S
hutterstock/Miljan Zivkovic Moneywise and Yahoo Finance LLC may earn commission or revenue through links in the content below.

    In a climate of rising economic uncertainty, both institutions and individuals are turning to alternative assets such as private equity and real estate. These investments promise not only higher long‑term gains but also stronger diversification and protection against inflation. Private‑market revenues are projected to hit $432.2 billion by 2030, representing more than half of global asset‑management income, according to PwC’s 2025 Global Asset & Wealth Management Report.

    Regulatory changes and new fund structures—like semi‑liquid vehicles—have broadened access. U.S. law now permits alternative holdings in 401(k) plans, and individual investors are increasingly seeking these assets to counter inflation and market swings. Bank of America’s Study of Wealthy Americans found that 72 % of Gen Z and millennial investors (ages 21‑43) believe traditional stocks and bonds alone cannot deliver above‑average returns. Of those surveyed, 17 % already hold alternatives, and 93 % intend to boost their exposure in the coming years.

    Mercer’s 2025 survey of wealth‑management advisors shows that 92 % currently include alternatives in client portfolios, with 91 % planning to raise allocations over the next two years. The leading classes are private debt (89 %), private equity (86 %), and real estate (85 %).

    Historically, private‑equity markets were the domain of institutions and high‑net‑worth individuals due to regulatory hurdles, complex due diligence, limited liquidity, and high minimums. Yet individuals control roughly 50 % of the $275‑$295 trillion global AUM, yet only 16 % of alternative‑fund AUM, per Bain & Company. Moreover, fewer than 15 % of firms with revenues over $100 million are publicly listed, limiting public‑market exposure to the broader economy. Consequently, investors and advisors are increasingly drawn to alternatives for diversification and superior returns beyond what public equity and debt can offer.