The Alts Leaders Survey 2025, conducted by Alternative Investments Market Intelligence, breaks down how the growth and adoption of alternative investments in private markets is taking place across different distribution channels. Overall, the study’s findings point to a market still in the early stages of integration. While adoption of these types of investments is expanding, the report’s data highlights significant segmentation by channel, making average figures less meaningful without added context.
The study gathers insights from senior executives in the distribution sector representing more than 65.9% of all private investment flows into alternative assets. The results show that although private alternatives are gaining traction, investment penetration remains uneven across the various distribution channels.
Key findings include:
1. Wirehouses Lead:
23% of clients invest in private market alternative assets, with an average portfolio allocation of 16%. This accounts for 3.75% of total client assets—nearly three times the share held by independent broker-dealers and five times that of the RIA community overall. Their institutional infrastructure, the expertise of their CIOs and analysts, along with the support of both technological and human capital infrastructure, are decisive advantages driving private investment adoption among clients.
2. Independent Broker-Dealers Lag Behind but Make Meaningful Allocations:
Adoption stands at 9%; however, participating clients have a 13% exposure, equating to over 1% of total assets. Structural barriers, lower client wealth, and suitability restrictions limit broader growth, the study notes. Some respondents indicated that historical underperformance of legacy real estate funds has dampened enthusiasm in this channel.
3. RIAs Tell Two Stories:
Committed RIAs show private market alternative adoption above 29%, with client allocations averaging 11%, representing 3.35% of implied client assets. However, Broad RIAs reflect only 0.78% in implied assets, signaling that many firms in this segment have yet to engage in alternative investments. Barriers include indexing preferences, operational limitations, and fee sensitivity.
4. Early-Stage Market Dynamics:
Interviews confirm that firms with dedicated resources expand adoption more effectively, while others remain cautious due to illiquidity, operational sensitivities, and fees.
Based on these figures, the study highlights several observations and implications:
Wirehouses are leaders in alternatives across distribution channels for multiple reasons: the combination of adoption and allocation generates the greatest impact on client portfolios, supported by CIOs’ analytical activity and advisor reinforcement.
Independent Broker-Dealers remain constrained by suitability: structural barriers persist, limiting both access and the scope of product approval.
RIAs include a subset of firms deeply committed to private market alternative investments, but the majority remain uninvolved, which weighs down capital-weighted averages, according to the study.
The report also notes that the wide dispersion across each channel in terms of private market alternative investment reflects a market still in its early stages: the large variation among firms reveals disparities in infrastructure and operational readiness.
The growing availability of evergreen funds with lower minimum investment thresholds and permanent access is expected to gradually increase penetration rates of alternative investments among clients.
During interviews, many respondents expressed a desire to “catch up” with firms that offer strong and sophisticated solutions for their clients.
