Private market keys for wealth management: framing a strategy to win

Most platforms still behave as if “retail alternatives” is one segment. It is not. 

Among US investors with $10 million or more in assets, 80% allocate to private market alternatives, and adoption peaks at 91% for those with $20 million or more.² Global family office assets under management are expected to rise from $3.1 trillion in 2023 to $5.4 trillion by 2030, with 20%-50% of portfolios typically allocated to alternative investments.³ However, today, most alternative platforms offer the same menu to all five segments: a long scroll of funds, minimums, strategies and term sheets. The implicit message is: “Here is everything we have; please self-segment.” That approach may appear backwards. A segment-first view forces some uncomfortable but useful clarity:

• Mass affluent investors do not need a feeder into a flagship buyout fund.
• Family offices do not want a mass-market interval fund with TV ads.
• Affluent investors are far more sensitive to simplicity and tax handling than they are to “institutional pedigree.”

Only when targets segments are identified then does it make sense to talk about fund structures.

There is no shortage of breathless headlines about “trillions of dollars unlocking” in retail alts. For a COO, that’s not helpful. A simple segmentation of the opportunity:

• TAM (total addressable market): the broad pool of assets that could, in theory, own some form of alternatives.
• SAM (serviceable available market): the portion your current channel, operating model and regulatory perimeter can reach.
• SOM (serviceable obtainable market): the portion you can credibly win in 3-5 years, given advisor trust, brand, shelf governance and execution capacity.

For most platforms, the near-term SOM is not in mass retail illiquids. It is typically concentrated in three places:

• Affluent accredited investors moving from near-zero to low-single-digit allocations via semiliquid wrappers.
• HNW clients shifting from small “toe-dip” positions to purposeful sleeves embedded in models and planning narratives.
• Family offices consolidating fragmented relationships and workflows onto fewer distribution partners.

This EY point of view emphasizes user-centered design. Applying that lens here: the right wrapper is simply the expression of the underlying client need.

It is important to note, no one is going to win every segment today, therefore a winning strategy is to focus on an individual segment at a time starting with doubling down on segments you already have a beachhead established.

A simple standard COOs can enforce is:

• Default to 1099-friendly structures for mass affluent where feasible; avoid operational complexities,(capital calls, multistate filings) that may impact trust.
• For accredited and HNW, make tax reporting predictable: standardized document timelines, consolidated reporting and digital delivery.
• Build tax expectations into advisor talking points up front: liquidity cadence, tax form type and timing should never be a surprise.

Think of five big levers

For most platforms, the gap is not ideas; it is execution capacity. Three clusters of investment usually show up in the COO’s roadmap:

Sustainable demand for products like interval funds requires

• Segment-driven product design: Tailor funds to client needs, with clear narratives on liquidity and tax reporting.
• Advisor enablement: Provide ongoing training so advisors can confidently position products through market cycles.
• Data-driven distribution: Use analytics to optimize channels and monitor adoption.
• Operational resilience: Ensure infrastructure can scale and adapt to regulatory changes.

A winning strategy should have two parts:

1. First, focus on where demand exists today by identifying your LP base and lowering barriers to entry. Catering to existing demand can be done in under 12 months, while building and launching products for a new LP base takes much longer.
2. Second, scale in the segments where you are already successful while planning for where you need to be in the next two to three years, ensuring strategic differentiation through transparent reporting, cost efficiency and operational scalability. 

By following these principles, COOs can position their platforms to thrive through any market cycle without needing to enter an arms race with a $500b+ AUM alts investment firm or other industry giants just to keep up. 

A simple operating roadmap

Rather than close with answers, it is more useful to leave with a short agenda you can use internally:

If this EY point of view does its job, it will not give you a blueprint to copy. It should, instead, make you slightly uncomfortable about how much of your current alts effort is product-led rather than demand-led.

The convergence of public and private markets is real. The platforms that win will be those that start with the segments, align the wrappers and then build the rails and not the other way around. 

Abiram Satish Sivasankaran, Senior Director, EY-Parthenon, Ernst & Young LLP is the additional author of this article.