Private Asset Classes

What is private credit?

Private Credit is broadly defined as negotiated loans that take place outside of the traditional bank network and are held by private companies. Being able to provide investors with more senior secured positions in the capital stack has made private lending an attractive option for portfolio diversification.

Who invests in private credit?

Private Credit has been broadly used by institutional investors in their portfolios for decades. Retail investors often have limited exposure to private investments due to factors such as accredited investor requirements, high investment minimums, and limited availability.

What is private equity?

While investors gain equity in a business by buying its shares on a stock exchange, they can also gain equity in a private business outside the stock exchange. By investing in private equity, investors can access a wide field of investment opportunities not typically offered in public markets.

Who invests in private equity?

Institutional investors typically allocate the largest proportion of their investments in private investments to private equity. The Canada Pension Plan (CPP) is one example of a large institutional investor that has a significant allocation to private equity. As of its 2022 Annual Report, the CPP had a 32% allocation to private equity, which was higher than its allocation to public equity.

Investors who only have access to publicly traded securities experience the typical day-to-day volatility of public markets. Instead of competing for the same 1,500 publicly traded companies, clients gain exposure to private companies.

Private businesses in the U.S. outnumber public companies 6,749 to 1 (Source: McKinsey and Company, Oct. 20, 2021. Reports of corporates’ demise have been greatly exaggerated;, Nov. 6, 2021, How many private businesses are there in the United States?). 

What used to be long term, illiquid investments, private securities can now offer diversified product offerings, diversified liquidity, and flexibility that complements a portfolio. 

What is private real estate?

Private real estate offerings come in a variety of strategies and structures and typically involve income-generating properties such as residential, storage, and industrial buildings. These investments can offer investors a range of benefits, such as capital growth, stable cash flows, and access to select real estate opportunities that are not available otherwise.

Who invests in private real estate?

Institutional investors such as pension funds and endowments have been investing in private real estate for decades due to its defensive nature and history of attractive long-term returns. Retail investors often have limited exposure to private investments due to factors such as accredited investor requirements and high investment minimums.

What are multi-manager private securities?

Multi-manager private securities are a family of structured private pools providing clients with access to diversified solutions including a variety of private securities.

Consisting of investments in leading Canadian and American private securities including private credit, private equity, and private real estate, Harbourfront advisors may provide clients with access to investments typically made available to pension funds or other institutional investors. These uniquely structured private pools help capture returns during periods of market growth and preserve capital during market volatility. As a result, clients can benefit from a more stable and balanced portfolio with diversified liquidity, diversified risk, and diversified returns.

Multi-manager private securities, like those offered by Harbourfront Wealth advisors, are defined by six key attributes:

  • Access: Access to select institutional quality pension-style investment strategies typically closed to non-institutional investors.
  • Structure: Uniquely structured and diversified across a large roster of sub-advisors.
  • Strategy: Composition and assembly primarily consisting of diversified, sub-advised pools.
  • Multi-Manager: A curated selection of institutional grade managers to capture returns during periods of market growth and preserve capital during market volatility.
  • Multi-Sector Diversification: Diversification within each asset class in leading Canadian and American private assets.
  • Risk Management: Institutional grade risk management controls with a holdings-based approach.

An Evolution of the Fund of Funds

Harbourfront Wealth advisors use our best-in-class thinking to uniquely structure pools of private securities using an institutional approach. Structured pools are available to accredited investors through registered portfolio managers through Harbourfront Wealth’s affiliated Investment Fund Manager, Willoughby Asset Management Inc.

Pension and endowments funds have been investing in private securities for decades. In 2018, Harbourfront built and launched accessible 'retail friendly' private securities with third-party managers.

~ Danny Popescu, CEO Harbourfront