Explore iCapital’s Alternatives Decoded for a wide-rangingand up-to-date analysis of the alternative investment landscape. Review the latest updates on absolute and relative market performance, assets under management (AUM), fund flow trends, deal activity, and much more. Gain insights into private equity, private credit, commercial real estate, infrastructure, hedge funds, structured investments, and annuities.
Alternatives Decoded
Private Equity
Private equity has historically been able to generate consistent outperformance versus public equities with less downside.Today, the opportunity set is larger than ever,as private equity provides access to a larger universe of investment opportunities compared to public equity. We believe private equity offers investors an opportunity to tap into a large pool of innovation with multiple paths of value creation.
Alternatives Decoded
Private Credit
Private credit is now a genuine alternative to bank lending and the syndicated market. An important part of the near-term investment thesis is favorable yields. However, in the longer term, the secular decline in lending by traditional credit providers holds the potential to increase the addressable market from primarily lending to manymore forms of credit such as asset-backed and residential mortgage.
Alternatives Decoded
Commercial Real Estate
Commercial real estate offers a broad set of diversified opportunities that provide low correlation to the public markets. In fact, the size of this market is often underappreciated. Despite some concerns about the state of real estate, many sectors have solid underlying fundamentals that can serve as a core source of income and potential price return.
Alternatives Decoded
Infrastructure & Other Real Assets
The appeal of infrastructure and real asset strategies is the low to negative correlation relative to stocks and bonds, and higher risk-adjusted returns due to thecontractual, inflation-protected cash flow nature of the investments.Infrastructure, in particular, has gained attention in recent years with the recognition that there exists a significant “funding gap” underpinned by growing public deficits andincreasing need for digital transformation and energy transition.
Alternatives Decoded
Hedge Funds
Hedge funds employ several different strategies thatcan help positioninvestorsfor various market conditions. Current trends, such as positive stock-bond correlations, elevated interest rates, and higher asset dispersion,can help improve risk-adjusted returns and offer substantial diversification benefits when adding hedge funds to a traditional portfolio.
Alternatives Decoded
Structured Investments
The volume growth in structured investments has steadily increased as investors have looked for vehiclesthat offer upside participation and/or yield enhancement potential while maintaining a degree of principle protection. More recently, activity in the equities market has led to growth-oriented solutions outpacing their income-oriented counterparts.
Alternatives Decoded
Annuities
The annuity industry has experienced sturdy growthin recent years due to rising interest rates and changing age demographics. We expect a growing part of the investing population to prioritize avoiding losses over earning gains and that should continueto provide a secular tailwind for annuities in the future.
Register to read on or download
Alternatives Decoded
Overview
Private Equity
Private Credit
Commercial Real Estate
Infrastructure & Other Real Assets
Hedge Funds
Structured Investments
Annuities
Important Information
Page Index
Alternatives Decoded
Overview
Private Equity
Private Credit
Commercial Real Estate
Infrastructure & Other Real Assets
Hedge Funds
Structured Investments
Annuities
Important Information
Page Index
Alternatives Decoded
Alternatives Decoded
Overview
Private Equity
Private Credit
Commercial Real Estate
Infrastructure & Other Real Assets
Hedge Funds
Structured Investments
Annuities
Important Information
Alternatives Decoded
Alternatives hold $16.7 trillion in assets under management globally across strategies
Alternatives Decoded
Overview
Private Equity
Private Credit
Commercial Real Estate
Infrastructure & Other Real Assets
Hedge Funds
Structured Investments
Annuities
Important Information
Alternatives hold $16.7 trillion in assets under management globally across strategies
Alternatives have grown significantly and are projected to grow further in years ahead
Alternatives Decoded
Overview
Private Equity
Private Credit
Commercial Real Estate
Infrastructure & Other Real Assets
Hedge Funds
Structured Investments
Annuities
Important Information
Alternatives have grown significantly and are projected to grow further in years ahead
