Alternative Investments 101: A Complete Guide to Investing Beyond Stocks and Bonds
Everything Wall Street Doesn't Want You to Know About Where the Real Money Goes — And How to Get Access
The Portfolio They Don't Show You
Every quarter, Yale's endowment publishes its asset allocation. And every quarter, it looks nothing like the portfolio your financial advisor built for you.
As of their last report, here's roughly how Yale invests its $40+ billion:
| Asset Class | Yale Endowment | Typical Retail Portfolio |
|---|---|---|
| Venture Capital | 24% | 0% |
| Leveraged Buyouts | 17% | 0% |
| Real Assets (Real Estate, Natural Resources) | 19% | Maybe 5% (REITs) |
| Hedge Funds | 18% | 0% |
| Stocks | 11% | 60% |
| Bonds | 5% | 35% |
| Cash | 6% | 5% |
Notice anything?
Yale — one of the most successful institutional investors in history, with a 40-year track record of crushing conventional portfolios — puts less than 20% in traditional stocks and bonds.
Meanwhile, your 401(k) probably has you at 60/40 or 70/30, with maybe a real estate ETF sprinkled in for "diversification."
This isn't because Yale's investment committee is reckless. It's because they have access to something you probably don't: alternative investments.
The term sounds fancy. Mysterious, even. Like it's reserved for people with family offices and last names on buildings.
But here's the truth: "alternative investments" just means "anything that's not publicly traded stocks or bonds." That's it. Real estate. Private companies. Commodities. Infrastructure. Things that exist in the real economy but don't have ticker symbols.
And increasingly, these investments aren't reserved for Yale anymore.
This guide explains what alternative investments actually are, why they matter, what types exist, and how regular accredited investors can access them without needing a $40 billion endowment.
"For decades, the best investments were invisible to regular investors. Not because they were complicated — because they were exclusive. That's changing. The question now isn't whether you can access alternatives. It's whether you understand them well enough to use them wisely."
— Kenton Gray, Founder & CEO, Veracor Group
What Are Alternative Investments? (The Honest Definition)
The Technical Answer
Alternative investments are asset classes outside the traditional categories of publicly traded stocks, bonds, and cash equivalents.
They include:
- Private equity
- Venture capital
- Hedge funds
- Real estate (direct, not REITs)
- Private credit/debt
- Commodities and natural resources
- Infrastructure
- Collectibles (art, wine, classic cars)
- Cryptocurrency (sometimes)
The Practical Answer
Alternative investments are where institutions put money when they want to do something that the stock market can't do:
- Generate returns uncorrelated with public markets
- Access opportunities before companies go public
- Own real assets that produce real cash flow
- Capture illiquidity premiums (extra returns for locking up capital)
- Reduce volatility through genuine diversification
When Harvard, Stanford, and pension funds allocate 30-60% to alternatives, they're not gambling. They're acknowledging that the public markets are only one piece of the puzzle — and often not the best piece.
Why They're Called "Alternative"
The name is actually kind of silly. Real estate isn't "alternative" — it's one of the oldest asset classes in human history. People were investing in land long before the New York Stock Exchange existed.
But from Wall Street's perspective, if they can't sell it to you with a ticker symbol and a 1% annual fee, it's "alternative."
The financial industry made public markets the default because public markets are where the money is (for them). Every trade generates fees. Every mutual fund charges expenses. Every financial advisor who puts you in a 60/40 portfolio of funds gets paid.
Private investments don't work that way. Fewer intermediaries. Longer hold periods. Less churn.
So the industry calls them "alternative" — implying they're exotic, risky, hard to understand. When really, they're just... different.
"Wall Street convinced everyone that stocks and bonds are 'normal' and everything else is 'alternative.' That's backwards. Real estate, private businesses, commodities — these things existed for centuries before the stock market. Public equities are the alternative. We just forgot."
— Kenton Gray
Why Alternative Investments Matter
Let me make the case for why you should care about this stuff.
Reason 1: Diversification That Actually Works
"Diversification" is one of the most abused words in finance.
