Asian private banking clients have significantly increased their exposure to alternatives over the past year, yet many still remain highly concentrated in US and tech exposure, warned industry leaders at the Asian Private Banker Alternative Investments Summit 2026 Singapore.

The panel discussion, Macro outlook of alternative investments: Innovations, potentials, new insights, delved into diversification within alts and how far Asia is in popularising the asset class.

Diversify with and within alts

With more clients seeing gains in alternative investments, Cheryl Tan, Julius Baer’s head of fund specialists for Asia and the Middle East, believes it is now time to review portfolio concentration, as most are heavily skewed toward the US and the tech sector.

In that regard, Tan has been advocating diversification within private credit to reduce concentrated lending and add differentiated exposure. For clients bullish on the AI theme, she recommends infrastructure funds for opportunities that cannot be tapped in public markets.

“Every manager has an expertise and bias. Putting together a number of complementary managers can enhance the overall risk-return of the allocation,” said Tan.

This skew in alternative portfolios and the need to diversify across managers are echoed by Meng Keet Wong, head of managed products and alternative investments at UOB Private Bank, who often finds clients surprised when they learn they are holding 30%+ in the tech sector.

“You might be diversified between managers, but if you end up owning the same three or four top positions that ultimately drive the portfolio, how diversified and protected are you really?” said Wong.

UBS Unified Global Alternatives’ head of private markets investment, Thomas Roland-Guyot, said the firm has been deploying a barbell strategy to help clients balance exposure across alts. On one side, the bank leans toward private equity, given the tailwinds of lower debt costs and higher investment activity. On the other end, the focus is on strategies with less correlation to the market, including infrastructure, long-term contracts, and intellectual property.

“Looking at the first few weeks of this year, we acknowledge there is still a lot of geopolitical tension, and we want to focus on strategies less correlated to the market,” said Roland-Guyot.

From a provider perspective, Diane Raposio, partner and head of Asia credit and markets at KKR, said the firm provides diversification by working across all asset classes and collaborating within teams to understand emerging themes and geopolitics, with both top-down and bottom-up approaches.

“As we’re building portfolios in alts investing, you need to make sure that those portfolios are diversified, so that portfolios can withstand changes in the market environment,” said Raposio.

Alts exposure is built over time

While forecasters expect private markets to reach US$50 trillion to US$60 trillion by 2032, meaning 25% of all assets will be in alts, it will still take a few market cycles for investors to get used to the alternatives market, according to Roland-Guyot.

“I cannot give you a figure. It’s very difficult for me to tell you that we will be reaching, like 40%, in a few years,” said Roland-Guyot.

To help the market ease into alts, Roland-Guyot believes innovation is key. To further illustrate this, Roland-Guyot pointed out that the development of secondary markets has provided investors with many more liquidity tools to exit the product market.

At Julius Baer, despite clients doubling alts exposure overall YoY last year, Tan also noted the complexity of alts and the lack of understanding and education that hinder faster adoption and allocation to alternatives.

Tan believes it is important to be patient, decide on an appropriate allocation, and then build the portfolio over time, where it is less about predictions and more about portfolio construction.

“Education is something that we want to place a bit more emphasis on this year, to help investors understand a bit more what they’re getting into, certainly with the proliferation of evergreens and hedge funds out there,” said Tan.

Seeing liquidity as a pain point for clients, Wong said evergreens have been a game-changer. In addition to starting conversations and providing educational opportunities, clients appreciate that receptions can be held quarterly, which has helped increase uptake.

“I remember in the past when we were trying to pitch, by the time we explained the J curve, capital calls, two hours in, you haven’t even started talking about the manager or the strategy,” said Wong.