For generations, investing has been synonymous with the stock market. Opening a retirement account, buying a collection of stocks and bonds, and staying invested, serves as the traditional strategy that has helped millions build wealth.
Today, a growing number of investors are exploring alternative investments like private real estate, private credit, infrastructure, aviation, and private equity, which are no longer reserved for large institutions or ultra-high-net-worth individuals. These opportunities are becoming an increasingly important component of diversified portfolios and provide exposure to parts of the economy that public markets don’t reach.
Companies listed on the New York Stock Exchange or Nasdaq represent only a fraction of America’s businesses. Research from KKR notes that approximately 85% of U.S. companies generating more than $100 million in annual revenue remain privately owned, meaning many of the country’s fastest-growing businesses never become available through a traditional brokerage account.
Since 2012, private equity-backed companies have also outnumbered publicly traded companies in the U.S. Investors relying exclusively on public markets are participating in only part of the economy, and alternative investments create access to opportunities that exist outside of those exchanges.
For years, some of the world’s most sophisticated investors (including pension funds, insurance companies, family offices, and university endowments) have allocated meaningful portions of their portfolios to alternative assets.
Because investors aim to build portfolios that can perform across different economic environments, they participate in alternative assets, which can offer:
According to KKR’s 2025 survey of registered investment advisors, nearly half of advisors already allocate at least 10% of client assets to private markets, and 81% expect to maintain or increase those allocations over the next five years. This trend reflects a broader shift in how professional investors think about diversification.
Many investors believe they’re diversified because they own multiple companies, but during periods of market stress, those companies often perform similarly. True diversification comes from owning assets driven by different economic forces like:
Each of these alternative opportunities responds differently to changes in interest rates, inflation, consumer spending, or market volatility. Although this doesn’t eliminate risk, it ensures that your portfolio isn’t dependent on a single source of returns.
Since public markets react instantly to headlines, a change in interest-rate expectations, geopolitical tensions, or quarterly earnings can dramatically shift prices within hours.
Private investments’ value is driven by operational performance, contractual income, underlying asset appreciation, and long-term business fundamentals, which is why institutional investors often view alternatives as a stabilizing component of broader portfolios.
As KKR’s Global Asset Allocation team notes, private credit, infrastructure, and real estate can provide more durable cash flows, while improving portfolio resilience during periods of heightened market volatility.
Cambridge Associates’ benchmark research shows U.S. private equity has demonstrated more consistent outperformance over public markets across investment periods of 10 years and longer, although shorter periods have produced mixed results.
Since different assets each serve their purpose, building a portfolio capable of producing consistent long-term outcomes, reduces concentration risk. A resilient portfolio often includes growth, income, capital preservation, and inflation protection.
Alternative investments typically involve longer investment horizons, reduced liquidity (compared to publicly traded securities), higher investment minimums, and a greater importance of manager selection.
These characteristics are considerations that investors should understand before allocating capital. Illiquidity, in particular, can be both a risk and a potential advantage. Investors willing to commit capital over longer periods may gain access to opportunities unavailable in public markets, if that investment horizon aligns with their financial goals.
Markets like private businesses, real estate, infrastructure, private lending, and specialty assets collectively represent trillions of dollars in investment opportunities and continue attracting increasing allocations from institutions seeking greater diversification and multiple sources of return.
To discuss how you can build a portfolio that isn’t dependent on the market, book a call with our Investor Relations Team here to help expand the definition of what investing can look like.
According to Realtor.com’s 2026 Housing Supply Gap Report, the United States is approximately 4.03 million homes short, with the shortage widening for the third consecutive year. Freddie Mac’s ongoing housing research also concludes that America remains structurally undersupplied by millions of homes, and that closing this gap will require years of sustained construction.
As builders increase production, they navigate higher material costs, labor shortages, land constraints, financing challenges, and regulatory hurdles that continue to slow new housing development. The National Association of Home Builders has identified these barriers as key reasons housing supply continues to lag demand.
Since each market has its own unique housing needs, long-term success comes from delivering the types of residential homes buyers are actively seeking.
Novacrest continues identifying underserved opportunities within residential housing and developing projects that align with local demand. Rather than forcing every opportunity into a single product type, the Residential Income Fund focuses on building residential projects that make sense for the communities we’re serving and the long-term fundamentals supporting those markets.
The housing market is made up of thousands of local markets, each driven by its own economic fundamentals. We focus on regions where the data supports population growth, employment expansion, and housing demand that consistently outpaces new supply.
Our criteria identifies markets with sustained inbound migration, driven by employment or lifestyle; job creation across multiple industries, rather than a single employer; a documented gap between housing demand and available inventory; and long-term growth characteristics that outlast short-term market cycles.
Every acquisition is evaluated through disciplined underwriting, and focuses on purchasing opportunities at or below 70% of estimated completed value. Each market is selected only when long-term demographic trends support the investment.
Because we build high-demand homes, in carefully-selected markets, with the discipline that long-term investing requires, we’ve created resilience when markets inevitably shift.
