5 minute read

What are alternative investments?

Investments that fall outside of the “traditional” asset classes including stocks, bonds, cash, and similar

More and more investors are shifting to alternatives to boost returns, generate income, provide diversification from traditional investments and achieve their goals.

Alternative asset insight agency Preqin predicts that the value of alternative assets under management may reach $14 trillion by 2023 — a 360%+ increase from the beginning of their study in 2008
Alternative Investments
While there isn’t an “official” definition, alternative assets are widely recognized as investments that fall outside of the “traditional” asset classes including stocks, bonds, cash, and similar. It’s important to remember that this means alternative assets aren’t just once-in-a-lifetime developments like cryptocurrency or one-offs like a rare wine collection — they can even include assets that have come to be considered “normal” among modern investors, such as real estate and hedge funds.

There are two main types. First are private assets such as private equity, private credit, infrastructure and private real estate. They are more complex and less frequently traded than public stocks and bonds, and give investors access to additional sources of return. Hedge funds, the second type, operate mainly in public markets but use less traditional tools such as short-selling and leverage.

Example Assets
Digital Assets
crypto currencies, NFT's, Web3, and more
Fine Art
a pool of artwork by blue-chip, mid-career, and emerging artists with one investment.
trading rare wines, with professionals that  ensure quality, authenticity and ultimately, good taste.
Legal Financing
Investing in or lending against lawsuits and the litigating firm’s contingency fees
Aircraft leasing, shipping container deconstruction and more
Private Equity
Buying an equity stake in a new or established company
Private Debt
Loans to companies outside of the traditional banking sector
Investments in row crop, permanent crop and livestock farming
Investments in pulpwood, softwood, commodity hardwood and precious hardwood
Investments in utilities, communications, renewable power and transportation infrastructure
Investments in high-end watches and other rare pieces
Supply Chain Debt
Provide advance cash flow for both buyers and sellers. It is also known as “reverse factoring” or “payables financing,”