At UBS, our scale and commitment to alternative investing means we can offer you the expertise of local and global professionals with a demonstrated track record in alternative investing. By combining the breadth and depth of our leading platform with alternatives manager selection capabilities, we offer access to unique opportunities and innovative solutions to help you achieve your long-term goals.

 

How alternative investing may benefit you

Complementing your existing portfolio with alternatives may benefit your long-term wealth strategy.

  • Expanded universe

    Exposure to investment opportunities or assets not easily available on public markets and traditionally reserved for large institutions and endowments.

  • Attractive risk-adjusted returns

    Potential to earn an excess return over public markets and/or improve the return generated per unit of risk.

  • Portfolio diversification

    Reduce dependence on traditional market drivers and add new levers of return.

  • Downside protection

    Mitigate portfolio volatility in uncertain market environments.

Alternative solutions for private wealth investors

Hedge funds

Hedge funds 

  • Actively managed portfolios, covering numerous strategies, market exposures and risk/return profiles
  • Key strategies include equity long/short, event driven, global macro and relative value

How alternative investing works

Alternative investments offer a unique opportunity to diversify your portfolio beyond traditional assets like stocks, bonds, or cash. By including assets such as private equity, hedge funds, real estate, and private credit, you can potentially achieve higher returns and reduce risk. Alternative investments can perform independently of market sentiment, behave differently from conventional markets and provide a buffer against volatility in equities or bonds.

For those with a long-term strategy, and the capacity to manage complexity and lower liquidity, alternatives can be a valuable addition. Investors should, however, keep track of the risks inherent to alternative investments. These include illiquidity, longer lockup periods, leverage, concentration risks, and limited control and transparency of underlying holdings. While risks cannot be fully eliminated they can be partially mitigated through extensive due diligence, strict manager selection, and diversification across vintages, managers, strategies, and geographies.

Why choose UBS for alternative investing

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Broad selection

Benefit from a comprehensive range of alternative investment solutions and strategies with our Unified Global Alternatives (UGA) group.

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Exclusive access

Explore exclusive investment opportunities with some of the world’s leading alternative investment managers via our open architecture platform.

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Tailored to your needs

Address your specific investment needs through our tailored solutions with single asset class or multi-alternatives approaches.

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Care in our craft

Harness the power of our 30 years’ experience in alternative manager sourcing and benefit from robust due diligence and risk management.

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What are the risks of investing in private markets funds

Investors in private market funds must consider the following risks. Many of these factors can actually work in investors' favor as long as expectations of investors and managers are set properly in advance.

  • Illiquidity. When investing in a private markets fund, investors must be prepared to accept significant illiquidity. This illiquidity is what allows access to more inefficient markets. On the other hand, investors cannot expect to access their capital or receive distributions with any regularity. Their only potential option for liquidity is to try to sell their stakes in the secondary market, where there may be no bid at all, or they may have to sell at a significant discount to fair value, if the fund manager even permits.
  • Uncertain cash flows. Amount and timing of the cash flow is at the manager‘s discretion. LPs need to fund a “capital call” within a certain time frame. Unpredictable cash flows apply to early stage capital calls as well as to distributions to investors at later stages
  • Fees. Private markets fund managers charge both management fees (typically in the 1.5-2.0% range) and incentive fees (typically in the 15-20% range). These levels are high compared to traditional asset funds, but the incentive fee helps to align objectives as the manager only gets paid if the investor achieves attractive returns. Most funds specify a hurdle or preferred return below which the manager does not receive incentive pay.
  • Lack of control: Investors in private market funds cede control over investment decisions, pace of investments and exits, strategic and operational matters, and other significant decisions to the third party fund manager. While this eliminates investors' ability to "vote with their feet" to express displeasure with the manager, ceding control gives the manager the necessary tools to seek outperformance for investors.
  • Blind pool risk. Investors must make long-term commitments to private markets funds in advance, without knowing what the underlying investments will be. This is known as blind pool risk. This dynamic can be mitigated through familiarity with the general partner and its track record as well as proper due diligence.
  • Limited disclosure. Disclosure on performance of underlying investments is periodic and can be more limited given that managers need time and flexibility to work with underlying companies and are focused on long-term value creation. Also, valuation of private assets involves subjectivity and assumptions, and as such may not necessarily be indicative of long-term performance or potential.
  • Use of leverage. This is not a blanket risk. Certain private markets strategies such as buyout use significant leverage which poses potential default risk if the company encounters stress, but many PM strategies do not involve any leverage. Prudent leverage in the right situation has historically shown to help enhance returns without significant incremental risk.

Non-Traditional Assets Disclaimer

Non-traditional asset classes are alternative investments that include hedge funds, private equity, real estate, and managed futures (collectively, alternative investments). Interests of alternative investment funds are sold only to qualified investors, and only by means of offering documents that include information about the risks, performance and expenses of alternative investment funds, and which clients are urged to read carefully before subscribing and retain. An investment in an alternative investment fund is speculative and involves significant risks. Specifically, these investments (1) are not mutual funds and are not subject to the same regulatory requirements as mutual funds; (2) may have performance that is volatile, and investors may lose all or a substantial amount of their investment; (3) may engage in leverage and other speculative investment practices that may increase the risk of investment loss; (4) are long-term, illiquid investments, there is generally no secondary market for the interests of a fund, and none is expected to develop; (5) interests of alternative investment funds typically will be illiquid and subject to restrictions on transfer; (6) may not be required to provide periodic pricing or valuation information to investors; (7) generally involve complex tax strategies and there may be delays in distributing tax information to investors; (8) are subject to high fees, including management fees and other fees and expenses, all of which will reduce profits.

Interests in alternative investment funds are not deposits or obligations of, or guaranteed or endorsed by, any bank or other insured depository institution, and are not federally insured by the Federal Deposit Insurance Corporation, the Federal Reserve Board, or any other governmental agency. Prospective investors should understand these risks and have the financial ability and willingness to accept them for an extended period of time before making an investment in an alternative investment fund and should consider an alternative investment fund as a supplement to an overall investment program.

In addition to the risks that apply to alternative investments generally, the following are additional risks related to an investment in these strategies:

Hedge Fund Risk: There are risks specifically associated with investing in hedge funds, which may include risks associated with investing in short sales, options, small-cap stocks, “junk bonds,” derivatives, distressed securities, non-U.S. securities and illiquid investments.

Managed Futures: There are risks specifically associated with investing in managed futures programs. For example, not all managers focus on all strategies at all times, and managed futures strategies may have material directional elements.

Real Estate: There are risks specifically associated with investing in real estate products and real estate investment trusts. They involve risks associated with debt, adverse changes in general economic or local market conditions, changes in governmental, tax, real estate and zoning laws or regulations, risks associated with capital calls and, for some real estate products, the risks associated with the ability to qualify for favorable treatment under the federal tax laws.

Private Equity: There are risks specifically associated with investing in private equity. Capital calls can be made on short notice, and the failure to meet capital calls can result in significant adverse consequences including, but not limited to, a total loss of investment.

Foreign Exchange/Currency Risk: Investors in securities of issuers located outside of the United States should be aware that even for securities denominated in U.S. dollars, changes in the exchange rate between the U.S. dollar and the issuer’s “home” currency can have unexpected effects on the market value and liquidity of those securities. Those securities may also be affected by other risks (such as political, economic or regulatory changes) that may not be readily known to a U.S. investor.

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