Why Invest In Alternative Investments?

Excellent diversification tool thanks to a low correlation
As a whole, alternative investments have a low correlation with traditional asset classes. Arbitrage strategies try to lock in profit while neutralising the market risk and Global Macro, Long/Short Equities and CTA can hedge their portfolios against market collapses by using derivatives or by selling securities short. In the most extreme cases, pure short sellers, investors will even make a profit when markets fall. These unique features turn alternative investments into very good risk diversification tools and can significantly reduce a portfolio's overall volatility.

Favourable risk/return ratio
The low volatility achieved by a portfolio of hedge funds and the good performance achieved on average form a very favourable risk/return profile, as a portfolio of hedge funds can yield returns similar to equities with the level of volatility found in bonds.

Hedge funds attract the best managers
The great freedom enjoyed by fund managers and the performance fee system traditionally found in hedge funds attract the most dynamic and successful managers.

How To Invest?

Caveat emptor! ("Buyers beware!")
Most hedge funds are based in offshore jurisdictions and are therefore mostly unregulated. The use of derivatives and high leverage can accentuate market movements and it is important to note that hedge funds often have strict redemption rules that limit liquidity. Some funds impose 2 or 3 years minimum lock-up period.

For sophisticated investors only
Most hedge funds require relatively high minimum investments. The initial amount often has to be USD 1 million rules. The complex strategies used by hedge fund managers can make them difficult to understand to non specialists.

3A: Your key to access the hedge fund universe
The risks involved in hedge funds and the difficulty to access them make it important to team up with the right partner. As leading experts in Switzerland in this demanding asset class, 3A is the logical choice to enter the world of alternative investments. Please contact 3A to learn more about 3A's expertise.

Do you want to know how 3A SA can help you in alternative investments? Please do not hesitate to contact us.

3A SA: The Swiss expert in alternative investing
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