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The Rise of Alternative Investments: A Guide for Wealthy Investors

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Explore popular alternative investments and their impact on portfolios.

description: an anonymous image of a diverse group of young investors discussing alternative investment opportunities on a digital platform, showcasing the trend of tech-savvy millennials and gen z embracing alternative assets.

If you're a wealthy investor between the ages of 21 and 43, alternatives are probably at the top of your list of investments that may offer higher returns and diversification. As traditional asset classes such as stocks and bonds face volatility and uncertainty, many investors are turning to alternative investments to balance their portfolios and potentially generate alpha.

When it comes to alternative investments, there are various options to consider. Real estate, fine art and collectibles, gold and precious metals, and cryptocurrencies are just a few examples of alternative assets that have gained popularity in recent years. These investments often have low correlation to traditional markets, providing a hedge against market downturns.

8 popular alternative investments: What you need to know:

  1. Real Estate
  2. Fine art and collectibles
  3. Gold and precious metals
  4. Cryptocurrencies
  5. Hedge funds
  6. Private equity
  7. Venture capital
  8. Peer-to-peer lending There are parallels between Taylor Swift's career and alternative investments, including brand loyalty, limited availability, and access to exclusive opportunities. Like investing in a rare piece of memorabilia or a private equity fund, being a Taylor Swift fan means being part of a select group with insider access to her music and merchandise.

What's the outlook for alternative investments? Private equity funds with an older vintage — the year in which they first drew down capital — are seeing strong performance, as they have had more time to mature and generate returns for investors. As interest rates remain low and market volatility persists, alternative investments are becoming increasingly attractive to investors seeking higher returns and diversification.

Research shows millennials and Gen Z have a taste for alt investments. With a growing interest in sustainable investing and impact-driven opportunities, younger generations are turning to alternative assets to align their portfolios with their values and beliefs. From ESG-focused funds to impact investing platforms, millennials and Gen Z are reshaping the investment landscape.

iCapital's Jason Broder talks about the fintech's massive expansion to help advisors implement alternative investments in traditional portfolios. By leveraging technology and data analytics, iCapital is making it easier for financial advisors to access and allocate capital to alternative investments, democratizing access to these opportunities for a wider range of investors.

New leadership is arriving at L Catterton, British Columbia Investment Management Corporation, Medalist Partners, and BNY. As alternative investments continue to gain traction in the market, leading firms are appointing new executives to drive growth, innovation, and strategic initiatives in the space. These changes reflect the evolving landscape of alternative investments and the increasing demand for specialized expertise in the industry.

The hyper-institutional New York City manager of $500 billion nabs the stakes after financial advisors moved the alts needle -- finally. With institutional investors increasing their allocations to alternative investments, traditional asset managers are adapting to meet the growing demand for these strategies. As alternative investments become more mainstream, asset managers are expanding their offerings and capabilities to cater to the evolving needs of investors.

How alternative can you get? Historically, conventional fund managers have dealt with the threat from private equity and hedge funds by exploring new alternative investment strategies and partnerships. From direct investments in startups to structured products and derivatives, fund managers are innovating to stay competitive in the ever-changing landscape of alternative investments.

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