Investors Increasingly Turning Toward Alternatives

Nontraditional investment opportunities are attracting more investors looking to protect wealth, achieve returns and generate income, according to a recent poll.

Nearly half of respondents (48%) of the Aequitas Capital poll of attendees at a recent Opal Financial Group private wealth conference said they now consider alternative investments as a primary part of their portfoliomeaning more than 30% of their portfolio is in alternatives. Approximately 78% expect to increase their allocation to alternatives over the next three years even though these investments often have less liquidity, transparency and an inferior track record.

Respondents indicated that the investing environment has become strained by the European debt crisis (24%); global economic slowdown (21%); U.S. presidential elections (19%); and the possibility of a U.S. recession (11%), causing investors to expand their search for private investment alternatives.

Twenty-nine percent of respondents cited “other alternatives” as demonstrating the greatest potential in the near future, compared with those who named real estate (23%), stocks (16%), venture capital (14%), commodities (12%), bonds (5%) and Treasuries (1%).

The poll included respondents from 73 private wealth managers, and was administered by Aequitas Capital and Opal Financial Group.