Why Alternatives Are No Longer Optional
For decades, investors relied on the 60/40 portfolio — 60% stocks, 40% bonds — as the cornerstone of wealth management. That mix worked well in an era of steady growth, declining interest rates, and predictable market cycles. But as the last few years have shown, these older strategies no longer necessarily hold.
Business owners and families wanting to preserve and grow wealth across generations are finding they need more than public markets alone. The answer for many is alternatives: private equity, private credit, infrastructure, hedge funds, and real estate.
The Untapped 99%
Alternatives are a reminder that nearly 99% of the global economy sits outside of publicly traded markets. By focusing solely on stocks and bonds, you could be ignoring an enormous universe of opportunity that institutions, endowments, and the wealthiest families have been accessing for decades.
Alternatives aren’t fringe anymore. They’re becoming central to portfolio construction because they offer what public markets often can’t: diversification, income, and access to growth engines that drive real wealth creation.
Why Alternatives Matter
We’ve seen firsthand how business owners can use these strategies to grow wealth and weather market shifts while running a successful business. Here’s why alternatives are gaining traction with entrepreneurs:
- Diversification beyond stocks and bonds – Alternatives behave differently from traditional markets, smoothing returns during volatility.
- Access to true growth engines – Investing directly in operating companies, real estate, and infrastructure can create outsized wealth opportunities.
- Tax efficiency – Many structures are designed with high-net-worth investors in mind, offering strategies to defer or reduce taxes.
- Behavioral benefit – Illiquidity can actually protect investors from making short-term, fear-driven mistakes.
On our podcast, Smart Money. Simplified, we discussed alternative investments with Eric Knauss, Chief Investment Officer at Proteus, a private-market investment platform for wealth advisors and fund sponsors. Eric is a seasoned advisor with over 40 years of experience at major firms, such as Merrill Lynch and T. Rowe Price. As he noted in our discussion, if regulatory hurdles didn’t exist, every investor should have some exposure to alternatives.
Lessons from Wealthy Families
Our work with ultra-wealthy families has revealed a key truth: the most successful ones don’t just manage money — they manage cohesion. This looks like:
- Keeping wealth intact through family councils and mission statements
- Educating the next generation early, often through philanthropy or entrepreneurship
- Using “family banks” to support new ventures, ensuring wins benefit the whole family, not just individuals
For these families, alternatives play a central role in sustaining purchasing power across generations. Public markets alone aren’t enough.
The Expanding Landscape
If you’re interested in exploring alternatives, the landscape has never been more approachable. Two decades ago, private equity, hedge funds, and real estate were the primary options. Today, the menu is much broader:
- Private credit – Filling the gap left by traditional banks, offering higher yields and diversification
- Infrastructure – From data centers and renewables to airports and utilities, tied to long-term usage and inflation protection
- Global opportunities – Access to niche, high-conviction investments once available only to institutions
Platforms like Proteus are helping democratize access by aggregating capital and lowering minimums, making it possible for investors to participate in premier funds once limited to $5–25 million minimums.
Explore What’s Next in Investing with The Wealth Stewards
For business owners, wealth is often concentrated in a company, a property, or a narrow band of public securities. Alternatives offer a way to diversify, protect, and grow wealth in ways the 60/40 model can’t.
The shift isn’t theoretical — it’s already happening. Institutions allocate 20–40% of their portfolios to alternatives. Now, forward-thinking families and entrepreneurs are following suit and investing intentionally to avoid being left behind.
As the investment landscape evolves, new opportunities are within reach for business owners and families like yours. Whether you want to protect your hard-earned wealth or build a multigenerational legacy, our team is here to help you identify the right alternatives strategy for you. Contact us to discuss how to integrate a modern, diversified portfolio into your broader strategy.
This content is provided for informational and educational purposes only and should not be construed as investment advice. Alternative investments involve significant risks, may be illiquid, and are not suitable for all investors. Past performance is not indicative of future results. Any investment decision should be based on an individual’s objectives, risk tolerance, and financial circumstances, and made in consultation with a qualified financial professional. This content does not take into account the investment objectives, financial situation, or needs of any particular individual. Advisory services are provided only to clients pursuant to a written advisory agreement.