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The Alternative Investments blog talks with Wanderlust Wealth   Management's co-founder about private equity and liquidity

Trends Watch: November 2, 2017

EisnerAmper’s Trends Watch is a weekly entry to our Alternative Investments Intelligence blog, featuring the views and insights of executives from alternative investment firms. If you’re interested in being featured, please contact Elana Margulies-Snyderman.  

This week, Elana talks to Michael Tanney, Managing Partner and Co-Founder, Wanderlust Wealth Management.

What is your outlook for alternatives?

I was fortunate to have an amazing learning experience in 2008. When things go bad, liquidity becomes one of, if not the most important factor to an investor. I can vividly remember the panic on clients’ faces when we told them there was no liquidity for their alternative positions. Fast forward to today, markets have more than tripled off the March 2009 lows and many people have forgotten that lesson.

As a registered investment advisor, Wanderlust Wealth acts as both a fiduciary for our clients and a financial psychologist. We have purposely kept our clients away from alternatives because of the lack of liquidity and high performance hurdles after fees. We believe there are opportunities for outsized returns in direct private equity investments; however, our clients are already wealthy and don’t rely on us to hit the home run. We are charged with hitting singles and doubles all day -- you can score a lot of runs by never making an out.

What is your outlook for the economy?

We expect the synchronized global economic expansion to continue. In a historically low interest rate environment, growing U.S. corporate earnings will continue to fuel upward movement in equities. While equity levels from a valuation perspective appear stretched, we think investors who are properly diversified across multiple asset classes will like the results of the fourth quarter of this year and into 2018.

What keeps you up at night?

Not the economy or volatile politicians. What worries us most is how willing people around the world continue allowing financial professionals to take advantage of them. Our industry sorely lacks transparency and integrity. We believe everyone deserves to be compensated and transactional fees are appropriate in certain circumstances. Registered professionals should always follow the equivalent of a Hippocratic Oath -- manage a client’s money as it was their own. It’s a refreshing, simple approach.

Elana Margulies-Snyderman is an investment industry reporter and writer who develops articles, opinion pieces and original research designed to help illuminate the most challenging issues confronting fund managers and executives.

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