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.
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.
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