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Wealthy investors expected to drive $32 trillion alternatives boom
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A version of this article appeared in CNBC’s Inside Alts newsletter, a guide to the fast-growing world of alternative investments, from private equity and private credit to hedge funds and venture capital. Sign up to receive future editions, straight to your inbox.
Investments in alternatives are expected to top $32 trillion by 2030, boosted in large part by growth from wealthy investors, according to a report from Preqin.
Total assets under management in alternatives – including private equity, hedge funds, real estate, venture capital, infrastructure, natural resources and private credit – are forecast to increase by 60% over the next five years, according to the private markets research firm.
A recovery in IPOs and mergers, falling interest rates and the AI boom will all drive a new growth cycle in private markets, according to the report. Assets in private credit are expected double to $4.5 trillion by 2030.
Yet even as deal activity and exits start to increase, fundraising from institutional investors continues to fall due to a lack of distributions and poor performance in many funds. Total fundraising for private equity plunged from a peak of $676 billion in 2023 to under $500 billion this year, the report said.
To power the next growth wave, the private equity industry is betting on wealthy investors. The report said ultra-high-net-worth individuals (typically defined as investors with $30 million or more), family offices and private-wealth managers will account for at least 30% to 40% of flagship fund capital “in future cycles.”
“With institutional rebalancing, private wealth can act as an alternative source of capital,” the report said. “Many larger managers are anticipating a doubling of private wealth capital raised in the short term. “
The big question is whether family offices and the ultra-wealthy are also following institutional investors out the door.
Family office allocations to private equity fell from 26% of their portfolios in 2023 to 23% in 2025, according to a Goldman Sachs survey of family offices. At the same time, family offices increased their allocation to public stocks.
Family offices are also focusing more on direct investments, bypassing funds and buying stakes in companies directly, according to surveys.
With deal activity returning, some surveys suggest family offices and ultra-wealthy investors are planning to start investing more. A survey from BNY Wealth showed that 55% of family offices surveyed plan to increase their allocation to private equity funds in the next 12 months – the highest of any asset class.
