Anya Coverman, President and CEO of the Institute for Portfolio Alternatives, joined Keith Black, Managing Director of RIA Channel, at the CAIS Summit, to discuss the growing flows into registered funds that will be showcased at an upcoming conference.
CAIS is a board member of the IPA, a trade organization that represents the alternative investments landscape. IPA hosts four conferences each year, each with a slightly different focus. The IPA Connect Registered Funds Conference 2024 occurs in Orlando, Florida, December 9 to 11. The conference will discuss interval funds, tender offer funds, BDCs, private equity, and non-traded REITs.
Historically, alternative investments were primarily available to institutional investors and qualified purchasers. Demand from accredited investors and the retail market for institutional-style diversification drives the growth in evergreen and registered funds. Retail investors currently allocate less than 2% of assets to alternative investments and would need to grow allocations substantially to match those of institutional investors at 30% or more. IPA’s recent survey found that tender offer and interval funds are likely to double assets from $20 billion in 2024 to $40 billion in 2026.
IPA members, including advisors and RIAs, look to use alternative investments to differentiate their practices. Rather than a traditional portfolio investing 60% in stocks and 40% in bonds, advisors today are moving toward allocations of 50/30/20 or 40/30/30, allocating 20% to 30% to alternative investments.
Younger generations are comfortable with alternative investments and may allocate a rising portion of the massive wealth transfer taking place from their Baby Boomer parents and grandparents.
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