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Alternative Investments Are No Longer “Alternative”

CAPITAL ALLOCATION • GROWTH • PRIVATE MARKETS

How Advisors Are Allocating Client Capital in 2026

Alternative investments have crossed a meaningful threshold.

What was once viewed as a niche allocation or an institutional-only tool is now firmly embedded in how advisors construct portfolios. Allocations are deeper, more durable, and increasingly supported by structures that allow private markets to scale across a broader client base.

At Citizen Mint, this evolution mirrors what we see across RIAs and family offices every day. The conversation is no longer about whether alternatives belong in portfolios. It is about how they are implemented and what role they play alongside traditional assets.

Advisors Are Allocating Meaningfully and Staying Invested

Nearly half of advisors now allocate more than 10 percent of client portfolios to alternative investments, with a growing segment allocating over 20 percent.1 Even more telling, these allocation levels have remained consistent year over year. That stability matters. It signals that alternatives are no longer a short-term response to volatility or a reaction to public market drawdowns. They are a structural component of modern portfolios.

For advisors, this represents a shift in mindset. Private markets are increasingly viewed as foundational building blocks rather than optional sleeves. For investors, it reflects a desire for differentiated return drivers, income generation, and portfolio resilience that public markets alone may struggle to provide.

Diversification Is the Primary Driver Behind Adoption

The reason alternatives have earned a permanent place in portfolios is not novelty. It is diversification.

As correlations rise within public markets and equity leadership becomes more concentrated, advisors are looking for return drivers that behave differently across market environments. Alternatives are increasingly used to introduce differentiated sources of return and risk.

Volatility to Return

For advisors, this is not an academic exercise. It is about improving portfolio resilience and giving clients confidence that their capital is not dependent on a single market regime.

Independent RIAs and Family Offices Are Leading the Way

Not all firms are adopting alternatives at the same pace. Independent RIAs and family offices continue to lead the industry in allocation depth, with a significantly higher percentage allocating more than 20 percent of client portfolios to private markets.3

This gap highlights a structural advantage. Firms with greater discretion and flexibility are better positioned to thoughtfully integrate alternatives into portfolio construction. Broker-dealers, by contrast, still have meaningful room to expand access in a controlled and compliant manner.

Citizen Mint is built with this exact audience in mind. Advisors who want curated access to private markets without sacrificing rigor, simplicity, or client experience.

Advisor survey data summarized from a 2026 Mercer alternative investments study conducted across RIAs, broker-dealers, and family offices.

Where Advisors Are Allocating Capital

Despite the growing breadth of alternative strategies available, advisor capital remains concentrated in a small number of core asset classes. Private equity, private credit, and real estate continue to dominate allocations across portfolios.

This concentration reflects discipline rather than inertia. Advisors are prioritizing asset classes with proven roles across market cycles. Long-term value creation in private equity. Contractual cash flows and income in private credit. Inflation sensitivity and diversification in real assets.

At Citizen Mint, our approach mirrors this philosophy. We focus on a curated set of high-conviction private market strategies rather than overwhelming advisors with excessive choice.

Interval and Evergreen Funds Are Enabling Scale

One of the most important developments in private markets adoption has been the rise of interval, tender-offer, and evergreen-style vehicles as conduits for scale.

Unlisted closed-end funds, including interval and tender-offer funds, have grown from under $40 billion in assets in 2016 to more than $200 billion by mid-2025.4 This growth has been driven by advisor demand for structures that balance access to illiquid strategies with defined liquidity, operational simplicity, and portfolio integration.

The rapid growth of evergreen and interval-style vehicles has also prompted deeper examination of their tradeoffs. While these structures improve accessibility and allow private markets to scale, they also raise important questions around valuation discipline, liquidity management, and whether long-duration assets are well suited to perpetual fund formats. Structure matters, and the right approach ultimately depends on the strategy, client profile, and portfolio role.

Even so, their sustained growth suggests many advisors are treating these vehicles as long-term portfolio tools, though whether that role proves durable across market cycles remains an open question.

Credit and Income Are Driving the Next Phase of Growth

A closer look at asset growth reveals where demand is strongest. Interval funds have become the preferred structure for credit and income-oriented strategies, which now represent some of the fastest-growing segments in private markets.

Loan and structured credit strategies alone account for tens of billions in assets, with the vast majority housed in interval funds. This reflects advisor demand for yield, income consistency, and downside protection in a market environment where traditional fixed income has faced meaningful challenges.

Interval and Tender Offer Funds

What This Means for Advisors and Clients

The takeaway is clear. Alternative investments are now embedded in how advisors think about portfolio construction, client outcomes, and long-term planning.

The next phase of private market adoption will not be driven by access alone. It will be defined by curation, structure, and execution. Advisors need solutions that simplify implementation while preserving institutional-quality exposure.

That is exactly where Citizen Mint fits. A curated private market platform built for advisors who treat alternatives as a permanent component of modern portfolio construction.

1 Advisor survey data summarized from a 2026 Mercer alternative investments study conducted across RIAs, broker-dealers, and family offices.

2 Partners Group analysis of data from: NACUBO US Endowment peer average portfolio 2023; 2023 Fidelity Institutional Insights: A Study of Allocations to Alternative Investments by Institutions and Financial Advisers; S&P Capital IQ; McKinsey Global private Markets Review 2024: Private markets in a slower era. For illustrative purposes only. Returns for hypothetical portfolios above is backtested.

3 Advisor survey data summarized from a 2026 Mercer alternative investments study conducted across RIAs, broker-dealers, and family offices.

4 UMB / FUSE analysis via interval & tender-offer fund market data.

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