Asset Management

Alternative Investments

Tradition is an advantage when well-balanced with innovation. This also applies to optimum diversification in your portfolio.

Hedge Funds and Alternative Investments

Performance on capital markets is not usually uniform. While some investments grow at a fast rate, but equally lose in value at the same rate, others are subject to more minor market fluctuations.

Many investments are strongly dependent on current interest and profit expectations, whereas others are assessed by investors on the basis of their intrinsic value. Certain investments increase in value at the same time that others lose in value. Finally, there are investment strategies that do not aim to increase the value of the investment but to earn on value shifts between different investments in the same sector.

We are specialists in devising an investment that gains its stability precisely from these different connections and that avoids cumulated risks. We recommend spreading traditional investments as well as increasing the number of income sources. Hedge funds, which function independently of the market and also generate earnings in times of rising interest rates or declining share prices, should be included in a modern securities account. Alternative investments, e.g. private equity holdings, ships and real estate, serve to stabilise the investment, while simultaneously increasing the earnings prospects of the entire securities account in the long-term.

Innovative strength and diversity is particularly important in developing investments. One of our most key aims is thus to gradually open up investment opportunities for our clients, which have been closed to individual investors in the past.

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Private Equity

Above-average yields cannot always be achieved with traditional investment instruments. This is why there are alternatives.

To generate above-average earnings in the attractive but non-transparent private equity, fund business requires many years of investment experience and detailed knowledge of the relevant target markets. Above all, one needs access to first-class funds, which frequently remain closed to new investors. It is important to avoid tax pitfalls that result in above-average yields before tax turning into unattractive yields after tax for investors liable for taxation in Germany.

As the management company of Sal. Oppenheim, OPPENHEIM Capital Advisory GmbH bundles exactly this expertise in structuring and managing private equity fund of funds concepts as well as individual private equity holdings. On this basis, a widely diversified private equity portfolio can be created for each client. The relatively low correlation of private equity to other asset classes results in an improved risk-return structure of the entire portfolio and makes this asset class an indispensable component of a well-balanced securities account. Since 1999, we have achieved above-average results with the investments offered to our clients, both before and after tax.

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Typical course of private equity investments

Source: European Private Equity & Venture Capital Association (EVCA)

Yield from private equity investments

Source: EVCA Yearbook 2005

A private equity investment is a long-term investment with minimal fungibility. The associated liquidity flows follow a typical pattern. The average IRR (Internal Rate of Return) on European private equity fundsover the 10-year period ending 2005 was 10.2%.

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