Alternatives fundraising activity is stabilizing and increasing in certain asset classes
Alternatives Decoded
Overview
Private Equity
Private Credit
Commercial Real Estate
Infrastructure & Other Real Assets
Hedge Funds
Structured Investments
Annuities
Important Information
Alternatives fundraising activity is stabilizing and increasing in certain asset classes
Dry powder has declined to $3.8 trillion as committed capital begins to get deployed globally
Alternatives Decoded
Overview
Private Equity
Private Credit
Commercial Real Estate
Infrastructure & Other Real Assets
Hedge Funds
Structured Investments
Annuities
Important Information
Dry powder has declined to $3.8 trillion as committed capital begins to get deployed globally
Deal momentum is rebounding to more normalized levels as GPs put dry powder to work
Alternatives Decoded
Overview
Private Equity
Private Credit
Commercial Real Estate
Infrastructure & Other Real Assets
Hedge Funds
Structured Investments
Annuities
Important Information
Deal momentum is rebounding to more normalized levels as GPs put dry powder to work
Alternatives offered strong outperformance vs. traditional 60/40 portfolio over time
Alternatives Decoded
Overview
Private Equity
Private Credit
Commercial Real Estate
Infrastructure & Other Real Assets
Hedge Funds
Structured Investments
Annuities
Important Information
Alternatives offered strong outperformance vs. traditional 60/40 portfolio over time
Over the next decade, alternatives are projected to outperform their public counterparts
Alternatives Decoded
Overview
Private Equity
Private Credit
Commercial Real Estate
Infrastructure & Other Real Assets
Hedge Funds
Structured Investments
Annuities
Important Information
Over the next decade, alternatives are projected to outperform their public counterparts
Several private market strategies offer higher yields than those available in public markets
Alternatives Decoded
Overview
Private Equity
Private Credit
Commercial Real Estate
Infrastructure & Other Real Assets
Hedge Funds
Structured Investments
Annuities
Important Information
Several private market strategies offer higher yields than those available in public markets
Alternatives can be a powerful diversifier due to their low correlation to public markets
Alternatives Decoded
Overview
Private Equity
Private Credit
Commercial Real Estate
Infrastructure & Other Real Assets
Hedge Funds
Structured Investments
Annuities
Important Information
Alternatives can be a powerful diversifier due to their low correlation to public markets
Alternatives offer higher returns and lower volatility vs. a traditional 60/40 portfolio
Alternatives Decoded
Overview
Private Equity
Private Credit
Commercial Real Estate
Infrastructure & Other Real Assets
Hedge Funds
Structured Investments
Annuities
Important Information
Alternatives offer higher returns and lower volatility vs. a traditional 60/40 portfolio
Manager selection has been an important driver of return outcomes in alternatives
Alternatives Decoded
Overview
Private Equity
Private Credit
Commercial Real Estate
Infrastructure & Other Real Assets
Hedge Funds
Structured Investments
Annuities
Important Information
Manager selection has been an important driver of return outcomes in alternatives
Several private market strategies are inexpensive relative to public markets and history
Alternatives Decoded
Overview
Private Equity
Private Credit
Commercial Real Estate
Infrastructure & Other Real Assets
Hedge Funds
Structured Investments
Annuities
Important Information
Several private market strategies are inexpensive relative to public markets and history
Private clients to increase alternatives allocation from $4 trillion to $13 trillion by 2032
Alternatives Decoded
Overview
Private Equity
Private Credit
Commercial Real Estate
Infrastructure & Other Real Assets
Hedge Funds
Structured Investments
Annuities
Important Information
Private clients to increase alternatives allocation from $4 trillion to $13 trillion by 2032
Opportunity to increase allocation is sizable given low portfolio allocation & advisor use
Alternatives Decoded
Overview
Private Equity
Private Credit
Commercial Real Estate
Infrastructure & Other Real Assets
Hedge Funds
Structured Investments
Annuities
Important Information
Opportunity to increase allocation is sizable given low portfolio allocation & advisor use
Private Equity
Alternatives Decoded
Overview
Private Equity
Private Credit
Commercial Real Estate
Infrastructure & Other Real Assets
Hedge Funds
Structured Investments
Annuities
Important Information
Private Equity
Private equity is the largest asset class within alternatives and has grown significantly
Alternatives Decoded
Overview
Private Equity
Private Credit
Commercial Real Estate
