Project description
Finance(alternative investment) : hedge fund and private equity

Investment Proposal for a High Net Worth Individual
Over the last 5 years, a high net worth individual(HNWI) has had a traditional asset allocation with
60% in equities and 40% in fixed income.
She is worried that markets are going to be volatile the next few years and returns to equities and
bonds disappointing. This is based on the strategic outlook of weakened global growth,

, & Wvate Equity enhance the return
to keep the

You are the advisor to this HNWI client, making the case for an allocation to alternatives. Your
client takes medium term view (3 – 5 years) to asset allocation.
Discuss in detail your recommendation to the client, providing clear reasons supporting your
argument. It should cover the percentage allocation to hedge funds and private equity as well as
the investment mix.
You should address:
Introductory remarks. Explain the benefits of diversifyingfrom the initial asset allocation.
(15 marks)
Manager structure. How many investments, of what size will make up your allocation?
(55 marks) Provide clear reasoning including the impact on the risk/return profile of the
portfolio.
Diversification – how would you decide the right level? (10 marks)
Implementation – what are the risks to successful execution of your recommendations?
(10 marks)
Timing
o how long would it take to build the program to the suggested allocation levels?
(5 marks)
o Is there a market timing element to your recommended allocation, and how is this
managed? (5 marks) In particular, reference the current global economic
climate.
Instruction files

ib9fo0_ai_occ_1_-_individiual_assignment.pdf(139,20 KiB)