For decades, the 60/40 portfolio (60% equities, 40% bonds) was the backbone of retirement planning. But the world has changed. Inflation, a rising correlation between stocks and bonds, and a prolonged low-yield environment have exposed the limits of the traditional model.
Meanwhile, the alternative investment opportunity, previously reserved for institutions to manage risk, generate income, and capture growth outside of public markets, has grown more accessible to individual investors.
Defining Alternative Investments
Alternative investments are asset classes that fall outside traditional stocks, bonds, and cash, including:
- Private equity: Ownership stakes in companies that aren't publicly traded. Returns can be compelling over long time horizons, but capital is typically locked up for five to ten years, and not all funds deliver. Manager selection is extemely important.
- Private credit: Loans made directly to businesses outside of the banking system. In an environment where traditional fixed income has struggled, private credit has gotten attention for its income potential and floating-rate structures, but liquidity is limited.
- Real assets: Physical or tangible assets like real estate, infrastructure, and commodities. These often carry inflation-hedging characteristics and can generate steady cash flows. They also carry sector-specific risks and long investment cycles.
- Venture capital: Early-stage investment in startups and emerging companies. The return profile is highly skewed: most investments underperform or fail, while a small number can generate outsized gains. This is high-risk, long-horizon territory.
- Hedge strategies: Funds that use a range of techniques, including short selling, leverage, and derivatives, to manage risk or generate returns uncorrelated with markets. These vary widely in complexity, cost, and purpose.
Not all alternatives are appropriate for every investor. Minimum investment thresholds, illiquidity, complexity, and suitability all must be evaluated carefully.
AI as an Investment Theme
Artificial intelligence has moved past the buzzword stage to true economic infrastructure story that requires context and education for interested investors. Join us on March 24 at 12 pm CT as we dive further into AI with our experts, Colton Richards CFP®, James Marsden, CFP®, CRPC®, AIF®, and Anna Nerys from IShares on our upcoming webinar,The AI Investment Opportunity: Building Smarter Exposure in an Evolving Market .
AI is not inherently an alternative investment. Shares of NVIDIA, Microsoft, or AI-focused ETFs are standard public market investments — liquid, accessible, and already reflected in most diversified portfolios. When you access AI through private markets, like venture capital funds backing early-stage AI companies, private equity funds financing AI infrastructure, or private credit supporting AI-driven businesses, you’re entering the alterrnatives landcscape.
Within the public market, AI systems are driving demand for semiconductors, data centers, and energy infrastructure thanks to their massive computational power requirements. Companies across the hyperscaler tier — the major cloud and computing platforms — have committed hundreds of billions of dollars to this infrastructure over the coming years.
At the software layer, AI is beginning to reshape productivity across industries, with companies that integrate AI effectively experiencing measurable changes in operating efficiency and margins.
Another, often overlooked layer of AI investment opportunity: the industries that benefit as AI scales, including energy and power infrastructure, cybersecurity, industrials, and edge computing.
Public vs. Private Market AI Exposure
Most investors already have AI exposure; they just didn't choose it. If you hold a broad index fund, you own the companies driving the AI build-out whether you've evaluated them or not. By early 2025, the top 10 companies in the S&P 500 made up nearly 40% of the index, and nearly all of those top 10 positions are closely tied to AI.
That may be appropriate for some portfolios, but it’s important to distinguish between passive exposure to an index and a deliberate allocation decision. Many investors may not know how much AI risk they’re really carrying.
While public market exposure to AI is fully priced into well-followed names, private markets offer potential access to AI infrastructure and applications at earlier stages — before valuations reflect broad market consensus. Venture-stage investments in AI carry substantial risk and illiquidity, but they also offer differentiated return potential not available in public markets.
Not every alternative strategy belongs in every portfolio, and not every AI investment theme is worth pursuing. Appropriate allocation requires understanding liquidity constraints, time horizons, fee structures, and manager track records.
At Apeiron, we consider each client’s goals, liquidity needs, and time horizons as we evaluate allocations to alternatives and emerging investment themes, and pay close attention to the potential concentration risk that comes with heavy public market AI exposure.
The AI Investment Opportunity: Building Smarter Exposure in an Evolving Market
If you want to go deeper on AI as an investment opportunity, we're hosting a webinar on March 24 at 12 pm CT: The AI Investment Opportunity: Building Smarter Exposure in an Evolving Market.
Colton Richards, CFP®, and James Marsden, CFP®, CRPC®, AIF®, will be joined by Anna Nerys of iShares to walk through the full AI investment landscape, from the history of AI to emerging long-term opportunities. You'll get a grounded look at how AI exposure already lives in current portfolios, which second-order sectors stand to benefit as the build-out matures, and how Apeiron is thinking about allocation strategy.