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Neil Blundell, Head of CAIS Investments Team, and Gregg Sommer, US Financial Intermediaries Leader at Mercer Investments, bring their expertise to the forefront as they discuss the increasing adoption of alternative investments in the wealth management channel. With 92% of advisors allocating to alts, their focus has shifted to implementing alts effectively. In this episode, Neil and Gregg join Host Alex Cavalieri, CAIS Head of Marketing, to explore key findings from CAIS’ 2025 The State of Alternative Investments in Wealth Management.
Read the 2025 report, Here
Chapters
Read the 2025 report, Here
Chapters
(00:01) Introduction to Guests and the 2025 CAIS-Mercer Survey
(00:38) The Shift Toward Alternatives: Key Survey Results
(04:15) The Rise of Registered Funds
(08:04) Blending Registered and Traditional Drawdown Funds
(18:51) Portfolio Construction Tools: From Why to How to Invest in Alts
(33:30) Overcoming Challenges in Alts Implementation
(37:05) Thematic Investing: AI, Infrastructure, and Energy Transition
(42:46) Looking Ahead: The Future of Alts in Wealth Management
Disclosures
This content is for institutional investors and for information purposes only. It does not contain investment, financial, legal, tax or any other advice and should not be relied upon for this purpose. The materials are not tailored to your particular personal and/or financial situation. If you require advice based on your specific circumstances, you should contact a professional adviser. Opinions expressed are those of the speakers as of the date of the recording, are subject to change without notice and do not necessarily reflect Mercer’s opinions. There are substantial risks associated with investments classified as alternative investments. Investors should have the ability, investing sophistication and experience to bear the risks associated with such investments.
Disclosures
This content is for institutional investors and for information purposes only. It does not contain investment, financial, legal, tax or any other advice and should not be relied upon for this purpose. The materials are not tailored to your particular personal and/or financial situation. If you require advice based on your specific circumstances, you should contact a professional adviser. Opinions expressed are those of the speakers as of the date of the recording, are subject to change without notice and do not necessarily reflect Mercer’s opinions. There are substantial risks associated with investments classified as alternative investments. Investors should have the ability, investing sophistication and experience to bear the risks associated with such investments.
Creators and Guests
What is CAIS Live Conversations, Building With Alts ?
CAIS Live Conversations: Building With Alts, tackles the often untapped potential of alternative investments by sitting down with the various players in the alts ecosystem. Listen in as we dive into alternative investments from the perspective of industry experts, RIA executives, IBD executives, alts manager leaders, and alts experts. Hear what other advisors are doing, learn about new technology, and join us as we turn investment complexities into real-life concepts that could potentially help diversify and drive growth in the independent space.
Welcome to the CAIS Live Conversations podcast. I'm your host, Alex Cavalieri, Head of Marketing here at CAIS. We are the leading alternative investment platform for the independent wealth community.
In these conversations, I'll sit down with industry participants from asset management executives to RIA and IBD leaders to uncover their insights and stories that may be driving the growth in the world of alts. Each episode, we take a deep dive into the views of those who are breaking down the barriers and making alternative investments accessible to financial advisors. In this episode, I'm joined by two industry leaders with deep expertise in alts and wealth management, Neil Blundell, head of investments at CAIS and Gregg Sommer, US financial intermediaries leader at Mercer.
Together, we unpack insights from our 2025 State of Alternative Investments in Wealth Management survey report. Drawing from the survey findings and their extensive experience, Neil and Gregg discuss how wealth has become a central focus in the alts ecosystem. Let's dive in.
The views and opinions expressed by the speakers herein are, as of the date recorded, are subject to change without notice and solely reflect the views and opinions of the speaker and not necessarily the views of CAIS, Mercer or the broader financial industry. This podcast does not constitute an offer or solicitation to buy, sell or hold any securities, financial products or services on behalf of CAIS, its affiliates or any third party investment managers, their affiliates or strategies. This podcast is provided for informational purposes only and is intended for an audience of investment professionals.
