Asset Allocation
The investment portfolio would be constructed from the following "building blocks":
Liquid investments
Alternative investments
Private investments
Liquid investments
Instruments
Investment mandates (active / passive)
Strategies
Long/Short, Arbitrage, distressed, trading
Diversification
Broad
Liquidity
Good
Pricing / Valuation
Transparent & mark to market
Information Availability,
disclosure
Extensive
Control of investment
Usually no control except possibility to exit/stop loss
Alternative investments
Instruments
Open / closed ended funds
Strategies
Asset-based lending, insurance, litigation funding, life settlements, trade finance
Diversification
Fair
Liquidity
Limited liquidity
Pricing / Valuation
Typically not based on market pricing
Information Availability,
disclosure
More limited
Control of investment
Usually no control except possibility to redeem
Private investments
Instruments
Direct debt | Direct equity
Strategies
Long credit | Long equity
Diversification
Limited
Liquidity
Held to maturity or exit event needed
Pricing / Valuation
Mostly accounting basis
Information Availability,
disclosure
Depending on the size of the investment
Control of investment
Depending on the size of the investment