Most investors utilize only a couple quivers in their arsenal; fixed income and equities. At times this is appropriate as there is value in these assets. However today, yields on fixed income are quite low, and equities, while not priced for perfection, are certainly priced for low inflation and reasonable economic growth. Should either of these assumptions prove incorrect, the medium term returns will be unrewarding.
This is where the other quiver comes in. Alternative investments, if selected properly and diversified, can add another element that is not dependent on what happens to inflation or how the economy is growing. Rather, alternative performance is driven by how the managers perform within their approach.
Indie Diversified Asset Fund, LP utilizes managers that invest in several approaches with the largest allocation being drug royalties, event driven, credit strategies and currency and commodity trading. Important to note is that many of these managers can own assets while also shorting assets to try to take market risk out.
To be brief, let’s focus on drug royalties for this writing. Simply stated drug royalties are investing in a royalty stream on pharmaceuticals that are paid by the drug company as those royalties are paid through the life of the patent. The pharmaceutical company entails the costs of marketing, production and any legal costs should there be claims. The beauty is that our managers purchase these royalty streams and, through their underwriting capabilities, have found opportunities that have consistently generated positive absolute returns over various market and economic cycles. How is that? Because the utilization of many pharmaceuticals is driven not by meeting consumer satisfaction but by meeting actual health needs, which don’t change materially from year to year.
For more information on adding alternative investments to your portfolio, send us an email or give us a call at 317.428.6600.
The above is not a complete summary of the terms of Indie Diversified Asset Fund, L.P. This brief description has been prepared and is being delivered solely to provide potential investors with the opportunity to determine their preliminary interest in the Fund. No offer to sell, nor solicitation of an offer to buy, any limited partnership interests in the Fund (or other securities) is made hereby. Solicitations of investments and any offers to sell limited partnership interests of the Fund, if any, will be made only on the basis of the final private offering memorandum of the Fund to be distributed solely to a limited group of eligible investors. The above information is presented as a summary and is qualified in its entirety by the information appearing in the private offering memorandum to be distributed by the Fund and by the provisions of the definitive agreements to be executed in connection with the formation and operation of the Fund.