Boutique or Bazaar? Why alternative strategies may find their creative niche in larger organisations
Trends in the asset management industry are re-shaping the alternatives world.
Bringing together the benefits of global scale and deep asset-class expertise across public and private markets, PGIM seeds, develops and manages a broad range of liquid and illiquid alternative strategies for some of the largest institutional investors globally.
We take a thoughtful approach to allocating to alternative strategies, and aligning these with clients’ investment objectives, risk profiles and liquidity preferences. It is because of this thoughtful, intentional approach, and our unwavering pursuit of performance, that institutional investors around the world trust PGIM to invest their more than $250 billion across our alternative strategies.1
PGIM’s Institutional Advisory & Solutions (IAS) group conducts bespoke research to help clients select the best mix of public and private assets by quantifying the tradeoff between portfolio horizon returns and liquidity risk. This OASIS™ framework allows clients to incorporate their commitment pacing strategy, fund-level selection skill and views on relative public versus private asset performance. IAS also generates macroeconomic and financial sensitivity analysis (RASA™) for public and private assets, allowing clients to build alternatives portfolios better targeted to their investment objectives.
Against the backdrop of the ongoing coronavirus crisis and market volatility, the outlook for economic growth remains uncertain. Yet, this unique environment continues to present a distinct set of opportunities for investors looking to explore strategies in private credit. In the second installment of the PGIM Alts Forum, PGIM experts assess the opportunities and risks surrounding a range of private credit strategies, including direct lending, real estate debt and sustainable power mezzanine debt.
QMA and QMA Wadhwani (QMAW) offer systematic liquid alternative strategies that seek to outperform consistently over the long run while mitigating downside risk. We utilize proprietary models and optimization methods, and our selective factor exposures are based in economic theory and insights from behavioral finance. We continually seek to improve these processes through ongoing research and model enhancements. Our experienced investment professionals choose from a wide range of instruments to take long and short positions in different countries and asset markets. Offering custom strategic overlay and actively managed options, QMA and QMAW’s alternative strategies are designed to provide diversification benefits through low correlation to traditional assets to help our clients solve their unique investment challenges.
Jennison’s Global Healthcare strategy seeks to outperform long-only healthcare approaches over full market cycles by capturing positive return during upcycles and minimizing losses during down cycles. The investment team believes that excess returns can be generated by investing in a concentrated, high-conviction long/short portfolio and that correctly analyzing new product opportunities can identify new growth companies and lead to significant alpha generation. The strategy’s growth investment style focuses on the durability and sustainability of growth rather than on absolute growth rates. Jennison favors biotherapeutic companies with what are viewed as compelling fundamentals and innovative products and pipeline drugs, as disruptive innovation is believed to be the driver of healthcare sector growth.
As one of the largest real estate managers in the world,6 PGIM Real Estate invests across the global real estate markets to meet the unique needs of investors through a range of real estate solutions across the risk-return spectrum. Our alternative investment expertise spans from the more traditional core, core plus and value-add real estate equity strategies; to investment grade to higher-yield private real estate debt strategies; to niche, specialized strategies including senior housing, impact and agricultural investing.
Our rigorous risk management, seamless execution, and extensive industry insights are backed by a 50-year legacy of investing in commercial real estate, a 140-year history of real estate financing,7 and the deep local expertise of professionals in 32 cities globally.
Through our investment, financing, asset management, and talent management approach, PGIM Real Estate engages in practices that ignite positive environmental and social impact, while pursuing activities that strengthen communities around the world.
PGIM Private Capital is a differentiated alternative credit manager, applying our unique sourcing capabilities and long-term discipline to capture consistent returns. Our global network allows us to penetrate target markets and offer unique deal flow to our investors. PGIM Private Capital’s experienced investment professionals leverage a direct calling approach to build close relationships with sponsors and lenders over time. We access opportunities with companies across the private capital risk spectrum and then use our regional office network to create a diversified portfolio of both sponsored-backed and non-sponsored leverage loans transactions.
All data (unless otherwise noted) is as of December 31, 2020.