Why don't advisors take advantage of Alternatives?
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Hello,
Long time browser first time posting. I used to run a RIA where I incorporated an LP structure and traded futures and other instruments for clients on a L/S basis. Recently I have found an interest in LITIGATION FINANCING because of it's yield and non-correlation to just about any economic or market fluctuations. I found it so enticing that I shut down my RIA and started raising capital for them as my compensation if we reach funding goals in one year would surpass 5 years building the RIA
My question is this. We mainly work with family offices and RIAs in raising the capital and the conversations I am having is they either don't invest in the alternative investment class, or, they simply don't want to go through the hassle with signing agreements and getting their client's on board. I have done some preliminary research and found only about 33% of all RIA's nationwide utilize alternatives (PE, HEDGE FUNDS, VENTURE CAPITAL, REAL ESTATE, ETC.) while client interest in these markets was at 67% as they asked directly about this offering. This comes from iCapital research.
So for the RIA's out there can you tell me some of your drawbacks to not investing in this space and if you did what would be the conversation you wish to have with a 3 party manager instead of just hearing oh we beat the market by x percent?