Personal Finance
Personal Finance
Alternative Investments

Questions or Need Help?  Call 888-762-6226

Alternative investments are just that - alternatives to traditional asset classes such as equity and fixed income.

These investments, which can include hedge funds, private equity, real estate, natural resources, and commodities, offer risk and return characteristics that may differ greatly from those of more mainstream asset classes.

Because of their differing risk/return characteristics, these assets can have a positive impact on your portfolio. These investments have the potential to reduce the overall risk of the portfolio without materially affecting expected returns. Due to private placement regulations, most alternative products are available only to institutional investors and private investors who meet certain qualifying standards.

Hedge funds can take an opportunistic approach to investing

A hedge fund is a privately organized, pooled investment vehicle that can invest in publicly traded securities, currencies, commodities, interest rates and derivatives. Typically pursuing absolute return objectives, they seek to generate positive returns across all market conditions. They do this by taking opportunistic positions and employing complex investment strategies.

How can an individual investor find attractive opportunities to invest?

Investing in hedge funds independently can be a difficult proposition. Even private investors who meet rigorous qualifying standards can be at a disadvantage when it comes to making an informed investment decision. Information is a closely guarded commodity within the industry, primarily due to strict nonsolicitation regulations, as well as the desire to protect proprietary strategies. PNC, with extensive expertise and contacts throughout the industry, can help you determine if these investments are right for you and help facilitate your investment in this dynamic asset class.

Private equity can offer enhanced diversification and the potential for superior returns over the long term

Private equity -- direct or indirect investment in companies that are not listed on a public stock exchange -- can also offer investors the potential for increased diversification as well as the potential for superior returns in exchange for increased asset, financial and especially liquidity risks.

A private equity investment requires the investment of long-term capital, as returns may not be realized for several years. Since there is no secondary market, transferring or selling ownership in such an investment is typically not possible. Private equity investment is possible through pooled funds, but these funds can share the same types of risk as direct investments. However, for qualified investors with capital to invest for the long term, private equity may provide an attractive complementary alternative to the public equity market. PNC Wealth Management can offer qualified clients expertise in private equity investing,  as well as a thorough due diligence process to select attractive investment opportunities for our clients.

The PNC Financial Services Group, Inc. ("PNC") provides investment and wealth management, fiduciary services, FDIC-insured banking products and services and lending and borrowing of funds through its subsidiaries, PNC Bank, National Association and PNC Bank, Delaware, which are Members FDIC. This report is furnished for the use of PNC and its clients and does not constitute the provision of investment advice to any person. It is not prepared with respect to the specific investment objectives, financial situation or particular needs of any specific person. Use of this report is dependent upon the judgment and analysis applied by duly authorized investment personnel who consider a client?s individual account circumstances. Persons reading this report should consult with their PNC account representative regarding the appropriateness of investing in any securities or adopting any investment strategies discussed or recommended in this report and should understand that statements regarding future prospects may not be realized. The information contained in this report was obtained from sources deemed reliable. Such information is not guaranteed as to its accuracy, timeliness or completeness by PNC. The information contained in this report and the opinions expressed herein are subject to change without notice. Past performance is no guarantee of future results. Neither the information in this report nor any opinion expressed herein constitutes an offer to buy or sell, nor a recommendation to buy or sell, any security or financial instrument. Accounts managed by PNC and its affiliates may take positions from time to time in securities recommended and followed by PNC affiliates. Securities are not bank deposits, nor are they backed or guaranteed by PNC or any of its affiliates, and are not issued by, insured by, guaranteed by, or obligations of the FDIC, the Federal Reserve Board, or any government agency. Securities involve investment risks, including possible loss of principal.