Your advisor says you're diversified because you own an S&P 500 fund AND an international fund AND a bond fund. Three funds! So diversified!
Except in a real crisis, those "diversified" assets all drop together. In 2008, international stocks fell with US stocks. In 2022, bonds fell with stocks. When correlations spike to 1.0, your diversification disappears exactly when you need it most.
Alternative investments can provide genuine diversification because they're driven by different factors:
- A multifamily apartment building's value depends on local rent growth, not Apple's earnings
- A private credit fund's returns depend on loan repayments, not interest rate speculation
- A farmland investment depends on crop yields, not tech stock multiples
When your alternatives zig while your stocks zag, that's real diversification. The kind that actually helps.
Reason 2: Access to Private Markets
Here's a fact that should bother you: companies are staying private longer than ever.
In 1999, the median company going public was 4 years old. By 2020, it was 11 years old.
What does that mean? It means that by the time a company IPOs, much of the growth has already happened. The early employees, the venture capitalists, the private equity firms — they captured the gains. Public investors get the leftovers.
Amazon went public at a $438 million valuation. Today it's worth over $1.5 trillion. That's a 3,400x return.
But most of that return happened in public markets because Amazon went public early. Today's companies? By the time they IPO, they're already worth $10-50 billion. The 100x growth phase happened privately.
If you want to participate in that early growth, you need access to private markets.
Reason 3: The Illiquidity Premium
Investors who can lock up capital for long periods historically earn higher returns. This is called the "illiquidity premium."
Why does it exist? Because most investors can't do it. They need access to their money. They panic during downturns. They sell at the wrong time.
If you can genuinely commit capital for 7-10+ years without touching it, you get paid for that patience. Private equity returns have historically exceeded public market returns by 3-5% annually, and a significant portion of that is the illiquidity premium.
The catch: you have to actually tolerate the illiquidity. Fake patience — where you say you're fine with 10 years until you suddenly need the money in year 3 — earns you nothing except problems.
Reason 4: Tax Advantages
Many alternative investments offer tax benefits unavailable in public markets:
Real estate syndications: Depreciation passes through, potentially offsetting other income
Opportunity Zone funds: Defer capital gains, potentially eliminate appreciation after 10 years
Private credit: Certain structures provide tax-efficient income
QSBS (Qualified Small Business Stock): Up to $10 million in gains excluded from federal tax
Tax efficiency won't turn a bad investment into a good one. But all else equal, keeping more of what you earn matters a lot over 20-30 years.
Reason 5: Different Risk/Return Profiles
Public markets give you a fairly narrow range of options:
- Low risk, low return (bonds)
- Medium risk, medium return (diversified stock funds)
- Higher risk, higher return (concentrated stock positions)
Alternative investments expand the menu:
- Income-focused with moderate risk (private credit)
- Moderate risk with inflation hedge (real estate)
- High risk with moonshot potential (venture capital)
- Lower volatility with absolute returns (certain hedge funds)
- Tax-advantaged structures (opportunity zones, QSBS)
More options means more ability to build a portfolio that actually matches what you need.
Types of Alternative Investments: The Complete Tour
Let's walk through each major category so you know what's out there.
Private Equity
What it is: Investment funds that acquire, operate, and improve private companies, then sell them for profit.
How it works:
- Fund raises capital from investors
- Fund buys controlling stakes in companies
- Management team improves operations, grows revenue, reduces costs
- Fund sells companies (to strategic buyers, other PE firms, or via IPO)
- Profits distributed to investors
Sub-categories:
Buyout funds: Acquire mature companies, often with significant debt financing. Classic "leveraged buyout" model.
Growth equity: Minority stakes in already-profitable companies that need capital to scale. Less leverage, less control.
Turnaround/distressed: Buy troubled companies cheap, fix them, sell them improved.
Typical terms:
- Minimum investment: $250K - $5M+
- Hold period: 7-12 years
- Target returns: 15-25% annually (top quartile)
- Fees: "2 and 20" (2% management, 20% of profits above hurdle)
The reality check: Private equity returns vary wildly by manager. Top quartile consistently beats public markets. Bottom quartile significantly underperforms. Median is closer to market returns, but with more complexity and less liquidity. Manager selection is everything.
