Navigating uncertainty: Smarter risk management through liquidity and hybrid strategies

The investment landscape has undergone a profound shift

A persistently high inflation environment, elevated interest rates and geopolitical instability have all contributed to a growing investor appetite for diversification, yield and more control over risk. As a result, private markets have emerged as a strategic asset class – but one whose traditional illiquidity is increasingly seen as a structural flaw rather than a feature. Liquidity and accessibility are no longer optional; they are defining features of next-generation private market strategies.

At Azimut, we have long believed that the true innovation in private markets lies not just in what we invest in, but how we structure those investments. The form matters as much as the substance: flexible, scalable vehicles combined with a distribution approach that brings alternatives to a broader investor base without compromising on quality

In private markets, the real innovation lies not in what you invest in, but in how you structure access.

The rise of hybrid strategies: Balancing return with flexibility

Today’s investors are asking for two things: the return potential of private markets and the optionality of more liquid products. Hybrid strategies are our answer. These vehicles combine private equity, private credit, infrastructure and real assets with a liquid sleeve or engineered liquidity mechanisms that offer greater agility in managing portfolios.

At Azimut, our hybrid structures are built to:

• maintain the risk-return profile of private assets,

• provide scheduled liquidity windows or NAV-based partial redemptions,

• accommodate evergreen models or comply with ELTIF 2.0 regulations to reach HNWI (High Net Worth Individual) and retail audiences.

The goal is clear: build long-term exposure to alternatives while giving investors more control over capital deployment, duration and rebalancing.

Smart risk is structural risk

Risk management in private markets has traditionally been backward-looking: it came in the form of monitoring, post- investment oversight or periodic reporting. But in today’s world, risk must be designed in from the beginning.

This means:

• embedding trigger mechanisms to reduce exposure to individual assets,

• implementing real-time NAV monitoring and valuation thresholds,

• stress-testing redemption windows in advance under multiple scenarios.

In our experience, these mechanisms aren’t constraints; they are confidence-builders for investors seeking to commit capital over longer horizons without giving up flexibility.

Risk management today isn’t about reacting to volatility. It’s about designing resilience from day one.

Technology as enabler, not add-on

Designing more dynamic, liquid and hybrid structures is only possible with the right technological backbone. That’s why Azimut has invested heavily in building a proprietary digital infrastructure that supports onboarding, subscription, monitoring and client engagement across more than 20 countries.

From Italy to Brazil, Luxembourg to the UAE (United Arab Emirates) and across Latin America, Asia and the Middle East, Azimut’s cross-border technology allows us to:

• streamline investor access with a paperless experience,

• deliver transparent reporting on underlying holdings,

• integrate educational tools to help investors better understand private market exposures.

In short, technology is how we deliver risk-managed alternatives at scale.

Distribution matters: Democratisation without dilution

Opening private markets to a broader audience is about more than regulation; it requires commitment, clarity and a consistent distribution philosophy.

Azimut’s global reach gives us an edge in scaling private market products, but we’ve learned that distribution without education is a missed opportunity. That’s why we’ve focused on three key pillars:

1. empowering financial advisors with tools and training,

2. designing products that are simple to understand yet institutionally sound,

3. partnering globally to access proprietary deal flow across asset classes.

The result is a model where investor sophistication is supported, not assumed, and where access doesn’t come at the expense of quality.

Looking ahead: Private markets must evolve

Hybrid and liquid solutions aren’t a passing trend. They’re the next logical evolution in how we bring private markets to life for modern investors.

As the boundaries between public and private markets blur, and as clients demand more personalised, agile portfolios, the managers who succeed will be those who combine product innovation, smart risk management and intelligent distribution.

At Azimut, we’re building for that future, today.

ELTIFs as a european enabler of hybrid innovation

Europe’s regulatory landscape has been evolving to support a broader access to private markets, and the revised ELTIF framework (ELTIF 2.0) represents a pivotal step in that direction. Azimut has embraced this opportunity decisively, becoming one of the most active players in the space with the launch of 21 ELTIFs to date. These vehicles have been structured to offer diversified exposure across private equity, private credit, infrastructure and real estate while maintaining investor protection, transparency and – crucially – engineered liquidity.

The ELTIF model allows us to balance long-term capital commitments with optionality for investors and to align regulatory compliance with product flexibility. For retail and HNW investors, this opens a door that was previously limited to institutions. For the industry, it signals a structural evolution: alternative investments are no longer confined to closed-end, illiquid formats – they are becoming modular, accessible and responsive to real- world investor needs.

Salvatore Sberna, Head of Alternative Investments & Conducting Officer, Azimut Investments S.A