Alternative investments encompass asset classes that fall outside traditional publicly traded stocks and bonds, including private real estate, private equity, private credit, hedge funds, infrastructure, and tangible assets such as commodities or collectibles. These investments are typically offered through private placements rather than public exchanges, which generally makes them less liquid and often subject to eligibility requirements, such as accredited investor status, that do not apply to purchasing public securities.
Investors add alternative investments to a portfolio primarily to pursue diversification, since many alternative asset classes have historically shown lower correlation to public stock and bond markets, along with the potential for enhanced returns or income streams that differ from those available through traditional securities. Private real estate is one of the most widely held categories within alternatives, offering exposure to physical assets, potential cash flow, and inflation-linked characteristics that differ meaningfully from equities. Because alternatives are typically illiquid and harder to value day-to-day than public markets, investors generally allocate to them as a portion of a broader portfolio, with an understanding that capital may be committed for a multi-year period.
Further reading: Because You Built This
ACCESS
