In the challenging financial landscape of recent years, investors are turning to alternative investments as a way to diversify their portfolios and potentially boost returns. Historically, alternatives have been the playground of institutions and the ultra-wealthy, but more individual investors are now seeking access to this asset class.
With the pool of publicly traded companies shrinking, individuals are looking beyond traditional investments in search of new opportunities. Private companies now make up the majority of US businesses, further driving interest in alternatives. Despite this, individual investors have only allocated a small portion of their wealth to this asset class, highlighting the untapped potential in the market.
According to Preqin Global Alternatives, the global assets under management for alternative investments are projected to reach $23.3 trillion by 2027, reflecting a significant growth opportunity for investors. As demand continues to rise, policymakers and asset managers are working to democratize access to alternatives, presenting financial advisors with a unique chance to expand their offerings.
In this evolving landscape, the allure of alternatives lies in their potential to provide a hedge against market volatility while offering exposure to emerging sectors. As investors navigate uncertain economic conditions, alternatives offer a compelling option for those seeking to build resilient and diversified portfolios.