"Private equity has the best marketing pitch in finance: 'We buy companies and make them better.' Sounds great. The question is whether a specific manager can actually do it. Track records matter here more than anywhere else."
— Kenton Gray
Venture Capital
What it is: Investment in early-stage companies with high growth potential.
How it works:
- Fund invests in startups (often at seed, Series A, or Series B stages)
- Most investments fail or return little
- A few investments succeed spectacularly
- Winners need to return enough to cover all the losses (and then some)
The power law: Venture capital returns follow a power law, not a normal distribution. The best investment in a fund might return 100x. The second-best might return 20x. Most return 0-2x. A single deal often drives the entire fund's returns.
Typical terms:
- Minimum investment: $100K - $1M+
- Hold period: 10-12+ years
- Target returns: 20-30% annually (top tier funds)
- Fees: "2 and 20" or "2.5 and 25" for top funds
The reality check: Venture capital is the most extreme "haves vs. have-nots" asset class. Top-decile VC funds generate extraordinary returns. Median VC funds often underperform public markets after fees. Access to the best funds is extremely limited — they're oversubscribed and only take investors they already know.
For most individual investors, venture capital is better accessed through diversified fund-of-funds or late-stage investments rather than direct early-stage bets.
Hedge Funds
What it is: Actively managed investment pools that use diverse strategies to generate returns.
The range is enormous: "Hedge fund" describes a structure, not a strategy. A long/short equity fund and a quantitative macro fund have almost nothing in common except their legal organization.
Common strategies:
Long/Short Equity: Buy stocks expected to rise, short stocks expected to fall. Aims to profit in any market.
Global Macro: Big-picture bets on currencies, interest rates, commodities based on macroeconomic views.
Event-Driven: Profit from corporate events — mergers, spinoffs, bankruptcies, restructurings.
Quantitative: Algorithm-driven strategies based on patterns, data, and mathematical models.
Distressed: Buy debt or equity of troubled companies at deep discounts.
Typical terms:
- Minimum investment: $500K - $5M+
- Liquidity: Quarterly or annual redemptions (not daily)
- Lock-ups: 1-3 years common
- Fees: "2 and 20" historically, though fees are declining
The reality check: The average hedge fund has underperformed simple index funds for over a decade. The exceptional ones — and they exist — deliver genuine alpha and portfolio protection. The challenge is identifying them in advance, not in hindsight.
Most individual investors don't need hedge funds. Those who benefit most have large portfolios where volatility reduction matters more than return maximization.
Real Estate
What it is: Direct ownership of physical properties or investment in funds/syndications that own properties.
Why it's in "alternatives": Public REITs are considered traditional investments. Direct real estate — owning actual properties or investing in private syndicates — is alternative.
Types of real estate investments:
Direct ownership: Buy a property, manage it (or hire management), collect rent, eventually sell.
Syndications: Pool capital with other investors to buy larger properties. Professional sponsor handles operations.
Private real estate funds: Diversified portfolios of properties managed by institutional firms.
Development: Ground-up construction of new properties. Higher risk, higher potential return.
Property categories:
- Multifamily: Apartment buildings. The workhorse of real estate investing.
- Office: Increasingly complicated post-COVID.
- Industrial: Warehouses, distribution centers. E-commerce tailwind.
- Retail: Malls, shopping centers. Challenged but not dead.
- Self-storage: Surprisingly consistent.
- Medical/Healthcare: Growing demand, specialized tenants.
Typical terms (for syndications):
- Minimum investment: $25K - $100K
- Hold period: 3-7 years (value-add) or 7-10+ years (core/long-term)
- Target returns: 12-20% IRR, often with 6-8% annual cash distributions
- Fees: Acquisition fees, asset management fees, disposition fees
The reality check: Real estate offers tangible assets, income, tax benefits, and inflation hedging. But it's also local, management-intensive, and cyclical. The operator/sponsor matters enormously. I've seen great properties destroyed by bad management and mediocre properties turned around by exceptional operators.
