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Alternatives Industry Targets Individual Investors
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The rush for individual investors to invest in alternatives is accelerating, with firms like KKR, Blackstone, Apollo, and Ares focusing on individuals with assets between $1 million and $5 million. Wealth managers are facing challenges in incorporating alternatives into client portfolios, with only 2.3% of U.S. financial advisor assets invested in illiquid alternatives in 2023. KKR has suggested sophisticated wealthy investors allocate up to 30% of their portfolios to alternatives and has provided frameworks for creating alternative portfolio allocations ranging from 10% to 30%. Individual investors and their advisors understanding how to better utilize well-formulated alternatives in their investment portfolios is seen as a positive development.
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How might the increasing focus on individual investors in the alternatives industry impact the traditional investment landscape?
What challenges do wealth managers face in incorporating alternatives into client portfolios?
What potential risks and benefits are associated with allocating a significant portion of investment portfolios to alternatives?
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