Asset manager State Street Global Advisors and hedge fund Bridgewater have announced a collaboration as they take steps to increase access to alternative investment strategies.
Rather than building or buying capabilities, the tie-up allows both firms to quickly increase their presence in wealth management.
In a statement, Karen Karniol-Tambour, co-CIO of Bridgewater Associates, said that they “see global investors increasingly focused on portfolio resiliency and desiring durable client portfolios amidst a coming investing era that is likely to be very different from the last.”
“We believe a diversified asset allocation is a great step in preparing for the future, and we are excited to broaden access to our approach with an innovative organization like State Street Global Advisors,” she added.
The move marks the latest such collaboration to tackle the alternative markets, following a similar announcement from KKR and Capital Group in May.
The pair are working together to introduce hybrid public-private markets investment solutions to the U.S. market in 2025.
Similarly, Capital Group President and CEO Mike Gitlin said that the pair “will bring the strategies of a premium alternatives manager to clients with a compelling fee and greater accessibility.”
“Clients should think of this as ‘the best of both worlds’ – a hybrid investment solution that combines Capital’s active management and long-term investment approach with KKR’s private market expertise,” he said, following the announcement in May.
The recent venture demonstrates exactly how buoyant the alternative market is, how important an element of the investors’ playbook it has become, and how crucial diversification and a balanced portfolio is for investors.
In fact, according to Jeffrey Fine, global co-head of alternatives capital formation at Goldman Sachs Asset Management, diversification matters now more than ever. He said investors are putting money into private credit, for example, as they look to meet higher allocation targets.
“Folks have learned in the past that if you’re too cautious in periods of disruption, you can miss really attractive vintages,” he said during the firm’s 2025 investment outlook on Tuesday. “We advise clients to stay more invested and not to leave the alternatives markets when we go through periods of disruption or decline.”
Fine also stressed how larger changes are taking place as private equity firms move beyond traditional institutional clients.
“In addition to offering alternatives broadly to wealth customers that now have a choice between public and private markets, insurance customers that historically were only invested in certain types of products are now more broadly invested in” alternatives,” he added. “The liquidity profile across alternatives has improved considerably, and that’s closed a lot of gaps in our markets to stabilize and hopefully make them less volatile in periods going forward.”
