Alternative Investment

Crystal Capital Partners Says Diversification Was Key In Volatile 2022

Investors who had a broad diversification of strategies available to them for 2022 “slept well at night” despite the market volatility, according to Alan Strauss, senior partner and director of investor relations at Crystal Capital Partners.

Crystal Capital Partners, a turnkey alternative investment platform for financial advisors, which is based in Miami, saw positive results for the year, while the indexes were all in negative territory, Strauss said in an interview.

“Crystal Capital Partners has been investing in alternatives for more than 20 years,” Strauss said. “Actually, the hedge fund industry is no longer an alternative; it has become pretty mainstream.”

Crystal Capital Partners, which unlike many hedge funds is also an RIA, invests for more than 200 institutional, pension, foundations and endowment investors, and the funds outperformed key benchmarks in 2022. The turnkey platform also grew its AUM by double digits, the firm said.

“For many investors, 2022 was one of the toughest in terms of the environment. Stocks and bonds were down, and global macro challenges dominated the economic terrain. In a year defined by uncertainty, with more than 50 active private market and hedge funds listed, the platform was able to provide an extensive selection of alternative investment solutions that delivered positive returns,” Steven Brod, CEO of Crystal Capital Partners, said in a statement.

In 2022, Crystal’s Hedge Fund Platform generated net positive returns of 3.83%, outperforming the HFRI Fund Weighted Composite Index, the HFR FOF Index, and the S&P 500 Total Return Index, all of which had negative returns for the year. Crystal Capital Partners’ total AUM grew by 20%, as the firm witnessed a 32% growth in new advisory relationships, the firm said.

Five new hedge funds were added to the platform in 2022. The firm explained that the majority of Crystal Capital Partners’ platform assets, 54%, were allocated to institutional multi-strategy hedge funds, while the rest were allocated to global macro, long-short equity, distressed securities, relative value, and event-driven strategies.

In addition to increasing the number of hedge funds available on its platform, Crystal added 17 new private market funds, with growth equity being the biggest allocation by strategy, followed by buyout, private credit, venture, and real assets.

“Our investment managers have been through a number of market cycles two to three decades, and they understand market cycles” not just the challenging environment of 2022, Strauss said. “Diversification of strategies is more important now than ever.”

The world and the markets are still facing global uncertainties that have not seen before,” but having diverse investment strategies should continue to out-perform the indexes, he said.


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