Alternative investment strategies are becoming increasingly popular among investors looking to diversify their portfolios. These non-traditional assets and strategies, such as private equity, venture capital, hedge funds, managed futures, real estate, commodities and derivatives contracts, can provide opportunities for higher returns uncorrelated with traditional investments. However, alternative investments can also come with higher fees, complexity, and risk compared to traditional investments like stocks and bonds. It is important for investors to thoroughly research any alternative investment opportunity before allocating capital. One alternative investment manager that warrants further analysis is Pace Alternative Strategies (PAS), which offers a series of mutual funds providing exposure to multiple alternative strategies.
Overview of Pace Alternative Strategies
Pace Alternative Strategies (PAS) is an investment management firm that provides mutual funds offering exposure to alternative investment strategies. Some of the strategies they employ in their funds include long/short equity, market neutral, event-driven, relative value, tactical trading, and options income. Their goal is to produce long-term capital appreciation across various market cycles while aiming to reduce volatility and risk compared to traditional long-only equity and fixed income investments. PAS currently manages over $500 million in assets across their fund lineup. Some of their largest mutual funds include the Multi Strategy Absolute Return fund, Long/Short Equity fund, Market Neutral Equity fund, and Merger Arbitrage fund. When analyzing the performance and applicability of PAS’s funds, key factors to examine are returns over time, standard deviation/risk metrics, downside protection in bear markets, manager track record, fees, and overall portfolio fit.
In summary, Pace Alternative Strategies offers exposure to a variety of alternative investment strategies via their family of mutual funds. While past returns have been mixed, they may provide diversification benefits for investors with higher risk tolerances. However, the complex strategies employed can also introduce opacity and the funds carry expenses towards the higher end. Therefore, investors should carefully weigh the strategy, risk, and cost profile against their personal investment objectives when considering allocation to PAS’s alternative strategy funds.