The world’s richest investors are increasingly looking beyond stocks and bonds, pouring money into hedge funds, private equity and infrastructure assets, as market volatility and fears about persistent inflation spur diversification. From Asian billionaires to global family offices, alternative investments are becoming a larger part of portfolios once dominated by traditional assets, industry observers said. JPMorgan Asset Management’s private wealth alternative assets in Asia-Pacific are up 40% in the past 12 months, according to Dan Watkins, the firm’s regional managing director, underscoring growing appetite among high- and ultra-high-net-worth clients. “So there really is a huge appetite for alternative exposure in that ultra-high and high net worth category,” Watkins said recently at a media summit in Singapore. The shift comes as investors face increasingly concentrated stock markets, geopolitical uncertainty and concerns that stocks and bonds do not provide the same protection against market declines as before, experts said. “We are seeing a strong increase in planned asset allocation to alternatives among the family offices we speak to,” said John Woods, Asia investment director at Lombard Odier. Alternative investments now represent 60% of single-family office portfolios, surpassing traditional assets for the first time, according to BNY Wealth. Traditional assets accounted for 41% of allocations, according to the report. Wealthy investors are seeking diversification, income and access to investments outside of listed markets, and concerns about lofty valuations, tight credit spreads and the growing correlation between stocks and bonds have accelerated the trend, Woods added. The Appeal of Hedge Funds Hedge funds are emerging as a favorite option among wealthy investors seeking protection from market swings, particularly as traditional diversification strategies face growing challenges. Olaolu Aganga, head of portfolio analysis and construction at Citi Wealth, said hedge funds have attracted the most recent interest among qualified clients, who are seeking returns less dependent on the direction of stock markets. Private credit is another area attracting interest, offering investors contractual income streams, while some hedge fund strategies seek to benefit from differences in performance between companies rather than relying on broad market rallies, Woods said. Citi’s 2026 survey of 351 family offices found that inflation was their biggest concern, followed by interest rates, financial system stability and market volatility. Wealthy families are increasingly looking for investments that can generate income and help preserve purchasing power amid persistent inflation and interest rate uncertainty, while diversifying their portfolios against market volatility, according to Aganga. However, the Citi survey also showed that public stocks saw the strongest net increase in allocations, suggesting that wealthy investors are adding alternatives rather than abandoning traditional markets. “This is not a complete rotation away from the public markets,” Woods said. Infrastructure demandInfrastructure has become another major beneficiary of change, as the rise of artificial intelligence has created enormous demand for data centers, power grids and digital connectivity. Thomas Roland Guyot, head of private markets investment specialists for Southeast Asia at UBS Unified Global Alternatives, said investors are increasingly targeting assets that support artificial intelligence, electrification and energy security. Such investments potentially offer a combination of long-term growth and relatively predictable cash flows, particularly when revenue is supported by essential demand or long-term contracts. It is already being reflected in the flows of funds. Net inflows into open-end infrastructure funds rose 30% year-on-year in the 12 months to the first quarter of 2026, according to PitchBook data cited by UBS. Private equity remains a cornerstone of wealthy investors’ alternative portfolios, although they are becoming more selective. Family offices are increasingly favoring direct investments in companies, co-investments with private equity managers and buying stakes in existing funds on the secondary market, rather than relying solely on traditional pooled funds, according to Citi Wealth’s Aganga. These approaches can give investors greater control over their investments or opportunities to acquire assets at discounts, Lombard Odier’s Woods said. obstacles associated with traditional private market funds, Woods added. Risk factors Investment in alternative assets is not free of risks, even when mitigating them boosts flows. Private investments can lock up capital for years, while valuations can take time to reflect deteriorating market conditions. Even funds marketed as semi-liquid can restrict withdrawals when redemption requests increase. “Better access does not equal liquidity,” said JPMorgan’s Watkins. Citi’s Aganga also warned that performance can vary significantly between managers, while private assets may appear less volatile than they really are because valuations are updated less frequently. Investors must also protect themselves against unintended concentration. A portfolio that owns data centers across real estate, infrastructure and private equity funds can appear diversified while remaining heavily exposed to the same AI investment cycle, said Guyot of UBS. For now, the flow of capital into alternative assets is showing growing appeal among the wealthy, though not at the expense of traditional investing, and Woods noted that much of the new investment is being funded with fresh capital and excess cash rather than large-scale sales of stocks and bonds.