Welcome back to another episode of the CAIS Live Conversations Podcast. I'm your host, Alex Cavalieri. In today's episode, I am incredibly excited because we have just released our 2025 CAIS Mercer survey on alts within wealth management.
And I'm joined by Neil Blundell of CAIS and Gregg Sommer of Mercer, our partners over at Mercer, to dive into the results, what we've seen, what we've heard from advisors. We heard from over 550 advisors in this survey. So Neil and Gregg, I appreciate you joining.
I'm excited to get into the conversation. Great.
Thanks, Alex. Great to be here.
Looking forward to it, Alex.
Thank you. So getting into the results and just diving into the top level, I think the biggest thing, this is our third year doing this survey. And one of the things that stood out is that 92% of advisors that responded to the results said that they're allocating to alternatives.
And even more interestingly, 91% said that they plan to boost their allocations to alternatives in the coming years. When we think about that, Neil, just to start off with you, what does that mean to the world of alts? What does that mean to the world of wealth in terms of what we're seeing right now?
Yeah. I mean, Alex, I mean, that was an incredible number in terms of 90 plus percent moving into alts. And I think if we take it back, I mean, CAIS has really been focused on education and access.
And now what we're seeing is a movement towards that modern portfolio, which many deem is the 50, 30, 20, with 20 percent being alternatives. And you're just seeing greater and greater adoption. And I think there's a couple of dynamics that are happening.
Number one, I think there's kind of a generational wealth transfer that's happening. You know, boomers moving to Gen X or millennials, they're probably more comfortable. I want to incorporate alts into their portfolio.
So that's one of the kind of major shifts. And another thing is just, you know, markets and the market regime that we're in. You know, historically, the 60, 40 portfolio generated over the last probably 30 years, between eight and nine percent.
But if you look at it going forward and, Gregg, this could be a good segue to you on capital market expectations or forward looking return assumptions. You know, it's really over the next 10 years, the 60, 40 could be sub five percent. Right.
So I think to achieve objectives, right, to increase income, increase growth in the portfolio, increase diversification, alts are really just becoming a requirement.
Yeah, what I would add, Neil, that's spot on. What I would add is, first of all, if you look at the survey for the last three years, you can see those numbers keep going up. OK, so that trend is very clear from our survey.
Second, I would go so far as to say, even just a few years ago, having the three dimensional portfolio, including private markets, was still maybe somewhat optional. I would say now if advisors are not offering that to their clients, they are well behind the trend and they're really not properly have proper offerings from their clients. So it's now a standard.
OK, and you can see that in supporting the numbers. Secondly, as Neil mentioned, the macroeconomic environment has really changed dramatically, and we may be seeing lower public market returns over the next decade or two. Then lastly, I would say, whether it's CAIS, whether it's Mercer, whether it's other organizations, the ability for advisors to utilize alternatives for their clients is now so much easier.
So all these things are coming together in a perfect triangle to give access and capabilities and I think best serve underlying clients.
And Gregg, to that point, you talk about ease. And I think one of the things and the trends that we saw in this year's survey is registered funds are continuing to be a topic that's top of mind for advisors. And 66% of advisors are more inclined to consider registered funds, such as BDCs, interval funds and non-traded REITs.
And when you think about where registered funds sit within the context of alts and how they've grown over the course of the past several years, what does that mean in terms of that ease of access, in terms of that ease of operations and just how advisors are thinking about alts in general and where they fit within the client portfolio, particularly from a liquidity perspective as well?
So clearly we've all seen this trend accelerate as far as registered products. Okay. And I would just first state, I foresee that continuing into the future.
It's only going to accelerate further. There's a great, there's been a great deal of interest in private credit because that's a good match with income opportunities and cashflow. And that really started post global financial crisis when the private market stepped in to fill the void that was necessary in the business.
I think that's going to expand into other asset classes, including infrastructure. But the real underlying theme or point I want to make is, what these registered products do is to provide access to these types of investments to accredited investors and retail investors. And it used to be the cutoff for institutions and QP investors.
