Alternative Investments: Stability and Substance for Demanding Portfolios
Why Tellco is strategically expanding its allocation to illiquid asset classes such as private equity, infrastructure, and private debt – and how institutional investors can benefit.
In the picture: Mark Dieringer, Head of Alternative Investments at Tellco
Market volatility, inflationary pressure, and ongoing uncertainty in capital markets present increasing challenges for institutional investors. Expanding beyond traditional asset classes is a key step toward building more resilient, crisis-resistant portfolios. At Tellco, this approach has been a strategic priority: a consistent focus on alternative investments.
Diversification with Substance
“Alternative investments diversify our portfolio beyond equities and bonds,” explains Mark Dieringer, Head of Alternative Investments at Tellco. “This makes us less vulnerable to market fluctuations.”
Asset classes such as private equity, infrastructure, and private credit play a central role in this strategy. They offer uncorrelated sources of return, inflation protection, and access to structural growth trends – particularly in sectors like technology, digital transformation, and renewable energy.
Lessons from Past Crises
The benefits of alternative investments become especially evident in times of crisis. During turbulent periods in the financial markets, infrastructure and real estate projects often continued to deliver reliable cash flows, while public equities suffered significant losses.
“These returns are based on stable fundamentals – such as rental income or contractually secured revenues,” says Dieringer. “They can serve as a buffer against systemic shocks and enhance portfolio resilience.”
Illiquidity as an Advantage
Pension funds and institutional investors often approach illiquid assets with caution. At Tellco, the view is different. “Our long-term liabilities are well matched with the illiquidity profiles of infrastructure or private credit,” explains Dieringer.
Moreover, we maintain liquidity buffers of 5 to 10 percent of total fund assets to ensure short-term obligations can be met without the need for forced sales. In this context, illiquidity becomes a feature – not a flaw.
Efficiency Despite Complexity
A common perception is that alternative investments are expensive. Tellco addresses this with a clear focus on net returns. Investment decisions are based on performance after fees. For co-investments, fee structures will be actively negotiated – using mechanisms such as hurdle rates and tiered carried interest models.
“This ensures that managers’ interests are aligned with our own,” says Dieringer. “In our private credit portfolio, we target net returns of 8 to 10 percent. That level of outperformance justifies the higher complexity and costs.”