Alternative assets may not be the portfolio diversifiers they’re thought to be, Rhode Island’s deputy general treasurer for finance told an audience last week. Speaking at the annual Fire and Police Pension Fund Summit in his home state, Kenneth Goodreau warned that allocating to alternative classes might not end up reducing a portfolio’s overall volatility, as common opinion holds.Bravo Kenneth! Couldn't have said it better myself.
Who needs David Swenson? For investment wisdom you could do a lot worse than go to the Rhode Island Fire and Police Pension Fund Summit!
“If you look at alternatives right now, the asset classes are moving in tandem. We’re basically dealing with a global liquidity pool where everybody’s looking for the same thing,” Goodreau said. “The more people you get on the same side of an asset, the riskier it gets.”
“The real asset class I’m looking for is non-correlated,” Goodreau said, “and it’s very difficult to find.”