So, there's a lot of advantages to the registered funds, but that's what it's really doing. It's opening up the market to a whole new pool of investors, which is incredibly exciting. Now, you have to be careful because you have to do proper due diligence, and you have to approach this in a very methodical manner.
But institutional investors have been using these types of investments at 40 plus allocations for decades. So, now we're opening up the market. That's really what registered funds are doing.
I really think that the development of registered funds is a game changer for alts adoption going forward. So, we've seen an absolute product renaissance over the last five years. That's really enabled accredited investors access to alts, as you mentioned.
If we just look at CAIS, so registered funds are relatively new, but we've seen over 50% of our transactional volume be in registered funds. And I think it's actually interesting in the survey results when we look at who's utilizing registered funds. And there was a great exhibit in there that if we just take a look at that, I mean, client sizes from 500K to 5 million are utilizing significant amounts of registered funds, probably 70% plus.
It dropped slightly between 5 to 50 million. So it's still over 50% or roughly 50%. And then it was kind of interesting because then it kind of goes back up when it's 50 plus million, right?
Then it goes back up where more registered funds are being utilized. So across the whole board, pretty significant utilization of registered funds. And it really just goes into whatever client size there is.
I think the advisors really like fully funded evergreen portfolios with simplified tax reporting. And it's really only the kind of larger clients that kind of lean more into some of the drawdown vintage strategies because of the complexities in allocating to it.
When you think about the registered fund and where it sits, how do you think that's balanced with the traditional drawdown funds? And how are advisors that you're talking to every day, where they're sitting and saying to themselves, okay, registered fund, drawdown fund, how do they fit together within the context of the alts portfolio? And also in context of the overall client portfolio cost publics as well as privates?
Well, it's a nice blend. And I would also project in the future, I believe you're going to get outside of wealth management, institutional interest in these types of funds as they try to balance liquidity, okay? So we're still in the early enough innings where analysis on returns, on fees, and all those things are still being done when you compare drawdown to registered funds.
As it becomes more established and more standardized, I think you actually might get more institutional money flowing toward registered funds while also maintaining the traditional drawdown structure.
Yeah. And Alex, what's also interesting is you've seen new types of registered funds being developed that give, I would say, high quality access to direct investments. So as an example, we've seen over the course of the last year to two years, the development of an operating company, which can give direct access to control private equity in a registered fund format.
So I think, again, as innovation, as product structures continue to develop, which I imagine will be the case going forward, there's just better access to direct investments in these types of structures.And I think that's going to be appealing across all investors.
And just to illustrate that, Alex, just one final point. This is an evolution, and we're in the second or third inning of this evolution. So the next decade plus is going to be very interesting to stay on top of this.
Which is wild to think about, because if you think about the allocation rates and you think about advisors' allocation rates, 76% of advisors that respond to the survey said they allocate more than 5%. Over 50% are allocating more than 10%. And Neil, you mentioned, as you were talking, private equity, operating companies, etc.
We saw some interesting data come out of the survey as it relates to different asset classes. So private equity, we saw that 75% of advisors plan to increase their allocations to private equity, private debt. We saw 60%.
Infrastructure, 51%. Structure notes, 38%, which was a big uptick versus last year. And you're just looking across these different asset classes in terms of those increased numbers.
As you think about what we're seeing on the CAIS platform and the trends we're seeing on the CAIS platform, is that in line with what we're seeing as well from a CAIS perspective?
That's a great question. And as we look at trends on the platform, I think last year, the private equity and private debt were also some of the top responses in terms of allocations. And that remains consistent.
I think even when you look at private equity, it might have edged out private debt in terms of forward-looking, you know, anticipated allocations. And that largely translates to exactly what we're seeing on the CAIS platform, where those are the two biggest subsectors based on transactional volume. I think private debt, you've had a number of BDCs that have come to the platform, which has been a really easy way to gain access to the asset class.
