What are alternative assets, and why might they belong in a Donor Advised Fund (DAF)?
Alternative assets include investments like private equity, hedge funds, venture capital, and private debt. These can be advantageous in a DAF because they offer high growth potential and are not correlated with public markets.What benefits do alternative assets offer in a DAF?
High growth not tied to public markets.
Diversification benefits, offering an additional premium.
A steady return on capital over time, especially from private investments locked away for extended periods.
Are there any risks or considerations to keep in mind with alternative assets in a DAF?
Yes, it’s crucial to maintain liquidity to meet obligations such as:Administrative fees.
Capital calls.
Charitable grants.
Without adequate liquidity, these obligations may become challenging to fulfill.
What are the tax advantages associated with alternative assets in a DAF?
Alternative assets can provide significant tax advantages. For detailed guidance, consult your client or the complex assets team.Who should consider alternative assets in a DAF?
Clients looking for growth, diversification, and steady returns over time while leveraging tax advantages may find alternative assets a good fit for their DAF.