Alternative Investment Features, Methods, and Structures

Alternative Investments are grouped together not because they have similar features but instead because they have characteristics distinct from traditional investments. Investing in alternatives can be done through fund investing, co-investing, or direct investing. Alternative investments typically offer investors greater diversification and higher expected returns than traditional investments but often involve longer-term, illiquid investments in less efficient markets. Investing in alternatives requires special- ized knowledge. Alternative investments typically rely on more complex and richer compensation structures than traditional investments in order to better align manager and investor incentives over longer periods.