Tatiana Collins

Alternative investments within private wealth portfolios are reaching higher concentration levels than the investment framework is designed to handle. They account for close to a third of portfolio allocation, according to JPMorgan’s Global Family Office Report 2026, as wealthy individuals are drawn to the promise of higher returns and thematic investing. Lifestyle assets such as fine art, family real estate, classic cars, wine and family-owned business interests occupy a largely unmanaged subset that sits outside the standard framework applied by institutional wealth managers.

Art and collectables represent approximately 10 per cent of ultra-wealthy individuals’ net worth, according to Deloitte’s Art and Finance Report 2025. Family real estate and lifestyle assets add materially to this figure, suggesting that the shadow wealth portfolio represents between 10 and 20 per cent of their total wealth. If these assets were fully integrated into the balance sheet, the true alternatives concentration for many wealthy individuals would be closer to 50 per cent of portfolio allocation.

The wealth management industry has been pursuing the total portfolio view by attempting to consolidate client positions into a balance sheet manually and by building holistic wealth propositions. Advisors know that these assets exist but lack the instruments to value and manage them coherently. Attempts to create an integrated view are reasonable and well-intended; however, they have not delivered the desired outcomes in the following circumstances.

Proposition: the solutions offered are not compelling enough to entice clients to bring their Shadow Wealth Portfolio into the managed allocation.

Infrastructure: facilities to manage these assets meaningfully within existing record-keeping systems are not integrated.

Trust: clients resist full disclosure of assets they consider private.

The generational wealth transfer as a trigger
The $84 trillion generational wealth transfer has been discussed for a decade through the lens of how next-generation individuals will invest: their channel preferences and service expectations. The more important question is their investment preferences. The next generation of clients is not only taking a self-directed approach to managing wealth but also has different asset preferences. The active investment tendency has already reshaped proposition design, driving growth in digital advisory solutions, self-directed trading applications and active portfolio mandates that give clients greater visibility and control over their investment decisions. Furthermore, UBS Global Wealth Management’s 2026 Next Generation Report surveyed 170 inheritors globally and found that, while traditional asset classes remain at the core, nearly half of individuals are actively building exposure to investment themes ranging from digital assets to sustainability. This represents a material shift in investment philosophy from the previous generation.

Consequently, collectables, which have traditionally been considered a safe haven and a reliable portfolio diversification method, are likely to be liquidated fastest once inheritance is transferred to a generation with no emotional attachment to these assets. Their simultaneous release into secondary markets could lead to supply saturation and consequent asset devaluation. Not all assets may be affected. Genuinely high-quality pieces such as museum-grade art with authentically documented provenance or pristine classic cars with an unbroken ownership history will hold value. The vulnerability lies in the mediocre middle: assets packaged and marketed to wealth accumulators as more product rather than better quality. The 'brown' furniture market in the UK is one example, where Victorian antiques, once sought after and sold for tens of thousands of pounds, are now available at country auctions for as little as £10 apiece.

A high-conviction strategy as a solution
A typical balanced portfolio relies overwhelmingly on a collection of investment options that serve as diversification tools. Next-generation clients will interact with investment philosophy in ways that the current framework does not accommodate. The total portfolio view is an attempt to solve a structural problem with a reporting solution. Rather than continuing the search for a perfect total portfolio view that private clients resist, a specialised managed portfolio built on the wealth manager’s conviction is a powerful alternative. It does something the total portfolio view has never been able to achieve, not because it is a better product, but because it is the only model that creates accountability through investment strategy, governance mandate and expertise at the same time.

In January 2026, BlackRock and Partners Group launched what they describe as a first-of-its-kind multi-alternatives Separately Managed Account (SMA), making diversified alternatives exposure available to private wealth clients through a single-account structure. The precedent already exists, as some of Europe’s oldest and most respected wealth managers, such as Julius Baer and Lombard Odier, have built their entire investment philosophy around exactly this principle: named strategies, defined risk parameters and clear performance accountability.

The question is why a passive mandate would be the right solution for alternatives allocation for individuals already leaning towards more active investing.

