Episode summary
PW Northern California 2026: Steve Biggs of The Mather Group Spoke to Courtney McQuade
Summary
Stephen Biggs argues that the best place to find alpha is less about chasing one hot theme and more about building a diversified alternatives portfolio. He says niche opportunities still exist in areas like real estate lending and infrastructure, but the bigger return driver is portfolio-level diversification that can move the efficient frontier and lower volatility. He also says the market for alternative strategies rotates over time, so investors should stay exposed to multiple parts of the asset class rather than trying to pick a single winner.
On AI, Biggs says the most attractive way to access the theme is through venture and growth companies, especially application-level businesses that may not yet be well known. He is also seeing renewed interest in hedge funds because investors want low correlation, steady returns, and smaller drawdowns amid stretched public-market valuations.
On private credit, Biggs says the feared wave of defaults has not shown up yet, though he still sees risk in some aggressive software underwriting. He says the main issue is not the asset class itself but how it is used, especially in semi-liquid structures where investors may underestimate duration and liquidity risk. He views consolidation among large managers as helpful for access, while smaller, more specialized strategies remain important for excess return potential.
Key takeaways
- Stephen Biggs says alpha is more durable at the portfolio level, through diversified alternatives, than by relying on one niche strategy.
- Biggs sees selective opportunities in real estate lending and infrastructure, but says private equity and venture exposures should rotate through a broader alternatives sleeve.
- He says AI exposure is best captured through venture and growth companies, especially application-layer businesses that investors may not yet know.
- Biggs says hedge funds are back in favor because investors want low correlation and lower drawdowns as public-market valuations remain elevated.
- On private credit, he says the expected default wave has not materialized, but underwriting quality and liquidity terms still matter more than the headline yield.
Notable quotes
“the bigger picture is what advisors should be focused on is the kind of portfolio level alpha that a diversified group of alternative investments can bring to the table”
“I think that's the best way to to access the potential growth in AI”
“It's not necessarily the big players that are already out there on the market and have grown to such a large size”
“we're looking uh some low correlations or non-correlations, steady returns, low draw low drawdowns given some of the valuations in public markets”
“that has not really happened yet, right? We haven't seen that wave of defaults”
How the episode opens
Steve Biggs, this is our fourth Sidelines interview together. First, we met at Alt San Francisco last year, Private Equity San Francisco, and then Alt LA back in March. It is that broad range that was uh the primary reason we had you on that last panel session talking about where can you find alpha right now? And so, tell us, as the head of alternatives at The Mather Group, where are you finding alpha right now?
Well, thanks for having me back for a fourth time. Uh as far as where we're finding alpha, I mean, I think there's some opportunities in some niche areas of, say, real estate lending and infrastructure. But, I think the bigger picture is what advisors should be focused on is the kind of portfolio level alpha that a diversified group of alternative investments can bring to the table.
So, uh you know, the ability to kind of diversify portfolio diversifiers outside of the traditional public markets, I think can really impact the returns and move that efficient frontier out, so you're generating alpha for your clients with lower volatility. Uh and over time, that, you know, where the particularly levels of alpha or, you know, the real opportunities always kind of varies and rotates. You know, sometimes it's private equity, sometimes it's venture capital.
But, if you have all those in your portfolio and treat it like a portfolio of public markets, I think over time, you're going to have all those opportunities. And then, just kind of keep focused on, you know, where within those maybe from time to time, you get uh dislocated markets and a chance to add some alpha.
Interesting. Interesting. And AI has also been a very hot topic here. How does that play in with Are you looking at that as an alternative investment, or how are you looking at AI?
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- private wealth
- alternative investments
- ai growth access
- private credit
- alpha opportunities
Companies and tickers mentioned
- The Mather Group
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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