The rich may not be so different after all.
After decades of investing in exclusive hedge funds, America's super rich are getting company as alternative investments are joining the investment management mainstream, areport from McKinsey & Co. released to clients in July showed.
"The new twist is driven by three major trends," said Kurt MacAlpine, an associate principal at McKinsey, noting that changes in how the products are structured, financial advisers' new tastes for them and changes in how they are accounted for in portfolios are all fueling demand.
Consultants at the firm forecast that retail alternatives, including hedge funds, will likely make up 13 percent of U.S. retail fund assets and about one quarter of revenues, by 2015.
That would be roughly double the figures from 2010, when retail alternatives made up 6 percent of U.S. retail fund assets and about 13 percent in revenues, the consultants found in their report entitled "The Mainstreaming of Alternative Investments 2012."
Until now, hedge funds have been reserved mainly for wealthy private investors who can afford their multimillion-dollar minimums and institutional investors like state pension funds.
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