And that's really promoted some of the flows into it. As we just mentioned, there's tender offer funds and the addition of opcos, in addition to draw down strategies. And we really see the flows across that entire spectrum, the mix of that.
And I do think advisors, when they're looking to do more vintage strategies, will be looking for, you know, specialized returns, probably higher returns if they're locking up capital for longer periods. So, you know, private equity is the space that you're seeing the biggest mix of vintage versus opcos versus other kind of tender offer funds. One interesting thing, sorry, Gregg, just to click on, which I also thought was was interesting is infrastructure, right?
So, Gregg, you mentioned it at the top. I think some of these structures are actually facilitating the ability for infrastructure to become an asset class that advisors allocate to. Historically, you know, allocations were were lower, and I think you've seen more development, and it was really interesting to see it be the third highest category, you know, at 50% plus of advisors looking to allocate above real estate even in terms of the asset flow.
So it's kind of aligning almost to exactly what we see on CAIS, just with infrastructure maybe being a little bit more forward looking. And I think that's matching product development.
And Gregg, as you're seeing funds come across the Mercer desk all day just in terms from a due diligence standpoint, talk about the importance of due diligence. Talk about the importance of independent due diligence. So just give some context on the importance of due diligence when it comes to these different products.
So first I want to be very clear and emphasize that any advisor or underlying client that's investing in private markets needs independent due diligence, okay? I cannot emphasize that enough. This is not an area for somebody to have a hobby in and not an area for somebody to conduct due diligence with a check the box approach or some generic approach.
Because this is becoming more popular, you're getting more organizations to find due diligence now in a broader fashion that can be a little dangerous, okay? So, to have independence, to have comprehensiveness, to have the proper experience, these are the requirements to reduce your risk and then hopefully identify managers that have the foundation to maximize return. The wealth management space, I hope, has the memory that when hedge funds were very popular 10, 15, 20 years ago, people thought they could throw money out in a blanket fashion.
Any hedge fund will make money, okay? You had to identify the top quartile, the top two quartiles, the top performing managers that also had lower volatility. It applies even more here because of the illiquid aspect to it.
I must emphasize connecting with an independent due diligence provider. I must say that the relationship between Mercer and CAIS has been so successful, and we've helped the wealth management community so much because of the different attributes. It's not only the collection of data, but it's the ability to analyze that data and have an objective process so that potentially you can identify what's best for investors.
Yeah, I totally agree. That's one of the things that we value so much in our relationship. What we saw this year, which was net new in terms of data that we analyzed, was what tools advisors are relying on the most to help build client portfolios.
And what we saw in the data is that portfolio construction tools and models are two of the highest ranked items on the list. You have home office guidance, you have asset manager commentary, you have wholesalers, you have fellow advisors, live events, all matter, all impactful, but those two stood out. Neil, when you think about and will first hit portfolio construction tools, just traditionally, there haven't been a lot of tools that have given advisors the ability to analyze alts and analyze alts in context of the broader portfolio, analyze alts in context of historical performance.
How has that changed over the course of the past few years? And also, what are some things that you're thinking about as it relates to those tools?
I think we've really moved from why alts to now, many of our advisors are really asking how to implement alts. And we're really entering this implementation age, right? Where I think the utilization of portfolio construction tools and models are really going to start to increase, right?
And if we just think through, I mean, portfolio construction tools and Gregg mentioned institutional investors, they've been using resources, tools to actually create portfolios for years, right? To determine what is the efficient frontier, how do you match your liabilities? And I think what's happening, and I think CAIS is at the forefront of this, and we've developed CAIS Compass, is really taking that institutional knowledge and bringing it into our network, right?
In a portfolio construction tool. And we've partnered with Mercer, where we are using and consuming, right? Their capital market assumptions, their forward-looking expectations, where now an advisor can really take a look at their portfolio, analyze how much public versus private markets, how much private credit versus private equity, and really begin to think through not only what was the historical return of that hypothetical portfolio, what's the forward-looking return based on, for example, Mercer's expectations, and then create a report pack to say, how does it differ from the benchmark?
