According to a recent article from Barron’s, the investment management industry is experiencing a fundamental convergence that’s erasing traditional boundaries between conventional and alternative assets, public and private securities, and institutional/wealth management solutions. This shift rests on four pillars: – the rise of multistrategy asset management
– the end of traditional strategic asset allocation
– the blending of public/private markets
– and the growing importance of wealth management.
Alternative investments now represent approximately $25 trillion in assets under management, yet the wealth management channel accounts for only 16% of that total. Client allocations to alternatives currently range from 1% to nearly 20%, with many investors remaining uninvolved due to access limitations or educational gaps.
Barron’s highlights that nearly 90% of global companies are now private, making it increasingly difficult to achieve broad economic exposure without private market allocations. Major financial institutions like State Street, Apollo, Capital Group, and KKR are already forming partnerships and creating hybrid investment vehicles to address this trend, indicating that financial advisors who fail to incorporate alternatives like gold into their strategies risk becoming obsolete in this new investment landscape.