Alternatives Decoded

Flow-of-Funds

Flow-of-Funds is proprietary data tracking subscription flows of alternative investments on the iCapital platform. This data illustrates a real-time view of investor appetite from the private wealth channel across various alternative asset classes and investment strategies.

Alternatives Decoded

Overview

Explore iCapital’s Alternatives Decoded for a wide-ranging and 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 many more 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 the contractual, 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 and increasing need for digital transformation and energy transition.

Alternatives Decoded

Hedge Funds

Hedge funds employ several different strategies that can help position investors for 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 vehicles that 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 growth in 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 continue to provide a secular tailwind for annuities in the future.