Recruiter's Glossary

Examples: Mutual Fund • Correlation • Futures

Alternatives

Term from Investment Management industry explained for recruiters

Alternatives, also known as alternative investments, are investment options that go beyond traditional stocks and bonds. These include things like hedge funds, private equity, real estate, and commodities. Investment professionals work with alternatives because they can help spread risk and potentially increase returns in ways that regular investments might not. Think of it like having different types of ingredients in a recipe – not just salt and pepper, but also exotic spices that can make the dish more interesting and potentially better.

Examples in Resumes

Managed $500M portfolio of Alternatives and traditional investments for high-net-worth clients

Developed strategy for Alternative Investments including real estate and private equity

Led team responsible for evaluating Alternative Assets and making investment recommendations

Typical job title: "Alternative Investment Managers"

Also try searching for:

Alternative Investment Analyst Portfolio Manager Investment Manager Alternative Assets Manager Hedge Fund Manager Private Equity Manager Investment Advisor

Where to Find Alternative Investment Managers

Professional Organizations

Job Boards

Professional Networks

Example Interview Questions

Senior Level Questions

Q: How do you evaluate risk in alternative investments compared to traditional investments?

Expected Answer: A senior professional should discuss different risk assessment methods, explain how they look at liquidity risks, market risks, and operational risks. They should mention the importance of due diligence and having a diverse investment approach.

Q: What's your approach to building an alternatives portfolio for institutional clients?

Expected Answer: Should demonstrate understanding of client needs, risk tolerance, regulatory requirements, and how to blend different types of alternative investments to meet specific goals. Should discuss importance of liquidity management and long-term planning.

Mid Level Questions

Q: Can you explain the difference between private equity and hedge fund investments?

Expected Answer: Should be able to clearly explain that private equity involves buying companies to improve and sell them later, while hedge funds use various strategies to make money in financial markets. Should mention typical timeframes and liquidity differences.

Q: How do you conduct due diligence on an alternative investment manager?

Expected Answer: Should discuss reviewing track record, investment process, team experience, risk management, and operational setup. Should mention importance of background checks and understanding fee structures.

Junior Level Questions

Q: What are the main types of alternative investments?

Expected Answer: Should be able to list and briefly explain main categories like hedge funds, private equity, real estate, and commodities. Basic understanding of how they differ from stocks and bonds.

Q: Why do investors include alternatives in their portfolios?

Expected Answer: Should explain basic concepts of diversification, potential for higher returns, and how alternatives might perform differently from traditional investments in various market conditions.