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Alternative Investments

Investing in Alternatives Across Macroeconomic Regimes

In our white paper, we describe a framework that categorizes market environments of the last 22 years into major macroeconomic regimes—Recovery, Expansion, Slowdown, and Contraction. In doing so, we aim to help advisors identify historical return patterns across both traditional and alternative asset classes.

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Our white paper analyzes how alternative asset classes performed across major macroeconomic regimes, including Recovery, Expansion, Slowdown, and Contraction. What you'll learn:  

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From Q4 2001 to Q4 2023, private markets asset classes had higher long-term average returns than US public equities—with tighter return spreads—across regimes.
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Private equity historically generated the highest average return compared to all other asset classes, likely bolstered by its performance during Recovery and Expansion regimes.
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Private debt funds performed best during Recovery regimes but also delivered an annualized return higher than its average when capital was deployed during periods of Contraction.
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Recovery regimes were the best time to allocate to real estate, which outperformed other alternative asset classes on a forward return basis during these periods.
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Hedge funds performed their best in periods of dislocation, especially during Recovery, when they could generate alpha through differentiated opportunity sets.
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Unlike other asset classes, private infrastructure delivered positive returns during every regime type, including Contraction.
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How an asset class has performed in the years following a specific regime is especially relevant for illiquid asset classes, given potential limitations on trading. Investing in illiquid asset classes may require a long-term, buy-and-hold approach.   

This communication is for discussion purposes only and does not constitute an offer to sell, or the solicitation of an offer to buy, any security or investment product. It does not purport to completely describe any security, investment product or service. CAIS does not provide any investment planning, legal, regulatory, tax, compliance or other advice and neither the Information, nor any prior or subsequent communications from or with CAIS or its representatives, should be construed as any such advice. Investment advisors and all investors should ensure that they have independently obtained sufficient information to ascertain the legal, financial, tax and regulatory consequences of any investments they consider. CAIS Capital, LLC and its affiliates (together “CAIS”) are not fiduciaries or advisors with respect to any financial services or products mentioned herein. The Information is subject to change, may be revised without notice, does not purport to be a complete description of any security, investment product or service, and should not be relied upon as the basis for an investment decision or for any other purposes whatsoever. Past performance is not a guarantee of future results. © 2024 CAIS LLC. All Rights Reserved.