Select global clients have access to alternative investments that are often unavailable to the average investor, like expensive wine, fine art, and equity in private companies. What may come as a surprise is just how much their portfolios are weighted towards these types of investments. Among ultra-high-net-worth investors (those with a net worth of at least $30 million), alternative investments make up 50% of assets, compared to just 5% for the average investor.

Select investors had 50% of their assets in alternative investments in 2020. Alternative investment usage is higher among wealthier investors, with 81% of ultra-high-net-worth investors having alternative assets in their portfolio. Private equity is the only alternative investment to outperform the S&P 500. Worldwide, 32% of investors currently hold alternative investments.Total alternative investments under management are estimated to reach $17.2 trillion in 2025. Alternative investments are investments in anything outside of the stock, bond, and currency markets. It’s a broad term that encompasses tangible assets, commodities trading, investments in hedge funds, and even digital assets. These types of investments are often chosen as a hedge against inflation and, of course, to maximize returns.

Examples of alternative investments are Private Equity, Real Estate, Hedge Funds, and Private Credit. For the everyday investor, alternative investments typically make up a small portion of their overall assets. Retail investors have about 5% of their portfolios in alternative investments.  High-net-worth investors (those with a net worth of at least $1 million) allocated 26% of their assets to alternative investments in 2020. Ultra-high-net-worth investors (those with a net worth of at least $30 million) had 50% of their assets in alternative investments.