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From Alternative to Mainstream
Chapter 1: Alternatives Ascending
From Alternative to Mainstream
Chapter 1: Alternatives Ascending
June 2021
Alternative investments were once a relatively small island in the investment industry, but investor demand for portfolio diversification and higher return potential are moving alternatives into the mainstream. Our new research study explores the role of mainstreaming in the current and future growth of alternatives.
BNY Mellon, in conjunction with Mergermarket, surveyed 100 institutional investors and 100 alternative asset managers on their perceptions and expectations, and whether the two sides are aligned.
Chapter 1 opens this report with a tour of alternative asset classes to explore how the pandemic’s upheaval has (or has not) influenced investors’ preferences within the world of alternatives.
Later chapters will explore changing investor and asset manager priorities, attitudes and behaviors. The collective views of investors and managers culminate in our study’s conclusion, highlighting five outstanding themes critical to future of the industry:
- The scramble for scale or specialism
- The case for customization
- Going and growing digital
- The “retailization” of alternatives
- The ESG imperative
“Investors will want more portfolio diversification over the coming months. Investing in alternative markets worldwide will help them achieve sustainable returns.”
— Head of Finance, Thailand
- By the Numbers
- 59%expect venture/growth capital funds to provide the best returns over the next 12 months*
- 40%expect real estate to be unattractive throughout 2021*
- 58%are most interested in increasing allocations to hedge funds in North America*
* As identified by institutional investor survey respondents
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