Alternative assets are going mainstream — but are investors ready?

With decades of experience allocating capital globally, Stephen Darke shares what it takes to identify a repeatable edge, when to walk away, and why institutional lessons are now flowing into wealth channels.

“You can't just get excess returns across all cycles without giving something up, and what are you giving up… Liquidity.”

If you’ve ever wondered how alternatives can complement a core portfolio, or why liquidity isn’t always your friend, this episode delivers plenty of food for thought.

00:40 – Origins and Early Careers
Steve and Stephen reminisce about their early days at Macquarie, reflecting on the firm’s entrepreneurial culture and the unconventional career paths that brought them together.

06:33 – What Are Alternatives?
Stephen breaks down what qualifies as “alternative investments” and explains their value in reducing portfolio volatility—especially when equities fall. He notes, “It may mean that you make less money in a very high-returning equity market. But overall, the risk-adjusted return in your portfolio is far more consistent.”

13:13 – Inside Navigator’s Unique Model
The discussion pivots to Navigator Global Investments. Stephen outlines how shareholders get exposure to a diverse set of 12 global alternative asset managers, and why owning stakes in the management companies, rather than the funds, is key to their business model.

27:18 – Risk Discipline in Hedge Funds
The pair discuss the risk controls in elite hedge fund structures. Stephen highlights firms like Balyasny and Citadel, where portfolio managers must operate within strict risk limits or lose their mandates.

35:33 – Future Growth and Strategic Deals
Stephen outlines Navigator’s capital allocation strategy and growth ambitions—highlighting their recent 23% acquisition of a global healthcare manager and foreshadowing more deals.

Explore previous episodes here. We’d love your feedback. If you like what you’re hearing (and what we’re drinking), be sure to follow and subscribe – we’re doing this every quarter.