Let’s get real about alternatives
Watch this video to find out how we're offering accredited investors access to the benefits real assets can offer.
FOR CANADIAN ACCREDITED INVESTOR USE ONLY. NOT FOR FURTHER DISTRIBUTION.
Canadian investors are living in a world in which their portfolios are increasingly threatened by factors outside of their control:
To mitigate these risks, the world’s most sophisticated investors have turned to real assets, investing in infrastructure, real estate, timberland and farmland, to name a few. But high minimum investment amounts, complicated investment processes, low liquidity and restricted access mean that these diversifying investments have traditionally been available to only the largest institutional investors.
Traditional funds can offer some exposure to parts of the real economy by holding securities issued by firms in the infrastructure, agriculture and real estate sectors. But since their holdings are traded on public exchanges, they’re still exposed to public market shocks. This has resulted in retail investors missing out on the key benefits that real assets can offer. At Manulife Investment Management, we believe it’s time to change that.
To help solve this disparity, we’ve leveraged our experience and expertise in real assets to create the Manulife Real Asset Investment Fund, a solution that brings institutional-grade management of real assets to Canada’s accredited retail investors. Manulife Real Asset Investment Fund combines the diversification and yield benefits of real assets with the liquidity of public market investments-with transparency and investor access at its core.
The strategy is made up of two investment sleeves; one providing exposure to assets driving the real economy, the other comprising public market investments that seek to mirror the private assets exposures. This second sleeve provides investors with liquidity and the ability to manage capital flows.
The end result is a fund with the benefits of institutional quality real asset exposures, combined with the access, liquidity and transparency that Canadian accredited investors deserve.
Private assets sleeve
Direct investment into Manulife Real Asset Fund:
Public assets sleeve
Publicly-traded investments in:
Over the long-run, the Fund is expected to maintain approximately a 70% allocation to the Private Assets Sleeve, implemented through units of Manulife Real Asset Fund ("MRAF”) and approximately a 30% allocation to the Public Assets Sleeve. MRAF invests primarily in affiliated Underlying Funds and may invest in Underlying Funds managed by unaffiliated investment managers providing direct exposure to real estate, timberland and farmland, infrastructure, private debt and other private market asset classes. MRAF is an affiliated Underlying Fund and is managed by Manulife Investment Management Limited (the “Manager”) and advised by the Manulife Investment Management (US) LLC and Manulife Investment Management Limited. The Fund may invest in affiliated mutual funds and pooled funds under the public sleeve. The Fund may also invest in mutual funds and pooled funds managed by unaffiliated investment managers if there are no suitable investment opportunities in affiliated funds. For more information, please consult the Fund’s Offering Memorandum.
For illustrative purposes only.
Real assets provide exposure to the real economy, such as roads and bridges, power lines, apple orchards, corn fields and office towers. This benefits investors by offering diversification and value. Assets like this have low correlation with traditional asset classes like equities and bonds, can help protect against inflation since their revenues are often tied to the Consumer Price Index (CPI), and have differentiated yield profiles that may be useful in a low-rate environment. Since they typically provide critical products and services, real assets may also have a potential for lower volatility levels than traditional assets. The result of these characteristics is the potential for improved risk and reward and better long-term outcomes. Thanks to their lower volatility levels and lower correlations with traditional asset classes, adding real assets can improve investors’ efficient frontiers – the set of portfolios that offer the highest expected return for a given level of risk.
20-year annualized returns as of December 31, 2022
Source: Morningstar Direct, January 1, 2003 to December 31, 2022. Representative indexes: Farmland: NCREIF Farmland; Infrastructure: Burgiss Global Infrastructure Pooled Composite; Canadian Real Estate: MSCI Canadian Property Index (01/01/2003 – 12/31/2004) & MSCI/REALPAC Canada Quarterly Property Fund Index (01/01/2005 -9/30/2022); U.S. Real Estate: NCREIF US Real Estate; U.S. Equities: S&P 500 TR Index; Canadian Equities: S&P/TSX Composite TR Index; Canadian Bonds: FTSE Canada Universe Bond Index; Timberland: NCREIF Timberland; U.S. Bonds: Bloomberg U.S. Agg. Bond Index. All returns are in Canadian dollars.
|
Mutual funds and ETFs focused on public investments in the real economy |
Liquid alternative mutual funds & ETFs |
Private real asset strategies |
|---|---|---|---|
What they are and what they hold |
Public equities and bonds of companies in sectors focused on the real economy, such as agriculture, utilities, infrastructure, and REITs |
Public equities & bonds; commodities; often with the use of short selling, leverage and derivatives |
Direct real estate; Timberland; Farmland; Infrastructure assets |
What they can do |
Provide some exposure to real assets owned by public companies; can be bought and sold on a stock exchange or from a network of bond dealers at any time with relative ease |
Provide some diversification through exposure to non-traditional strategies such as long/short and equity market neutral; provide liquidity |
Diversification thanks to income and growth patterns unrelated to public markets; help protect against inflation |
What they don’t do |
Provide direct exposure to real assets; capture the liquidity premium; diversify against adverse market events |
Provide direct exposure to real assets; capture the liquidity premium |
Provide daily liquidity |
May be suitable for |
Traditional investors who need liquidity, can tolderate market drawdowns, and want exposure to some elements of the real economy |
Investors looking for strategies that can be less correlated with traditional markets |
Long-term accredited investors focused on steady and diverse sources of income that have low correlations with traditional asset classes, and who want to hedge against inflation |
It takes deep experience, talent and global collaboration to manage real assets so that investors reap the benefits. Manulife has them all. Manulife general account has been investing in real assets for almost a century and today Manulife Investment Management timber and agriculture⁵ is the world’s largest natural capital investment manager. Now, Manulife Investment Management is democratizing real assets and bringing that expertise to accredited retail investors across Canada. Manulife general account has been investing in real assets since 1925. In addition to Manulife Investment Management's in-house investment capability, Manulife Real Asset Investment Fund also has portfolios in third party investment managers.