"Real estate is the most accessible alternative asset class for individual investors. The minimums are lower, the concepts are intuitive, and the tax benefits are meaningful. But accessibility doesn't mean simplicity. Underwriting sponsors is just as important as underwriting properties."
— Kenton Gray
Private Credit / Direct Lending
What it is: Funds that make loans directly to companies, bypassing traditional banks.
Why it exists: After 2008, banks tightened lending standards significantly. Many creditworthy companies couldn't get traditional financing. Private lenders stepped in.
Types of private credit:
Senior secured: First priority on collateral. Lower risk, lower yields.
Mezzanine: Subordinated debt. Higher yields, more risk.
Unitranche: Blended senior and subordinated in a single facility.
Distressed debt: Buying troubled loans at discounts, working out situations.
Specialty finance: Asset-backed lending, equipment financing, etc.
Typical terms:
- Minimum investment: $100K - $500K
- Yields: 8-15% depending on risk
- Hold period: 3-7 years
- Fees: Management fees (typically 1-1.5%), sometimes incentive fees
The reality check: Private credit offers equity-like returns with bond-like mechanics. Regular income, senior position in capital structure, less volatility than equity. But credit risk is real — when borrowers default, you lose money. Credit analysis and portfolio diversification matter.
Private credit has grown enormously in the past decade. Some observers worry about declining underwriting standards as money floods in. Quality varies.
Infrastructure
What it is: Investment in essential physical assets that society needs to function.
Examples:
- Transportation: Roads, bridges, airports, ports
- Utilities: Power generation, water systems, pipelines
- Communications: Cell towers, fiber networks, data centers
- Social: Hospitals, schools, housing
Why it's attractive:
- Essential assets with stable demand
- Often regulated or contracted revenues
- Long-lived assets with predictable cash flows
- Inflation-linked revenues in many cases
Typical terms:
- Minimum investment: $250K+ (for direct infrastructure funds)
- Hold period: 10-15+ years
- Target returns: 8-12% (core infrastructure) to 15%+ (infrastructure development)
The reality check: Infrastructure is the slowest-moving alternative asset class. Think decades, not years. For patient investors seeking income and stability, it can be excellent. For those expecting quick wins, it's a mismatch.
Natural Resources / Commodities
What it is: Investment in physical commodities or the assets that produce them.
Types:
- Farmland: Ownership of agricultural land
- Timberland: Forests managed for wood production
- Energy: Oil, gas, renewables
- Mining: Metals and minerals
Why it's attractive:
- Inflation hedge (commodities rise with inflation)
- Uncorrelated with financial assets
- Essential goods with persistent demand
Typical terms:
- Varies widely by type
- Farmland funds: 7-10+ year hold, 6-10% returns
- Energy investments: Higher risk/return, significant tax benefits
The reality check: Natural resources are volatile and cyclical. Timing matters. Tax benefits (particularly in oil/gas) can be significant but come with complexity. Not for everyone.
Collectibles and Other Tangible Assets
What it is: Investment in physical objects with value.
Examples:
- Fine art
- Wine
- Classic cars
- Watches
- Sports memorabilia
- Rare coins
Why it's attractive:
- Passion investing — own things you actually enjoy
- Uncorrelated with financial markets
- Potential for significant appreciation
The reality check: Collectibles are the most dangerous "alternative investment" for most people. They're illiquid, hard to value, require specialized knowledge, and carry high transaction costs. The market is full of fakes, and storage/insurance add costs.
Unless you're genuinely an expert or working with verified experts, collectibles are better treated as consumption (buy what you love) than investment (buy what will appreciate).
Cryptocurrency
Status: Debated
Some classify crypto as an alternative investment. Others see it as a currency. Others see it as pure speculation.
My view: Crypto is its own thing. If you're going to invest, understand the technology, the use cases, and the risks. Don't treat it like traditional alternatives with established track records and institutional acceptance.
Crypto may have a place in portfolios, but it requires different analysis than the asset classes above.
