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In a time of heightened economic uncertainty, institutional and individual investors have been increasingly allocating capital to alternative investments such as private equity (PE) and real estate. They’re not just seeking potentially higher long-term returns, but also stronger diversification and inflation hedging.
Alternative investments are no longer considered niche assets. Indeed, private market revenues are predicted to reach $432.2 billion — accounting for more than half of the total global asset management industry’s revenues by 2030 — according to PwC’s 2025 Global Asset & Wealth Management Report. [1]
In part, that’s because regulatory reform and new fund structures, including semi-liquid funds, are making it easier for a wider range of investors to participate in private markets. For example, U.S. legislation now allows for alternative investments within 401(k) retirement plans. But there’s also increasing demand from individual investors, especially as they look to hedge inflation and market volatility.
Almost three in four (72%) Gen Z and millennial investors (between ages 21 and 43) believe it’s “no longer possible to achieve above average investment returns by investing solely in traditional stocks and bonds,” according to Bank of America’s Study of Wealthy Americans.
Of those surveyed, 17% said their investment portfolios were allocated to alternatives, with most (93%) saying they plan to allocate more to alternatives in the next few years. [2]
Nine in 10 financial advisors (92%) currently incorporate alternative investments in client portfolios, with 91% planning to increase allocations over the next two years, according to Mercer’s 2025 survey of alternative investments in wealth management. Top asset classes include private debt (89%), private equity (86%) and real estate (85%). [3]
Previously, entry to private equity markets — including private equity real estate — was limited to institutional investors and high-net-worth individuals because of regulatory hurdles, complex due diligence, lack of liquidity and high minimum investments, sometimes in the millions of dollars.
While individual investors hold about 50% of the $275 trillion to $295 trillion in global assets under management (AUM), they represent only 16% of AUM held by alternative investment funds, according to a global private equity report from Bain & Company. [4]
At the same time, “fewer than 15% of companies with revenue over $100 million are publicly held, giving public investors narrow exposure to the broader economy,” according to the report. That’s one reason why individual investors and their advisers are “increasingly drawn to alternative investments as they look for new diversification options and better returns than they can get in the traditional markets for public equity and debt.” [5]
For example, global private equity has outperformed public equity by about 450 basis points per year over the past two decades, according to an analysis by MSCI. [6]
But access is now opening up to individual investors — and not just because regulatory hurdles are easing. The industry is “using innovative fund structures and technology solutions designed to make the historical barriers less onerous,” according to Bain & Company. [7]
For example, after 40 years, across multiple economic cycles, Lightstone Group has launched Lightstone DIRECT — which offers individual accredited investors direct access to the same multifamily and industrial deals they invest in with their own capital.
Lightstone DIRECT is a fully integrated investing platform from one of the largest privately held real estate investment firms in the U.S., with more than $12 billion in assets under management.
Lightstone Group has a four-decade track record. Founded in 1986, Lightstone Group has a 27.6% historical net internal rate of return (IRR) and 2.54x historical net equity multiple on realized investments since 2004.
With a minimum investment of $100,000, accredited investors can participate directly in high-quality, professionally managed multifamily and industrial deals, such as Abernathy Industrial Park, a 100% leased, six-building logistics campus in the Greenville–Spartanburg corridor. Early investors also benefit from limited-time incentives: lower acquisition fees with higher allocations and a 5.75% annualized yield on committed funds contributed before the Series Closing Date.
Not only does their model reduce fees and put investor money to work immediately, but it also provides true alignment. Unlike other managers, Lightstone invests at least 20% of its own capital in every deal, overseeing all aspects of the investment lifecycle, from acquisitions to construction to property and asset management.
The momentum behind alternative investments has the potential to continue as both individual and institutional investors look to diversify. For individual investors, new technologies and platforms can break down traditional barriers to PE opportunities — offering greater accessibility, simplified processes and lower minimum investment thresholds.
Explore investing opportunities with Lightstone DIRECT today.
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PWC (1); Bank of America (2); Mercer (3); Bain & Company (4), (5), (7); MSCI (6)
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