Madeleine Sinclair, Head of Private Wealth Distribution, North America for Blue Owl Capital, joined Julie Cooling, Founder and CEO of RIA Channel, at the CAIS Summit to discuss the benefits of educating advisors and their clients on alternative investments.
Blue Owl is a rapidly growing, publicly traded alternative asset manager (NYSE: OWL) with $200 billion in AUM. Blue Owl has prioritized the private wealth market since its inception, while other institutionally-focused managers are just now seeing the importance of private wealth investors. At Blue Owl, institutional and private wealth investors access the same deals at the same terms and pricing.
Alternatives are revolutionizing portfolio construction today in a similar fashion to the way ETFs did in the early 2000s. Education is the key to working with advisors in the private wealth market. Advisors would like to learn what alternative investments can provide to clients and how to be able to educate their clients on the value proposition. The most common questions heard from advisors are how to discuss these investment strategies with their clients and how to construct portfolios.
The Nest by Blue Owl is a comprehensive place for advisors to learn about private markets, implement strategies in client portfolios, and engage with the Blue Owl team. The Nest includes portfolio construction tools, thought leadership, and the ability to see how Blue Owl strategies might fit in client portfolios.
Advisors should consider each client’s objectives and liquidity needs when considering alternative investments for client portfolios. Sinclair notes that most clients can hold both public and private investments in their portfolios. It is important to know what you own and understand the liquidity profile of each investment.
Advisors who don’t allocate to alternative investments are missing out on a significant portion of the investible universe, as there are seven times as many private as public companies in the US with over $100 million in annual revenue. Sinclair states that advisors believe that access to alternative investments is a differentiator for their practice that facilitates deeper conversations with clients. Clients are looking for more diversified portfolios, especially after the stress on the 60/40 portfolio and the rising inflation experienced since 2022.
Resources: