Key Takeaways
- • A PPB Capital Partners survey of RIAs with $500M+ in AUM found that 45% expect alternative investment allocations in client portfolios to increase over the next 12 months, with 47% expecting allocations to remain flat, indicating 92% client comfort with current alternative holdings.
- • Expected increases in alternative allocations are material rather than incremental: 72.5% of respondents anticipate increases of up to 25%, with another 19.9% expecting larger increases.
- • Private equity, real estate, and private credit represent the top three alternative investment choices among RIAs at 37%, 22%, and 22% allocation respectively, driven by strong recent performance correlated with public market gains.
- • Client satisfaction with alternative investments persists despite limited liquidity in many products and a surging equity market, with only 7% of survey respondents reporting expected decreases in alternative allocations.
Summary
PPB Capital Partners' survey of top-tier registered investment advisors reveals a pronounced shift toward greater alternative asset integration in client portfolios. Among RIAs managing $500 million or more, nearly half (45%) anticipate increasing alternative investment allocations over the subsequent 12 months. Critically, this growth appetite coexists with substantial client retention: 47% of respondents expect allocations to remain unchanged, collectively representing a 92% base of advisors maintaining or expanding alternatives exposure. Only 7% forecast decreases, underscoring resilience in the alternatives strategy amid a robust equity market environment.
PPB founder Brendan Lake characterized the findings as "significant," highlighting that the magnitude of expected growth is material rather marginal. Specifically, 72.5% of survey participants project increases up to 25%, while an additional 19.9% anticipate even larger allocations. This trajectory is noteworthy given the structural constraints of alternative investments—limited liquidity typical of private assets—yet advisors and clients remain committed to these positions.
The performance of flagship alternative strategies has supported this allocation momentum. Private equity leads client demand at 37% of alternative holdings, followed by real estate and private credit, each representing 22%. Lake attributed the strong reception to robust performance outcomes: private company valuations have tracked public equity performance closely over the past year, buoying private equity returns. This correlation—where private market assets mirror public market appreciation—has validated client exposure and reinforced advisor confidence in alternatives as a durable portfolio component rather than a cyclical tactical holding.
PPB founder Brendan Lake characterized the findings as "significant," highlighting that the magnitude of expected growth is material rather marginal. Specifically, 72.5% of survey participants project increases up to 25%, while an additional 19.9% anticipate even larger allocations. This trajectory is noteworthy given the structural constraints of alternative investments—limited liquidity typical of private assets—yet advisors and clients remain committed to these positions.
The performance of flagship alternative strategies has supported this allocation momentum. Private equity leads client demand at 37% of alternative holdings, followed by real estate and private credit, each representing 22%. Lake attributed the strong reception to robust performance outcomes: private company valuations have tracked public equity performance closely over the past year, buoying private equity returns. This correlation—where private market assets mirror public market appreciation—has validated client exposure and reinforced advisor confidence in alternatives as a durable portfolio component rather than a cyclical tactical holding.
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