What happens in different environments? What's the growth of $100? What are the exposures that I'm getting?
And it really begins to educate as you're creating a portfolio, so you gain the comfort, right? So I think that's kind of step one, and developing these tools and bringing it into our network is fantastic, and that's portfolio construction and design. The second thing, which I think that was like the number one response, survey response, the number two survey response is model portfolios, right?
And when you think about models, I mean, in many cases, financial advisors are really focused on growing their business, right? And they want to make sure that they have the right implementation but the more customization they do, it's kind of distracting them potentially from growing their broader book. So models really allow for, or help guide advisors really think about when, where, and how to implement alts.
And it's really preset investment strategies with weights and funds that we often hear, is there an easy button? Can I click something and get an optimal portfolio with optimized managers for my clients in a scaled and efficient manner? And that's essentially what we're doing as well with our customized models platform and marketplace where I have the ability to upload models or advisors can design their own models and then really implement them at scale across their entire advisor base.
And I think when we talked about alts adoption, when we think about, you know, the how, I think that this is going to be kind of a momentous change, right, as we're developing alts models and having them delivered in the network.
And Alex, I would just correlate that to the public market. The public markets have been using models and this type of risk profile approach forever. So once again, this is the maturation, the bringing to scale, the bringing to market to the accredited investor for the alternative private market products.
One thing that was interesting in the results is it also, there was a chart that broke it down by client sizes and certainly models were being heavily utilized below $10 million of client size. What was interesting, there was a response of the 100 million plus, right? Would you, are you implementing models or would you utilize models?
And that actually was a pretty significant score. I think it was like 75% plus. So it's interesting to see how and where models are being potentially utilized across the advisor network.
Yeah, it's almost like a reverse mini barbell where you had it high in the, high in the, the under 500 K or 500 K to a million. Then you had a high again at the 50 to 100 million plus. Why do you think that is Neil, in terms of the kind of the, the early, I would say the lower tier or the, the lower allocation going to models and then just almost going back to it at the upper tier?
I think across the whole board, I gotta bring up the exhibit again, just so I think through it. I mean, it wasn't like a low score in the middle. It was probably like 50% plus.
So it's still pretty broad across, but on the two barbells, we're talking 70 to 80%, so very high. And I think it's clear to everyone when you think about models and the smaller clients, right? How do you gain efficiency?
How do you give robust asset allocation and managers seamlessly across maybe many small clients? And I think that models pop into mind is kind of one of the most efficient tools to utilize it. So I think that's probably clear in everyone's minds.
The interesting part is when it went back up to some of the larger clients, right? I think again, really thinking through portfolio design and construction can be a significant challenge. And I bet you when you're 100 plus, you're actually thinking through implementation at the same time, and what are the optimal vehicle types.
So I would imagine, you know, there's a model that incorporates, you know, registered funds plus drawdown. There's probably capital deployment models, capital basing models that are involved. It tends to be, you know, a high number of managers and a high number of structures.
And I imagine what's happening in some of these cases that there's a default kind of North Star of what the allocation looks like with managers and weights. And, you know, it's being implemented in a more systematic way, just to make sure everyone's getting the kind of optimal exposures.
The one comment I'd add, Alex, is I think portfolio construction tools and models benefit every category we're talking about as far as asset levels. The difference may be some of them have more familiarity or more access to them already, while others have or not. So that might be some explanation for the differentiation.
Yeah. And I think going back to that ease of access and ease of implementation, that's the common thread. I think we're seeing across the entire industry from an alts perspective.
And Gregg, you mentioned this at the beginning where, you know, public markets looking forward returns from a public market perspective that may be different from what it was in the past decade or past 15 years. And you think about some of the reasons that advisors are implementing alts into their practice more heavily. Obviously, it's to help their clients meet goals and objectives.
