Alternative investing How are investors adjusting their allocations to alternatives?

The last 30 years have seen a steady growth and acceptance of alternative asset classes in institutional portfolios as investors seek diversified sources of income and return.

Meeting return objectives in the current lower-return environment bolsters the appeal of alternatives

The most aggressive users are US university endowments, some with allocations as high as 60%. Yale University started this trend in the 1980s and is now over 75% invested in alternatives. It is the norm to see 40% to 60% allocations to alternatives in large endowments. Global family offices allocated an average 37% to a variety of alternatives according to a recent survey. Mega funds like large public pension plans and sovereign wealth funds typically allocate 15% to 25% to alternatives and are considering increasing their alternatives allocation.

This report provides an overview of the different asset classes investors can integrate into their portfolios more broadly – private equity, hedge funds, real estate, infrastructure, and commodities – and how to do so.