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Esoteric Assets Primer - Finding Alpha in a Highly Competitive Market

Esoteric Assets Primer - Finding Alpha in a Highly Competitive Market

Low True Correlation · Higher Alpha · Scalability

Financial markets are fairly efficient – they do not have obvious sources of excess risk-adjusted return – primarily because they are so competitive. But esoteric assets are less-competed assets, improving risk-adjusted return to investors.

Esoteric assets, less traded and unconventional, offer refuge from competitive markets despite illiquidity, presenting high-return opportunities in areas like sovereign receivables, legal finance, atypical jurisdictions, and new asset classes like charter school financing.

Investing in esoteric assets offers potential advantages such as low true correlation, higher alpha, and scalability, stemming from reduced competition and operational structuring, but comes with challenges like high illiquidity, laborious sourcing, and legal novelty risks, presenting a unique opportunity for excess returns driven by lack of competition and illiquidity premiums.

Access the full report to gain insights into the potential advantages, challenges, and risks associated with esoteric assets, and discover investment opportunities in this unique space.

If you do not have a work email address, please email us at and we can email you the report directly.

Table of Contents

  • Introduction to Esoteric Assets Primer

  • Competition for Assets Eliminates Risk-Adjusted Return

  • What is an Esoteric Asset?

  • Esoterics as an Alternative for Generating Higher Returns by Avoiding Price Competition

  • What Are The Risks Associated With Esoteric Assets?

  • Who Are The Investment Managers In This Space?

Thanks to our Contributor

Orthogon Partners

Orthogon Partners seeks to generate excess returns from less-competed ("esoteric") assets which have reduced dependence on credit, business, market, rate and other factors of systematic risk. Orthogon's investments in esoteric assets are intended to provide superior returns over broad market conditions with realizations targeted within a five-year period.


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