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William (Bill) J. Kelly Benedicte Gravrand, Opalesque Geneva:

Where is asset allocators’ attention turning to? If you are a financial educator, you can see the answer to this question through the eyes of the students, who are apparently focusing more on emerging markets, infrastructure and real estate, private debt, private equity and other alternative sources of returns, as well as Fintech.

William (Bill) J. Kelly, CEO of the CAIA Association, talks to Sona Blessing on Opalesque Radio about just that. CAIA is a 15-year old organisation that provides education and research in alternative investments.

The traditional 60/40 model has been fraught with risk over the last several years, he says. "Last time I checked there was over $10 trillion of sovereign debt yielding less than zero."

"I don’t know how the central banks are going to unwind their balance sheets," he adds. "But when they do it, the impact and the risk associated with even a 25 basis point moving rate can be enormous."

We are in for a rough patch, he says, and are focusing more on protection, drawdown risks and alternative sources of returns.

But this can lead to a crowding problem. Private equity is one of the asset classes that suffers from that problem. "There is about a trillion dollars of dry powder waiting to find deals," he says. And ther......................

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