They rank higher within the capital construction than bonds or equities, resulting in larger recovery charges ought to defaults happen. Below we provide articles that set out the investment case for eight alternative asset courses. Hedge funds and private fairness managers employed advanced funding strategies. A fund-of-funds industry grew out of the demand for an professional view. Markowitz’s work offered the mathematical underpinnings for portfolio optimisation. It gave buyers a tool to construct portfolios on the ‘efficient frontier’ – offering the maximum anticipated return for a defined stage of threat.