Wealthy investors expected to drive $32 trillion alternatives boom

A version of this article appeared in CNBC’s Inside Alts newsletter, a guide to the rapidly growing world of alternative investing, from private equity and private credit to hedge funds and venture capital. become a member to receive future editions straight to your inbox.

According to a report from Preqin, investments in alternatives are expected to exceed $32 trillion by 2030; This is largely due to the growth of wealthy investors.

Total assets managed in alternatives, including private equity, hedge funds, real estate, venture capital, infrastructure, natural resources and private credit, are expected to grow by 60% over the next five years, according to the private market research firm.

According to the report, the recovery in IPOs and mergers, falling interest rates and the artificial intelligence boom will lead to a new cycle of growth in private markets. Private credit assets are expected to double to $4.5 trillion by 2030.

But even as deal activity and exits begin to pick up, the rate of fundraising from institutional investors continues to decline due to a lack of distribution and poor performance in many funds. Total fundraising for private equity has fallen from a peak of $676 billion in 2023 to less than $500 billion this year, the report said.

To power the next wave of growth, the private equity industry is counting on wealthy investors. Ultra-high-net-worth individuals (generally defined as investors with $30 million or more), family offices and private asset managers will account for at least 30% to 40% of flagship fund capital “in future cycles,” the report said.

“With institutional rebalancing, private wealth can act as an alternative source of capital,” the report said. “Many major managers expect private wealth capital raised to double in the short term.”

The question is whether family offices and the ultra-rich also follow institutional investors.

Family office allocations to private equity fell from 26% of their portfolios in 2023 to 23% in 2025, according to a Goldman Sachs survey of family offices. At the same time, family offices increased their allocation to public shares.

Family offices are also focusing more on direct investments, hopping funds and buying shares in companies outright, surveys show.

As deal activity returns, some surveys show family offices and ultra-wealthy investors plan to start investing more. A survey by BNY Wealth showed that 55% of family offices surveyed plan to increase their allocation to private equity funds over the next 12 months; This is the highest rate among all asset classes.