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Alternative Market Briefing

U.S. elections to impact alternative assets more, hedge funds less likely affected by cyclical events

Thursday, October 13, 2016

Komfie Manalo, Opalesque Asia:

The upcoming U.S. presidential elections could have a more pronounced impact in the alternative assets, such as real estate and the art market, Jeff Korzenik, chief investment strategist at Fifth Third Bank. The bank recently convened a roundtable of financial experts to help ease investors weather the uncertainties of the November election and to provide historical perspective on how different asset classes and markets respond to changes in both the executive and legislative branches.

Korzenik said that the alternative space is something to be watched closely if the election brings in lawmakers committed to a higher tax rate on the wealthy. Transaction taxes or the introduction of new fees could also have an adverse effect on certain alternative investment strategies, he said.

Glen Johnson, managing director at Mirador Family Wealth Advisors added that the election probably will not alter the way ultra-high-net-worth investors manage their holdings. "In this class, 40 percent of portfolios are illiquid, meaning they can't be quickly sold. Hedge funds and private equity are a bit less likely to be impacted by cyclical events. With 10-to-12-year time horizon for private equity investments, global macro or short-term events have very little immediate impact."

Michael Donovan, a Fifth Thi......................

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