J.P. Morgan – Biennial Alternative Investments Review, 2025

This report reviews the performance, underwriting standards, and portfolio risk of alternative investments including buyout and venture capital funds, hedge funds, private credit, and real estate.

Top quartile buyout and venture funds continue to outperform public markets. Hedge funds deliver strong risk-adjusted returns but face record levels of crowding, concentration, and high beta exposure. Private credit funds provide returns above leveraged loans but have loosened underwriting standards amid large capital inflows. Many alternative investment portfolios contain unmonetized companies dating back several years. The report also addresses litigation risks related to the retail democratization of alternative assets and summarizes recent academic research. Alternative assets have grown significantly, with private equity and venture assets doubling as a share of world equity market cap over the last decade, and private credit assets growing tenfold.