Interest in alternative investments is on the rise.
According to a new report from global research and consulting firm Cerulli Associates, U.S. advisors’ mean allocations in 2017 to alternatives represented 7.2% of their total assets under management, compared to 5.7% the year prior.
The report, U.S. Alternative Investments 2018: Accessing Evolving Alternative Platforms, focuses on the U.S. retail and institutional alternative product landscape and distribution and product development trends in the U.S. alternative asset market.
“This past year, the global alternative investments industry benefited from two main drivers,” Michele Giuditta, director at Cerulli, said in a statement. “Strong economic growth across North America, Europe and Asia, and the growing attraction institutional investors have for alternatives assets in these markets.”
According to Giuditta, worldwide alternative assets were approaching $9 trillion as of year-end 2017 and private capital investments accounted for nearly $5 trillion of that AUM.
Hedge funds and liquid alternatives also rebounded after experiencing a tough year in 2016, when “performance declined, and redemptions outpaced new allocations,” according to Giuditta.
“Advisors have played an increasingly important role in the spread and adoption of alternative investment products across different channels,” explains Giuditta.
Cerulli’s latest survey revealed that nearly 40% of advisors report using alternatives (excluding liquid alternatives) and just more than 37% report using liquid alternative mutual funds.