As stocks fall, more investors are expected to look to alternative investments, according to new data from PwC. Bobbi Rebell reports.
Get ready for the next big boom: Alternative Investments. Money flowing into hedge funds, private equity and real assets, like real estate, is expected to quintuple in the next five years, according to new data from PwC. Demand from investors is growing, says Global Strategy Leader John Siciliano: SOUNDBITE: JOHN SICILIANO, GLOBAL STRATEGY LEADER, PWC (ENGLISH) SAYING: "You are seeing many new forms of investment vehicles become broadly available to people. Think of real estate. They think of infrastructure, timberlands, agriculture, water rights, but there are also other areas where asset management has taken over center stage from the banks and the insurance companies globally. And that can be middle market lending that can be leveraged loans, it can be peer to peer lending. So that is sort of one way of looking at the transformation." Pension funds want more made-to-order investments, and newly affluent investors want access to what had long been off limits, mainly because of multimillion-dollar investment minimums. PwC said, assets managed in liquid alternative funds will balloon to $664 billion by 2020 from $260 billion at the end of 2013. Pension Partners Chief Investment Officer Ed Dempsey: SOUNDBITE: EDWARD DEMPSEY, CHIEF INVESTMENT OFFICER, PENSION PARTNERS (ENGLISH) SAYING: "We are going to see more of it. Especially, if the equity markets are plateauing here. If the equity markets are going to plateau, and suddenly interest rates begin to rise, which means losses on bond portfolio's investors are going to be driven into more esoteric, more alternative type of investments. " And, with stocks near record high levels now taking big hits from global tensions in places like Greece, interest in other investments is likely to continue to grow.