Ultra-wealthy investors are shifting money toward hedge funds, private equity, and infrastructure investments as they seek protection from market volatility and inflation concerns.
JPMorgan Asset Management reported that private wealth alternative assets in Asia-Pacific surged 40% over the past 12 months, according to regional chief executive officer Dan Watkins. "So you really have this huge appetite for alternative exposure happening in that ultra-high-net-worth, high-net-worth category," Watkins said.
Alternative investments now account for 60% of single-family office portfolios, surpassing traditional assets for the first time, according to BNY Wealth. Traditional assets accounted for 41% of allocations.
Hedge funds attract wealthy investors seeking returns less dependent on equity market direction. Private credit offers contractual income streams. Infrastructure investments have gained momentum from artificial intelligence demand for data centers and electricity networks, with net inflows into open-ended infrastructure funds rising 30% year on year in the 12 months through the first quarter of 2026, according to PitchBook data.
Family offices increasingly favor direct investments in companies and co-investments alongside private equity managers rather than relying solely on traditional pooled funds. This approach can give investors greater control or opportunities to acquire assets at discounts, said John Woods, chief investment officer for Asia at Lombard Odier.
Experts note risks remain. Private investments can lock up capital for years, and valuations may be slow to reflect deteriorating conditions. Even funds marketed as semi-liquid can restrict withdrawals when redemption requests surge. "Improved access does not equal liquidity," Watkins said. Performance also varies significantly between managers, and investors may face unintended concentration risk, such as holding data centers through multiple fund types while remaining heavily exposed to the same AI investment cycle.