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Bailey McCann, Opalesque New York:

Institutional investment in alternatives has reached maturation and it's driving many investment managers to look more closely at individual ultra high net worth investors and the wealth management channel broadly as a source of new capital, according to a new report from BNY Pershing.

Alternatives account for approximately 3% of high net worth individual portfolios, the report says. However, alts managers are actively working through the logistical hurdles that have made it difficult for these investors to access private placement funds. Managers are offering new fund structures, improving business operations and doing more investor outreach and education to bring in individual investors, the report says.

Pershing notes that an increased focus on alts within wealth management firms is palpable, with hundreds of new hires taking place and specialist teams devoted to this segment becoming larger. Pershing's figures show that hiring rates are likely to increase by nearly 50% year over year in 2024.

Nearly 90% of respondents shared that they are using alts to generate longer-term returns and the most popular asset class is REITs, used by 89% with their private clients. Private equity also is one of the top three alts asset classes ranked in the survey, used by 67% of wealth managers.

Wealth managers said it was important that alts contributed to current income within portfolios and said liquidity was an important fact......................

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