Novacrest co-founders, Kiani and Anwar Kharfan created the Residential Income Fund for investors who want their capital working in real residential assets, and they remain directly involved in every part of the business, from investor communication and operations to acquisitions, development, and asset management.
If you’d like to understand more on the Residential Income Fund and how we evaluate opportunities, you may schedule a conversation with our Investor Concierge today.
For months, the market has awaited rate cuts, which have not yet arrived, and increasingly, seem not to be coming anytime soon.
The Federal Reserve is holding rates in the 3.5% to 3.75% range, and expectations for cuts continue to get pushed back. Some institutions are now projecting few or no cuts in 2026.
Simultaneously, inflation remains above the Fed’s 2% target, and treasury yield expectations are creeping higher. External pressures, like energy prices and geopolitical instability, continue to add uncertainty.
On the surface, the market appears stable. Savings accounts and CDs are yielding ~4 to 5%, the economy is still expanding and public markets remain active.
But underneath, investor behavior is shifting.
With inflation still elevated, 4 to 5% yields are barely keeping pace, in turn, limiting real wealth creation.
Equities continue reacting to inflation data, rate expectations and global instability, resulting in inconsistent performance and lower conviction.
Today’s environment presents a clear tradeoff, where safer investments yield low returns, and higher returns seem only possible with volatile or uncertain opportunities.
That gap leaves many investors with no clear allocation strategy.
Due to lack of compelling alternatives, high-income investors are holding significant capital in cash positions, brokerage accounts and retirement vehicles.
While interest rates dominate headlines, the core driver of real estate value remains supply.
Supply remains structurally constrained, as the U.S. Is underbuilt by millions of homes:
Despite variation in methodology, the conclusion is that the U.S. does not have enough housing.
Recent data (sources listed below) shows that existing home sales have declined, yet inventory remains tight.
Although buyer demand has slowed, supply has not meaningfully improved. The market is slowing due to constrained supply conditions, rather than oversupply.
Housing markets are ultimately governed by a simple dynamic:
When supply is constrained and population demand continues, prices and demand resilience follow.
This results in rising home prices, cautiously optimistic builders and long-term housing fundamentals remaining intact.
This combination of a supply-constrained environment with elevated financing costs, makes for a non-traditional real estate cycle.
This type of environment filters weak operators and rewards disciplined, execution-focused strategies.
In this market, success is driven by entry price discipline, cost control, buyer targeting and execution speed.
Novacrest is positioned within a specific gap created by this environment.
Between low-yield traditional fixed income and higher-risk, market-dependent investments, our approach focuses on:
Novacrest not only diversifies an investor’s portfolio, but also allocates to income-producing strategies that function in today’s conditions.
For years, markets rewarded growth, multiple expansion and long-term upside.
Now that our environment has shifted, today’s markets reward:
The Fed holding rates is accelerating a broader shift in investor behavior, forcing a decision between remaining in low-yield, low-conviction positions and moving into strategies designed to produce income now.
As established earlier, higher rates, slower transaction volume and inflation don’t stop real estate, but remove weak operators.
Novacrest’s strategy is built to operate in today’s environment and does not depend on a favorable one.
Our buyers (cash buyers, move-up buyers, out-of-state buyers, and working professionals) are less dependent on financing, which helps stabilize demand even as rates remain elevated.
We focus on areas with population growth and sustained housing demand, ensuring a consistent buyer pool.
We underwrite with conservative pricing, built-in margins and flexibility for incentives, which allows us to maintain velocity, rather than await market appreciation.
As the builder, we control costs, timelines, pricing and exit strategy.
Execution in the Diversified Real Estate Fund is internally underwritten and managed.
We do not assume falling interest rates, rapid appreciation, or ideal market conditions.
Each deal is structured to perform in today’s environment.
The market today is defined by two realities: rates remain higher long-term, and housing supply is structurally constrained.
This combination reshapes how capital is deployed and creates a clear separation between passive investing and execution-driven strategies.
Novacrest is built for today’s environment as a solution for investors seeking consistent, income-producing opportunities, backed by real assets.
Book a call with us today and bring your questions to our concierge team.
The Wall Street Journal: https://www.wsj.com/buyside/personal-finance/banking/high-yield-savings-rates-today-4-9-2026
The Wall Street Journal: https://www.wsj.com/buyside/personal-finance/banking/cd-rates-today-4-9-2026
Realtor: https://www.realtor.com/research/us-housing-supply-gap-2026/
National Association of Home Builders: https://www.nahb.org/news-and-economics/press-releases/2026/02/2026-housing-outlook-ongoing-challenges-cautious-optimism-and-incremental-gains
Eye On Housing: https://eyeonhousing.org/2026/02/the-size-of-the-housing-shortage-2024-data/
Window & Door: https://www.windowanddoor.com/article/2026-housing-market-outlook
National Low Income Housing Coalition: https://nlihc.org/news/nlihc-releases-gap-2026-shortage-affordable-homes
AP News: https://apnews.com/article/53aee15e8a48b930f286b19475b861ac
Washington Post: https://www.washingtonpost.com/business/2026/02/04/us-housing-shortage-millions/