And we saw that that's a 75% number in terms of the results from the survey. But you also had advisors noting that 86% say that alts help them differentiate their practice. 63% help them win new clients.
53% help them gain wallet share with existing clients. And your conversations with advisors every day, your firm's conversations with advisors every day, how are they changing how they talk about their practice?
Sure. So Mercer partners, as you know, with lots of advisors. And they are leveraging the knowledge of the space and access to products from other advisory firms.
And clients are looking at that now and going with new advisors or staying with advisors based on their offering. So Mercer is helping provide that, helping advise and do different things in that area. So we're seeing that consistently.
And quite frankly, part of the value prop is, our value prop is providing that differentiation so they can grow their firm. Now, additionally, the way they differentiate themselves is through growing their firm, right? And providing access to their products.
Now the CAIS-Mercer relationship comes into play here, right? So they can make the actual investments and implement alternative type of sleeves into their portfolios. So I think, as I said at the beginning, this is no longer an option.
It's necessary for an advisory firm, and that's the big change.
As an advisor is implementing alts, and they're just getting started and they're trying to understand how to implement alts into their client portfolios and their practice. It may be daunting. It may be an area where they don't necessarily know where to start.
I think one of the things that we've seen is that integrations are a huge factor, making sure that any platform that they're using from an alts standpoint integrates with custodians, reporting providers, etc. But we also saw things around tech that's making it easier to actually manage those alts is incredibly important, whether it's education, whether it's customization, workflow management. Neil, what have we seen and developed from a CAIS platform perspective that has helped advisors actually not only implement, obviously, we talked about the portfolio construction tool, but just manage the alts life cycle across that pre-trade, trade and post-trade?
I think that connecting the ecosystem is one of the most critical factors. If we go back a long time ago, if you are subscribing into an alternative investment, you're filling out your own paperwork, the 90 pages yourself, you're sending it off, and then all of a sudden, it's held separately in an account where you're getting paper statements delivered to you, and you don't really know how that feeds into the context of your broader portfolio. I think that's where CAIS and the fact that we've connected into the ecosystem with administrators, with performance providers is really critical because now advisors can essentially educate themselves, look at the menu in terms of the investible options across the whole range of different capabilities, have independent diligence, Mercer to get a sense for the quality of those managers and both investment and operation due diligence, and then this whole pre-trade, trade and post-trade process where you're, in CAIS, is continuing to work on this, it's like clicking a button and then easily getting that, that allocated into the alts, bringing it into your portfolio, back into your publics, and you could see holistically how the portfolio is shaping up and the performance of it, and it's all kind of in one place in a unified ecosystem.
And I think that's important. I mean, one of the last topics that we're just talking about is in terms of like increasing wallet share, right? That's an interesting topic, right?
Because, and as we were saying, alts is becoming more mainstream. You know, an advisor is not integrating alts, right, into their public portfolio or not using it all at all. Typically, you know, a client could actually source it from somewhere else.
Right. And, you know, those and if you're an advisor getting paid on, you know, advisory fees, it's, you know, in an account. So, if it's not being advised on, if it's held separately and not integrated in your portfolio, you're losing that wallet share, right?
And that's a material fact, especially if we go back to where we are in the regime cycle, where we are in terms of alts being a requirement in the portfolio to meet outcomes, which is another one of the points Gregg touched on. I mean, having an integrated system where you could see this all in one place, I think goes back to that ease of implementation and ease of management. And it's again, just become a requirement for investing in alts.
One other topic that just comes to mind that overlaps so many of the topics we're speaking about is education. And I don't want to overlook that. Education has driven the trend.
Education has driven the implementation and the increased allocations. And the way advisors are educated today is so much superior to how it was in the past. It's not about slides or presentations.
It's about truly understanding where do these private market asset classes fit into your clients' portfolios based on their risk profiles which go across all these models. Okay. So understanding when you say private equity, when you say infrastructure, okay, does your underlying client understand what that is and where the money is going?
