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StrikeAndYield crib sheet · information and education only

Alternatives & Private Markets

Beyond public markets: private equity, venture, private credit, hedge funds and insurance-linked securities.

The shelf — 16 instruments

Plain English 6

AnnuityThe only product that pays until you die. You are not buying a return — you are buying insurance against outliving your money, and the price is your capital.
Hedge FundNot an asset but a licence: pooled capital free to go long, short, levered and anywhere — strategies as the product.
Open-Ended Property FundDaily dealing in buildings that take months to sell — the clearest liquidity mismatch anybody still sells to the public.
P2P & Marketplace LoanRetail investors funding consumer and business loans through a platform. Real credit risk, real yields, and a business model that has repeatedly discovered it was a lender all along.
Private Equity FundBuy whole companies with borrowed money, improve or re-lever them, sell in five years — finance's ownership business.
Venture CapitalPortfolios of long shots: most investments die, one pays for everything — the power law as an asset class.

Needs one idea 5

Infrastructure FundsOwning the pipes, ports, towers and grids — cash flows measured in decades, contracts measured in inflation clauses.
Prediction MarketA contract paying $1 if an event happens and nothing otherwise, so its price reads as a probability. A forecasting instrument that is also, unavoidably, a wagering one.
Private CreditThe shadow banking success story: funds replaced banks as lenders to the buyout world, and kept growing.
Timberland & FarmlandAssets that grow while you wait. The only investment whose inventory increases in volume when you decline to sell it — and the reason institutions treat them as a category of their own.
Unit-Linked PolicyA fund portfolio inside an insurance wrapper. The investment risk is entirely yours; what you bought from the insurer is a tax treatment and a set of fees.

Market knowledge 5

Catastrophe BondEarn double-digit yields for insuring hurricanes — the asset class genuinely uncorrelated with markets.
Life SettlementBuying someone's life insurance policy, paying its premiums, and collecting when they die. Genuinely uncorrelated, and the asset class where the modelling error has a name and a face.
Litigation FinanceFunding a lawsuit in exchange for a share of the award. Genuinely uncorrelated with markets, entirely correlated with a judge — and priced like a portfolio of binary options.
Royalty StreamBuying a share of somebody else's revenue, forever or until a patent expires. Top-line exposure with no operating costs — and a valuation that lives or dies on the terminal assumption.
Venture DebtLending to companies that lose money, secured on the expectation that someone else will fund them again. Cheaper than equity for the founder, and a bet on the next round for the lender.

What moves prices here

  1. Manager selection — It dominates everything else here
  2. The cost and availability of leverage — Most private returns are levered public returns
  3. Exit conditions — A return is not realised until somebody buys
  4. The valuation policy — Smoothness is a reporting choice, not a property
  5. Fee structure — It compounds against the investor exactly as returns compound for them
  6. Lock-ups and liquidity terms — They decide who bears the cost of an exit

The calendar

QuarterlyValuation marks
On demandCapital calls
On exitDistributions
AnnuallyAudited accounts
Every few yearsFundraising cycles

Which risk decides, across the shelf

Failure mode DecidesShare
Market3 of 1619%
Credit4 of 1625%
Liquidity11 of 1669%
Funding3 of 1619%
Operational6 of 1638%

Counted from the same table each product page prints. Not a rating and not a ranking: there is deliberately no total.

It reaches

Information and education only. Every line on this sheet is derived from the pages of this site, which explain mechanisms in general terms using simplified models. Nothing here is advice, a recommendation, or a valuation to rely on. Conventions differ by market and jurisdiction and change over time. Full disclaimer at strikeandyield.com/disclaimer.