95% of Advisers Use Alternatives, but Liquidity Fears Keep Allocations Small

Alternative investments have become a near-universal fixture of adviser practices, according to a new survey commissioned by CION Investments, YCharts, and Compound Insights, though the data suggests advisers are holding back on allocation size even as their conviction in the asset class grows.

The survey, conducted between March 5 and April 7, polled 301 registered investment advisers and found that 95% report alternatives appearing in client portfolios today, with 61% saying alternatives are used across many clients rather than a select few, according to the report, titled From Public to Private: How Advisers Are Using Alternative Investments.

Adoption hasn’t translated into large allocations, however. Among clients who hold alternatives, 68% have allocations of at least 10% of total assets, but just 9% exceed 20%, the survey found. That gap points to a broader theme in the data: advisers appear more convinced of the case for alternatives than they are comfortable sizing positions accordingly.

Interest in expanding exposure remains strong. When asked which alternative categories they’d like to use more but haven’t yet implemented at scale, 52% of advisers pointed to infrastructure and real assets, followed by 46% for private equity and 36% for private credit, according to the report.

The survey’s most notable finding may be what’s not holding advisers back. Only 14% cited a lack of portfolio role for alternatives as a reason they haven’t scaled up their use of the asset class further. Instead, the barriers advisers identified were structural: 61% cited liquidity concerns, while complexity of structures and client comprehension each drew 46%.

That distinction matters for how the industry should read the results. The data doesn’t describe advisers who remain unconvinced of what alternatives can do for a portfolio; it describes advisers who believe in the asset class but are wary of vehicle design, redemption terms, and their own ability to explain those tradeoffs to clients. Evergreen vehicles and interval funds were the most commonly used structures, cited by 61% of advisers, followed by liquid alternatives ETFs at 50%.

The findings arrive amid what the report describes as a period of heightened scrutiny for private equity and private credit strategies, following headline-driven concerns about specific deals. Advisers’ stated preference for infrastructure and real assets tracks with a broader pattern: tangible, easily explained asset classes appear to inspire more confidence than more abstract private credit and equity structures, even though interest in the latter remains substantial.

This is not the first data point suggesting private wealth’s expansion into alternatives has become a durable, structural trend rather than a temporary shift. AltsWire reported in December that cumulative private wealth capital formation in alternatives had surpassed $1 trillion since 2000, according to Robert A. Stanger & Co., with Stanger projecting 2025 fundraising alone would top $200 billion. Where that report measured the scale of capital already deployed, this survey adds detail on the mechanics still slowing things down at the adviser level: the gap between how much advisers want to allocate and how comfortable they currently are doing so.

The report offers practical recommendations for advisers navigating that gap, including developing a firm-wide common language around what qualifies as an alternative investment, building a clear implementation strategy, and prioritizing manager due diligence given tighter capital conditions than the low-rate years following the pandemic.

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