Self-directed investing works for liquid, publicly traded equities, where investors have access to real-time data, pricing transparency and immediate market access, whereas the investment horizon for alternative investments is measured in years, with constrained liquidity. The high-conviction portfolio demands a robust investment governance structure for an asset class that cannot simply be treated as a product-shelf selection without significant risk of poor timing, valuation errors and liquidity mismanagement. Next-generation investors who actively manage their public equity portfolios through a digital platform also need a specialist to manage their private markets exposure holistically. Hybrid SMA structures provide meaningful visibility, reporting frequency and customisation rights that address individuals’ preference for control without compromising governance discipline.

Implications for advisors
In practice, such a solution means three things. At the foundation are genuinely high-quality assets and accurate value assessment across the entire asset base. This distinction requires specialist knowledge that most generalist wealth advisors do not possess, but it creates an opportunity for differentiation for those who do.

Beyond that, firms need a genuinely consolidated view of individuals’ or families’ total wealth, whether actively or passively managed, liquid or illiquid, and on or off the register. This requires the operational infrastructure to connect private markets data and is operationally demanding. Private markets reporting runs on quarterly cycles, whereas public portfolios update daily. Lifestyle assets are, at best, reviewed annually. Reconciling them into a coherent total portfolio picture is both operationally and technically demanding for firms already managing significant complexity within legacy systems. Finally, firms must meet the next generation’s preference for active management by giving clients meaningful control over portfolio personalisation. This is not a quick fix and requires building or acquiring an entire capability stack, alongside a patient, sequenced and operationally grounded investment advisory approach spanning CIO functions, analytics, decision engines, platforms and communications delivery.

The industry has spent a decade preparing for the generational wealth transfer. It has modelled channel preferences, built digital platforms and expanded alternatives allocation. However, it has not modelled privately managed alternative assets and their valuation trajectory once they come under stress. Once these assets start to move, what is off the client’s balance sheet starts to matter more than what is on it. Wealth managers who can bring a high-conviction portfolio architecture, not just a product shelf, measured against a clear benchmark and with full liquidity transparency, will offer a value proposition compelling enough to capture the next generation’s mandate and bring the Shadow Wealth Portfolio into the total view.

References
BlackRock and Partners Group (2026) Multi-Alternatives Separately Managed Account Launch. Press release, 29 January. Available at: https://www.blackrock.com/corporate/newsroom/press-releases/article/corporate-one/press-releases/blackrock-and-partners-group-launch-private-markets-sma-for-wealth-platforms

Deloitte Private and ArtTactic (2025) Art and Finance Report 2025. Deloitte Luxembourg. Available at: https://www.deloitte.com/content/dam/assets-zone2/at/de/docs/presse/2025/deloitte-art-finance-report-2025.pdf

Hunsader, K J Lawrey, C. and Affuso, E (2025) 'Evaluating collectibles as alternative investments: a hedonic pricing analysis of vintage Hot Wheels', Review of Behavioral Finance, 17(3), pp. 462. Available at: https://www.emerald.com/rbf/article-abstract/17/3/462/1247556/Evaluating-collectibles-as-alternative-investments

JP Morgan Private Bank (2026) Global Family Office Report 2026. JP Morgan Private Bank. Available at: https://privatebank.jpmorgan.com/eur/en/insights/reports/2026-family-office-report

UBS Global Wealth Management (2026) UBS Global Next Generation Report 2026. UBS, April. Available at: https://www.ubs.com/us/en/wealth-management/our-solutions/private-wealth-management/family-advisory-philanthropy/articles/global-next-generation-report.html
 

About the Author
Tatiana Collins is CEO of Ingenie, an investment intelligence platform for private markets, and Partner at Synthesis, a Japanese advisory group. She has spent 20 years designing strategies, commercialising and scaling advisory and discretionary portfolio management solutions at leading wealth, asset management and sovereign wealth institutions including HSBC, Citi and DBS in Europe and Asia-Pacific. She has collaborated with Imperial College London on AI application in digital advisory and with University College London on AI model efficiency in financial infrastructure. Her current focus is on how emerging technologies are reshaping portfolio management and investment decision-making as firms navigate the shift towards agentic AI.