The California Alternative Investments Association (CalALTs) is a not-for-profit membership organization whose members include alternative asset managers, investors and service providers who are dedicated to the continuing evolution of the alternative asset management industry in California. Originally founded in 2010 as the California Hedge Fund Association (CHFA), CalALTs continues the mission of fostering meaningful connections among its members and a vast network of thought leaders, influencers and peers who share investment ideas, best practices and industry intelligence that drive tomorrow’s success. The organization hosts education and networking events for members and its digital and social platforms provide members with the relationships, information, and opportunities to generate better outcomes. Below are some frequently asked questions and answers about CalALTs.
We currently have over 1,200 members that span nearly all alternative asset classes. Our membership consists of individuals from a wide range of asset managers, various types of investors, and a diverse array of individuals from service providers including accounting, law, brokerage, technology and more.
No. Our members come from firms and locations around the globe but many are located in California and most have a very keen interest in growing their business presence in the state and advancing the state’s alternative asset management industry.
CalALTs welcomes individuals from a wide range of asset management firms including hedge funds, private equity and venture capital funds, real estate funds, liquid alternative funds, fintech firms, and even more traditional asset management firms with an interest in expanding their offerings into the alternatives realm.
Networking is certainly a key component of what we try to achieve at CalALTs, both at our events and at third party events we organize and promote throughout California and beyond. In addition to providing networking opportunities, we produce a wide range of digital and in-person educational opportunities, advocate for best practices throughout the alternative investment industry, and through our newly updated website and social medial channels, seek to create dynamically interactive forums where innovative ideas are fostered and shared.
And while CalALTs is not a lobbying organization, we have periodically been asked for advice and counsel on regulatory matters from media outlets and authorities here in California and elsewhere. We are also interested in helping government and business work collaboratively to craft mutually beneficial regulations that will allow investors to responsibly access compelling-yet-appropriate investment solutions of all kinds.
There are numerous immediate benefits of being a part of CalALTs including access to:
• Numerous CalALTs Networking Events
• Exclusive Industry Event and Product and Service Discounts
• The CalALTs Targeted Job Board
• The CalALTs Young Professionals Group
• The CalALTs Digital Members Directory
• Curated Data on Various California-based Asset Management Firms
• Various Media Outlining Industry Best Practices and Resources
• The Vibrant CalALTs Interactive Online Community
• Timely Industry News Updates
• Targeted Brand Exposure and Marketing
• Exclusive Thought-Leadership Round Table Dinners
• Topical White Papers
• Webinar Attendance and Hosting Opportunities
• Event Hosting and Sponsorship Opportunities
California is the nation’s most populous state with over 40 million residents and collectively its population forms one of the world’s largest and most dynamic economies. For decades, California has defined the leading edge of innovation in industries ranging from technology, to agriculture, to entertainment. Over the past decade, in part due to the activities of CalALTs, our state has emerged as world leader in alternative investing. Whether one is seeking out the industry’s top fintech firms or the most promising venture capital or real estate investment opportunities, California is a target-rich environment that draws investment capital from financial institutions and other investors from every corner of the globe.
As a home to an outstanding public and private education system and dozens of the world’s top universities, California offers alternative investment employers an incredibly deep pool of outstanding talent. Because of its California origins, this talent often brings to bear highly innovative, often contrarian, thinking that is unlike that of any of the world’s other financial centers. With an appealing temperate climate, and an unparalleled variety of coastal, urban, suburban and rural living opportunities, California offers an extremely high quality of life that continues to draw new residents from locations throughout the U.S. and beyond. As a result, California has a unique capacity to support every sector of the alternative asset management industry including some of the world’s most sophisticated asset management firms.
Finally, because of its location on the western edge of the continental U.S., California is uniquely positioned to take advantage of is the rapid integration of emerging economies from the Asia Pacific Region. The state’s robust travel infrastructure and diverse population provides more access to and interaction with China, Singapore, India, Malaysia, and other rising economies than any other U.S. state.
Over the past 7 years since CalALTs’ inception, we’ve seen several dynamics unfold. First, many well-established alternative asset management firms from all over the world have set up California branches in order to leverage the many advantages our state offers. Second, many alternative investment firms have launched and matured here in California and are now emerging as global leaders in the industry. Finally, California continues to be a location that investors from around the globe look to place capital as they seek access to the state’s many opportunities in venture capital, real estate, and more.
