McKinsey: Retail Alternatives To Double By 2015

Jul 31 2012 | 11:19am ET

Retail investors appetite for alternative investments will continue to grow steadily, McKinsey & Co. predicts.

The consultancy estimates that retail alternative products will account for 13% of total U.S. retail fund assets by 2015, more than double its slice of such assets in 2010. Alternatives' share of retail fund revenues will also grow commensurately, from about 13% to about 25%.

The new demand is fueled by how the products are being structured, financial advisors' enthusiasm for them and how they are being accounted for in portfolios, McKinsey said. But many asset managers are "unprepared for the shift," the firm found.

To combat that unpreparedness, such firms need to boost both their risk-management and sales capacities, McKinsey recommends.


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