You know, today, everyone talks about digital infrastructure, physical infrastructure. People can relate to that a little bit though, because they hear about AI, they hear about Nvidia, which the whole country knows about. So these are things that are now out broadly in the market.
And I think advisors have learned to explain these types of investments in a way of why do you care? How is it going to help you? What value does it add in your portfolio?
And not in some theoretical type of way.
Yeah, and Alex, I might steal one of your upcoming questions here, but there was another survey exhibit, right, that talked about like the challenges in adopting alts, right? And just ties into this, I think, incredibly well, right? Where the three responses, right, were high levels of administrative paperwork.
The second one was lack of liquidity. Third was concern around diligence and compliance. I think those were the same responses as the private, you know, the one, two, three, I think it was kind of all aligned.
What was interesting was lack of access to top performing managers kind of went to the bottom, right? And, you know, typical investment minimums, right, became less and less of a concern. And I think it's actually interesting because it touches on the point of registered funds and the democratization of alts to a credit investor.
So I think that's kind of interesting where you can kind of see these responses. But what would spark the comment on talking about this is like, I think CAIS and Mercer are always looking at, you know, these challenges to implement alts. And really, you know, what's the number one, right?
So, you know, high-levels, administrative case and our technology platform, we're really thinking through, how do we simplify that journey? How do we connect the ecosystem, which I just mentioned? We were talking about education, right?
Just a second ago and lack of liquidity. And I think this goes back to what Gregg was just speaking to and spurred the comment of like, we've seen again a renaissance of development on registered funds. There's all sorts of different vehicles and liquidity within those vehicles being produced.
And I do think in many cases they are semi-liquid, right? Different than the vintage strategies. And I think it's going to be really interesting because it offers a new universe of investments, investors access to them.
But I still think at the same time, there needs to be a lot of education, right, around, you know, not only the benefits, but what are some of the risks, right? And the last third concern, I think it goes back to, it was concerns on diligence. And again, Mercer, right, and we're kind of collectively solving that challenge.
So this is our hit list and we keep on going down the hit list to make sure we touch everything.
You tackle all of them. And I think to Gregg's point about education or how advisors are getting educated nowadays, it's totally different from how it used to be. And but you still have some of your traditional aspects.
One of the things and one of the reasons why we launched our CAIS Live program, our event program, is because we heard from advisors that they want to get educated in person. They want to have the conversations face to face. They want to be able to learn about the products and the strategies specifically from the managers directly.
They want to be able to dive into how other advisors are implementing alts in their practices. And I think that different forms or mediums like the event side or even this podcast or different channels that were educating advisors play a huge role. But Gregg, you mentioned something, too.
I think the appeal of alts specifically with these thematics are interesting. You mentioned AI and just what people are looking at outside of your traditional companies, your traditional asset classes. We asked a new question this year in terms of themes that advisors will most likely present to clients.
And you saw a long list around tax advantage. You saw AI bubble up to the top. What are some of the things that you're seeing, Gregg, at Mercer in terms of some of those themes that are kind of coming to the forefront as it relates to how advisors are thinking about introducing different strategies in asset classes and thematics to their clients?
So first of all, the point of the concept of themes and stories, those are the most anyone has ever either sold anything or ever communicated. Themes and stories and relatable facts is how people connect to ideas and people connect to each other. So I think that's one of the big changes is understanding themes are important.
Okay. Now in the survey, as you mentioned, AI, so tax advantage certainly was number one. That's not a surprise when you're dealing with taxable monies, that's always going to be the case.
But a bit more interesting, AI infrastructure, I think were the next ones in the survey. And I mentioned AI because the whole world is just engrossed with AI. And AI can mean so many different things, but you can create multiple sub themes from AI.
And what opportunities are going to be created from AI, everything from things like self-driving cars to language and to other areas. So those are themes that underline wealth management investors can relate to, be interested in, and potentially invest in. I do want to highlight infrastructure which Neil and I both mentioned.
If you look back to the after the global financial crisis, I really believe that was the beginning of the private credit boom. And what happened was the prior sources of credit never came back the way they were, the traditional banks and other sources. So that void had to be filled.
