An alternative investment is regarded as an investment product other than traditional investments such as stocks, bonds, money markets, and/or cash.
As the definition of Institutional Investor magazine's Alternative Investment Newsletter indicates, alternative investments include commodities, financial derivatives, hedge strategies (or absolute return strategies), real estate, and private equity, as well as venture capital. They are supposed to have very low correlation with traditional investment products. However, this definition may not be suitable due to a fast-changing investment environment and should be reconsidered over time.
Some alternative investment managers, such as hedge funds, cannot advertise or announce their performance under U.S. and European law. Most hedge funds or private-equity groups accept investments from only high-net-worth individuals or institutions.
Although many hedge funds cannot advertise, accredited investors, in accordance with Rule 501a of Regulation D of the U.S. Securities Act of 1933, can access the BarclayHedge databases of 6,400 hedge funds and download fund information, including AUM, contact information, and full performance data since inception.
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