Alternative Investments is an emerging market. In recent years, alternatives have become a prevalent aspect of multi-asset investing. It includes investments ranging from private, commercial, real estate, hedge funds, liquid alternatives to illiquid private equity funds, and real assets. The alternative investments industry is rapidly expanding and increasing its ability to provide durable investment strategies, and hence is attracting a growing number of individual investors. Due to extended periods of very low interest rates and rising volatility on equity markets around the world, traditional investments have left many investors with inadequate return. Therefore, the need for alternative investments is crucial but the greatest problem investors face is evaluating and allocating these alternatives in proper proportion to get maximum returns. The following paper assesses the primary factors that influence investors as they evaluate and make decisions about alternative investments and how adding them to portfolios can improve returns and reduce risks.
