Francesca Martinez talks about alternative investments in Rankia Magazine

When discussing alternative investments, there is often a perception that these products are primarily geared toward institutional investors and ultra-high-net-worth individuals. Until a few years ago, this was true, but over time, structures and vehicles have been created to democratize these types of investments and reach more clients—mainly high-net-worth individuals who did not meet the minimum investment requirements but could potentially sacrifice some liquidity in a more "intermediate" way.

Intermediate liquidity is a characteristic of evergreen or semi-liquid alternative funds. As their name suggests, they offer greater liquidity than traditional closed-end funds, typically allowing redemptions after one year of investment (known as the "lock-up period") without incurring a penalty fee. These funds operate with a single capital call for the total committed amount, generally have monthly valuations, and allow quarterly redemptions—usually capped at 5% of the fund's NAV—provided the lock-up period has been met.

As with traditional alternative investments, there are various types of evergreen funds, including private debt, private equity, real estate, and infrastructure. One asset class that we find particularly interesting in the current economic context is direct lending within private debt. Most funds in this category provide direct loans to private companies, which may or may not be backed by private equity ("sponsored" or "non-sponsored"). These loans are typically floating-rate and, depending on the fund or manager, are often first-lien senior secured loans, meaning they take priority in payments in the event of a default. These funds are usually highly diversified, holding between 100 and 500 underlying loan positions. All these characteristics make direct lending an attractive asset class, which we believe will remain appealing in a prolonged high-interest-rate environment.

Most of these funds are structured as Business Development Companies (BDCs). This structure was created to promote investment in a crucial segment of the U.S. market—the small and middle market—which has faced difficulties accessing traditional bank debt or capital since the 1970s recession. BDCs have the same periodic reporting requirements as U.S. mutual funds, ensuring constant visibility into their portfolio and invested instruments.

One standout product in this asset class is Blue Owl Credit Income (OCIC), which provides loans to middle-market U.S. companies backed by private equity sponsors. This fund is available on several platforms, allowing access with lower minimum investment amounts than traditional alternatives, making it an investable option for a broader range of high-net-worth clients.