Unified Portfolio Management: Navigating Traditional & Alternative Assets

Portfolio management is the process of selecting and managing a mix of investments to meet specific financial goals. It involves balancing risk and return by investing in various asset classes, including stocks, bonds, and alternative assets like real estate and private equity. A well-managed portfolio helps investors achieve long-term objectives while minimizing risk exposure.

As the investment landscape evolves, wealth managers are increasingly turning to unified portfolio management to integrate both traditional and alternative assets under one cohesive framework. This approach allows for better visibility, performance tracking, and operational efficiency.

The Shift Toward Unified Portfolio Management

• $27.6 Trillion by 2028 Alternative assets are projected to reach $27.6 trillion in AUM by 2028, growing faster than traditional asset classes. As investors look beyond stocks and bonds, alternatives like private equity and real estate are becoming a critical part of portfolio strategies.

• Underpenetrated Retail Market Although individuals hold 50% of global assets, they only account for 16% of alternative investments. This gap presents an opportunity for wealth managers to expand access to alternatives.

• One-Stop Platforms for Financial Advisors 85% of financial advisors plan to increase allocations to alternative investments, driven by semi-liquid structures that allow more retail participation.

‍Expert Opinions: The Need for Unified Management

Industry leaders emphasize the importance of managing both liquid and illiquid assets within a unified system:

• Preqin: "The continued expansion of private markets will make integrated management of liquid and illiquid assets essential."

• Bain & Company: "Simplified client reporting across asset classes enhances client satisfaction and attracts the next generation of investors."

Actionable Recommendations for Wealth Managers

1. Select a Multi-Asset Platform Invest in technology that integrates traditional and alternative assets, providing real-time visibility across all investments.

2. Holistic Reporting Consolidate performance, risk, and fee reporting into a single statement to show clients how each asset class contributes to their goals.

3. Enhance Operational Support Expand capabilities such as fund administration and KYC checks to manage the complexities of alternative assets.

4. Educate Advisors and Clients Provide resources to help both advisors and clients understand the role of alternative assets in portfolio diversification.