncertainty, higher volatility and shifting business models, UBS writes that "longer capital lock-ups make it even more important to allocate actively and deliberately as market conditions evolve." The paper clarifies that active management in private markets is not about frequent trading.
Multi-alternative solutions combine several alternative asset classes within a single investable vehicle, typically private equity, private credit, infrastructure, real estate and hedge funds. According to UBS, bringing these strategies together under unified governance and risk management, with active management applied on top, provides investors with a broad range of return drivers. The structure also offers integrated portfolio construction, diversification across strategies and vintages, and streamlined oversight.
The paper treats the asset classes as complements rather than substitutes. Private equity and venture capital provide access to fast-growing private companies, while private credit contributes income. Real assets offer stable cash flows with potential inflation protection. Hedge funds and absolute return strategies are described as aiming to perform across market environments and potentially offering downside protection during periods of stress.
The central argument is that illiquidity does not make risk disappear. Citing structural uncertainty, higher volatility and shifting business models, UBS writes that "longer capital lock-ups make it even more important to allocate actively and deliberately as market conditions evolve." The paper clarifies that active management in private markets is not about frequent trading.
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