Today, getting a decent return on your investments can be a real challenge. However, private assets can enhance the risk-adjusted expected return of an investment portfolio.
- The current low interest rate environment has made investors look for returns outside traditional equity and fixed income markets, especially in asset classes which offer a liquidity premium. As a result, the demand for private assets is growing. For institutional investors and high-net-worth individuals, it is still possible to find investments that provide attractive returns, says Tero Tuominen, Managing Director and Head of Alternative Funds at Evli Fund Management Company.
Evli’s alternative investment fund offering consist of real estate, private equity and infrastructure funds. Evli offers three property funds investing exclusively in Finland, as a local touch is key in this asset class:
Evli's Private equity funds are:
- Private assets have become an essential part of a well-diversified investment portfolio, as expected returns can be increased without increasing risk. This is an advantage that is already utilised by most institutional investors and an increasing share of HNWI investors, Tuominen says.
As private assets are not actively traded, they are only suitable for investors who have a long investment horizon and who can accept illiquidity.
Private assets are in many senses a demanding and hands-on asset class, where targets are typically hard to access and individual investments are large. This is why funds are a good way for many to get exposure to this asset class.
- With private assets, it’s not about just investing, but about owning. Typically, we acquire substantial ownership or the entire asset, and we must be actively involved in managing it. It is also a very exciting market. For instance, Evli Growth Partners has a very interesting investment in TIER Mobility that is one of Europe’s leading e-scooter companies, Tuominen explains.
Evli's Alternative Fund portfolio management consists of a team of 17 investment professionals with a total AUM and the end of 2019 of EUR 855 million.
– Maybe a background of endurance raises a person with a hard working culture, Tuominen contemplates.