What You Need To Know About Alternative Investments in Canada | A Guide for Advisors

For Canadian investment advisors, we are living in a new market reality that presents both challenges and opportunities.

The investment landscape is undergoing a profound shift. Persistent inflation, higher-for-longer interest rates, and market volatility have reshaped how investors think about diversification. The traditional 60/40 portfolio, once considered the gold standard of investing, is being increasingly disrupted and no longer consistently delivering reliable returns.

All together, this leaves many questioning the reliability of passive-only strategies.

However, there is an opportunity to capitalize on the potential offered by alternative investments and private markets. Potential that has long been relied upon by institutional portfolios.

Why Alternative Investments Have Entered the Mainstream

Institutional investors have been utilizing alternatives, including private credit, for income diversification for some time.

And what was once reserved for large pension plans and endowments is now increasingly available to high-net-worth (HNW) investors, with an increasing expectation on advisors to capitalize on these opportunities because of:

• Disruption to traditional models: Equity valuations remain elevated while bond yields face pressure, making passive-only strategies less reliable.
• Growing accessibility of private markets: The increase of private credit funds, energy investments, and secondaries now allows broader advisor access to strategies previously out of reach.
• Increased diversification: With the uncertain investment landscape, advisors need to diversify their portfolios further to meet client risk tolerance, liquidity needs, and tax efficiency.

What are the Benefits of Alternatives for Canadian Investors

For advisors, adding alternatives to client portfolios offers a multitude of benefits but three in particular stand out:

1. Monthly income generation: Strategies like syndicated credit and energy royalties can provide steady, asset-backed cash flow.
2. Diversification: Exposure to niche strategies may reduce concentration risk and lower investment correlation with public markets.
3. Downside protection: Alternatives can serve as a stabilizer in turbulent markets by focusing on conservative lending and discounted entry points.

Outcomes Drive Invico’s Approach to Alternatives

With now two decades of experience in private markets, Invico Capital Corporation has a proven track record of performance and, most importantly, discipline backed by an experienced investment team with over 100 years of combined underwriting experience across credit, energy, and private capital markets.

We prioritize supporting investors by making long-term decisions that align with our core investment philosophies, rather than chasing trends, enabling us to navigate complex economic cycles.

Purpose-Built Strategies to Meet a Range of Client Goals

Invico continues to establish funds designed explicitly with investors in mind, aiming to complement traditional portfolios with differentiated sources of yield, all backed by experts in their respective fields. Below is a breakdown of our current funds, their strategic focuses, and key features.

Key Takeaways for Advisors

Alternative investments are no longer a niche option. They are an essential tool for advisors seeking to deliver consistent outcomes in a challenging environment. By embracing private markets, private credit, and energy investments, Canadian advisors can offer their clients resilience, income, and true diversification.

If you would like to learn more about Invico’s investment strategy or any of our funds, contact your Invico wholesaler directly or email us at investors@invicocapital.com.