- U.S. retail investors are turning to alternative investment strategies, particularly private equity and hedge funds, to improve returns, as low interest rates and a crowded equities market have cramped the performance of stocks and bonds, the Financial Times .
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- Assets under management in these alternative assets which reached $10.3 trillion in 2019 among institutional investors globally, are forecast to hit $14 trillion by mid 2023, according to data provider Preqin. Recent U.S. regulatory guidance that will expand retail investor access to is likely to add to this trend.
- Of the 300 advisers featured on this year’s Financial Times , less than half (128) have any client money invested in alternatives, with those firms allocating an average 7% of assets.
- Tom Kehoe, managing director and global head of research and communications for the , said that while alternatives can be a good way to diversify a portfolio, he warned that if an investor is forced to sell an alternative asset quickly, it could be at a steep discount.
- “The average hedge fund was able to withstand that market correction better than equities did in the first quarter,” Kehoe said.
