World’s super-rich are piling into alternative investments

The world’s wealthiest investors are increasingly looking beyond stocks and bonds, pouring money into hedge funds, private equity and infrastructure assets, as market volatility and fears about stubborn inflation spur diversification.

From Asian billionaires to global family offices, alternative investments are becoming a bigger part of portfolios once dominated by traditional assets, said industry watchers

JPMorgan Asset Management’s private wealth alternative assets in Asia-Pacific surged 40% over the past 12 months, according to Dan Watkins, the firm’s regional chief executive officer, underscoring the growing appetite among high-net-worth and ultra-high-net-worth clients.

“So you really have this huge appetite for alternative exposure happening in that ultra-high-net-worth, high-net-worth category,” Watkins said recently at a media summit in Singapore.

The shift comes as investors grapple with increasingly concentrated equity markets, geopolitical uncertainty and concerns that stocks and bonds may not provide the same protection against market downturns as they once did, experts said.

“We are seeing a sharp increase in planned asset allocation to alternatives among the family offices we speak to,” said John Woods, chief investment officer for Asia at Lombard Odier.

Alternative investments now account for 60% of single-family office portfolios, surpassing traditional assets for the first time, according to BNY Wealth. Traditional assets accounted for 41% of allocations, the report found.

Wealthy investors are seeking diversification, income and access to investments outside listed markets, and concerns over elevated valuations, tight credit spreads and the growing correlation between stocks and bonds have accelerated the trend, Woods added.

Hedge funds’ allure

Hedge funds are emerging as a favored option among wealthy investors seeking protection against market swings, particularly as traditional diversification strategies face growing challenges.

Olaolu Aganga, head of portfolio construction and analytics at Citi Wealth, said hedge funds have attracted the strongest recent interest among qualified clients, who are seeking returns less dependent on the direction of equity markets.

Private credit is another area drawing interest, offering investors contractual income streams, while some hedge fund strategies seek to profit from differences in performance between companies rather than relying on broad market rallies, said Woods.

Citi’s 2026 survey of 351 family offices found that inflation was their biggest concern, followed by interest rates, financial system stability and market volatility.

Wealthy families are increasingly seeking investments that can generate income and help preserve purchasing power amid persistent inflation and interest-rate uncertainty, while diversifying portfolios against market volatility, according to Aganga.

The Citi survey, however, also showed public equities recorded the strongest net increase in allocations, suggesting…