According to PwC’s global Asset and Wealth Management (AWM) study, assets under management (AUM) in alternatives are poised to outpace overall growth, with a projected compound annual growth rate (CAGR) of 6.7 percent, reaching $27.6 trillion USD by 2028

This surge reflects burgeoning investor appetite for private equity, real estate and infrastructure, highlighting the industry’s transition to more specialized, high-demand investment opportunities.

“The interest in private markets is accelerating the creation of multi-asset managers and leading to a step forward in acquiring infrastructure, private credit and other potentially high-margin businesses,” PwC said.

The firm noted that global assets under management should reach US$171 trillion by 2028, reflecting a 5.9% CAGR, up from 5% a year earlier.

PwC further highlights the growing role of cryptocurrencies in alternative investments as institutional allocations to digital assets grow. Specifically, 57 percent of asset and wealth managers surveyed indicated that cryptocurrencies remain their preferred choice amid the rise of digital assets.

PwC also noted the growth of tokenized products as a key focus for innovation in asset management, with AUM in tokenized investment funds expected to jump from US$40 billion in 2023. to over US$317 billion by 2028.

Although it represents a small part of the overall market, this segment is growing at an impressive CAGR of over 50 percent, driven by the demand for greater liquidity, transparency and wider access to alternative investments such as private equity, real estate and commodities.

In addition, regulatory relief around digital assets creates new opportunities for AWM firms to diversify their portfolios and attract a tech-savvy client base.

Although only 18 percent of firms currently offer digital assets, investor interest is growing, with 80 percent of digital product offerings reporting increased inflows.

PwC also pointed out that breakthrough technology is changing access to the private market, with apps and platforms allowing retail investors to buy small stakes in tokenized funds.

Tokenized fractional ownership lowers investment barriers and allows illiquid assets to be traded on secondary markets.

The PwC survey revealed strong interest in tokenized private market assets, with more than half of asset managers and institutional investors citing private equity as their top tokenized asset class.