Assessing market demand


The retail alternatives market is rapidly expanding, driven by investors’ pursuit of greater diversification, yield, and access to assets like private equity, real estate, infrastructure, and private credit—areas previously limited to institutions. Regulatory changes and product innovation are making these opportunities more accessible, prompting advisers and wealth platforms to broaden their offerings.

Deloitte projects that US retail allocations to private capital will grow from $80 billion to an estimated $2.4 trillion by 2030. Key factors driving this growth include:

• Potential for higher returns compared to public markets;
• Lower minimum investments, reducing entry barriers;
• Technology platforms improving access to alternatives; and
• Innovative structures such as interval funds, BDCs, and non-traded REITs.

The current landscape

Competition in the liquid alternatives space is heating up as both traditional and alternative asset managers race to bring institutional-style strategies to more investors. Traditional firms are moving beyond mutual funds and ETFs, tapping into interval funds by using their established brands and wide distribution networks. Meanwhile, private capital managers offer deep expertise in alternative investments and oversee many of the interval funds popular with high-net-worth individuals and financial advisers.

Operating model design

Building an effective operating model for retail alternatives isn’t simple—it means navigating complex products, strict regulations, and the need for scalable solutions.

Firms face several important choices when designing retail alternatives:

• Choosing the right investment vehicle: Decide whether a mutual fund, interval fund, REIT, or another structure works best. Each has different requirements and impacts accessibility, liquidity, and operations.
• Picking the asset class: Select which alternatives to offer. Every asset class comes with unique rules for valuation, data, monitoring, and compliance—so it’s key to align choices with the firm’s strengths and retail clients’ needs.
• Sourcing investments: Traditional managers must determine how they’ll access investments: build capabilities internally, acquire a specialist firm, or partner with an alternatives manager. Each approach involves trade-offs on speed, cost, and brand strategy.
• Selecting the client channel: Decide who to target and how—advisers, banks, brokers, or direct to consumer. Different channels have varying fee structures and service expectations.
• Distributing product: Choose whether to partner with tech platforms, build distribution in-house, or use wholesalers. Distribution impacts cost, brand visibility, and scalability, and requires strong distributor relationships.

Key changes to look out for

Alternative and traditional investment managers entering the retail market will face significant shifts across their operating models.

Moving forward

Deloitte recommends a thoughtful, structured “Phase 0” centered on clarifying objectives, mapping operating model impacts, and building a robust implementation plan that can help firms better seize market opportunities and manage the complexities of retail alternatives. For leaders looking to set their teams up for success, this new report offers strategic insights to help navigate operational changes, anticipate market shifts, and confidently implement retail alternative investment solutions.