Alternative Investments

How to make nontraditional assets work for you.

BY ERIC DERRINGTON, SENIOR VICE PRESIDENT AND SENIOR PORTFOLIO MANAGER, WHITTIER TRUST COMPANY

When people talk about asset classes, they often cite cash, bonds, and publicly traded stocks. “Alternative investments” are sometimes added as a catchall category, but these types of assets are not homogeneous.

At their core, alternative investments are private, nontraded assets, often in privately held companies and entities, and include real estate, private equity and venture capital, hedge funds, and private loans and debt financing. Simply put, they represent a different way of owning assets. Here is an overview of how Whittier Trust approaches this often complex—and potentially rewarding—investment category.

Demystifying alternative investments

Alternative investments can play a crucial role in achieving goals such as diversification, inflation hedging, and generating enhanced returns. While return potential is often the primary motivator, at Whittier Trust, we view alternatives as an extension of our public-market investing. Every opportunity is evaluated through a rigorous vetting process to determine whether it merits our clients’ capital.

Diversification beyond public markets

One of the key benefits of alternative investments is diversification. Today, the top 10 companies in the S&P 500 represent more than a third of total U.S. market........

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