The euphoria around artificial intelligence (AI) has sent tech share prices soaring in recent months and continues to raise the question of whether certain stocks are overvalued. And, if so, when the bubble will pop. This uncertainty is pushing high-net-worth individuals (HNWIs) towards alternative assets, such as private credit, private equity, private real estate, and venture capital.
Much of the value creation in technology is happening outside of public markets. Tech companies are staying private for longer – an average of 14 years, compared with five years in the late 1990s, according to JP Morgan – partly because of the amount of capital sloshing about in private markets. Anthropic agreed to a $30 billion funding deal in April 2026, which will value the maker of the AI chatbot Claude at more than $900 billion; OpenAI, meanwhile, was valued at $852 billion at the end of March. To put these valuations into context, both companies are, at the time of writing, larger than big-name public companies including Coca-Cola, Netflix, Palantir and Visa.
For HNWIs, vehicles such as angel investing, equity crowdfunding and venture capital funds can help them get in at the ground floor before a company becomes wildly successful — and then maybe decides to go public. Meanwhile, private infrastructure funds can enable HNWIs to capitalise on the aggressive spending happening in the data centre space; S&P Global analysis shows that private equity investment in US data centres hit a five-year high of $45.70 billion in 2025.
The generational shift
Part of the attraction of alternatives is that they tend to move independently of the stock and bond markets and have the potential to generate greater returns. The trade-off is that these investment vehicles are complex and can have high minimum commitments, plus, they typically require investments to be locked up for extended periods, sometimes several years. However, these are constraints that the majority of HNWIs are in a better position to absorb than ordinary investors.
A recent survey of 1,000 HNWIs carried out by Goldman Sachs found that, while approximately a fifth of their net worth is held in cash, they are increasingly willing to invest in alternatives. 39 per cent of those with investable assets under $5 million have exposure to the asset class. This rises to 63 per cent among those with a portfolio value of $5-10 million, and 80 per cent among those with a value of $10-20 million.
As for why alternatives are piquing the interest of these investors, the main reason given (15 per cent) is the desire to reduce reliance on public markets and diversify their portfolios. The other top two reasons (both 13 per cent) are the need to enhance returns and generate cash flow. A lack of attractive opportunities in public markets was the least cited reason.
Goldman Sachs also observed that 54 per cent of HNW Millennials consider alternatives the best way to capture growth opportunities, like those presented by AI. The figure is 37 per cent among Gen X and 14 per cent among Boomers. Alternatives account for 20 per cent of HNW Millennial portfolios, on average, more than Gen X (11 per cent) and Boomers (six per cent).
HNW Millennials’ relaxed attitude to alternatives comes as no surprise to Matthew Beck, chartered financial planner at independent financial advisor Smith & Pinching. “Many have witnessed the buzz around early-stage tech investing and the soaring value of companies like the AI chipmaker Nvidia. This has naturally created an appetite for investments with different return profiles.”
Beck puts the difference in attitude partly down to “the democratisation of investing – the increased visibility of investing on social media and the launch of platforms that allow you to invest in anything from your smartphone.” As a result, the HNW Millennials he works with tend to be more comfortable with volatility than their parents.
Lydia Kellett, partner at Mishcon de Reya, a law firm which acts for HNWIs and their families across all aspects of their business and personal lives, explains that while older HNWIs may opt for a traditional portfolio structure – 60 per cent allocated to stocks and 40 per cent to bonds – HNW Millennials are more adventurous and willing to explore different investment opportunities to optimise their capital gains.
“They’re generally distinguished from prior generations by a longer-term approach to investments, a greater tolerance for complexity, and an increasingly sophisticated, values-driven approach to how and where they commit capital,” says Kellett.
Diversity will remain key to wealth generation and preservation
As generational wealth changes hands, Kellett expects to see more HNW Millennials diversify beyond stocks and bonds. However, the 60/40 portfolio structure will still have a role to play, especially for HNWIs in search of steady returns.
Beck stresses that HNW Millennials shouldn’t overlook traditional asset classes, regardless of their risk appetite, as these are the best way to build and preserve long-term wealth.
“Alternatives can have a place, particularly through professionally managed structures, but typically as a relatively small allocation rather than the core of a portfolio,” he says. “The most important question is not whether HNW Millennials can access these assets, but whether they genuinely need the exposure in the first place.”
His advice to HNW Millennials is to engage their wealth advisors on how alternatives are structured and whether they’re in a financial position to invest in them. The danger is that they may end up wanting to chase alternatives in pursuit of outsized returns without fully understanding the risks, complexities, and the fact that their capital will likely be locked up for a long time.
Read more: Do HNWs need to worry about a potential private credit crunch?