In the latest episode of “What’s the Alternative,” guest Tony Davidow, an experienced investment strategist at Franklin Templeton, brings his wealth of knowledge from his career at major firms like Morgan Stanley and Guggenheim. He offers listeners a deeper look into how alternative investments can be a powerful tool for building wealth and supporting causes that matter to them. Throughout the episode, Tony shares stories from his career and insights from his recent book, Private Markets, giving practical advice on how these unique investments work and why they’re valuable.
A key part of the discussion is the “democratization” of alternative investments. In the past, these types of investments were only accessible to large institutions and very wealthy individuals. But, as Tony explains, things have changed. More retail investors, or everyday people, now have access to these options. However, with this new access come both opportunities and challenges. Advisors have to think about the specific needs of each client when choosing investments, including how quickly a client might need to access their money (liquidity) and the tax effects of these investments. Tony emphasizes the importance of educating clients and being transparent, which helps advisors build strong, balanced portfolios that fit their clients’ goals.
The episode also dives into private markets, exploring different types of funds like interval and tender offer funds that allow for some access to money without the long lock-in periods of traditional private investments. Tony explains how these “illiquidity buckets” can actually benefit investors, helping them focus on long-term growth rather than short-term market ups and downs. Advisors play a big role here, helping clients understand how investments in areas like sports rights or community projects aren’t just about financial returns—they also add personal meaning and connect with clients’ values. This makes the client-advisor relationship stronger and helps clients feel more engaged with their investments.
Another important topic covered is the difference between private equity and credit investments. Tony explains how, with fewer companies going public, the private market is expanding, giving investors more opportunities—but these investments require skill to choose wisely. Private equity often brings higher returns but requires careful management. Tony also discusses private credit and distressed credit, where investors lend to private companies or buy debt from struggling ones, explaining the specific skills needed in this area.
Lastly, Tony reflects on the process of writing his book. Writing gave him the chance to organize his experiences and share valuable lessons on topics like regulatory challenges and new market trends. He also points to helpful resources for advisors and investors that support ongoing learning in this field.
This episode is packed with practical knowledge and clear advice for advisors and investors interested in alternative investments. Tony Davidow’s insights offer listeners a better understanding of how to use these investments to create wealth and achieve personal goals, while also guiding advisors on how to help clients navigate this exciting space with confidence.
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