Alternative Asset Appetite Rises With Wealth; Private Markets Mature, Studies Say

Tom Burroughes

15 May 2026

A survey by the asset management arm of , carried out in July and August last year, finds that 91 per cent of those surveyed who have $20 million or more in wealth hold alternative assets such as private equity, hedge funds, private credit, forms of real estate and venture capital.

While a fifth of net worth remains in cash for preservation and flexibility, 80 per cent of individuals with over $10 million in investable assets use alternatives, compared with 39 per cent for those with $1 to $5 million, GSAM said.

“Millennials show greater familiarity and higher allocations to alternatives. They view public equities as riskier compared to how older generations view stocks. They are also more motivated by access to innovation and unique opportunities, which we believe is signalling a future where alternatives play a central role in portfolio construction,” GSAM said in in its report, entitled Opening The Door To Alternatives.

However, the authors of the report noted a gap between perception and reality.

“Over half (56 per cent) of individual investors surveyed label alternatives as `high risk,’ yet the wealthiest portfolios heavily rely on them for performance and diversification. The gap is exacerbated by limited discussions with financial advisors, as only 41 per cent of advised clients say they have conversed about alternatives, whereas ETFs and tax strategies are discussed far more often,” the report, which called for more education about alternative assets, said.

The report comes at a time when the private markets space has been roiled by worries of defaults and exposures among private credit funds although, as this publication has heard, some players dispute claims of a systemic problem. There have been several redemptions from private credit funds in recent weeks, for example.

MSCI report
MSCI unveiled its inaugural State of Private Markets 2026 report, which said private markets are maturing, marked by rising demand for transparency, persistent liquidity constraints and a growing need to evaluate investments within a total-portfolio framework.

“The asset class works, but the infrastructure supporting it has not kept pace with its scale,” Luke Flemmer, head of private assets at MSCI, said. “Liquidity pressure, uneven confidence in markets and recent stress in private credit are all rooted in a structural lack of transparency. Investors need to know what they own, what those investments are worth and where risk lies to successfully manage public and private assets together.”

The report noted that stresses in private credit are a worry. It said that “semi-liquid” structures, such as those offering periodic redemptions based on manager-reported valuations, increase scrutiny on how accurate and timely those valuations are. (Such structures are also called “evergreen.”) There are more signs of borrower strain, particularly among smaller funds, the report said.

In private equity, the MSCI report identifies a continued slowdown in exits and distributions that is contributing to a more challenging fundraising environment as well as a growing reliance on secondary markets and continuation vehicles to generate liquidity. In a more buoyant tack, the report said the expansion of AI infrastructure is creating “significant investment opportunities across private markets.”

“From data centres to software and energy systems, AI-related investments are cutting across asset classes, reinforcing the need for more granular, integrated analysis of portfolio exposures,” it said.