How to Actually Access Alternative Investments
Knowing alternatives exist is one thing. Getting into them is another.
Path 1: Private Funds (Traditional)
What it is: Direct investment in private equity, venture capital, hedge funds, or real estate funds.
Requirements:
- Accredited investor status (minimum)
- Often "qualified purchaser" status ($5M+ in investments)
- Minimum investments typically $250K-$1M+
How to access:
- Wealth management relationships (private banks, RIAs)
- Direct relationships with fund managers
- Placement agents and capital introduction
The reality: Access to the best funds is extremely limited. They're oversubscribed and relationship-driven. You often need to know someone, or invest through an allocator who does.
Path 2: Feeder Funds / Fund of Funds
What it is: Funds that invest in other funds, providing diversification and access.
Advantages:
- Lower minimums ($50K-$250K)
- Diversification across managers
- Access to funds you couldn't reach directly
Disadvantages:
- Additional layer of fees
- Less control over specific investments
- Returns muted by diversification
Best for: Investors who want alternative exposure but can't access top funds directly.
Path 3: Real Estate Syndications
What it is: Direct investment in specific properties through private placements.
Requirements:
- Accredited investor status
- Typical minimums: $25K-$100K
How to access:
- Sponsor direct marketing (especially 506(c) offerings)
- Online platforms (CrowdStreet, RealtyMogul, etc.)
- Advisor referrals
The reality: Real estate syndications are the most accessible alternative investment for most accredited investors. Lower minimums, understandable assets, and plentiful options. Quality varies enormously.
Path 4: Online Platforms
What it is: Technology platforms aggregating alternative investment opportunities.
Examples:
- Real estate: CrowdStreet, Fundrise, RealtyMogul
- Private equity/venture: AngelList, EquityZen, Forge
- Multi-asset: iCapital, CAIS (typically through advisors)
- Private credit: Percent, Yieldstreet
Advantages:
- Lower minimums (sometimes $10K-$25K)
- Convenient access and documentation
- Some curation and due diligence
Disadvantages:
- Variable quality (platforms are gatekeepers, not guarantors)
- Best opportunities may not need platforms
- Platform risk (what if they fail?)
Best for: Investors starting their alternative investment journey who want convenience and lower minimums.
Path 5: Opportunity Zone Funds
What it is: Qualified Opportunity Funds investing in designated zones, offering significant tax advantages.
Requirements:
- Accredited investor status (typically)
- Capital gains to invest (to maximize benefits)
How to access:
- Direct from sponsors
- Through platforms
- Advisor networks
The reality: OZ funds are a specific subset of alternatives with unique tax benefits. If you have capital gains, they deserve serious consideration. (See our Complete Guide to Opportunity Zone Investing for details.)
Building an Alternative Investment Allocation
How much should you allocate to alternatives? And how should you diversify within alternatives?
The Endowment Model (For Reference)
Large endowments often run 30-60%+ in alternatives:
- Private equity: 15-25%
- Venture capital: 10-20%
- Real estate: 10-15%
- Hedge funds: 15-25%
- Natural resources: 5-10%
But endowments have something you don't:
- 100+ year time horizons
- Professional investment staff
- Access to top-tier managers
- No personal liquidity needs
- Tax-exempt status
Copying Yale's allocation doesn't make you Yale.
A More Realistic Framework
For individual accredited investors, I suggest thinking in tiers:
Tier 1: 0-10% alternatives (Getting Started)
- You're new to alternatives
- Building knowledge and relationships
- Learning how illiquidity feels
- Focus: 1-2 real estate syndications or a single diversified fund
Tier 2: 10-20% alternatives (Comfortable)
- You've made a few investments
- You understand the mechanics
- You've experienced a full cycle (or at least several years)
- Focus: Diversify across managers and types
Tier 3: 20-35% alternatives (Experienced)
- Significant track record with alternatives
- Strong professional network for deal access
- Comfortable with complexity
- Focus: Optimize for your specific goals (income, growth, tax efficiency)
Tier 4: 35%+ alternatives (Sophisticated)
- Genuinely sophisticated investor or using professional allocators
- Access to top-tier managers
- Long time horizon and stable liquidity
- Focus: True endowment-style allocation
What I Tell First-Time Alternative Investors
Start small. Learn. Then scale.
