The Rise of Total Portfolio Approach - 6

The State of Global
Investable Capital
AARON FILBECK, CAIA, CFA, CFP®, CIPM, FDP
MANAGING DIRECTOR, HEAD OF UNIFI BY CAIA™
We've had incredible timing in writing pivotal pieces right before unprecedented market
events. In 2020, The Next Decade of Alternative Investments: From Adolescence to Responsible
Citizenship was published at the onset of the first global pandemic in over a century.
Fast forward to 2022, The Portfolio for the Future™ was
released just before we entered the most challenging
year for the 60/40 portfolio in almost 40 years. It leaves
us wondering what will happen next.
Whatever the upheaval, alternative investments continue
to realise their growth potential, representing $22 trillion
in assets under management as of the end of 2022.
Following substantial drawdowns in public equity and
bond markets in 2022 and continued growth in private
markets, alternative investments now account for 15% of
Exhibit 1: Global
Investible Market
as of December
31, 2022
Source: CAIA
Association,
Morningstar
Direct, Preqin,
HFR, FRED, Grand
View Research
the total investible universe, as displayed in Exhibit 1.
The Problem With Product Categories
The growth of alternative investments has exhibited
uneven growth within and across various categories.
Private markets, particularly private equity, and private
debt, have significantly outpaced other strategies, as
shown in Exhibit 2. However, the proliferation of various
sub-strategies has caused many of these " asset classes "
to turn into very diverse and complex industries, rendering
our tendency to " over-bucket " counterproductive.
6
The Rise of Total Portfolio Approach

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