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Partnering for Success: Capitalizing on Growing Retail Adoption of Alternative Investments
This insights piece covers the business case for providing alternative investment exposures to a broader U.S. retail investor base and the two chief ways in which the retail alternative landscape will expand.
Foreword by
Daniil Shapiro, CFA
Director, Product Development
Biography→
Based on Cerulli’s projections, alternative investment managers currently source approximately 13% of U.S. assets under management (AUM) from retail channels. This proportion is expected to grow to 23% in three years, translating to a trillion-dollar opportunity for firms able to capitalize on this trajectory.
Our findings suggest the retail alternatives landscape will expand in two ways: intermittent liquidity fund offerings—including multimanager fund-of-fund products—and ongoing innovation of investment platforms that streamline access for financial advisors and end-investors to expanding menus of alternative investment products.
Executive Summary
Buy, Build, or Engage Strategic Partnerships?
Given the complexities associated with developing and distributing alternative investment products, manager interest in striking multimanager, strategic partnerships has grown considerably. More than half (53%) of alternatives managers polled rely on such partnerships and half (50%) plan to increase reliance during the next three years—overtaking acquisitions of alternatives shops as the chief avenue to offering alternative product. However, these partnerships have not yet established a track record of success in wealth management channels.
Asset Managers: Method of Manufacturing Alternative Investments Currently vs. Next Three Years, 2024
Alternatives Tech Platforms: Which Is Right for You?
Managers looking to distribute alternatives should evaluate alternative platform capabilities for distribution support and work with those platforms where they believe capital is available for their products. Platforms deliver a range of services that fall into investment access, operations, and educational support. Learn how Cerulli classifies such platforms and key differentiators.
Alternative Investment Platform Overview
Read the Full Article
These insights can help you analyze a trend that’s impossible to ignore or reverse—the rise of alternative investments offered to retail investors. Evaluate the different types of multimanager offerings and distribution platforms while evaluating whether to enter or expand into the alternatives market.
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