Discuss the qualitative risk issues that have most likely materialized over the past year. Ingerria Gresl is an adviser with an investment management company and

Discuss the qualitative risk issues that have most likely materialized over the past year.

Ingerðria Greslö is an adviser with an investment management company and focuses on asset allocation for the company’s high-net-worth investors. She prepares for a meeting with Maarten Pua, a new client who recently inherited a $10 million portfolio solely comprising public equities.
Greslö meets with Pua and proposes that she create a multi-asset portfolio by selling a portion of his equity holdings and investing the proceeds in another asset class. Greslö advises Pua that his investment objective should be to select an asset class that has a high potential to fulfill two functional roles: risk diversification and capital growth. Greslö suggests the following three asset classes:

Public real estate Private real assets (timber) Equity long/short hedge funds