Advisors Boost Alts Allocations as Tech Priorities Shift
A new study from alts platform iCapital found that advisor usage of alternative investments continues to gain momentum, despite some of the challenges that faced private credit. However, asset allocation preferences have shifted as well as what advisors are prioritizing when it comes to alts technology.
Overall, the study found that 89% of surveyed advisors plan to maintain or increase allocations to alternatives. In addition, this year’s study found that the percentage of advisors who said they planned to increase allocations rose to 39%, up from 14% in the 2025 version. (Conversely, the percentage of advisors that said they plan to allocate less also doubled from 5% in 2025 to 11% in 2026.)
The survey found some sharp shifts in sentiment around alts technology, an area in which firms like iCapital, CAIS and others have rapidly expanded functionality and features. Risk and performance analytics tools rose to the top (51%) as the most critical technology and partner integration needed to implement an alternatives investment strategy, up from 43% a year ago. Conversely, automated subscription and redemption processing dropped from 41% to 26%, custodian and fund administrator connectivity fell from 41% to 28%, and CRM integration fell from 42% to 30%.
On the operational side, “advisors are increasingly focused on portfolio construction, liquidity and risk assessment, compliance, reporting, and client communication,” according to the report.
Advisors identified “difficulty in assessing liquidity and risk exposure across asset classes” as the top challenge (59%), followed by compliance and regulatory concerns (53%) and limited access to institutional-quality investment products (50%).
A separate question found that the challenge of explaining alternative investments to clients was the biggest barrier (17%) to usage, followed by lack of educational resources (13%) and documentation/due diligence requirements (13%).
In terms of asset selection, private equity remained the top choice with 64% of respondents listing it as a sector advisors are interested in allocating to on behalf of clients, down a hair from 66% in 2025. Real estate rose to second place at 50% (up from 44%), followed by private credit at 43% and hedge funds at 42%. The latter two were down from 56% and 54%, respectively, in 2025. In addition, venture capital surged to 37%, up from 26%.
Meanwhile, the recent wave of redemption requests hitting non-traded business development companies and interval funds seems to have dampened enthusiasm for evergreen funds a bit. A year ago, 77% of respondents said they expected average client exposure to evergreen strategies to exceed 10% within two years. That number dropped to 63% in the current survey.
The study was conducted during the first half of 2026 by an independent third-party research firm using telephone interviews with online follow-up. Respondents included financial professionals across private wealth firms, national and regional broker/dealers, independent broker/dealers and RIAs and included 870 respondents across 15 countries spanning the United States, Europe, the Middle East and Asia-Pacific.
