The appropriate allocation depends heavily on individual circumstances, including liquidity needs, risk tolerance, return expectations, cash-flow needs, and investment horizon, among other considerations.
Historically, individual investors have allocated only a very small portion of their portfolios to alternatives — typically less than 5% of their investments allocated to private credit, private equity, private infrastructure, and other alternative investments combined. This lower level of allocation can be partly attributed to the fact that private market investments have been challenging for individuals to access until recent years.
But individual investors can look to institutions for signs of potential allocation levels. Historically, institutional investors such as pensions, endowments, and foundations have allocated nearly 40% to private markets and alternative investments.*
And according to a 2025 Mercer survey, over the next three years, 32% of institutional investors intend to add or expand their private market allocations to enhance diversification and achieve return objectives.** The Mercer study found that institutions plan to increase allocations across all private market asset classes while reducing allocations to cash and U.S. stocks.
At the end of the day, individual investment allocations are a personal decision and should depend on factors including your liquidity needs, time horizon, diversification needs, and overall risk tolerance.
*Source: Ardian, as of January 2026. Endowment & Foundations, Public Pensions figure are a weighted average from Preqin Institutional Allocation Study 2025, April 2025. Individual Investors figure comes from Bain Global Private Equity Report 2023, excluding Single Family Offices. All figures are rounded.