In this episode of the Wealth Management Invest podcast, WealthManagement.com's David Bodamer is joined by Tony Davidow, senior alternative investment strategist with the Franklin Templeton Institute. With over 35 years in the industry, Tony shares insights on the increasing accessibility of alternative strategies and the role of private credit, private equity and real estate in diversified portfolios. He emphasizes the importance of education for advisors in alternative investments, the need for operational efficiency and working with institutional quality managers to navigate this complex but rewarding investment space.
The tone focuses on:
- How range and tender offer funds have revolutionized access to alternative investments for a wider range of investors
- The importance of diversification in the 60/40 portfolio strategy and the need for alternative investments in today's market environment
- How they protect private equity, private credit and private real estate against market risks and provide enhanced portfolio diversification
- Why the institutional quality of asset managers is essential to ensure successful investments in alternative asset classes
- And more
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About our guest:
As an investment strategist for the Franklin Templeton Institute, Tony Davidow is responsible for developing and delivering the Franklin Templeton Institute's insights on the use of alternative investments through independent research, participation in industry conferences and webinars, and direct engagement with key partners and clients. Prior to his current role, Mr. Davidow held senior management roles with Morgan Stanley, Guggenheim and Schwab among other firms. Davidow began his career working for a New York-based Family Office and has worked directly with many high net worth institutions and families over the years. He is a frequent writer and speaker with deep expertise in the use of alternative investments, asset allocation and portfolio construction, as well as goal-based investing.
Mr. Davidow received the prestigious Investment and Wealth Institute of Wealth Wealth Management Impact Award in 2020 for his contribution to the wealth management industry; and was awarded the Stephen L. Kessler Writing Award in 2017, and the Honorable Mention Award in 2015.
Disclosure:
This material reflects the analysis and opinions of the speakers as of March 4, 2024 and may differ from the opinions of portfolio managers, investment teams or platforms at Franklin Templeton. It is intended to be of general interest only and should not be construed as individual investment advice or a recommendation or solicitation to buy, sell or hold any security or to adopt any investment strategy. It does not constitute legal or tax advice.
The views expressed are those of the speakers and the comments, opinions and analysis are provided as of the date of this podcast and are subject to change without notice. The information provided in this material is not intended as a complete analysis of any material fact with respect to any country, region, market, industry, security or strategy. Statements of fact are from sources believed to be reliable, but no representation or warranty is made as to their completeness or accuracy.
What are the risks?
All investments involve risks, including the potential loss of principal. The value of investments may go down and up, and investors may not get back the full amount invested.
Investments in many alternative investment strategies are complex and speculative, involve significant risk and should not be considered a complete investment program. Depending on the product invested, an investment in alternative strategies may provide only limited liquidity and is only suitable for persons who can afford to lose the entire amount of their investment. An investment strategy focused primarily on private companies presents certain challenges and involves increased risks compared to investments in public companies, such as dealing with the lack of information available on these companies as well as their general lack of liquidity. Diversification does not guarantee a profit or protect against a loss.
The risks of investing in real estate investments include, but are not limited to, fluctuations in rental occupancy rates and operating expenses, variations in rental schedules, which in turn may be adversely affected by local, state, national economic conditions or international. Such terms may be affected by the supply and demand for real estate, zoning laws, rent control laws, real estate taxes, availability and costs of financing and environmental laws. In addition, real estate investments are also affected by market disruptions caused by regional unrest, political unrest, sovereign debt crises and uninsured losses (generally from catastrophic events such as earthquakes, floods and wars). Investments in real estate-related securities, such as asset-backed securities or mortgages, are subject to prepayment and extension risks.
An investment in private securities (such as private equity or private credit) or vehicles investing in them should be viewed as illiquid and may require a long-term commitment with no assurance of return. The value and return of these investments will vary due to, among other things, changes in market interest rates, general economic conditions, economic conditions in particular industries, the state of the financial markets and the financial condition of the issuers of the investments. There can also be no assurance that companies will list their securities on a stock exchange, as such, the lack of an established and liquid secondary market for certain investments may have an adverse effect on the market value of these investments and the ability of an investor to dispose of them at a favorable time or price. Past performance does not guarantee future results.
Data from third party sources may have been used in the preparation of this material and Franklin Templeton (“FT”) has not independently verified, validated or audited such data. The FT accepts no responsibility for any loss arising from the use of this information and reliance on comments, opinions and analysis in the material is at the discretion of the user.