Active allocation, deeper diversification, and tailored solutions built over 25 years of multi-asset innovation.
Investment professionals
Years of multi-asset investing
in assets under management1
Capitalizing on inefficient markets, diversification potential, and seeking attractive risk-adjusted returns.
World’s largest natural capital investment manager
$20.2 billion in AUM5
40+ years of experience
$17.8 billion in AUM6
74.2 million square feet of commercial property globally
$27.1 billion in AUM7
All data as of December 31, 2022, unless otherwise noted; all AUM calculated on a fair value basis in Canadian dollars (CAD). Data includes assets managed by Manulife Investment Management and its affiliates on behalf of Manulife's Canadian and U.S. General Accounts, and also certain third-party investors. Investment advisory services to third party investors and certain affiliated investors are offered by Manulife Investment Management Private Markets (US) LLC ("Manulife IM PM (US)") a U.S. Securities and Exchange Commission registered investment adviser with $48.7B assets under management.
1 Excludes subadvised assets under management. Assets shown in Canadian dollars. Manulife Investment Management’s global investment professional team includes expertise from several Manulife IM affiliates and joint ventures; not all entities represent all asset classes. AUM includes C$3.5 billion non-discretionary advice for the Manulife General Account by MAST Index team, and C$3.0 billion External Clients AUM advised by MAST LDI team, but these funds are managed by other Manulife IM desks.
2 Investment professionals includes individuals who manage assets on behalf of both the Manulife General Account and external third parties.
3 Excludes subadvised assets under management. Assets shown in Canadian dollars. Manulife Investment Management’s global investment professional team includes expertise from several Manulife IM affiliates and joint ventures; not all entities represent all asset classes. AUM includes C$87.7 billion managed by Manulife IM Private Markets and C$6.0 billion managed by Manulife IM Public Markets. The methodologies used to compile the total AUM are subject to change and may not reflect regulatory AUM as reported on certain affiliates' Form ADV.
4 Includes significant experience investing on behalf of the Manulife general account.
5 Source: IPE research as of February 5, 2023. Ranking is based on total Natural Capital AUM, which includes forestry/timberland and agriculture/farmland AUM. Firms were asked to provide AUM and the ‘as of’ dates vary from 12/31/2021 to 12/31/2022. Represents assets of Manulife Investment Management’s timberland group managed on a discretionary and non-discretionary basis for the general account, its affiliates, and third-party clients.
6 Experience of North American corporate finance.
7 Manulife IM PM (US) manages $1.2B of real estate equity strategies on a discretionary basis and $1.5B on a nondiscretionary basis; AUM reported on a fair value basis; The methodologies used to compile the total AUM are subject to change and may not reflect regulatory AUM as reported on certain affiliates' Form ADV.
November 4, 2022
© 2023 Manulife Investment Management. All rights reserved. Manulife Investment Management, the Stylized M Design, and Manulife Investment Management & Stylized M Design are trademarks of The Manufacturers Life Insurance Company and are used by it, and by its affiliates under license.
This communication is not and under no circumstances is to be construed as an invitation to make an investment in the Manulife Real Asset Investment Fund (the “Fund”), nor does it constitute a public offering to sell the securities of the Fund. The offering of units of the Fund is made pursuant to its Confidential Offering Memorandum only to those “accredited investors” in certain jurisdictions of Canada who meet certain eligibility and cannot be sold in Canada to the general public. The offering memorandum contains important information regarding the fund's investment objectives, strategies, restrictions, risks, fees, redemption limitations, liquidity and other matters of interest. There are no assurances that the stated investment objectives of the fund will be met.
Applications for investment in the Fund will only be considered on the terms set out in the Confidential Offering Memorandum, a copy of which can be obtained from us. Eligible investors should review the Confidential Offering Memorandum carefully before deciding to purchase units and should note that alternative investments can involve significant risks. The Fund is not guaranteed, its values may change frequently and past performance may not be repeated. The Fund is managed by Manulife Investment Management Limited. Manulife Investment Management is a trade name of Manulife Investment Management Limited.
Investing involves risks, including the potential loss of principal. Financial markets are volatile and can fluctuate significantly in response to company, industry, political, regulatory, market, or economic developments. These risks are magnified for investments made in emerging markets. Currency risk is the risk that fluctuations in exchange rates may adversely affect the value of a portfolio’s investments. The information provided does not take into account the suitability, investment objectives, financial situation, or particular needs of any specific person. You should consider the suitability of any type of investment for your circumstances and, if necessary, seek professional advice.
This material, intended for the exclusive use by the recipients who are allowable to receive this document under the applicable laws and regulations of the relevant jurisdictions, was produced by, and the opinions expressed are those of, Manulife Investment Management as of the date of this publication, and are subject to change based on market and other conditions. The information and/or analysis contained in this material have been compiled or arrived at from sources believed to be reliable, but Manulife Investment Management does not make any representation as to their accuracy, correctness, usefulness, or completeness and does not accept liability for any loss arising from the use of the information and/or analysis contained. The information in this material may contain projections or other forward-looking statements regarding future events, targets, management discipline, or other expectations, and is only as current as of the date indicated. The information in this document, including statements concerning financial market trends, are based on current market conditions, which will fluctuate and may be superseded by subsequent market events or for other reasons. Manulife Investment Management disclaims any responsibility to update such information.
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