Diversification in Private Markets

In this report we consider the role of diversification for investors in alternatives, identifying asset classes with historically low correlation and presenting Preqin data alongside public equity and 60/40 portfolio benchmarks

• Diversification in alternatives is supported by access to earlier-stage companies and diverse earnings profiles, among other factors

• Real assets tend to exhibit low correlation to public equities and 60/40 portfolios, which helps with downside risk management

• Investing in private markets creates need to manage cash flow diversification across strategies and vintages