Opportunities

What Is an Alternative Investment?

An alternative investment is a financial asset that does not fall into one of the conventional investment categories. Conventional categories include stocks, bonds, and GIC’s. Alternative investments include private capital (equity or debt), venture capital, hedge funds, managed futures, art and antiques, commodities, and derivatives contracts. Real estate is also often classified as an alternative investment. Alternative investments like private capital do not trade on volatile public markets and as a result, reduced liquidity creates more stability. 

Historically, alternative investments were only held by institutional investors or accredited, high-net-worth individuals due to the high risk nature of alternative investments. Private Capital investments have become more accessible to retail investors due to the newer eligible investor category created by provincial securities regulators. Private capital investments are sold to accredited and eligible investors through licensed Exempt Market Dealers like VCMI. 

Reference: https://www.osc.gov.on.ca/en/SecuritiesLaw_31-103.htm

The Opportunity

  • Private capital may have low correlation to volatile public markets and provides diversification into alternative asset classes
  • Private capital can provide stable risk adjusted returns and growth
  • Almost 40 per cent of Canadian pension plans are now invested in alternative investments because they are worried about volatility and risk-adjusted returns from stocks and because they are especially concerned about low interest rates (read more here)
  • J.P. Morgan Asset Management forecasted long-term returns from private equity to increase and returns from a traditional portfolio consisting of 60% U.S. stocks and 40% bonds to decrease (read more here)
  • VCMI is a boutique Exempt Market Dealer that offers high quality private capital investments
  • VCMI is licensed to sell private capital securities in Alberta, British Columbia, Nova Scotia and Ontario
  • The primary focus of VCMI is to help protect capital and create wealth
  • VCMI offers several opportunities in a variety of different asset classes for portfolio diversification

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