Size and Growth of Alternatives
Alternative investments (Alts) as an asset class, encompassing strategies that fall outside traditional equity and fixed-income solutions, continue to gain importance for investor portfolios. This is driven by the potential for improved portfolio performance and better access to the asset class.
The demonstrated success of alternatives has led to significant growth, with estimates showing over $17 trillion in assets under management today compared to $7 trillion a decade ago. Projections show alternatives growing by about 11% per year to a size of over $29 trillion by 2029.
Greater access to the asset class for investors is an important feature today, with asset managers focused on “democratizing” alternatives to expand the pool of potential investors. There has been meaningful growth in offerings with smaller minimum investments, greater transparency, and lower fees, which allow investors to capture more of the value added, along with the illiquidity premium inherent in private vehicles. Another attraction today is the availability of funds that are not partnerships, providing 1099s instead of K-1s (simplifying tax reporting).
These newer offerings often allow investors to access markets typically reserved for illiquid funds, such as private equity or direct lending, but in vehicles that offer the potential for liquidity on a quarterly basis.
Past performance is no guarantee of future performance and future returns are not guaranteed. There are risks associated with investing in stocks such as a loss of original capital or a decrease in the value of your investment.
This report is provided for informational purposes only and shall in no event be construed as an offer to sell or a solicitation of an offer to buy any securities. The information described herein is taken from sources which we believe to be reliable, but the accuracy and completeness of such information is not guaranteed by us. The opinions expressed herein may be given only such weight as opinions warrant. This Firm, its officers, directors, employees, or members of their families may have positions in the securities mentioned and may make purchases or sales of such securities from time to time in the open market or otherwise and may sell to or buy from customers such securities on a principal basis.
