Wealthy investors are expected to lead a $32 trillion boom in alternatives

A version of this article appeared in CNBC’s Inside Alts newsletter, a guide to the fast-growing world of alternative investments, from private equity and private credit to hedge funds and venture capital. subscription To receive future issues, directly to your inbox.

Investments in alternatives are expected to reach $32 trillion by 2030, fueled largely by growth from wealthy investors, according to a report by Preqin.

Total assets under management in alternatives — including private equity, hedge funds, real estate, venture capital, infrastructure, natural resources and private credit — are expected to rise 60% over the next five years, according to the private markets research firm.

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

However, even as deal activity and exits begin to increase, fundraising from institutional investors continues to decline due to a lack of distributions and poor performance at many funds. Total private equity fundraising fell from a peak of $676 billion in 2023 to less than $500 billion this year, the report said.

To support the next wave of growth, the private equity industry is betting on wealthy investors. Ultra-high-net-worth individuals (typically defined as investors with $30 million or more), family offices and private wealth managers will make up at least 30% to 40% of the main fund’s capital “in future cycles,” the report said.

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

The big question is whether family offices and wealthy individuals are also following institutional investors out the door.

Family offices’ 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 allocations to common stocks.

Family offices are also focusing more on direct investments, bypassing funds and buying stakes in companies directly, according to surveys.

As deal activity returns, some surveys suggest that family offices and wealthy investors plan to start investing more. A BNY Wealth survey found that 55% of family offices surveyed plan to increase their allocations to private equity funds in the next 12 months – the highest percentage of any asset class.