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Alternative cambridge options swathe across numerous nonpublic categories, such as for example private equity, hedge funds, venture capital, commodities fund and so on. Typically open and then accredited investors who've no less than $1 million in net financial assets, over the past many years, alternatives have earned higher returns than public equity markets. That type of outcome has understandably raised alternatives'profile being an attractive investment option.

It's not surprising then, that large institutional investors and high net worth individuals have significantly increased their allocations into alternative investments. And, for probably the most part, they haven't been disappointed. The evidence of public equity fund outperformance by alternatives, particularly in the private equity category, is impressive. According to the Greenwich-Van U.S. Hedge Fund Index and the Cambridge Associates Private Equity Index 3 Year Returns, U.S. Private Equity funds showed a 25% return, as set alongside the nest highest Dow Jones Commodities Index with a somewhat less than 15% return.

Reaping Returns, Driving Desires

Backed by clear evidence of strong overall returns, where the investment community once viewed alternatives with a great measure of skepticism, over the past decade, alternatives have gained favor as a practical investment option. According to the World Wealth Report 1997 - 2006, high net worth investors do have more than doubled their allocations to alternatives over the past five years, which includes further fueled the popularity of such investments, causing the common individual investor to clamor for their opportunity to obtain a seat at the table.

What's more? Institutional investors have seen equally dramatic results. Based on Cambridge Consultants, the leading investment advisor to foundations, its clients'allocations to alternative investments have increased from only five percent in 1991 to 25 percent in 2005. The significant increase has been driven by return performance. As foundations can see a boost in overall returns, it has buoyed their confidence in selecting alternatives as a practical piece of these investment mix.

In fact, in June 2006 The Chronicle of Endowments reported that consequently of higher allocations, larger foundations in particular "...earned returns that have been more than 50 percent higher than those earned by small endowments..." Moreover, out of 130 endowments monitored, the greatest returns were earned by those -- Yale, Amherst, Harvard and University of Michigan -- that had more than 40 percent of these assets in alternative investments