Alternative Realities: Modeling better portfolios

PodcastInsights NowJohn SpearSep 24

Model portfolios are expanding, with an industry estimate putting assets above $18.6 trillion by 2029, and private-market alternatives are becoming easier to incorporate through evergreen structures and improved implementation technology. The guest sees potential portfolio benefits from private equity, real estate, and private credit, while emphasizing that spending needs and liquidity constraints affect how much illiquid exposure a portfolio can support. Wider platform capabilities and advisers' interest in customization and client relationships may support further adoption.

Investment Strategy Private Credit Real Estate Venture Capital Risk Management Technology Stocks

Preview · 10 more points in the app

Read the Full Summary

Key Takeaways

Model adoption is already broad and may expand further: John Spear cites an estimate that model assets will exceed $18.6 trillion by 2029, more than doubling their end-2025 level, while about 80% of U.S. fee-based advisers use models. The guest expects wider platform capabilities and the time models free up for client work and business growth to support adoption of models with private alternatives.

Private-market allocations are becoming easier to incorporate into models as evergreen structures let advisers make an allocation and hold it for a client’s tenure, while improved technology reduces the work of building and managing vintage-diversified programs. The guest says 53% of surveyed model providers were considering or already offering models with semi-liquid or illiquid alternatives, reflecting some shift of institutional use toward the mass market as platforms become available.

John Spear argues that private markets can serve different portfolio objectives: private equity may offer an illiquidity premium, real estate may diversify because it follows a different cycle from public markets, and private credit may enhance income. The guest’s long-term capital-markets analysis estimates that adding private markets could raise a traditional 60/40 portfolio’s return by 50 basis points without materially changing risk, improving its Sharpe ratio and risk efficiency.

MARKETS

Model Growth — John Spear cites an industry estimate that model assets will exceed $18.6 trillion by 2029, more than doubling from the end of 2025. He says about 80% of U.S. fee-based advisers use models in some form.

“As well just thinking about the broader market backdrop, the adoption of models continues to be something that's happening industry wide, and it's estimated that total model assets for the…”—

Liquid Alternatives — John Spear says liquid alternatives have been part of model portfolios for decades. Models traditionally favored daily-liquid vehicles that are scalable and let advisers access client funds day to day.

“I think liquid alternatives have been a part of the models portfolios business for decades, and that is traditionally because models have been historically focused on daily liquid vehicles and…”—

Private-Market Access — John Spear says evergreen, investor-friendly fund structures are making private-market alternatives more compatible with models, allowing advisers to allocate and hold them for a client's tenure. Improved implementation technology also makes access to seasoned private-market allocations less labor-intensive than building a vintage-diversified program by hand and managing capital calls.

“Recently, we've seen a shift within the market where private market alternatives are becoming more model friendly…”—

Model Portfolio Growth

The speakers explain how model portfolios outsource investment management, save advisers time, and are gaining broad industry adoption, with assets projected to exceed $18.6 trillion by 2029.

Private Markets In Models

Evergreen fund structures and better implementation technology are making private-market alternatives easier to include in scalable models, extending access beyond institutional investors.

Alternative Portfolio Benefits

The guest says models provide expertise in sourcing and sizing private investments, while private equity, real estate, and private credit can add return potential, diversification, and income.

Liquidity And Customization

Private-market allocations should reflect clients’ spending and liquidity needs, while customized models can preserve an adviser’s investment preferences and distinct client-facing identity.

Private Alternatives Outlook

The guest expects broader platform capabilities and access to companies staying private longer to support further adoption of models that include private-market investments.