I still don't think it's filled, but we're on our way to doing that. When we look toward the next 10 to 20 years, which I always encourage investors to do look forward, not backwards, is the physical and digital infrastructure that are required in the world as we look forward is immense. And governments with all the debt that they have building, it's going to have to be funded on the private sector.
So this is going to be, I believe, a parallel path potentially as the private credit took over the last 15 years. So that could be interesting opportunities for wealth management. And then we all know now, since the world has all identified what we're talking about, is investment managers have now designed products, has now designed communication methods, are now catering to the wealth management space.
So I think that will be an interesting area for underlying investors and advisors to look at as we look forward.
Yeah. And Alex, when I look at this list of themes, I mean, there's two things beyond what Gregg mentioned that I think is kind of interesting. One is GP stakes, right?
And I think there's the traditional way of a fund, right, that provides liquidity to larger firms for various different reasons, right? And I think that's, you know, a way to get diversified access to the GP of multiple different managers out in the universe, right, to get exposure.
And if, Alex, if you go one level below in the survey, I believe it talked about energy transition and sustainability and so on. Also, that's not going to go away, and that's there, but there are obviously political and other influences on that. So that creates some risks that have to be evaluated.
And I think the interplay between a lot of these is just so apparent. You think about artificial intelligence and infrastructure. Greg, to your point, there's a direct relationship between the infrastructure needed to actually power the AI boom in the future state.
You talk about energy grid in terms of energy grid pressure and stress, and that goes into the energy and transition sustainability theme. So I think all of these things are, and it's an exciting time to think about how alts are just fitting in in context of the investment process for not only institutional investors, asset managers, but also the advisor world. So to close us out here, just one last question to both of you.
2025, we're kicking off the year. By the time this will drop, we will be in the new year. What are you both excited about?
What's the one thing that you're most excited about in the year ahead within our space?
Well, first of all, all the excitement that we're talking about with alts and specifically private credit infrastructure, I believe increased allocations in those areas will be very, very exciting. I also believe personally in my team, we're going to be in front of more advisors on the education side. And I'm really excited about that because it's a matter of teaching and collaboration.
And I think as we go into 25 and 26, and we see more and more monies go into these registered funds and higher allocations, the world thinks about all these things as partnerships. Okay. And having that mentality of, okay, advisors have clients, advisors have partners.
We're going into this collaboration bigger type of world. So that's exciting to me because we all can keep learning, we all can keep collaborating, and we all can keep helping underlying investors within their portfolios.
Above that.
Yeah, that's great, Gregg. I totally agree. And mine actually even probably feeds into that a little bit.
I mentioned earlier, I was like the age of implementation. What's really interesting to me is the how, the why to the how, right? And the fact that wealth has become a focus for the whole ecosystem, whether that's alternative asset managers, Mercer due diligence providers to the technology platform.
We're all trying to figure out, right? How do we really focus on the wealth community, provide them the tools and resources, right? And I think that this is really just the beginning.
And, you know, with, you know, things that we're doing, such as CAIS Compass, model portfolios, we're going to continue to invest and innovate in the space. And I think, you know, when we look a little bit forward, I think, you know, the tools and resources that have been just commonplace for institutions, maybe we can use technology, right, to really deliver that to individuals, right? We're in the decade, as we mentioned earlier, based on capital market assumptions, where this is a requirement, right?
So I think this, that's kind of the most, you know, top of mind, interesting area. And to Gregg's point, to tie it all together, it's the integrations, right? Part of that is working with Mercer and different tech providers to deliver these, these different solutions.
Awesome. It'll be an exciting year, exciting year ahead, and we appreciate you both joining us. For anybody who's listening, wants to get the report, we'll drop the link in the show notes.
But Neil and Gregg, thank you for coming on. We appreciate it and we look forward to building with you both.
Thanks Alex. Yeah, thanks Alex. Really appreciate it.
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