The global alternatives investment industry, which includes private equity, private credit, and growth equity, is set for substantial expansion over the next few years. According to Preqin’s Future of Alternatives 2029 report, assets under management (AUM) in alternatives are projected to reach $29.2 trillion by 2029, positioning the industry to cross the $30 trillion mark by 2030. This projected expansion represents a compound annual growth rate (CAGR) of 9.7% from the end of 2023 through 2029, driven by sustained investor demand across key asset classes like private debt and growth equity.

Private Debt and Private Credit: Key Drivers of Alternatives Growth

Within the alternatives landscape, private debt—often referred to as private credit—stands out as one of the fastest-growing asset classes, projected to reach $2.64 trillion by 2029. Rising investor interest in private debt is driven by its potential for income generation and portfolio diversification, particularly in volatile market conditions. Private credit offers customized financing solutions, attracting both institutional and individual investors seeking higher-yield opportunities relative to traditional fixed income.

What is Private Equity, and Why is it Growing?

Private equity, another cornerstone of the alternatives industry, involves investments in privately held companies. These investments can range from buyouts and restructuring of mature companies to growth equity investments supporting companies with high growth potential. Growth equity—a subset of private equity—targets companies ready to scale, bridging the gap between venture capital and later-stage buyouts. Both private equity and growth equity offer unique returns, appealing to investors looking for alternatives to public markets and increasing accessibility.

Secondaries: The Fastest-Growing Segment in Alternatives

The secondaries market involves trading existing stakes in private equity and private credit funds, enabling investors to access mature assets while mitigating early-stage risks. This strategy offers a tactical entry into private investments with quicker liquidity, boosting its appeal in alternative asset portfolios.

Among alternative assets, the secondaries market is set to grow at the fastest pace, with an annualized growth rate of 13.1%. Secondaries provide investors the opportunity to trade stakes in private equity or private credit funds, offering liquidity in traditionally illiquid markets. This flexibility and mid-term liquidity make secondaries increasingly popular, contributing to strong growth within the alternatives sector.

Rising Demand from Institutional and Individual Investors

Cameron Joyce, CFA, CAIA, Preqin’s Global Head of Research Insights, highlights the rapid evolution of alternative investments fueled by demand from both institutional and individual investors. “Global alternatives markets continue to evolve rapidly, especially as individual investors’ access opens up, as the private wealth channel’s growth continues,” Joyce explains. This growing demand across investor types is a key factor behind the projected rise in alternatives AUM, positioning the alternatives industry as a critical component of future investment portfolios.

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References

1. Preqin – https://www.preqin.com/about/press-release/global-alternatives-markets-on-course-to-exceed-usd30tn-by-2030-preqin-forecasts#:~:text=Preqin%20forecasts%20the%20global%20alternatives,tn%20in%20AUM%20by%202030.
   
2. Alternative Credit Investor – https://alternativecreditinvestor.com/2024/09/18/private-debt-aum-to-hit-2-64tn-by-2029/
   
3. FNEX Investment Banking – https://fnex.com/investment-banking/