Key Takeaways
- • Brookfield Asset Management's Alts Institute survey of 600+ wealth managers overseeing $657 million in AUM found that more than half believe an optimal alternatives allocation is between 16–25 percent of portfolios, signaling a structural shift toward alts as core holdings rather than tactical positions.
- • Private equity, infrastructure, private credit, and real estate are the four asset classes wealth managers plan to increase allocations toward most aggressively over the next one to two years.
- • Eighty-three percent of wealth managers now use alternatives equally for risk management and return generation, reflecting a fundamental change in how alternatives are positioned within institutional portfolios.
- • Sixty-four percent of wealth managers intend to expand evergreen fund allocations over the next two years, indicating growing preference for perpetual capital structures in alternatives deployment.
- • Seventy-five percent of respondents stated that wealth managers lacking strong alternatives offerings face competitive disadvantage, underscoring alternatives as a critical service differentiator in the wealth management market.
Summary
Wealth managers across the UK and Switzerland are materially increasing their commitment to alternative investments, treating them as core portfolio components rather than peripheral tactical tools. A comprehensive study by Brookfield Asset Management's Alts Institute—surveying over 600 wealth managers collectively managing $657 million in assets, plus 60 fund selectors across the US, Canada, the UK, and Switzerland—reveals this strategic reorientation in real time.
The survey's most striking finding centers on allocation sizing: more than half of respondents identified an optimal alternatives allocation range of 16–25 percent, suggesting institutional conviction that alternatives warrant roughly one-fifth of typical diversified portfolios. This marks a meaningful departure from historical practice, where alternatives occupied peripheral positions. John Sweeney, chief executive of Brookfield's private wealth business, noted that the research "reinforces that alternatives have become an increasingly important part of the wealth management toolkit," reflecting Brookfield Asset Management's broader positioning across its $1 trillion in global AUM.
The asset classes driving this expansion are clearly defined: private equity, infrastructure, private credit, and real estate are identified as the primary targets for increased allocations over the one-to-two-year horizon. This concentration on four specific categories suggests wealth managers have moved beyond exploratory due diligence and are deploying capital into proven, institutional-grade alternatives channels. Additionally, 64 percent of wealth managers plan to increase evergreen fund utilization, indicating a structural preference for perpetual capital vehicles that offer operational continuity and reduce reinvestment friction.
Client positioning has fundamentally shifted. Seventy-five percent of wealth managers reported that peer firms lacking robust alternatives offerings face competitive disadvantage—a clear signal that alternatives delivery has become a table-stakes service requirement rather than a differentiator. Correspondingly, 83 percent of respondents stated that alternatives now serve dual purposes: risk management and return generation in equal measure. This dual-mandate positioning reflects sophisticated integration of alternatives into holistic portfolio construction rather than segregation as return-chasing tools. Furthermore, three-quarters of wealth managers indicated their client conversations have evolved beyond foundational education into portfolio-outcome discussions, suggesting clients now possess sufficient alternatives sophistication to engage on strategic allocation questions.
The survey's most striking finding centers on allocation sizing: more than half of respondents identified an optimal alternatives allocation range of 16–25 percent, suggesting institutional conviction that alternatives warrant roughly one-fifth of typical diversified portfolios. This marks a meaningful departure from historical practice, where alternatives occupied peripheral positions. John Sweeney, chief executive of Brookfield's private wealth business, noted that the research "reinforces that alternatives have become an increasingly important part of the wealth management toolkit," reflecting Brookfield Asset Management's broader positioning across its $1 trillion in global AUM.
The asset classes driving this expansion are clearly defined: private equity, infrastructure, private credit, and real estate are identified as the primary targets for increased allocations over the one-to-two-year horizon. This concentration on four specific categories suggests wealth managers have moved beyond exploratory due diligence and are deploying capital into proven, institutional-grade alternatives channels. Additionally, 64 percent of wealth managers plan to increase evergreen fund utilization, indicating a structural preference for perpetual capital vehicles that offer operational continuity and reduce reinvestment friction.
Client positioning has fundamentally shifted. Seventy-five percent of wealth managers reported that peer firms lacking robust alternatives offerings face competitive disadvantage—a clear signal that alternatives delivery has become a table-stakes service requirement rather than a differentiator. Correspondingly, 83 percent of respondents stated that alternatives now serve dual purposes: risk management and return generation in equal measure. This dual-mandate positioning reflects sophisticated integration of alternatives into holistic portfolio construction rather than segregation as return-chasing tools. Furthermore, three-quarters of wealth managers indicated their client conversations have evolved beyond foundational education into portfolio-outcome discussions, suggesting clients now possess sufficient alternatives sophistication to engage on strategic allocation questions.
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