Alternatives
A catch-all for asset exposures outside listed equities, listed bonds and cash: hedge funds, private equity, private credit, infrastructure, commodities, gold. Small allocation in most NZ retail mandates.
Alternatives is an umbrella label for any asset exposure outside listed equities, listed fixed interest and cash. Common sub-categories: hedge funds, private equity, private credit, unlisted infrastructure, commodities, gold, royalty/streaming structures, and litigation finance.
In NZ retail PIE-fund practice, "alternatives" usually refers to a small allocation (0–10% of total assets) inside a diversified-multi-asset fund, often accessed through one or two underlying specialist funds rather than direct manager mandates. Typical purposes: diversifying away from the equity-bond correlation, accessing risk premia not present in long-only mandates, and increasing return potential at lower exposure to listed-market drawdowns.
Alternatives carry higher fee layers (a base fund fee plus often a performance fee at the underlying-fund level), reduced liquidity, and valuation that depends on the underlying-fund valuation cadence. The PDS, SIPO and OMI together disclose the alternatives sleeve's size, underlying funds, fee mechanics, and liquidity terms.
Related terms
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private-credit
Private credit
Debt financing provided by non-bank lenders to private companies, typically with negotiated bilateral terms. An alternative-asset sleeve in some NZ wholesale and select retail mandates.
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infrastructure
Infrastructure (listed and unlisted)
Investment in long-life physical assets — toll roads, airports, power transmission, water utilities. Listed-infrastructure access via global indexes; unlisted infrastructure via specialist funds.
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SIPO
Statement of Investment Policy and Objectives (SIPO)
The fund-manager document setting out the fund's investment objectives, strategy, asset-allocation ranges, derivative use, hedging, rebalancing and exclusion rules — filed on FMA Disclose and binding on the manager.
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asset-allocation
Asset allocation
The percentage split of a fund's portfolio across asset classes: equities, fixed interest, listed property, cash, alternatives. Drives the fund's risk and return profile more than security selection.