Despite Private Credit Volatility, Investor Appetite for Alternative Assets Remains Strong, Goldman Sachs Reports

Nevertheless, a recent survey conducted by Goldman Sachs reveals sustained investor confidence. Of the respondents currently invested in alternatives, 93% expressed satisfaction with their holdings, while 97% reported performance met or exceeded expectations. Among those aware of private credit market developments, 56% indicated no shift in their outlook toward alternatives, 30% admitted increased caution, and 14% developed a more favorable perspective.

The survey included 1,000 U.S.-based high-net-worth individuals (HNWIs) with at least $1 million in investable assets, along with ultra-high-net-worth individuals (UHNWIs) possessing $30 million or more. Data collection occurred between June 29 and July 31.

“Investors with greater familiarity and education around alternatives remain undeterred,” said Kristin Olson, Goldman’s global head of alternatives for wealth management. She noted that the findings reflect both investor resilience and a broader trend toward increased participation in private markets among individual investors.

Shifting Toward Diversification

Olson highlighted that investors are diversifying within the alternatives space, allocating more heavily to private equity, infrastructure, and real assets—sectors experiencing robust inflows. She also anticipates a recovery in private credit activity, pointing out that redemption pressures appear to be easing rather than intensifying.

Concerns related to software industry risks and fears of an impending downturn have proven largely unfounded, she added. “Not all software companies were destined for obsolescence,” Olson remarked. Furthermore, direct lending strategies tied to floating-rate instruments are benefiting from improved spreads amid tighter lending conditions, offering attractive risk-adjusted opportunities for disciplined lenders.

However, rising interest rates pose challenges for existing credit portfolios lacking proper underwriting safeguards.

Liquidity Challenges for Retail Investors

Access to alternative investments remains more limited for everyday retail investors compared to their affluent counterparts. Available options include exchange-traded funds (ETFs), business development companies (BDCs), and interval funds—each presenting distinct liquidity trade-offs managed by fund sponsors.

“As you move down from ultra-high-net-worth to the typical investor, maintaining sufficient liquid assets becomes critical to meeting periodic liquidity demands,” explained Olson. Despite these hurdles, regulatory initiatives like the SEC’s proposed expansion of accredited investor criteria could unlock greater access for mainstream investors.

The SEC recently proposed raising income thresholds for accreditation—from $200,000 annually for individuals and $300,000 for joint filers—to potentially include net worth benchmarks excluding primary residence values.

“These changes will help broaden access to alternatives for the wider investing public,” Olson stated.

Diversification Across Alternative Assets

According to Olson, building a well-diversified alternative investment strategy involves spreading exposure across asset classes such as private equity, real estate, and infrastructure—not solely focusing on private credit. However, availability varies significantly depending on investor type and platform access.

For ultra-high-net-worth clients, allocations exceeding 20% to alternatives may be appropriate based on individual circumstances and liquidity profiles. Broader retail adoption still lags behind, with average alternative allocations remaining in low single digits across most portfolios.

“[Allocation levels] are highly tailored to each client’s unique needs and liquidity requirements,” Olson emphasized.

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