The alternative market, especially private capital, has emerged as a strong contender for steadier yields as public markets like equities and fixed income face unprecedented pressure following the pandemic. However, the proclivity towards alternatives has not been an after-effect of the pandemic but something that has seen a growing trend over the past few years. However, the growth hasn’t scaled well with the outdated technology that is still prevalent in many modern family offices.
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What are Alternatives?
After the 2008 financial crisis exposed the dangers of bingeing on cheap credit, family offices along with other institutional investors started to move away from the tried and tested 60-40 portfolio model, i.e, 60% allocation to equities and 40% to fixed income securities. These investors started allocating increasing resources to higher-risk assets that had the potential to generate consistent, inflation-beating returns if done right. These asset classes are collectively known as alternative investments.