Your first alternative investment should be:
- Small enough that losing it entirely wouldn't matter
- Simple enough that you genuinely understand it
- Managed by someone with a verifiable track record
- Aligned with your actual time horizon
Don't go from 0% alternatives to 25% alternatives overnight. Build gradually as your knowledge and comfort grow.
"I've never met someone who regretted starting slow with alternatives. I've met plenty who regretted going big before they understood what they were doing. Patience isn't just about holding investments — it's about learning the terrain before you commit."
— Kenton Gray
Risks and Realities: The Honest Version
I've been enthusiastic about alternatives. Now let me be honest about the challenges.
Risk 1: Illiquidity Can Hurt
"I'm fine with 10-year lock-ups" is easy to say when everything's going well.
Then:
- You lose your job
- Medical bills arrive
- Divorce happens
- A better opportunity emerges
- Markets crash and you panic
Private investments don't care about your circumstances. You cannot sell. Period.
Only invest what you genuinely, truly, in-any-scenario won't need for the full term.
Risk 2: Transparency Is Limited
Public companies file quarterly reports, hold earnings calls, and face analyst scrutiny.
Private investments? You get what the manager gives you. Quarterly letters, maybe. Annual reports. K-1s.
Valuations are estimates until something actually sells. That "unrealized gain" on your statement might evaporate at exit.
Risk 3: Fees Compound Against You
A 2% management fee plus 20% carried interest doesn't sound catastrophic. But over 10 years, it adds up.
Example:
- Invest $1M
- Gross returns: 12% annually
- After "2 and 20": ~8-9% net
- After 10 years: $2.4M (vs. $3.1M at 12%)
- Fee drag: ~$700,000
Fees aren't evil — managers deserve compensation. But you should know exactly what you're paying and ensure the value justifies it.
Risk 4: Manager Selection Is Everything
In public markets, most active managers underperform indexes. But the dispersion is relatively narrow. A bad S&P 500 fund trails a good one by maybe 1-2% annually.
In private markets, the dispersion is massive. Top-quartile private equity might return 20% annually. Bottom-quartile might return 5%. That's a 4x difference in terminal wealth over 10 years.
Picking the right manager isn't an enhancement — it's the entire game.
Risk 5: Access Isn't What It Seems
The best funds are often closed to new investors. They're oversubscribed. Relationship-driven.
What you can actually access may be the funds that need to market themselves — which is often, though not always, a signal of lower quality.
Platform deals, heavily advertised offerings, and "exclusive access" emails may be accessing you more than you're accessing them.
Risk 6: Complexity Can Hide Problems
Some investments are complex because the opportunity requires it. Others are complex because complexity obscures unfavorable terms, excessive fees, or hidden risks.
If you can't understand it after genuine effort, that's often a red flag, not a sophistication gap.
Common Mistakes to Avoid
Mistake 1: Chasing Past Returns
That fund returned 30% last year! I want in!
Except last year's returns don't predict next year's. And the best-performing strategies often mean-revert. Chasing hot returns leads to buying high and selling low.
Mistake 2: Over-Concentrating
Your buddy's real estate syndication sounds amazing. You go all-in.
Then interest rates spike, the property struggles, and 30% of your net worth is locked in an underperforming illiquid investment.
Diversification matters in alternatives even more than in public markets.
Mistake 3: Ignoring Liquidity Needs
You "don't need the money" until suddenly you do.
Be ruthlessly honest about your actual liquidity needs. Then add a buffer. Then add another buffer.
Mistake 4: Trusting Marketing Over Documents
The pitch deck looks incredible. The webinar was inspiring. The founder is charismatic.
The PPM reveals conflicts, excessive fees, and risks glossed over in marketing.
Always read the documents. The pitch is sales. The documents are disclosure.
Mistake 5: Skipping Due Diligence
The platform is reputable. Someone you trust recommended it. It seems legitimate.
