Unlocking the Mystery of Women and Alternative Investments
Have you ever wondered why men tend to allocate twice as much of their assets to alternative investments compared to women? This question spurred my curiosity and led me to interview 52 successful investors from around the globe for my latest white paper titled “Women & Alts: A Global Perspective,” which was just released. The insights I gathered are eye-opening and shed light on the preferences and attitudes of women towards alternative investments.
During my interviews with 26 women and 26 men in the finance industry across 31 cities and 25 countries, we delved into their investment approaches and discussed the composition of their portfolios. The disparity in allocation towards alternative investments between genders is a crucial issue to address, considering the growing significance of alts in a well-rounded investment portfolio. Institutional investors have long recognized the benefits of diversification through alts, and it seems male retail investors are following suit. However, female retail investors have been slower to adopt this trend.
According to Preqin’s Future of Alternatives 2028 report, global alternative assets under management are projected to reach US$24.5 trillion by 2028, up from an estimated US$16.3 trillion in 2023. The allure of alternative assets lies in their low correlation with traditional asset classes like equities and bonds, which can enhance diversification, mitigate risk, and potentially boost long-term returns.
Defining alternative investments can be a challenge, as the landscape is vast and constantly evolving. Through my research, I identified the top 10 alternative assets that resonate with women. These include private equity, art, private credit/debt, gold, non-primary residence real estate, startups, angel investments, wine, collectibles, and infrastructure assets. Women have demonstrated a strong interest in exploring alternative investments, indicating a real need for equal access to this rapidly growing asset class.
Insights on Marketing Strategies
- What’s Not Working: Financial institutions have recognized women as a valuable target market, but many of their messaging and marketing tactics miss the mark. The perception that women are risk-averse or lack confidence is outdated and inaccurate. The opaque nature of some alternative investments poses a barrier to entry for women, highlighting the need for clearer explanations and educational initiatives. Additionally, the lack of a strong network effect in alternative investing further alienates women from this space.
- What Does Work: Interviews with industry experts revealed effective marketing strategies that resonate with women. By explaining investment products clearly, making the narrative personal, and leveraging women’s forums and communities, financial institutions can attract more women to alternative investments. Engaging with women where they are, whether through social media or targeted events, can also bridge the gap and make alts more accessible and relatable.
It’s clear that more efforts are needed to ensure women have equal opportunities to engage with alternative investments. The insights shared by both male and female investors offer valuable guidance for the industry to make meaningful progress in this area. For a detailed exploration of this topic, I invite you to read the full report, “Women & Alts: A Global Perspective.” Let’s work together to unlock the mysteries of alternative investments and empower women in the financial realm.