Alternatives & Strategic Asset Allocation Creating a robust framework for private investors

Deutsche Bank

Christian Nolting

Research

24 Pages

Deutsche Bank outlines a strategic framework for incorporating alternatives into long-term asset allocation, emphasizing their role in diversification and risk balance. With private-market AUM topping $15 trillion in 2024, the paper explores how alternatives can address equity concentration, smooth portfolio outcomes, and be implemented using a robust, data-led process.

Key Takeaways

Private markets expansion: Alternative assets have tripled every decade, surpassing $15 trillion in AUM as of 2024.
Equity bias offset: Alternatives reduce exposure to U.S. mega-cap and sector-specific risk prevalent in public equity allocations.
Framework-based inclusion: Allocation decisions use extended SAA logic with scenario analysis, not simple return or volatility assumptions.
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