Alternative Asset Integration

Are alternatives becoming mainstream? Here is what that means for the future of asset management

By: Kennedy Lewallen

Nov. 10, 2025

If you want a preview of where asset management is headed, look at the rise of alternative investments. Stocks and bonds still matter, but asset managers are increasingly building strategies around assets that live outside of public markets. This shift is becoming one of the biggest structural changes in how portfolios are being built.

Alternative investments are anything outside of the typical public markets most people think about. This includes areas like private equity, venture capital, private credit, hedge funds, infrastructure, real estate, and even niche strategies like farmland or energy pipelines. Alternatives are usually less liquid and harder to sell fast, but they can offer investors access to companies, assets, and strategies that are not traded on the open market. The CFA Institute describes alternatives as a broader set of assets that offer different sources of risk and return vs public stocks and bonds, and they have historically been used heavily by institutions like pension funds and endowments. 

A major reason this is happening is because the traditional 60 percent stocks and 40 percent bonds allocation has been challenged by high-interest rate volatility, inflation cycles, and inconsistent market visibility the past few years. Investors want more stability and more diversified return sources that are not dependent on public market cycles. McKinsey’s 2025 Global Private Markets Outlook highlights that private markets remain a core long-term allocation target for institutions even though fundraising cooled last year. This shows the industry narrative is shifting permanently, not temporarily. 

We are also seeing the biggest asset managers in the world take very active steps to build real scale in this space. BlackRock acquired Global Infrastructure Partners, which created one of the largest infrastructure investing platforms globally. Fidelity launched the Fidelity Private Credit Fund which gives qualified U.S. investors access to private credit inside a registered structure. Vanguard partnered with HarbourVest to allow certain advisory clients to access private equity. These are all examples of asset management firms that historically focused mostly on public equity and fixed income now expanding into alternatives because this is where clients want exposure and long-term capital is going. 

Access is also improving for individual investors. In the past, alternatives often required extremely high minimums, long lockups, or institutional status. Now we are seeing interval funds and tender offer funds enter the market which have periodic redemption windows instead of daily liquidity. The SEC has published investor bulletins on interval funds to help advisors understand how they work and what risks exist. These structures allow investors to participate in areas like private credit or real estate without needing to commit millions up front or be tied into multiyear lockups. 

Looking ahead, I think alternatives are at the beginning of their expansion into the retail and advisory channels. More evergreen private market funds are likely coming across strategies like secondaries, infrastructure, real assets, and private credit. Asset managers want a longer duration of capital, and investors want diversification. Combining those two incentives means growth is very likely to accelerate. BlackRock already launched a tokenized fund structure, and while it is still early, the technology could reduce friction and lower barriers for certain types of alternative strategies over time. 

The key take away here is that alternatives are not replacing stocks and bonds, they are becoming the new third major building block inside modern portfolios. The next generation of portfolio construction will be multi asset by default, not public market dominant. If you are going into finance, learning about alternatives now will help you stand out because asset managers are actively retooling product shelves, skill sets, and research teams around this shift. What feels new right now will very likely be standard industry practice within the next decade.