Why are advisors allocating more to private markets like CAIS?

Advisors are primarily using private market assets for risk diversification and as return enhancers for client portfolios.

What are the main challenges advisors face with alternative investments?

The primary challenges cited by advisors are high levels of administration and paperwork, followed by a lack of liquidity.

Which private market assets are advisors allocating to most?

Advisors report significant allocations to private equity, private credit, and real estate, with growing interest in thematic areas.

Home / Business and Economy / Advisors Pivot to Private Markets for Diversification

Advisors Pivot to Private Markets for Diversification

12 Dec

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Summary

Advisors overwhelmingly use private markets for risk diversification.
90% of advisors allocate to alternatives; 88% plan increases.
Admin tasks and liquidity remain key challenges for advisors.

Advisors Pivot to Private Markets for Diversification

Financial advisors are demonstrating a strong and growing preference for incorporating private market assets into client portfolios, primarily for the purpose of diversifying risk. The latest survey results reveal that a significant majority of advisors, 90%, currently invest in alternative assets, and an even larger portion, 88%, intend to expand these allocations within the next two years. This trend signals a structural shift in how advisors approach portfolio construction, integrating private investments as a core component.

The survey highlights that advisors utilize various private market asset classes, including private debt, real estate, and infrastructure, with risk diversification being the main motivation. Private equity and digital assets, however, are viewed as avenues for enhancing portfolio returns. Beyond these core areas, interest is also rising in thematic investments such as artificial intelligence, tax-advantaged strategies, and energy transition-related initiatives.