In recent years, a variety of market factors have dampened the absolute and relative returns of some hedge fund strategies and a natural result of that, some global investors, including some higher profile California-based institutions, have redeemed certain hedge fund investments. However, the portfolios of most California-based institutions, still teeming with investments in areas such as private equity, real estate, and various liquid alternative strategies, have by no means abandoned the alternative investment industry as we define it. Moreover, given that over time investment is a cyclical business, CalALTs has every expectation that as the economic environment changes and market structures continue to evolve, alternative strategies that may be out of favor today will undoubtedly start to re-accrue assets in the coming years from institutional investors in California and beyond. Indeed, global allocations to nearly every alternative asset class, hedge funds included, have recently reached all-time highs (over $3 trillion in hedge funds alone) and while there may be pockets of retreat in some areas, there are equal and larger instances of growth in other areas.
In 2016, CalALTs collaborated with Preqin on a special report entitled “Preqin Special Report: Alternative Assets in California” which detailed the explosive growth of the alternatives industry in California in recent years and noted the fact that a significant majority of institutional investors in the State remain heavily invested in alternatives (http://www.calhedgefund.org/wp-content/uploads/2016/09/Preqin-Special-Report-Alternative-Assets-in-California-September-2016.pdf). Specifically, the study showed that California’s pension funds account for 3 of the top 5 investors allocating to hedge funds, 2 of the top 5 investors allocating to private equity & venture capital and 3 of the top 5 investors allocating to real estate. Later in 2017, Preqin and CalALTs will release an update to this report and based on trends we’re seeing, we expect the story for alternative investments in California to improve further.
Given the size and scope of California and its thriving alternative investment industry, along with many of the unique characteristics of the state and the many constituents of the finance community, it was our view in founding CalALTs that it should primarily be and organization of, by and for California as opposed to a national organization. And while we have attracted interest and members from beyond California and engage in some activities beyond the State’s borders, we remain fully committed to serving the needs of California and doing all we can to foster the continuing growth and enhancement of the alternative asset management industry here. The primary benefit of our more localized focus is that we’re able to tap into the many passionate networks of managers, investors and service providers in Los Angeles, San Francisco, Silicon Valley, Orange County, San Diego, and elsewhere in the State.
The members of these networks are incredibly supportive of each other and collectively, they work tirelessly to help each other grow their respective businesses and access the latest and best information on topics ranging from regulation, to technology, to capital introduction. As a result of this culture of collaboration, many individuals and firms have successfully leveraged their CalALTs membership and involvement into material business and professional growth and that is ultimately the best testament to our ongoing commitment to being a California-based organization that is focused on understanding what members of California’s alternative investment industry think, want, and need.
As investors here in California and worldwide search for more compelling and less volatile investment returns, we are focused on doing all we can to educate the investment community about the benefits of alternative investments, educate them as to the best practices for sourcing and allocating to alternative investments, and providing them some direction as to where and how to find alternative investment solutions here in California that may meet their evolving needs.
In addition, we are focused on closely tracking the rapidly evolving regulatory landscape and keeping alternative investment managers and their investors informed as international, federal and state rules evolve. Finally, we are keenly interested in even better leveraging technology to achieve these and other of our goals and to use our updated website and social media platforms to better connect the constituents of California’s alternative investment community and bring together professionals from hedge funds, private equity, venture capital, real estate, fintech, and other areas together under a well-organized umbrella devoted to supporting the ever-increasing needs of the State’s investment community.
There was strong demand from other alternative managers and ultimately, the issues facing managers and investors are universal across the investment spectrum and are not unique to hedge funds or any other specific tranche of the alternative investment industry.
Given the new regulatory environment, the lines between alternatives and traditional investments are no longer clear. Alternative investments are no longer just hedge funds and the investment landscape continues to evolve. We want to give the industry on the west coast a unified voice.
Additionally, the alternative asset management industry has evolved over the last few years to where it has become difficult to fit managers into boxes like "hedge" or "private equity." While there are certain issues that affect one sector of the alternative asset management industry, more and more issues impact alternative asset managers across the board. We are just evolving along with the industry.