So you skip the background checks. Don't call references. Don't verify the track record.
Then things go wrong, and you realize you didn't actually know who you gave your money to.
Every investment deserves due diligence. No exceptions.
The Veracor Philosophy on Alternatives
At Veracor, alternatives are core to what we do. Here's how we think about them.
Four Pillars Focus
We invest across four pillars that matter to human flourishing: Home, Health, Finance, and Technology.
This isn't marketing language. It's an investment filter. We ask: Does this investment support basic human needs? Will demand persist regardless of economic cycles?
Investments aligned with fundamental needs tend to have durability that purely financial engineering can't match.
Patient Capital Approach
We're not trying to flip investments in 3 years. We're building wealth over decades.
This patience unlocks opportunities unavailable to short-term capital. We can develop properties correctly, not quickly. We can support businesses through growth cycles. We can wait for the right exit instead of forcing a bad one.
Patient capital aligns naturally with illiquidity premiums.
ROSI Framework
Return On Social Impact isn't charity. It's recognition that investments benefiting communities tend to perform well over time.
Opportunity Zone investments that genuinely serve community needs face fewer political headwinds. Real estate that improves neighborhoods attracts better tenants. Healthcare investments addressing real gaps have persistent demand.
ROSI and ROI aren't in conflict. They're correlated.
Our Offerings
For aligned investors, we offer:
Opportunity Zone Fund: Tax-advantaged real estate development in designated zones.
VIBE Fund: Diversified private investments across our Four Pillars.
Co-Investment Opportunities: Select direct participation alongside fund investments.
We're not right for everyone. But for investors who share our time horizon and values, we believe we offer something distinctive.
Getting Started: Your Action Plan
If You're New to Alternatives
- Educate first. Read, learn, understand. You're doing that now.
- Check your foundation. Is your core portfolio solid? Emergency fund funded? Retirement accounts maxed?
- Confirm accreditation. Verify you qualify before spending time on opportunities.
- Start small. One investment. Modest size. Learn the experience.
- Evaluate honestly. After 12-18 months, how do you feel? Ready for more, or realizing it's not for you?
If You're Ready to Expand
- Define your goals. Income? Growth? Tax efficiency? What role are alternatives playing?
- Assess liquidity honestly. How much can you truly lock up for 7-10+ years?
- Diversify intentionally. Across managers, strategies, vintages, and types.
- Build relationships. Access often matters more than analysis in alternatives.
- Track performance. Not just returns — manager communication, alignment, actual vs. projected.
Resources
Schedule a conversation about Veracor offerings: veracorgroup.com/consultation
Email us: [email protected]
Related guides:
- The Complete Guide to Opportunity Zone Investing
- Accredited Investor Guide
- Regulation D 506(c) Guide
- Due Diligence Checklist
The Bottom Line
Alternative investments aren't magic. They're tools.
They offer access to opportunities, return profiles, and tax advantages that public markets can't match. They also carry risks — illiquidity, complexity, manager dependency — that public markets don't.
The best investors use alternatives as complements to a solid foundation. They understand what they're buying. They diversify thoughtfully. They maintain patience through cycles.
The worst investors chase returns, concentrate recklessly, ignore due diligence, and panic when liquidity is unavailable.
The asset class doesn't determine the outcome. Your approach does.
"Yale's portfolio isn't magic — it's discipline, access, patience, and expertise applied over decades. You probably can't replicate their access. But you can replicate their discipline. Start there, and the rest becomes possible."
— Kenton Gray, Founder & CEO, Veracor Group
Important Disclosures
This guide is for informational and educational purposes only and does not constitute investment, tax, or legal advice.
Alternative investments involve significant risks including loss of principal, illiquidity, lack of transparency, and dependence on manager skill. Past performance does not guarantee future results.
Many alternative investments are available only to accredited investors or qualified purchasers. Verify your eligibility before investing.
Alternative investment returns can vary dramatically by manager. Top-quartile and bottom-quartile results differ substantially.
© 2026 Veracor Group. All rights reserved.
Last updated: January 2026