08.11.26

Advisor Demand for Alts Stays Strong, but Allocations Are Shifting

by: David Bodamer

A new survey from iCapital found strong advisor demand for alternative investments, with 89% planning to maintain or increase allocations and 39% expecting to increase them, up sharply from 14% last year. Advisors are increasingly prioritizing risk and performance analytics over automated transactions and other operational tools as alternatives become more integrated into portfolio management. Liquidity and risk assessment remain the biggest challenges, followed by compliance and access to institutional-quality products. Private equity remains the most popular alternative, while interest in real estate and venture capital increased. By contrast, allocations to private credit and hedge funds declined, reflecting recent market concerns. Interest in evergreen strategies also weakened amid redemption pressures, suggesting advisors are becoming more selective while continuing to expand alternative investment exposure.

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