As private wealth clients increase their alternative investment allocations, private banks are racing to secure exclusivity deals with top-tier houses. However, with these funds eventually becoming widely accessible, how can banks maintain differentiation once the initial “honeymoon” period ends?

This is part of a broader strategy of private banks looking to close a massive gap in alternative asset allocations, with a third of the industry expecting client exposure to surge to between 11% and 15% by 2030. This ambitious target represents a potential tripling of current levels, given that 44% of portfolios currently hold less than 5% in the asset class.

Despite the anticipation of a major breakthrough, significant structural and mental hurdles continue to dog the sector. The reality is that transitioning alternatives from a niche add-on to a core portfolio pillar will require private banks to go above and beyond their current strategies to overcome these persistent obstacles.

Structurally, private wealth investors are deterred by illiquidity concerns about long-dated, locked-up funds and uncertain cashflow visibility. Many prefer fully funded vehicles over cumbersome capital call mechanics, which involve complex cash management and high operational intensity for first-time investors, according to Chee Jiun Wen, Bank of Singapore’s head of alternative investments.

Additionally, reporting opacity – marked by NAV lags and appraisal-based valuations – remains a significant structural hurdle to entry, not to mention other psychological barriers such as how alternatives could sometimes be perceived as “complex” and “opaque” and that Asian investors value flexibility over liquidity given their entrepreneurial backgrounds, per Chee. 

Closing this gap, however, requires a fundamental shift in how the industry addresses the pain points stifling adoption.

When the honeymoon is over

A number of private banks have been working to differentiate their alts shelves through exclusive partnerships with general partners, which often come with a finite “honeymoon period” before the same opportunities are widely available at other banks. 

“Exclusivity is a key differentiator in an increasingly crowded alternatives market,” said Chee, adding that the bank focuses on high‑conviction GP partnerships offering clients access to capacity‑constrained managers and co‑investment opportunities that are not broadly available.

Standard Chartered’s private markets co-investment club follows a similar blueprint. Launched in March 2025, it offers UHNW clients deal-by-deal access to global private market opportunities alongside institutional managers. Currently, Ardian is the exclusive GP partner for the co-investment club, offering programmatic access to private equity co-investments.  

These partnerships attract questions over how the banks will ensure the value proposition remains intact for the client after the exclusivity period expires.

Nomura International Wealth Management (Nomura IWM)’s head of funds and alternatives, Connie Sin, has argued that this temporary exclusive tie-up creates “false differentiation”, as it creates a sense of urgency but without any competitive edge.

“We view exclusivity not as ‘being first,’ but as securing quality, alignment, and genuine scarcity for our clients,” Chee said. 

“While exclusive arrangements naturally broaden over time, our focus still remains on GPs that can drive long‑term value, and that comes from team stability, consistent performance over cycles, consistent investment strategy and preferential fees. Our due diligence and partnership depth keep access to the GP valuable long after exclusivity fades,” he added.  

For Goldman Sachs, the bank differentiates its offerings by access to distinctive investment opportunities, including those originated by Goldman Sachs, as well as select GPs. “We co-invest alongside clients in most Goldman Sachs offerings, demonstrating shared interest and commitment to their success,” said Lily Chan, head of alternatives for wealth and alternative capital markets for Asia Pacific, Goldman Sachs. 

Private banks identified alternative investments as their top priority for partnership with fund houses, ranking ahead of multi-asset, fixed-income, and equity investments. Within the alternatives space, private equity, hedge funds and commodities were cited as the most in-demand categories, according to the latest PWMA report. 

Educating private clients

The rise of evergreen funds, also known as semi-liquid vehicles, has played a key part in democratising access to alternative investments. Access continues to broaden, with an expectation that evergreen offerings will expand into secondaries, venture capital and sector-focused areas. 

“While there is increasing interest in these products, investors have to navigate the complexity that comes with an increased range of offerings and variety of structures. That is why manager selection is key — investors should focus on managers who have the discipline, process and infrastructure to support these structures,” said Chan.

“It is important for investors to understand liquidity provisions and how managers handle flows in determining accessibility of investment capital. Knowledge of local markets and structures is also important,” Chan said, adding that investors should evaluate the sustainability of a strategy’s returns alongside the manager’s ability to scale fundraising and deal execution effectively.

Education will continue to be the key to closing the gap. Bank of Singapore’s Chee highlighted the importance of relationship manager enablement that includes but is not limited to developing structured learning pathways for RMs, including strategy primers, in‑person teach-ins, and live GP-led sessions to deepen asset class and product understanding, as well as client education.

What’s next

It remains to be seen whether private banks can win the race to bridge the alternatives penetration gap by 2030, as their success hinges on scaling these innovative structures fast enough to overcome deep-seated investor caution.

Positive catalysts are emerging: maturing investor understanding of private markets, especially with improved transparency and reporting; and increased volatility across global markets (both equities and fixed income), resulting in long/short equity and global macro hedge funds outperforming, per Chee.

Chan, too, saw a growing interest in secondaries and credit as investors look for greater portfolio diversification. 

“They are actively seeking strategies to mitigate the J-curve effect of their portfolios. Furthermore, in a rate-cutting environment, clients are increasingly focused on credit strategies that offer attractive cash yields with low default risks to enhance overall returns while navigating market fluctuations,” she explained, adding that the listing of alternative assets could be one future driver of growth.  

While global private equity and credit managers remain core, Chee noticed an increasing appetite for Asia-originated alpha. 

Bank of Singapore actively monitors the landscape to identify niche Asia managers with domain expertise, as well as curating regional real asset and infrastructure exposure aligned with local sustainability and digital infrastructure trends, per Chee. 

For the industry’s heavyweights, the focus for 2026 remains clear. “We will focus on strategic initiatives to attract new clients and enhance origination efforts. We are dedicated to delivering a best-in-class alternatives platform,” said Chan.