The alternative investment landscape is shifting despite ongoing global volatility and expectations of a prolonged high-interest-rate environment. Our 2025 SS&C Intralinks LP Survey—in which we gathered insights from 171 limited partners (LPs) across six continents to learn about their alternative investment plans—highlights private equity (PE) as a standout asset class, consistently outperforming private credit, which has gained traction since the COVID-19 pandemic. North America remains the top investment destination, with most institutional investors (LPs) favoring the U.S. and Canada. However, challenges like declining valuations and macroeconomic uncertainty continue to loom, creating a mixed sentiment in the market.
Despite these concerns, investors are notablely optimistic. A significant 78% expect deal activity to increase over the next 12 months. This outlook is supported by the introduction of new fund and deal structures and a growing interest in co-investments, with more than a third of LPs finding them an attractive addition to their strategies.
Satisfaction with alternative investment returns has dipped slightly compared to last year, reflecting changing market conditions. Only 16% of investors reported that returns exceeded expectations, down from 20% previously, while 34% said returns fell short. Smaller investors, however, reported greater satisfaction than their larger counterparts. Nevertheless, the appetite for alternatives remains robust. Over 50% of LPs already allocate more than $500 million to alternative investments, and 62% plan to increase these allocations within the next year. This enduring interest in alternatives is largely driven by the need for diversification, inflation protection and defensive strategies.
Technology is playing an increasingly pivotal role in the alternative investment space, with most LPs satisfied with the capabilities of their general partners (GPs). However, there’s still room for improvement. Investors are seeking more streamlined solutions for portfolio monitoring and reporting, particularly as ESG regulations and reporting demands increase. A growing number of LPs are calling for unified platforms able to consolidate data from multiple funds, with 81% saying this would enhance their investment management processes.
Geopolitical uncertainty and rising interest rates continue to be key concerns for investors, particularly as major global economies face upcoming elections. These factors are expected to drive further diversification in portfolios, with more LPs looking to expand their relationships with GPs to mitigate risk. In fact, 62% of LPs plan to add more GP relationships over the next year, underlining the need for greater transparency and flexibility in their alternative investment strategies.
While the current environment presents some headwinds, alternative investments—especially private equity—remain a core part of investor portfolios. With traditional stock-and-bond portfolios losing their appeal, LPs are increasingly looking to alternatives for yield, inflation protection and exposure to sustainable assets. As GPs continue to improve transparency, reporting and performance, the alternatives sector is expected to maintain its growth trajectory through the remainder of the decade.
Despite market conditions shifting, alternatives remain a critical tool for investors seeking to diversify and de-risk their portfolios. By focusing on technology, ESG initiatives and providing strong risk-adjusted returns, GPs can continue to attract capital and remain competitive in the ever-evolving alternative investment space.
Read the full "2025 SS&C Intralinks LP Survey" report to learn more about these trends and the outlook for alternative investments.
