According to research by Preqin, “the global market for alternative investment will be $18.3 trillion in five years, up from $9.3 trillion and almost twice its size at the start of this year”. This is thanks to greater retail investor interest in alternatives. Retail investors increasing attraction to the private markets is due to macroeconomic factors, such as rising inflation and interest rates, as well as geopolitical tensions. These factors have encouraged investors to “seek alternative sources of return in an uncertain economic environment”.

Historically, retail investors have not turned to alternative due to regulatory barriers, however asset managers are making these sectors more accessible to the public through technology and by offering new products specifically tailored to retail investors. This will allow for investors to buy into asset classes that have traditionally performed well in volatile markets.

Preqin predicts that venture capital will be the fastest-growing asset class, followed by infrastructure, then private debt.