Alternative Investments: How Small Investors Can Benefit

View of containers in the Port of Liverpool

Infrastructure investments belong to the field of alternative investments. There, however, they only make up a comparatively small proportion. Private equity and venture capital continue to account for the majority.

(Photo: dpa)

Frankfurt The ongoing phase of the low interest rate policy of the central banks and the price fluctuations on the stock exchanges will drive investors even more into alternative investments in the coming years, the capital invested outside the bond and stock markets.

According to a forecast by Preqin, one of the leading analysts for “alternatives”, the assets under management in private equity, venture capital, hedge funds, private debt and infrastructure will increase to 23.2 trillion euros by 2026. That would almost double the current $13 trillion managed in 2021.

The diversification of the investments and the still attractive yields favored this trend, said the new Preqin CEO, Christoph Knaack. The recent high inflation rates could further accelerate the trend, because the real interest rate on bonds is clearly negative in the event of strong currency depreciation.

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