It is an “ideal time” to add alternatives to your portfolio, Atrato Group principal and co-founder Steve Windsor told Money Marketing.
Atrato Group is an alternatives investment platform that works with investments that do not fall into traditional categories like stocks.
Alternative investments can include private equity, venture capital trust (VCTs) and hedge funds.
Windsor said that despite renewables being listed as an alternative, in the future they could move out of the category and become more of a mainstream investment.
Windsor also said “the renewables sector is amazingly popular” and wind has a huge part to play in this category.
He added the UK is doing well in implementing wind energy and is using its coasts to build offshore wind farms.
However, he believes the UK could do more on solar panels but he admitted that the country is not always known for its sunny weather.
Windsor also revealed that he works with advisers at Hargreaves Lansdown and from what he has heard, clients are asking about alternatives and asking what else they can do to get involved in the space.
He explained that alternatives do make a good medium-term investment and picking the correct thematic investment for the next two years is what an independent financial adviser (IFA) needs to do for their clients.
In regards to renewables, Windsor said “there is tremendous value on the table” and that the UK has started to hit a turning point.
It has realised renewables gives the country access to cheaper electric.
Windsor added that about a year ago, the renewable asset class as a whole was giving investors a 4-5% return, this has now risen to 8%.
In March 2023, Foresight partner Hugi Clarke told Money Marketing advisers are “waking up to VCTs” and are more confident about recommending them to clients.
Advisers tell Foresight, a sustainability-led alternative assets investment manager, that VCTs are more mature now.
Clarke said now is a good time to talk about VCTs as they present a good opportunity for British investment and a way of levelling up the UK.
VCTs are investment vehicles that were set up to promote investment in small UK businesses that meet certain criteria.