Navigating volatility with alternatives

In a world where volatility seems to be the only constant, Westbrooke Alternative Asset Management is finding opportunity in the chaos. “Last year was particularly quiet for us,” says Dino Zuccollo, Head of Investor Solutions at Westbrooke. “It was incredibly difficult to price risk appropriately.”

Fast forward to 2025, and the tide has turned. Westbrooke is now capitalising on a burst of activity, raising what Zuccollo describes as a “really large” UK-based hybrid capital fund in partnership with Rand Merchant Bank, to the tune of £175m. “Suddenly everything we’ve been working toward is happening at once,” he says.

The firm is also making moves in other asset classes, with two UK-based private equity deals in progress, a new private credit fund in the US, and a property opportunity stateside. These initiatives complement their core legacy debt business, which continues to perform steadily.

Why an integrated model matters

But what sets Westbrooke apart isn’t just deal flow – it’s philosophy. “We’re not just an asset manager. We’re investors first. We invest our own capital alongside our clients in every deal,” says Zuccollo. “That fundamentally changes how we assess risk and opportunity.”

In an environment rocked by global uncertainty, from pandemics and wars to political upheaval like the Trump presidency, investors are increasingly seeking uncorrelated, resilient assets. “Times of turbulence have reminded clients why having alternative assets in their portfolios is so critical,” Zuccollo explains. “The traditional 60/40 portfolio just doesn’t work anymore. Stocks and bonds are more correlated than ever, and there are fewer listed companies, meaning higher concentration risk.”

For financial advisers navigating this complex landscape, Westbrooke’s integrated model offers a rare advantage. “We offer access to a broad range of private market opportunities – private debt, hybrid capital, real estate and private equity – across SA, the UK, and the US, all under one roof,” he says. “That kind of streamlined access is invaluable to wealth managers who are being bombarded with products and noise.”

Skin in the game

“At Westbrooke, there are two rules,” says Zuccollo with a grin. “The first rule is: don’t lose clients’ money. And the second rule? Refer back to rule number one.” This guiding philosophy is more than a clever catchphrase; it’s the backbone of the firm’s approach to capital preservation, client trust, and risk management.

When entering a new market, geography or asset class, Westbrooke puts its own capital on the line. For years, they are often the only investor in their ventures, using that time to test the robustness of strategies, partner alignment, and structural integrity – including tax and legal frameworks. “If we’re going to get it wrong, let it be with our money, not our clients’,” Zuccollo explains. “Our reputation is sacrosanct.”

Only after this internal proving ground does Westbrooke open an offering to broader markets and institutional capital. It’s a measured approach rooted in alignment, not just ambition.

Westbrooke’s risk philosophy

“Investing capital globally is an extremely complex task,” says Zuccollo. “In order to do this effectively, we have developed a proprietary risk philosophy and approach over more than two decades. It’s a set of rules and guiding principles, which are now deeply ingrained within our business, that allows us to invest in a capital preservation centric manner, while at the same time extracting asymmetric returns for the level of risk taken. This approach provides our clients with a unique advantage that cannot be found outside of Westbrooke – we call it The Westbrooke Advantage.”

The rise (and rise) of private debt

Among the alternative investments gaining ground is private debt, a core area for Westbrooke. Despite market expectations of a shift back to equities amid falling interest rates and political optimism, the recent landscape has done little to dent the appeal of private credit. “Every time you think private debt is becoming less relevant, it reminds you how important it really is,” says Zuccollo.

In a world where inflation fears and global uncertainty loom large, private debt’s predictability and resilience have made it increasingly attractive. Westbrooke’s flagship private debt fund, Westbrooke Yield Plus, has amassed close to £200m, returning nearly 8% annually, even through periods of heightened volatility.

“It’s done exactly what we said it would do,” Zuccollo notes. “Limited fluctuation, no tariff exposure, and it acts as a modern shock absorber, especially now that traditional bond portfolios don’t behave that way anymore.”

Why alternatives haven’t gone mainstream – yet

While alternatives are a staple in many global portfolios, accounting for 15 – 30% of high-net-worth client allocations in developed markets, the same can’t be said for South Africa. Hedge funds are slowly gaining acceptance, but private market assets, like those offered by Westbrooke, remain far from mainstream. Why the lag?

Zuccollo points to several factors: lack of understanding, unsuitable platform infrastructure, high investment minimums (starting at $100 000 or R1m), and the red tape of exchange control for offshore allocations.

“It’s not just about access. It’s about education,” he says. “Many advisers are still on a journey to truly understand the asset class and its risks.” But the tide is turning. Zuccollo sees a strong trend among wealth advisors toward deeper engagement with alternatives – even if allocations remain limited for now.

“Like anything in life,” Zuccollo says, “if you’re looking for alpha or uncorrelated returns, there will be challenges. But if you understand the strategy, take calculated risks, and demand the right return for those risks, it works.”

He isn’t advocating for abandoning liquidity altogether. “Of course, you need a portion of your portfolio to be accessible. But to have a chunk of your capital tied up – where you can’t just pull it out – forces long-term thinking. And long-term thinking is exactly what’s missing from so many portfolios today.”

What really constitutes an alternative?

Zuccollo takes a pragmatic view. “Alternatives are any investments or risk profiles that fall outside traditional bonds, equities, or cash. So yes, crypto technically qualifies, but in practice, it trades like a highly leveraged risk asset. It’s not giving you the correlation benefits or diversification that a true alternative should.”

And what about gold? “That’s actually the reverse case. Gold isn’t ‘alternative’ in nature, as it is widely accessed. But its diversification benefits do make it a valuable alternative asset in many portfolios.”

Selectivity is the name of the game

Westbrooke’s focus is on providing clients exposure to unlisted private markets, something they’ve historically lacked access to. “The universe of unlisted companies globally is over 850% larger than the listed market. Yet most clients have almost no exposure. That doesn’t make much sense.”

Currently, real estate and private equity are re-emerging as focus areas for Westbrooke. “At the start of the year, pre-tariffs, we saw strong potential there. Lower interest rates and a more buoyant market usually support both sectors. Now, with geopolitics and elections in play, it’s harder to predict trends. 

That’s why Westbrooke has been cautious. “We did almost nothing in private equity and real estate for the past few years. This year, we’re re-entering, but carefully. When there’s blood on the streets, that’s often when the best opportunities arise.”

A significant recent initiative is Westbrooke’s new hybrid capital fund, developed in partnership with RMB (Rand Merchant Bank). It’s a sizable effort, aimed at raising £75m in equity, with RMB committing £100m in debt, to deploy in the UK’s corporate lending space. “That’s about R4bn of South African capital going offshore. It’s a major step, and once the raise is complete, we’ll be ready to talk more.”

Partnerships like this matter deeply to Zuccollo, not just for their financial impact, but for what they signal. “They show that South African capital can move intelligently and confidently into sophisticated, global alternative strategies. We want to be at the forefront of that.”

In an era where investors are being asked to think beyond daily market swings and reframe wealth as a long-term legacy, Westbrooke, and voices like Dino Zuccollo’s, are making a strong case for patient, deliberate capital.

“It’s just a mindset shift. But once you make it, you start to see everything differently.” And that could be just what South African investors need most.