Current Strategies, Trends in Alts: Q&A with CAIS’ Neil Blundell
Amid economic volatility and fluctuating market conditions, investors are increasingly inclined to consider alternative assets in their allocation strategies. Most investors construct their portfolios by distributing their investments among conventional assets, including equities, fixed-income instruments, and liquid funds. While they can provide both expansion and a measure of diversification, some investors seek diversity that transcends these conventional asset classes.
Neil Blundell, head of investments at CAIS, a platform that connects independent financial advisors with alternative asset managers, told Connect Money that private credit is a much-discussed alternative asset investment strategy by wealth managers with their clients followed by private equity. He also noted the need for a streamlined experience for both the advisor and client and where alternative assets are headed.
CM: In terms of both interest and comprehension, where do alternative assets stand when CAIS engages in discussions with wealth managers?
NB: Advisors appear to recognize the value of allocating to alternatives – according to a 2023 CAIS-Mercer survey of financial advisors, 72% of advisors were already allocating 6% or more to alternatives, with 85% of advisors whose clients are now allocated to alternatives expecting to increase allocations by 2025.
CM: What strategies within alternative assets are advisors emphasizing and why?
NB: Private credit is one of the most discussed asset classes among advisors, which was echoed by the 2023 CAIS and Mercer survey finding that 68% of advisors planned to increase allocations to private debt during 2024.
Private equity also continues to be a popular topic among advisors– the same CAIS and Mercer survey found that 68% of advisors planned to increase allocations during 2024.
CM: The market for alternative asset platforms appears to be crowded. What does CAIS bring to the table that does not exist already?
NB: CAIS provides a tailored investment experience for the independent wealth community through an integrated, end-to-end alternative investment solution.
CAIS’ proprietary technology helps the advisor community address operational efficiencies historically associated with investing in alternatives, allowing for a seamless pre-trade, trade and post-trade investment process.
Additionally, CAIS leads with learning with CAIS IQ, its proprietary education platform, as well as in-person events to help connect advisors directly with the leading managers in the alternative investment ecosystem.
CM: When it comes to investing in alternative assets, what do you believe is the most pressing need of the wealth management industry? What actions is CAIS taking to resolve this issue?
NB: As the wealth management industry continues to embrace alternatives, there is a pressing need for a streamlined, customizable and end-to-end investing experience to not only support advisors’ allocations to alternatives, but to help them scale their offerings.
CAIS recently launched CAIS Solutions, CAIS’ SaaS offering which is powered by CAIS’ technology and enables independent financial advisors to centralize their fund positions – no matter where they are sourced – through automated processes across the entire alternative investment lifecycle.
In under a year, CAIS is already registering mass adoption for the solution, with CAPTRUST, Baird and Focus Financial among the firms who have recently partnered with the platform.
CM: What is your message to wealth managers regarding the rationale and benefits of including alternative assets in their clients’ portfolios over the long term?
NB: A three-dimensional portfolio – composed of stocks, bonds and alternatives – can play an integral role in helping advisors meet the goals of their end-clients.
Advisors recognize the different merits and risks of each alternative asset class. The same survey found that most advisors acknowledge the role alternatives may play in bottom-line impact for their business, with 78% saying it helps clients meet goals and objectives and 59% suggesting that access to alternative investment opportunities is helping them win new clients.
CM: Looking ahead, what trends do you see for CAIS and alternative assets overall?
NB: CAIS will evolve and continue to provide the tech-stack and necessary infrastructure that allows advisors to learn about funds, compare them to others, process transactions, automate reporting and integrate with third-party service providers, ultimately powering the entire pre-trade, trade and post-trade investment cycle.
Additionally, we will continue to see product innovation across alternative asset classes, including funds and vehicles that are tailored to the wealth channel.
