The investment translator's mandate.

The wealth management industry has spent the last decade talking about "democratising" alternatives. The numbers show that for now, it's still just talk. According to Cerulli Associates, the average financial adviser's client portfolio holds just 2.3% in alternative investments, and the industry's own target for 2026 is a modest 3.1%. Cerulli's researchers have called this figure "consistently disappointing," and they run the numbers every year expecting it to move.

I don't find it disappointing. I find it familiar.

I ran into this exact gap in 2001, when I was building Macquarie's alternatives distribution platform from a standing start. The strategies worked. Endowment funds had been generating strong risk-adjusted returns from alternatives for decades. What didn't work was getting an adviser, sitting across from a client, to recommend something that didn't fit into their business and they couldn't understand how it helped their clients.

Twenty-five years later, the same gap exists in a much larger market. Cerulli now estimates advisers hold roughly US$1.9 trillion in less liquid private market strategies, and expects that to reach US$3.7 trillion by 2029. That's a genuine, quantifiable opportunity, and much faster growth than liquid public market assets.

The gap I spent my career bridging hasn't closed. But it is moving.

Nobody owns the whole category, and that's the point

Part of the confusion in this market comes from treating "alternatives" as a single product line, the way you might treat domestic equities or bonds. But alternatives aren't just one thing. Private equity, private credit, infrastructure, real assets and venture capital behave very differently to each other, are priced differently, and require entirely different due diligence.

Even the largest, most specialised players don't claim the whole field. Macquarie Group built one of the world's leading infrastructure platforms, and yet it still operated within specific niches like transportation and energy rather than infrastructure in its entirety. When I designed Macquarie's agricultural funds management business, the point wasn't to own "alternatives." It was to own a specific, deep, defensible niche and to do it better than anyone else.

That niche came with dirt on it, literally. A farm is revalued when a valuer walks the property, not when a screen ticks, and two comparable properties can trade months apart with no shared reference point between them. Someone has to build the plumbing that makes an asset like that investable, and that plumbing is the wealth management business.

The firms trying to be the answer to alternatives as a category are solving the wrong problem.

The winners will be the ones who help advisers navigate a moving target, not the ones claiming to have built the whole map.

The best argument for keeping humans in the loop is the data itself

There's a reasonable case that public markets are increasingly a domain for automation. Listed equities and bonds follow standardised reporting and disclosure rules, which means the underlying data is clean, comparable, and exactly the kind of structured input that AI systems are built to exploit.

Private markets don't offer that. As State Street's own research on private markets data has pointed out, private transactions are bilateral by nature; two parties negotiate a valuation without a shared external reference point, and even basic definitions like assets under management can vary within a single organisation depending on which team you ask. The International Valuation Standards Council reached a similar conclusion in its recent review of AI in valuation: the technology can support a valuer's work, but professional judgment remains essential, and that isn't a temporary gap waiting to be engineered away. It's a structural feature of markets that were never designed to be standardised.

I learned where that boundary sits by building on both sides of it. The robo-advice engine I built ran 180,000 calculations and could automatically price the fee and return impact of 99.8% of Australia's superannuation (pension) market. But it could do none of that until humans had done the unglamorous part first: maintaining the input tables that translated a sector which had never agreed on standardised language. The machine did the arithmetic. The judgment about what the data actually meant stayed human, and no amount of computation changed that.

That's not an argument against using AI in private markets, and plenty of firms are using it well for sourcing and due diligence. It's an argument for why the adviser, the allocator, and the fund architect who can exercise judgment in ambiguous, non-standardised situations aren't going anywhere.

I spent a career making judgment calls on illiquid, structurally messy assets. That skill doesn't get automated away.

It gets more valuable as more capital moves into exactly the kind of assets that resist standardisation.

The advantages of building in a smaller market first

Australia's wealth advisory market is smaller than the US market by an order of magnitude, and that turned out to be an advantage. Because the institutional market alone was never large enough to sustain a full alternatives ecosystem, Australian managers were forced early to build offerings that worked for both institutional allocators and retail advisers within the same structures. The US market, by contrast, could treat institutional and retail as separate businesses for decades, because the institutional side was large enough to stand alone.

That's no longer true. As US managers now court the wealth advisory channel in earnest, they're encountering a learning curve that the Australian market partially worked through years earlier. I built exactly that kind of integration, translating the same underlying investment thesis into products, education, and compliance frameworks that worked for two very different audiences at once. It's not a lesson in "Australia does it better." It's a lesson in what gets built when you don't have the luxury of ignoring one side of your client base.

The job is translation, not simplification

For decades, the standard industry response to adviser hesitancy has been to simplify the product until it fits in a retail wrapper. I think that's the wrong instinct, and it comes from a flawed premise: that financial advisers are less sophisticated investors than institutional allocators. They aren't. They're time-constrained relationship managers who need tools and frameworks, plus products structured to deliver investor benefits in the right way. The answer is not technical specifications and a thinner prospectus.

The firms that win this decade won't be the ones with the broadest shelf of alternative products. They'll be the ones that build what I call the 'investment translation layer': institutional rigour in how the product is designed and governed, paired with the entrepreneurial precision to build the education, the term sheets, and the adviser playbooks that make a genuinely complex product usable at scale. That's a dual-track capability. Very few executives are built to do both halves of that job, which is exactly why it's still open ground.

The advisers who wanted access to alternatives in 2000 didn't get that access in time. The ones who need better diversification tools today are asking the same question in a different decade. The firms that answer it, clearly and honestly, are the ones that will own the next phase of this industry. Not by selling alternatives harder, but by ensuring they make sense.

If you run a wealth platform, here is a two-minute test. Could your advisers explain your flagship alternative product to a client without reaching for the fact sheet? If the answer is no, you don't have a distribution problem. You have a translation problem. I'd genuinely like to hear how your firm answers it.