This is the first piece within the private market series that will explore the evolution happening within alternatives and the private market investment landscape.

Over the past several years, private markets that were once dominated by large institutions have become increasingly accessible to high-net-worth individuals and smaller institutions. This shift marks a significant change in how these investors are able to approach portfolio construction, diversification, and long-term capital growth opportunities. Historically, alternative investments such as private equity, private credit, venture capital, and institutional real estate were limited to pensions, endowments, sovereign wealth funds, and family offices, which had the scale, relationships, expertise, and resources to manage their complexity. In contrast, individuals faced high investment minimums, limited access, and low transparency.

Today, structural and technological advancements are lowering these barriers. Digital platforms have introduced end-to-end solutions for alternative investments by streamlining everything from subscription processes to performance reporting. These tools have empowered individual investors and their advisors to access institutional-quality opportunities without the administrative burden that previously made alternatives impractical. Simultaneously, regulatory changes have expanded investor eligibility. The SEC has broadened the definition of an accredited investor to include individuals who have certain professional certifications, designations, or credentials, opening access to a wider group of qualified investors.¹

One key driver of this shift is the saturation of institutional capital. Over the past two decades, institutions have steadily increased their allocations to alternative assets. According to the NACUBO 2024 study, the average institution allocated around ~32% to alternative investments, with the weighted average rising to ~55% indicating that larger institutions committed even more to the asset class. Private equity alone accounted for ~17% of total allocations. As institutional allocations plateau, private asset managers are now turning to high-net-worth investors as a key source of long-term capital. Yet, affluent individuals still allocate just 3% to alternatives.^2,3

Investment structures are evolving to support this transition. New vehicles such as evergreen funds, interval funds, and feeder funds are designed to provide easier access, lower minimums, and greater liquidity flexibility. Evergreen funds are open-ended and continuously raise and invest capital. They offer periodic liquidity, typically with quarterly NAVs and simplified tax reporting. Interval funds, registered under the Investment Company Act of 1940, offer semi-liquid terms with scheduled redemption windows. Feeder funds aggregate smaller investors into larger institutional strategies, providing exposure to flagship private funds that would otherwise be inaccessible.

For investors with long investment horizons, private markets offer unique opportunities. Private equity and venture capital provide exposure to mature and growth-stage private companies that have the potential to enhance portfolio returns. Private credit investors typically seek stable income and reduced sensitivity to interest rate fluctuations. Real assets, such as real estate, energy, and infrastructure, can be beneficial as an inflation hedge while generating cash flows. Each subset offers unique characteristics to pair with traditional asset classes.

However, despite recent developments, alternative investments still come with complexity. Liquidity constraints are inherent to many private strategies, and even vehicles offering periodic redemptions are not as flexible as public offerings. Fee structures tend to be higher and more intricate, and there are often tax considerations, such as the issuance of K-1s or exposure to unrelated business taxable income (UBTI), which can complicate investing through non-taxable or tax-deferred accounts. Due diligence is paramount in private markets where manager dispersion is much wider than public counterparts.⁴

In our view, a strategic approach is essential. Alternatives should be treated as components of a holistic portfolio strategy, aligned with an investor’s goals, time horizon, risk tolerance, and liquidity needs. This requires regular oversight and integration with the broader wealth plan. Advisors play a vital role in not only providing access to these opportunities but also helping investors understand how alternatives may potentially fit into their long-term financial objectives.

Ultimately, the increased availability of private investments is part of a broader evolution in capital markets. For the first time, qualifying individuals and smaller institutions can access strategies once reserved for the largest and most sophisticated investors. This is leading to better fund structures, improved transparency, and enhanced investor experience. It represents both an opportunity and a responsibility. With greater access comes the need for greater understanding. When approached thoughtfully, private markets have the potential to enhance long-term outcomes and provide a level of diversification that traditional markets alone may not offer. However, success depends not just on access, but on strategy, selectivity, and alignment with each investor’s unique objectives.

1 – https://www.sec.gov/resources-small-businesses/capital-raising-building-blocks/accredited-investors

2 – NACUBO: Study of Endowments 2024

3 – iCapital Alternatives Decoded: Navigating the World of Alternative Investments Q1 2025

4 – Unrelated Business Taxable Income (UBTI) is the income earned by a tax-exempt entity from activities that are not related to its exempt purpose.