While there isn’t an “official” definition, alternative assets are widely recognized as investments that fall outside of the “traditional” asset classes including stocks, bonds, cash, and similar. It’s important to remember that this means alternative assets aren’t just once-in-a-lifetime developments like cryptocurrency or one-offs like a rare wine collection — they can even include assets that have come to be considered “normal” among modern investors, such as real estate and hedge funds.

There are two main types. First are private assets such as private equity, private credit, infrastructure and private real estate. They are more complex and less frequently traded than public stocks and bonds, and give investors access to additional sources of return. Hedge funds, the second type, operate mainly in public markets but use less traditional tools such as short-selling and leverage.

‍