Infrastructure & Other Real Assets
Hedge Funds
Structured Investments
Annuities
Important Information
Private equity is the largest asset class within alternatives and has grown significantly
Since 2000, fewer companies went public as they have stayed private for longer
Alternatives Decoded
Overview
Private Equity
Private Credit
Commercial Real Estate
Infrastructure & Other Real Assets
Hedge Funds
Structured Investments
Annuities
Important Information
Since 2000, fewer companies went public as they have stayed private for longer
Private companies outnumber publicly traded ones, across most revenue segments
Alternatives Decoded
Overview
Private Equity
Private Credit
Commercial Real Estate
Infrastructure & Other Real Assets
Hedge Funds
Structured Investments
Annuities
Important Information
Private companies outnumber publicly traded ones, across most revenue segments
Private markets offer investors an opportunity to tap into a larger pool of innovation
Alternatives Decoded
Overview
Private Equity
Private Credit
Commercial Real Estate
Infrastructure & Other Real Assets
Hedge Funds
Structured Investments
Annuities
Important Information
Private markets offer investors an opportunity to tap into a larger pool of innovation
Private equity outperformed public equities over various time horizons
Alternatives Decoded
Overview
Private Equity
Private Credit
Commercial Real Estate
Infrastructure & Other Real Assets
Hedge Funds
Structured Investments
Annuities
Important Information
Private equity outperformed public equities over various time horizons
Private equity delivered more consistently positive returns with fewer negative years
Alternatives Decoded
Overview
Private Equity
Private Credit
Commercial Real Estate
Infrastructure & Other Real Assets
Hedge Funds
Structured Investments
Annuities
Important Information
Private equity delivered more consistently positive returns with fewer negative years
Private equity performance improved when investing during downturn year vintages
Alternatives Decoded
Overview
Private Equity
Private Credit
Commercial Real Estate
Infrastructure & Other Real Assets
Hedge Funds
Structured Investments
Annuities
Important Information
Private equity performance improved when investing during downturn year vintages
Private equity fund managers have multiple ways to create value vs. public markets
Alternatives Decoded
Overview
Private Equity
Private Credit
Commercial Real Estate
Infrastructure & Other Real Assets
Hedge Funds
Structured Investments
Annuities
Important Information
Private equity fund managers have multiple ways to create value vs. public markets
Private equity valuations have stabilized and are lower than public markets in the U.S.
Alternatives Decoded
Overview
Private Equity
Private Credit
Commercial Real Estate
Infrastructure & Other Real Assets
Hedge Funds
Structured Investments
Annuities
Important Information
Private equity valuations have stabilized and are lower than public markets in the U.S.
Fund managers have adjusted to higher cost of capital by reducing the use of leverage
Alternatives Decoded
Overview
Private Equity
Private Credit
Commercial Real Estate
Infrastructure & Other Real Assets
Hedge Funds
Structured Investments
Annuities
Important Information
Fund managers have adjusted to higher cost of capital by reducing the use of leverage
Realization of further rate cuts may help improve levered company financials
Alternatives Decoded
Overview
Private Equity
Private Credit
Commercial Real Estate
Infrastructure & Other Real Assets
Hedge Funds
Structured Investments
Annuities
Important Information
Realization of further rate cuts may help improve levered company financials
Private equity exit activity is recovering given higher valuations in public markets
Alternatives Decoded
Overview
Private Equity
Private Credit
Commercial Real Estate
Infrastructure & Other Real Assets
Hedge Funds
Structured Investments
Annuities
Important Information
Private equity exit activity is recovering given higher valuations in public markets
Capital markets activity is gradually improving across both IPO and M&A markets
Alternatives Decoded
Overview
Private Equity
Private Credit
Commercial Real Estate
Infrastructure & Other Real Assets
Hedge Funds
Structured Investments
Annuities
Important Information
Capital markets activity is gradually improving across both IPO and M&A markets
Extended holding periods increase the need for sources of liquidity
Alternatives Decoded
Overview
Private Equity
Private Credit
Commercial Real Estate
Infrastructure & Other Real Assets
Hedge Funds
Structured Investments
Annuities
Important Information
Extended holding periods increase the need for sources of liquidity
Growth in private equity secondaries is driven by strong supply/demand dynamics
