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Investors continue to adjust asset allocation models to reflect a significant overweight to positions in global equities and alternative investments that may include private credit, special situations and, increasingly, real assets. We expect a paradigm shift in asset allocation to occur, which may surpass the period of enlightenment that occurred in institutional investment from fixed income to equity securities in years past.
Master limited partnership investing was once considered to be in the alternative investing realm, but now has become mainstream as there is increasing demand for assets offering stable income and growth potential. “[Three decades] ago alternatives were in fact ‘alternatives’ and they have now become allocations that range from 25 percent–50 percent,” notes Commonfund’s January 2014 report, Alternatives Reality: What to expect from future allocations. Allocations to MLPs by financial advisers and institu