"Access to alternative investments is expanding in ways that were almost unthinkable a decade ago. Evergreen funds and interval funds now offer individual investors exposure once limited to larger institutions. On the surface, that looks like progress: more tools to work with and more ways to build resilient portfolios. But when access expands this fast, complexity tends to follow. And that is exactly what investors face today."
"Alternatives include private market investments that come with different liquidity, valuation methods, and drivers of return than public markets. They span a wide range of strategies including private credit, private equity, growth equity and venture capital, real estate, and infrastructure. "Secondary" investments, or the purchase of existing private market investment interests, are also growing in popularity. Investors are being offered more alternative strategies than ever, yet many still lack clarity."
"To understand how individuals are engaging with alternatives, Goldman Sachs surveyed more than 1,000 people with at least $1 million in investable assets. The results paint a picture of disciplined savers, some of whom are unsure about how to use alternatives. These investors save consistently. Yet substantial portions of that accumulated wealth are not being put to work. Across respondents, roughly 20% of net worth sits in cash."
Access to alternative investments has expanded through instruments like evergreen and interval funds, allowing individuals to use strategies once limited to institutions. Alternatives encompass private credit, private equity, growth equity, venture capital, real estate, infrastructure, and growing secondary market purchases, each with distinct liquidity, valuation, and return drivers. Manager sourcing, risk assessment, and portfolio construction vary widely across providers. Many investors lack clarity about appropriate roles and allocations for these exposures. A survey of over 1,000 investors with at least $1 million in investable assets shows disciplined saving behavior but roughly 20% of net worth held in cash labeled "flexibility." Some cash could better support long-term goals through deployment.
Read at Fortune
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