Alternatives Decoded
Overview
Private Equity
Private Credit
Commercial Real Estate
Infrastructure & Other Real Assets
Hedge Funds
Structured Investments
Annuities
Important Information
Growth in private equity secondaries is driven by strong supply/demand dynamics
Private Credit
Alternatives Decoded
Overview
Private Equity
Private Credit
Commercial Real Estate
Infrastructure & Other Real Assets
Hedge Funds
Structured Investments
Annuities
Important Information
Private Credit
Private credit assets under management have grown rapidly to record levels
Alternatives Decoded
Overview
Private Equity
Private Credit
Commercial Real Estate
Infrastructure & Other Real Assets
Hedge Funds
Structured Investments
Annuities
Important Information
Private credit assets under management have grown rapidly to record levels
Secular decline in bank lending is being driven by regulation, capital requirements
Alternatives Decoded
Overview
Private Equity
Private Credit
Commercial Real Estate
Infrastructure & Other Real Assets
Hedge Funds
Structured Investments
Annuities
Important Information
Secular decline in bank lending is being driven by regulation, capital requirements
Growth in private equity buyout strategies drives further demand for private credit
Alternatives Decoded
Overview
Private Equity
Private Credit
Commercial Real Estate
Infrastructure & Other Real Assets
Hedge Funds
Structured Investments
Annuities
Important Information
Growth in private equity buyout strategies drives further demand for private credit
Private credit strategies historically outperformed public fixed income sectors
Alternatives Decoded
Overview
Private Equity
Private Credit
Commercial Real Estate
Infrastructure & Other Real Assets
Hedge Funds
Structured Investments
Annuities
Important Information
Private credit strategies historically outperformed public fixed income sectors
Direct lending offered favorable risk-adjusted returns versus public fixed income
Alternatives Decoded
Overview
Private Equity
Private Credit
Commercial Real Estate
Infrastructure & Other Real Assets
Hedge Funds
Structured Investments
Annuities
Important Information
Direct lending offered favorable risk-adjusted returns versus public fixed income
Private credit drawdown risk is moderated by buy-and-hold nature, fewer dislocations
Alternatives Decoded
Overview
Private Equity
Private Credit
Commercial Real Estate
Infrastructure & Other Real Assets
Hedge Funds
Structured Investments
Annuities
Important Information
Private credit drawdown risk is moderated by buy-and-hold nature, fewer dislocations
Risk premium, complexity and market inefficiencies provides a backdrop for attractive yields
Alternatives Decoded
Overview
Private Equity
Private Credit
Commercial Real Estate
Infrastructure & Other Real Assets
Hedge Funds
Structured Investments
Annuities
Important Information
Risk premium, complexity and market inefficiencies provides a backdrop for attractive yields
Direct lending spreads recently widened, moving closer to historical excess spread
Alternatives Decoded
Overview
Private Equity
Private Credit
Commercial Real Estate
Infrastructure & Other Real Assets
Hedge Funds
Structured Investments
Annuities
Important Information
Direct lending spreads recently widened, moving closer to historical excess spread
Income has been a steady component of private credit returns over time
Alternatives Decoded
Overview
Private Equity
Private Credit
Commercial Real Estate
Infrastructure & Other Real Assets
Hedge Funds
Structured Investments
Annuities
Important Information
Income has been a steady component of private credit returns over time
Credit losses for private credit have been in line with high yield and bank loan issuers
Alternatives Decoded
Overview
Private Equity
Private Credit
Commercial Real Estate
Infrastructure & Other Real Assets
Hedge Funds
Structured Investments
Annuities
Important Information
Credit losses for private credit have been in line with high yield and bank loan issuers
Private credit coverage ratios are improving, which could help keep defaults in check
Alternatives Decoded
Overview
Private Equity
Private Credit
Commercial Real Estate
Infrastructure & Other Real Assets
Hedge Funds
Structured Investments
Annuities
Important Information
Private credit coverage ratios are improving, which could help keep defaults in check
Lower volatility, high income led to more consistently positive results for private credit
Alternatives Decoded
Overview
Private Equity
Private Credit
Commercial Real Estate
Infrastructure & Other Real Assets
Hedge Funds
Structured Investments
Annuities
Important Information
Lower volatility, high income led to more consistently positive results for private credit